=Paper=
{{Paper
|id=Vol-1498/HAICTA_2015_paper64
|storemode=property
|title=Marketing Strategies of Large Agricultural Holdings and Social Commerce: the Case of Terra Orti PO
|pdfUrl=https://ceur-ws.org/Vol-1498/HAICTA_2015_paper64.pdf
|volume=Vol-1498
|dblpUrl=https://dblp.org/rec/conf/haicta/Borrelli15
}}
==Marketing Strategies of Large Agricultural Holdings and Social Commerce: the Case of Terra Orti PO==
https://ceur-ws.org/Vol-1498/HAICTA_2015_paper64.pdf
Marketing Strategies of Large Agricultural Holdings and
Social Commerce: the Case of Terra Orti PO
Irene Paola Borrelli1
1
Simone Cesaretti Foundation, Italy, e-mail: irenepaolaborrelli@gmail.com
Abstract. Generally, the advantages of short food supply chains are associated
only to small agricultural holdings and/or farms with a limited production
output, but not to larger agricultural holdings. These considerations are limited.
For larger producers these forms of marketing could transform from being a
mere instrument of commercial diversification into a promotion instrument that
makes it possible to translate the acknowledged or desired values in products
in the short supply chain to the entire commercial output. The paper, following
analysis of the characteristics of e-commerce in agribusiness, proposes the
experiences of the Terra Orti Producers Organisation in implementing social
commerce for promoting fruit and vegetable products from the “Piana del
Sele” territory.
Keywords: social commerce, e-commerce, Producers Organisation, short food
supply chains, Campania Region.
1 Introduction
Interest in the development of short food supply chains is increasingly greater.
Agricultural holdings are particularly attracted by this form of marketing for two
opportunities: obtaining a "higher added value", by reducing intermediation costs or
trimming a higher price compared to methods by traditional channels, and capturing
new niches in the market, thereby meeting the specific customer needs in terms of
quality and/or the services required (Fabbrizi et al., 2014; Bazzani and Canavari,
2013; Di Trapani et al., 2013).
Generally, these considerations are valid for small agricultural holdings and/or
farms with a limited production output, but for larger agricultural holdings their
validity is somewhat relative. Indeed, for larger businesses, a belief that utilising a
short food supply chain can provide a unique response to their commercial needs is
arguably a short-sighted or utopian view.
The objective of this paper is to give a new understanding of these forms of
marketing, forms which are also useful for larger producers.
The aim is to transform the short food supply chain from being a mere instrument
of commercial diversification into a promotion instrument that makes it possible to
translate the acknowledged or desired values in products in the short food supply
chain to the entire commercial output. This will enable large agricultural holdings to:
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• harness a new section of demand with which to construct a relationship of trust
that may influence consumer choices in different purchasing situations and
places;
• possess a more immediate knowledge of new trends in demand with the
advantage of being able to improve their commercial output and anticipate the
demands of the traditional channels.
The paper, developed as part of the “New Orto Chain” project funded by the
Campania Region, following analysis of the characteristics of e-commerce in
agribusiness, proposes the experiences of the Terra Orti Producers Organisation in
implementing social commerce for promoting fruit and vegetable products from the
“Piana del Sele” territory.
2 E-commerce and Agribusiness: a Question of Trust
In general, it may be asserted that commerce that is supported by the Internet offers
considerable opportunities for businesses. Businesses can expand their customer base
and enter new markets, going beyond their immediate geographical vicinity
(Cesaretti et al., 2006). Unfortunately, the potential of this tool is underused. There
are in fact few businesses that recognise the strategic value of the Internet for their
competitiveness (Misso, 2013).
This is of even greater relevance in the agri-food sector, the particular features of
which are slowing down the spread of e-commerce within the sector as a whole.
Cultural factors and concerns of food health and safety constitute major obstacles
to the dissemination of the use of ICT and Internet tools (Misso et al., 2013). Added
to this is the high degree of product differentiation, both in terms of specific sensory
qualities, and respect for qualitative parameters, which leads to considerable
difficulty in formulating effective e-commerce communication (Canavari et al.,
2009).
One of the most significant barriers to the introduction and use of e-commerce in
the sector is trust, which is an essential element during the purchasing process, and is
not being communicated and conveyed appropriately by existing e-commerce tools
(Cubico et al., 2006).
