Product Quality vs. Differentiation

[smcgrath76]

Differentiating your product in the marketplace is often different than product quality. I read in an earlier post that we (Canada) have the best product in the world. Why? How?
A lot of discussion about Grass vs. Grain fed beef. Are these better or worse than each other, or merely product differentiations.
In Australia for example, there is a major feedlot expansion occuring in the South with the result being barley fed beef. In fact a lot of the cattle have the same genetics as North American cattle. If you really want to investigate genetics on an animal take a popular AI sire and look him up on the Australian breed association site.
Just wondering what people's thoughts are on how we differentiate our Canadian product in the globabl marketplace.

[grassfarmer]

To answer one question you raise,I would suggest grassfed beef is a better quality product in terms of it's affect on human health - read the evidence yourself at: http://www.eatwild.com/nutrition.html

[rsomer]

If you asked a producer in Brazil, Australia, the U.S., France, UK, or most other major beef producing countries, they would each claim their beef is the best in the world. Believing your beef is the best in the world will not sell it globally.

Before we can answer how Canada can differentiate its beef product in the global marketplace we first need to ask why Japan bought 2.5% of its beef from Canada and over 50% from the U.S. even though there is a lot of reason to believe that the beef Japan was purchasing from the U.S. was of Canadian origin.

Each country’s beef product comes with a package of attributes that make it attractive to the purchasing country. Only part of that package is the actual beef product, other attributes might be service, terms of payment, image, willingness to customize the product to the customers needs and tastes. Last but not least Canadian producer are becoming more and more aware that the attribute package includes politics and trade.

I think it is not useful to consider how Canada can best differentiate its beef product at the present time. Considering the foreign ownership of Canada’s beef packing plants, there is de facto no such thing as a Canadian beef product. There is a Tyson Foods product and a Cargill product which might have originated in any of a number of countries. I would think these global players are not interested in developing a Canadian brand with the express purpose of competing globally with product coming out of their plants in the U.S. and elsewhere in the world.

Before we can match the marketing efforts of a country such as Australia we as Canadians need to own our industry as the Australians do. But before we do that we need to consider the entire beef package and whether or not we can match our competitors in the "other attributes" such as bilateral trade, foreign affairs and military influence. If we cannot match our competitors total offering when we may be better off supplying product to other countries who can. Just a thought.

[Cedar]

I'm not sure it's fair to claim that we have the best beef in the world. There simply is too much difference in genetics, feeding, climate,...etc., etc. Also, everyone has their own definition of "best"! Some like it lean, some like it AAA or Prime! (Please feel free to "chime in" here grassfarmer!) How do we even define "best"? In order to do that, we would have to first decide on a specific target market...then work with their definition of "best". The only leg we would have to stand on to back up that statement to the entire world in a general sense would be our traceback system, i.e. "best" with regards to traceability, as well as an excellent track record for dealing properly, and honestly, with health issues as they arise and not "sweeping it under the rug".
As far as Grass vs. Grain fed, these are, IMHO, definitely product differentiations. I could argue that one is better than the other, but not every consumer would agree! I would, however, hesitate to use the word "merely" there! This is a differentiation that is very important to some. To my mind, the health conscience consumer will seek out grass fed. It has been my experience that one has to consume this product for a while to realize the benefits it has to offer, but in this post-BSE climate, one would assume more people would be more interested in such a product, both here and around the world as the BSE problem spreads. I, for one, have been consuming grass fed beef for about 3 or 4 years now, and now have a grain fed in the freezer....ugh!!!!... There is no going back! In a way, I am glad to have had the grain fed for a short time again, as I now recall all the ailments that had simply vanished while on the grassfed! I will never again grain finish, unless I have no other choice!

rsomer: Interesting points. Of course the megasales to Japan from the U.S. and minisales from us have a lot more to do with trade and/or politics.....can we rise above these factors with a well differentiated product???? A product that has something to offer that no other country is offering? Perhaps if we could get ourselves organized (ha ha) and all work together, listen to the needs of the consumer (in whatever country) then different producers could aim at satisfying each of the different requirements.

Excellent observations about Cargill and Tyson...so true...so, we're back to square 1: processing facilities first! I don't suppose there would be any way to convince our governments of this problem, and convince them that we need help to develop a truely Canadian product????? (Something on which we could proudly display the Maple Leaf and achieve results, much to the dismay of the "COOL Evangelists". ) At least, some laws that lean towards our favor instead of the megacorp packers! (One would think any government would be able to pass laws in this regard!) (Ya, you're right...naaah...I'm dreamin' again!!!!) Just another problem with international megacorps!

