The Magic Bullet for WoolWednesday, Jul 12, 2000
Discussion on the McKinsey report is starting to identify some of the complex problems that are inherent
in setting out to find a magic bullet to improve farm gate returns from wool.
It is a fundamental rule of marketing that relationships in the marketing channel are equally as important
as the on farm production environment. Auction while having merit in periods of high demand
is less than perfect in times of low demand.
The success of Merino producers and now Romney growers in establishing cooperative style organisations
is a good example of practical reaction to an intolerable decline of an auction based marketing
system designed for the past.
Niche marketing is often presented as an answer to poor market returns. However marketing success in
the modern global market is primarily achieved by shortening the distribution channel by the elimination
of redundant non-contributing functions inherited from the past.
It behooves the producer of a product to seek out the best quality partners in the processing and distribution
channel to ensure access to the appropriate target customer.
Is the McKinsey report taking the woolgrower in this direction?
This fine frosty spell will be improving farmer and livestock enjoyment of the winter.