For the purchases of agri-food products, trust already plays an important role, and
it is amplified even more in Internet negotiations. Indeed, with these purchasing
methods, the sense of trust is considered the variable that should be focused on in
order to overcome the consumer's perception of risk in these purchasing methods,
associated with the fear of passing on personal information such as credit card
details, and the problem of making purchases without being able to actually touch the
items (Bhatnagar et al., 2000).
Being able to build a relationship of trust in e-commerce is different from the
process of a face-to-face business transaction with the seller. For these purchasing
situations, the consumer can rely on ancillary information such as non-verbal
expressions, the seller's expertise, empathy, and emotions. All of these are elements
that can help facilitate confidence and reduce the perception of risk, without
forgetting that the dynamic nature of the relationship can provide greater
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opportunities in offering an immediate response to the consumer's concerns (Bazzani
and Canavari, 2013; Giuca, 2012).
It is therefore necessary to question how overcoming these problems is essential in
devising strategies that can facilitate virtuous processes that ensure consumer
confidence.
In designing an e-commerce platform, one limitation is not being able to manage
an adequate information flow that can suitably communicate the high levels of
quality or differentiation.
There can be many fields of operation, which are summarised by Lee and Turban
(2001) in three areas:
• credibility in the website and its information;
• reliability identified with the online channel;
• a relationship of trust understood as a form of individual tendencies in terms of
trust in relationships with others.
The business can act independently on matters of credibility and reliability, but for
a relationship of trust - a distinctly cultural and personal element - it must work to
make the consumer central.
In this sense, support may be provided by leading online tools such as social
networks, blogs, wikis, etc. that offer the chance to create an interaction with visitors
and users. More specifically, with these applications, users can foster networks of
relationships with their peers based on shared interests, values and identities (Finotto
& Micelli, 2010; Simmons, 2008; Cova, 1997).
3 Web 2.0 from e-Commerce to Social Commerce
We must therefore imagine how to move from the mere publication of information
to creating virtual places in which everyone can contribute. A way of doing so is by
encouraging participation: the user moves from being a passive subject to the
protagonist of content creation.
In other terms, with web 2.0 we are witnessing the transformation of the internet
from a space of information to a space of participation. These tools are helping to
change the nature of consumption radically, improving customer participation,
promoting relationships between customers, and creating, inter alia, a greater
economic value (Kim and Srivastava, 2007; Liang et al. 2011; Parise and Guinan
2008). This development of electronic commerce is commonly identified with social
commerce.
Modern web applications are having a significant effect on business transactions,
reliability and reputation (Swamynathan et al. 2008).
Social commerce is the new frontier of e-commerce, is overcoming the isolation
of the consumer who, through social networking, is taking part in a rich social life
which inevitably has an impact on their perceptions and purchasing processes
(Finotto & Micelli, 2010).
The development of an e-commerce platform into social commerce requires new
guidelines for its design. Based on the model of Fisher (2010), Huang and Benyoucef
(2012) have identified four levels of intervention: individual, conversation,
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community and commerce. These elements are all interrelated, and the absence of
just one of them may result in not being able to trigger the benefits of the synergies
between e-commerce and virtual community.
Fig. 1. Social Commerce design model by Huang and Benyoucef (2012)
Under the approach proposed by these authors, everything should be centred on
the individual. Everyone should make their contribution to the community but their
individuality should be preserved and appreciated. The second step is conversation,
or participating in the exchange of ideas and information. Without these interactions,
there is no proliferation of user-generated content and no sharing of knowledge.
Conversations, in the case of social commerce, are the expression of the relationships
that cement and create the virtual community. Finally, the broader level of design
involves Commerce and is aimed at implementing the needs of the created
community and online business services.
Being able to implement social commerce can provide not only a better and easier
access to your business with greater brand awareness, but can also play a strategic
role in future development. Through certain applications, in fact, the business can get
some indication on how to improve or innovate their commercial products.
Moreover, the ongoing relationships in the community can be used to facilitate after-
sales service, by delegating part of the support activities to the users themselves.
In parallel, the business that is starting out with these experiences should be aware
that these applications require a substantial transfer of its own communication
processes to figures that are not controlled: there will be loyal and enthusiastic
customers, but also critics and opponents (Finotto & Micelli, 2010). In order to limit
the risks of negative consequences in terms of credibility and image, it is crucial to
be able to rely on professionals who known how to manage the information as
efficiently as possible and can stimulate user participation.