With regards to your last paragraph, rsomer: Growing things should never, ever, have this much politics and associated crap! Any country with a brain should be able to smooth over all that stuff and make it so farmers can just farm....ah, ya...dreamin' again!

Sorry to ramble on so again....

[Cedar]

Just a few thoughts from the home "niche market" front. Our marketing people in Calgary found it almost too easy to break in to the high end restaurant market. The main reason was consistency, with a few little things like aging and even feed used to change flavour and tenderness. I am not naive enough to think that our branded breed lines are that much more superior in taste, but do beleive that feeding a bit more forage and lengthening the feeding period will change the end product.

One of the reasons that I believe we were able to grab market from Xcel and Cargil so easily was customer satisfaction and ability on our part to bend to that customer. One of the biggest complaints these chefs had about buying from the big boys was that when they ordered triple A, or Sterling Silver, they would get the something different each week. I thought that size of carcass was one of the criteria for Sterling Silver, however, it obviously was not a major concern of the saleman. While trying not to be too breed specific, I will also say that an older style British steer while taking a bit more time to reach 1300lbs. will definately produce a different product than a continental steer on a 70 or 80% ration from 500 to 1300lbs. Both would likely fit the Sterling Silver criteria.

America has many more numbers, and also has more opportunity to be specific for certain markets. Creekstone farms was almost breed specific for their Japanese Export market prior to BSE, and will be again when they start trading again.

As mentioned by BIG C, Canada's beef industry could be compared to the fur trade with Cargil and Tyson moving in and harvesting any and all cattle that us overproductive Canadian folks can produce.

If we want to show the world that we have a wonderful product, we need to take back control of marketing, and work with selective markets to give them what they ask for.

Grassfed, grainfed, a little more forage ...... I think that is all individual taste. Health wise..... match your activity to your consumption and you will live as long as you're supposed to live.

[cakadu]

What is your definition of differentiation?

Is it that quality(ies) that makes consumers want to buy your product over any other? What attributes does it have to warrant customers buying it over the beef at Safeway? As has been talked about in this thread (and many others) is it the fact that they are eating grassfed beef for taste, does it appeal to their sense of wanting to preserve the environment, did they eat it as kids? Are you selling an eating experience, do customers want to hear how the beef (as an example) was produced from the farm to the plate?

One way to differentiate is to give the quality that the customer expects each and every time.

What do others feel defines differentiation?

[cowman]

I have a relative who owns a business, and lives, in Thailand. He lives in a "tourist" area where the main population/clients are European. He claims hardly any of the locals ever eat beef as the Thai product is really poor and the only imports coming in are Australian. He said most of the Europeans prefer to eat chicken or pork, rather than the Australian product(I guess they are used to something better?). He usually visits Canada once a year and he sure looks forward to getting a big juicy Alberta steak!
The North American market is built on "baby beef"? The big packers need to move that beef everyday...they don't have the cooler space to age it properly(nor does it make economic sense). After the breaking plant, that beef hits the shelf at about 3 days and is probably either consumed right away or frozen. Now a steak house probably has aged beef, but definitely that cost is passed on? I mean $16.95 for an 8 ounce steak? $34/lb.! Well I guess you need to knock off 25 cents for the potato and salad!
The packers are locked into a system that requires rapid turnover to be profitable? That is the system that has evolved that they believe is most profitable? That system won't change unless the consumer demands it and is willing to pay for it. Barley/corn fed beef isn't going to go away unless aged grassfed beef is so superior people are willing to pay a whole lot more for it? Or perhaps the grass people are willing to take a lot less for their cattle?

[cswilson]

Like grain fed beef there are vast differences in the quality of gras finished animals-the Australian beef that people talk about is not at all like the product being sold for a premium here. I don't think grassfed beef will ever totally replace grain fed but I do think there is a demand for it that should be met.

[grassfarmer]

Cowman, central to your argument against grassfed beef seems to be your assesment of age of animal at slaughter under the two systems. What age do you think the average, youngest and oldest animals going through the respective systems are?

[ValueChainFX]

THE ABSOLUTES OF QUALITY MANAGEMENT