Brazil's misfortune is more than a short-term opportunity for Canada
CBC editorial by Sylvain Charlebois:
The discovery of foot-and-mouth disease in Brazil in early October is a huge crisis for the world’s top beef exporter. Dozens of countries have closed their border to Brazilian beef and the cost to Brazilian producers is expected to exceed $1 billion US this year alone.
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Just as Brazil took advantage when we were hit with BSE, Canada will be looking to increase its beef exports to countries previously served by Brazil.
But it would be a missed opportunity if we rely on a conventional marketing strategy that treats beef as an undifferentiated commodity sold largely on the basis of price and favourable currency exchanges.
If we are to benefit from current and future opportunities abroad and at home, we need to adopt a new approach with global market segmentation. Market segmentation is known to be the selection of groups of consumers who will be most receptive to a particular product. In the future, success will go to those who do the best job of meeting the needs of buyers in those individual global markets.
Before BSE, many Canadian cattle producers opted for a straightforward demographic segmentation strategy often used as a natural method to divide the market into several smaller geographic areas. That strategy, of course, led to the overpowering dependence of Canadian cattle producers upon the U.S. market.
Rather, global market segmentation should be based on attitudes towards meat products and food safety, rate of beef consumption, or even benefits sought by potential markets (for example, no growth hormones or antibiotics; or organic beef). The focus should be mainly on elements that empower an organization to be market-responsive to occurrences like foot-and-mouth and BSE.
Also, seasonal consumption patterns of beef differ between hemispheres and global segmentation can offset domestic demand bends.
Globalization has seen the rise of consumer clusters – groups determined by their preferences and their behaviour. The successful suppliers of the future will be the ones who master market segmentation. For cattle producers, this means the ability to change and even customize production and distribution practices.
Brazil’s misfortune is an opportunity for other beef-producing nations, even BSE-listed countries like Canada. But it is not just a chance to pump up sales in the short term. Instead, this is an opportunity to develop market segmentation strategies that will benefit our cattle industry over the long term.