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4 Designing Social Commerce for the Promotion of Piana del Sele
Agri-food Products
In 2013, through provision of the measure 124 of the 2007-2013 Rural
Development Programme, the Campania Region funded the "New Orto Chain"
project, which was aimed at testing organisational models for developing new forms
of marketing and communication in short channels that could meet the dual objective
of ensuring competitive development of the fruit and vegetable sector and reference
territories.
Research institutions such as the Parthenope University of Naples and the Simone
Cesaretti Foundation, along with production and marketing businesses in the fruit
and vegetables sector such as the agricultural business Morella, the agricultural
company F.lli Esposito and the Terra Orti Producers Organisation were involved in
bringing about this project.
In particular, in this programme reflections are proposed on the big business -
short supply chain approach in relation to the implementation of online sales.
The leading group in this activity is Terra Orti, one of the most successful
Producers Organisations in the Campania Region, operating in the “Piana del Sele”
area.
In 2014, their turnover exceeded 50 million Euros, and production volumes
surpassed 520,000 tons. An analysis of the turnover for the year 2014 shows that
84% comes from domestic sales, 15% from EEC countries and 1% from countries
outside the EEC, thanks to the presence of Swiss customers. As far as the domestic
market is concerned, there are around 350 clients and the primary marketing channels
are the general markets, that contribute 49% to the turnover, while other
intermediaries comprise 45%. A secondary but nonetheless import contributor is
large-scale retail with 5%. From the analysis of the general market channels and
"other intermediaries", it emerged that the main production destination is the north of
Italy. If we consider that the general markets are the main form of supply for
retailers, we can affirm that in 2014, only 5% of the total production was consumed
in the reference area of the Terra Orti.
These figures clearly show the prevalence - or indeed the exclusivity - of the
traditional channels and, therefore, a reduced opportunity of having a direct contact
with consumers. There is clearly a gap between the world of production and the
world of consumers, a strong contrast in the consumers' need to want to know more
not only about what they are eating but about who is producing it.
All of this is at the heart of the Producers Organisation's interest in alternative
forms of marketing, such as the short food supply chain.
In this context, the Producers Organisation has been investing in direct sales
channels in recent years. They have opened sales outlets, initiated box-schemes
activities for urban areas in the region. participated in fairs and markets, and
organised informative meetings and cultural events. These activities are not highly
profitable but allow the business to earn the trust of their customers, involving
direction, information and sponsorship of their brand, of their products and their
particular business culture.
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Their presence on social networks is also very significant, the Facebook page of
the Producers Organisation numbers more than 2,000 users.
The last method of direct selling that it was decided to experiment with is e-
commerce. In the case of e-commerce, the working group decided not to stop
implementation of the classic e-commerce platform but to design a social commerce
to promote the value of agri-food products from the Piana del Sele territory.
In the spirit of social commerce, a communication strategy was established that
would surpass commercial supply and include broader thematic analyses that could
involve interests on the basis of which users could meet with one another.
The basic idea is to create and stimulate a virtual community that can share the
experiences and gastronomic culture of the region. In other words, the intention is to
recreate the distinctive features of the short food supply chain online; the spirit of the
initiative is "everywhere with you".
Starting from this assumption, it was not just a simple product catalogue that was
constructed but a whole territorial supply based around it.
The choice of information to be included was influenced by the many meanings
associated with the product acquired in the short food supply chain, summarised in
the following table (Brunori, 2007; Goodman & Goodman, 2009).
Table 1. Meanings associated with the product of the short food supply chain.
Attribute Meanings
Functional healthiness, taste, freshness and seasonality of the
product
Ecological Food miles, the reduction of packaging, preservation of
natural resources involved and the preservation of
biodiversity
Territorial product's ability to reproduce the diversity of its terroir
Cultural enogastronimic culture, territorial identity
Ethical fairness and corporate social responsibility
Political relationship in the supply chain, re-orientation of the
paradigms of production and consumption
More specifically, the aim was to attract the consumer community to become
more aware about purchasing not just a product, but a small piece of the region. For
each product, an information sheet was created that would meet all the features.
Below is an outline summary of the content offered by the various attributes.
Table 2. Summary of the content offered by the various attributes for each product in the e-
business platform.
