Subsections

• • Key Attributes
  • Product differentiation
  • Market differentiation
  • Quality product
  • Image of an exlusive product
  • Threats to be aware of
  • Consumer resistance

Marketing options

The commercial farming of charr is in it's infancy and this potentially could be a strength or weakness depending on the marketing strategies to be adopted. A plausible scenario is that in the next five years a relatively small number of producers (in world wide production terms) could produce a relatively small amount of high quality charr (2000 - 3000 tons).

This is the ideal level of production, as it would be just enough to satisfy the demands of the current charr/fish market and allow room for expansion as it increases incrementally each year. An appropriate marketing strategy would ensure that this particular scenario would result in maintaining arctic charr in its current market position as an exclusive upmarket product with a high value price.

On the other hand it is also very plausible that charr farming could go through a rapid expansion, in which case the production will outstrip the demands of the market. This in turn will lead to strong competition, price reductions, poorer quality fish being put on the market, and eventually ending with stationary customer demand and poor market development.

A major step on the road to the ``ideal'' situation would be for the charr producers of each individual country to form a representative body or association, and for each charr association body from each country to meet and openly report with each other, through say FEAP (Federation of European Aquaculture Producers). At a national level the approach would be to try and ensure a common approach among the producers and to ensure the goals of the association are achieved. The goals of these associations would be, primarily, to sell as much charr as possible for as great a price as possible.

Lessons in the mass marketing of farmed fish should be learned from the experience of the salmon industry over the past 15 years. Briefly the history of the salmon industry is that, it underwent a large expansion throughout Europe during the eighties, and it wasn't until 1990 that a price collapse occurred. This price collapse primarily occurred due to production exceeding demand, and the salmon industry lacked having a strong customer based marketing strategy. Up until that point most of the marketing regarding salmon was directed to trade marketing, whereas it could have been aimed at the consumer. A marketing policy focused on customers and based on producers agreement on quality standards, would have helped to, (1) maintain a good image of salmon as a quality high value fish and, (2) help to expand the existing market.

Key Attributes

Although there is a small existing charr market there are several unique features of the fish that can be used as selling points in future marketing. In Scandinavia and Northern Europe the charr is considered a delicacy, the flesh has a mild flavour and a low fat content. Another characteristic is that it has a firm, red fillet which is appreciated by restaurateurs for it's appearance on the plate. The fish itself is suited for machine filletting and may easily lend itself to fish processors in producing a value added product. Value added products are an effective way of diversifying the basic fish product, creating greater customer demand and broadening or developing the market. Marketing promotion of the product can use these features to attain a high price for an exclusive product.

Product differentiation

This marketing strategy favours the development of separate marketing channels for charr as opposed to using the existing marketing channels and distribution systems for salmon. There is always the chance that if charr uses the same marketing channels as salmon that it will be treated as a substitute product for salmon (or even trout) and therefore would be subject to the same fluctuations in price that salmon is subjected to. Alternatively if Arctic charr can be launched as a separate, new and exclusive product at the top of the quality scale it will be able to maintain a full value price unaffected by the salmon market. What this in effect means is, that if the price of salmon drops, people won't change form buying charr to buying salmon as an alternative because they see charr and salmon as two distinct separate products.

Market differentiation

The target markets that the charr producers should be looking at are the top-class restaurants and "exclusive" retail outlets. Analogous fish products would therefore be premium priced fish such as turbot and halibut as these also have low production figures and specialist markets. At present consumers and sellers in the EU are matching large charr with pike, perch, sea bass and wild salmon.

Some developments along these lines have already been established by the Norwegian charr farmers. When charr in Norway was first being marketed it was decided that they would set a price above salmon and on average the charr price has been above salmon even though it's level of production has been increasing steadily. At present the price of charr is approximately 380-500 Icel. Kr. for gutted fish and Icel. Kr. 600-900 for fillets, and in Canada prices are in the $ 4.50 - $5/lb range.

