In recent years, citizens' growing awareness about environmental issues in combination with their shift to a healthier lifestyle has created growth prospects for the medicinal and aromatic plants (MAPs) sector worldwide. Although the climatic conditions of Greece are a comparative advantage for MAPs, the sector has not grown significantly. The main objective of this paper is to give an insight into the external environment of a vertically organized dried herbs business as well as to examine e-commerce tools and applications which can contribute to its development. The results of this paper in combination with further research about the internal business environment and its viability consist a useful guide for newcomers in the MAPs sector in order to make the right decisions as regard the structure and the production process of their business.
The increasing global demand for medicinal and aromatic plants (MAPs) generates
significant opportunities for the development of rural and less-favoured areas.
Although MAPs constitute one of the best cultivation options for these areas - as they
use soils of low value with minimum inputs for high quality products - the sector has
not been significantly developed
Based on the Strategic Plan for MAPs
The purpose of this paper is to describe the external environment of a business which engages in the production and manufacturing of dried herbs and to analyze the role of e-commerce in its development. For this purpose, industry and consumer trends are presented aiming to provide an overview of the current situation in Greek MAPs sector and giving insights of potential for future development. In addition, the role of e-commerce tools and applications is described in formulating effective e-marketing strategy. 2
The external environment of a business has a significant impact on its viability, so it must be considered thoroughly. In this paper, the external environment of a farm business which produces and processes dried herbs is analyzed with a qualitative approach. The analysis focuses on, (i) the Greek MAPs Sector, (ii) Consumer trends concerning dried herbs and seasonings and (iii) the applicability of e-commerce at the business level.
The main MAPs cultivated in Greece are reported in Table 1. In terms of acreage
oregano, lavender and anise are the most important crops while in terms of number of
farms oregano, crocus and sideritis are the most widespread. Other MAPs are
cultivated by few farmers in small areas
The value chain of Greek MAPs is characterized by a relative lack of collective
action both in primary production and in sales. Some examples of collective
organizations are: (i) the Agricultural Cooperative of Aromatic, Pharmaceutical and
Energy Plants of Aetolia-Acarnania, the members of which founded in 2009 the
company «ANTHIR», which engages in the production, processing and marketing of
dried MAPs, (ii) the Association of Aromatic and Medicinal Plants of Greece, (iii) the
association of producers in Kilkis and (iv) the Cooperative of Aromatic and
Pharmaceutical plants, Fruits and Vegetables of Voio, Kozani. This lack of collective
action is linked to restrictions on the viability of farms, which due to their small size
cannot take advantage of economies of scale and are faced with high production costs
and reduced bargaining power. Under these restrictions, farms - as well as processing
plants - have a low potential for investment, certification and access to innovation and
restricted access to niche markets. In addition, the lack of cooperative relations and
organizations - from the supply of propagating material to the sale of the final product
-is a disincentive for new growers and entrepreneurs, who wish to engage in the MAPs
sector
There is a variety of reasons why consumers purchase MAPs. Indeed, these products
have an extensive range of uses, for instance as raw materials in the food, beverage,
pharmaceutics and cosmetics industries
Furthermore, based on the SP-MAPs, more and more consumers are shifting
towards a healthier lifestyle. In this process, consumers tend to prefer organic foods
over conventional ones and MAP-based products are no exception to this trend. In
France and Germany, there are organic retail chains (Bio C Bon in France, Naturkost
& Bio company in Germany), which are growing rapidly and covering a wider
consumer audience. Another motive for choosing organic food are environmental
factors, as growing awareness for issues such as climate change and the sustainable
use of natural resources has also affected consumption patterns and consumers are
turning towards products that have undergone minimum processing with minimum
environmental footprint
A dried herbs business can utilize a wide range of e-commerce tools and
applications such as e-mail, enterprise content management, messaging systems and
monitoring services to sell products online. The variety and security of these tools are
important characteristics for businesses in the MAPs sector, as they allow to reach
specialized audiences that use such technologies at a relatively low cost. Condition for
the successful operation of an online store is the creation of a comprehensive marketing
plan. In what follows, some of these tools and applications are briefly presented.
• Rational use of social media can have a significant impact on product promotion
and sales. In particular, a dried herbs business using social media can (i)
perform market research regarding consumer trends and competitors’ products,
(ii) manage complaints effectively due to direct interaction with consumers (iii)
increase traffic to its website or online store and (iv) increase brand recognition.
• E – marketplaces, where consumers can purchase products from multiple
producers at wholesale prices. The e-marketplaces are responsible for the
promotion of the platform as well as the successful performance of transactions,
while the third-party vendors deal with production and positioning. Some
examples of e – marketplaces which are used by agri-businesses are Amazon,
eBay and e-bloko in Greece.
• Close to the philosophy and structure of e-marketplaces are price comparison
sites (PCS), which are mostly oriented towards comparing products based on
price or other criteria. PCS are popular among businesses in the agri-food
sector, which register their products and store information on search engines,
so they are more visible to potential consumers. One of the most popular PCS
is “Google shopping” through which the user is led by the search results to the
online store of the company.
• Affiliate marketing is a type of performance-based marketing where an affiliate
(publisher) promotes a site of a vendor to its audience and is paid only if some
of them perform a pre-agreed action
To sum up, e-commerce is expected to provide great benefits for the companies in the MAPs sector including access to global markets, better approach and communication with consumers as well as efficient product promotion. The effective use of some of all the above methods can have a notable impact on a company’s profitability and sustainability.
The Greek MAPs sector is not significantly developed; however, it shows increasing trends as it pertains to the Greek soil and climate conditions. External environment analysis is crucial for the successful entry of a business in this sector. In particular, the analysis of the market-industry and consumer trends are important tools for the rational design of the business strategy and decision-making. Furthermore, ICT applications, particularly e-commerce, contribute to the implementation of the selected strategy, as they can lead to better market segmentation, targeting (selection of the target market) and product positioning. Social media, e -marketplaces, PCS, affiliate and content marketing are some of the tools that help agri-businesses to promote their products. The discussion in this paper highlighted opportunities for a MAPs business, but further research is required to analyze the company's internal environment as well as its viability in order to render them applicable. mediterranean region of Turkey’. Journal of Medicinal Plants Research, 5 (10), pp. 2054-2063. 10. Ragkos, A., Theodoridis, A., Batzios, A., Koutouzidou, G., Samathrakis, V., Batzios, C. and Vazakidis, A. (2017). ‘Multifunctional agriculture and ICT: Incompatibility or a recipe for territorial development?’. 8th International Conference on Information and Communication Technologies in Agriculture, Food and Environment (HAICTA 2017), Chania. Crete, 21-24 September. 11. Vasilikiotis, C., Kalfas, I., Topalidou, E., Genitsariotis, M. and Zoukidis, K. (2015) Medicinal & Aromatic Plants. Available at: http://mosaic.njaes.rutgers.edu/rty_reports/common_files/pdfs/afs/MAPs%20Sect oral%20Study.pdf (Accessed: 7 April 2020).