Attribute Content for each product in the e-business platform
Functional Properties and benefits closely related to health
Ecological Character merchandise in terms of biodiversity protection;
Territorial Land cultivation; customs and traditions
Cultural History and rarity
Ethical Enhancement of producers with geolocation
Political Economics and production methods
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For the "social" aspects, the platform provides for the complete interaction with
the social network Facebook. In the product list, it is possible to consult feedback
from users who have purchased it and for uses to post their comments about the
product.
All that has been described thus far does not provide an answer to the broader
mission of a social commerce, or, to stimulating the community on issues of interest.
On this particular aspect, the working group had to choose a common denominator
for the community. There were many alternatives to those most commonly used in
nutritional education, healthy food, or even, particular dietary habits. Along with the
Producers Organisations, it was decided to develop the subject of food understood
not as something to be consumed, but as an expression of traditions and culture. The
proliferation of television programmes, specialised magazines, and websites shows
how interest in these issues is increasingly widespread and involves a broad target
market.
In this regard, the platform will give ample space for prospective web-chefs to
share culinary experiences. Recipes from culinary tradition in the Campania region
using Producers Organisation products will be suggested, and users will be invited to
express their opinion and to post their reviews. All this is aimed at encouraging the
consumer to transform the traditional product into a gastronomical innovation.
For content development, a collaboration was established with the Higher Hotel
School in the municipality in which the Terra Orti Producers Organisation is based.
This aspect has a double positive value, both for the authority of the content offered
to the virtual community, and in terms of the relationship of the Producers
Organisation with local stakeholders.
In addition to the recipes, students are organising short video suggestions with
their school that reveal some tricks of their trade. This activity aims to be of service
to aspiring web-chefs but also aims at expanding the community, by attracting
interest from the network of friends of the students involved.
Initially, in order to encourage user participation, a competition was launched to
find the best recipe. The winner received a basket of Producers Organisation products
and a discount voucher for online purchases.
Another important aspect in facilitating information retrieval is the navigation
menu. It was considered important to offer the user different options in order to meet
specific needs:
• Recipes: providing a further breakdown of information, this method will be
chosen primarily by the community member who has an interest in the
information
• Products: providing a sub-menu showing the product category (jams, preserves,
marinated vegetables, etc.), consumers who have already purchased a product
and want to do so again, and consumers who already have the product but want
more information on how to use it, will choose this method.
For the original purposes of enhancing the product offerings from Piana del Sele,
it should be stressed that creating web pages involves providing more and more
information about the region. In other words, research into traditional or innovative
569
dishes and/or the products on offer by Terra Orti will be supplemented by a
discovery of the Piana del Sele territory.
5 Conclusion
The platform has not been available online long enough to be able to make
assessments on the outcome of the results. One very interesting aspect relates more to
the producers than the users or consumers. The initiative has generated interest in the
majority of Producers Organisation members, both small and large producers. Their
need for recognition has been answered, and the anonymity that originates from
traditional channels has been overcome.
The first positive responses have been established in terms of creating a virtual
community. The followers of the Producers Organisation facebook page have
responded promptly to requests to share a link to the platform on their profile.
In addition, the majority of the virtual "friends" have accessed the platform and
some have started to breathe life into the community with their comments.
There is a further interesting feature about the first active users: they are people
with origins in Campania but who live outside the region. It is a sign that their
sensitivity to the specifics of their region is strongly pronounced and the desire to
strengthen their roots serves as a strong incentive to participate.
From an operational perspective, the need to devote more resources to managing
the "conversations" was revealed. In order for social commerce to work as effectively
as possible, expertise is required that is both technical in order to deal with the
commercial output, but also relational in ensuring the constant stimulation of
interaction among the different users.
With this initiative, the Terra Orti Producers Organisation does not only target
economic results, as highlighted above, although managing to earn revenue that
could help with its management would be important, but it also aims at triggering a
promotion tool for the entire commercial output through social commerce.
All of this provides evidence of the benefits that large fruit and vegetable
businesses can reap by investing in short supply chain marketing. They are benefits
that manifest themselves not in monetary terms, but in terms of the relationship of
trust that is established with the end consumer.
Acknowledgments. The paper was carried out within the project "New Orto Chain",
coordinated by Prof. Cesaretti and developed in partnership between research
institutions, Di.SEG-Parthenope University of Naples and Simone Cesaretti
Foundation, and businesses Terra Orti PO, F.lli Esposito and Azienda Agricola
Morella. The project funded by the measure 124 of the RDP 2007-2013 of the
Campania Region.
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