Quality product

The concept of a high quality product is probably the most important selling point to be acheived and maintained. The quality of the product has been looked at in chapter 7, but different grades of quality must be established and a quality assurance strategy set up. Ensuring that ``market sized'' fish only are released on the market is an example of how a quality assurance schene can help producers. This is because smaller charr may be seen by consumers as an alternative to trout, and they expect to pay lower prices accordingly. This way the top quality charr products will always get the premium price and thus maintain price stability.

The growing interest among the public in nature protection and sustainable growth, increases the demands on the farmer to establish their codes of best practices for environmental management but it can certainly be an asset when marketing farmed charr. It's natural northern habitat has a positive image as relatively unspoilt and clean. The fact that the fish is grown in cold water is an indication of limited use of energy, not to mention the fact that wild stock is being spared from overfishing.

Image of an exlusive product

The image of the product is the next aspect that has to be developed; this way the exclusiveness of charr can be re-enforced by a well selected brand name, logo and packaging. Other strong images such as product heritage and country of origin have to be chosen and used by the producers. Existing examples of product images used in charr marketing are Canadian charr, which is promoted as traditional, favorite food of Inuits; at the same time Iceland promotes it's charr by emphasising the arctic habitat, along with the unspoilt nature of it's environment.

The key point with all these strategies is the establishment of an international charr producers group, as then the common interest of charr producers can be looked at. Although it is an ambitious plan several other product groups are already established e.g. frozen cod blocks (North Atlantic Seafood Association); trout producers (European Trout Association), and these involve larger numbers of members than would be expected in charr farming.

Iceland already has a brand quality mark produced by the association of Icelandic arctic charr producers, this example should be copied by the other countries which are producing smaller amounts. Indeed the Icelandic and Norwegian producers may have the biggest market share but strong links with producers from other countries can help in selling the product in other countries.

When considering how to increase the charr's market share there is e.g. the method to directly promote this type of fish as a dish, either with a promotional campaign of recipes and suggestions, or by the development of value added products. The charr producers should keep an open mind towards all opportunities but be alert towards threats on the market as well.

Threats to be aware of

To avoid problems which can arise a few years down the line, charr producers should be aware of the threat of competition to their farms and business. These threats can be summarised as follows;

1. The threat of substitute products viz. (trout and salmon).
2. Bargaining power of buyers.
3. Industry competitors, i.e. rivalry among existing firms.
4. Bargaining power of suppliers.
5. Threat of new entrants.

As stated above the threat of substitute products can be countered by a strong advertising and marketing campaign which emphasizes the uniqueness of the product.

Threat two, the bargaining power of buyers, can also be a big potential problem, especially when there is a small yearly tonnage being produced. In some cases just one or two buyers are controlling the whole market. For example in France the large supermarket and hypermarket chains dominate the fresh fish trade and so trying to sell to the French is difficult outside of these major companies. Co-ordination between national and international groups could help to reduce this threat, but this is not to recommend the establishment of a cartel.

Threat three is probably the most dangerous, as rivalry among existing farms at its worst can lead to price competition. Lowering prices is intrinsically a very adverse move as a lower price does not mean that the customers will buy more product at lower prices. In this situation when there is a price war expensive products may loose their premium image, if the price is reduced below a certain level. It may broaden the market but it will definitely reduce product image.

Cutting prices to get a bigger market share is usually quickly copied by rivals, so any advantage is short lived. In a situation where the farmer has an increasing amount of unsold stock and a cash flow problem, the alternative approach to price lowering would be to use volume discounts, whereby a price reduction will occur if the volume bought by a producer increases above a certain level. This way the customer is not getting the same for less money but paying more money for more product.

Due to the small nature of the charr industry threats 4 and 5 are not relevant at this stage, but they may come into play sometime in the future.

Consumer resistance

Examples of consumer resistance that can be expected to be encountered about charr are,

1. that the fish is not all that different to salmon.
2. charr isn't worth the extra price.
3. that it is just more expensive due to the remoteness of the farms to the markets.

It is possible that these negative attitudes can be overshadowed by a strong pro-charr marketing policy.

Due to the remoteness of a lot of the charr producers farms, air freight may be a more common way of moving the fish from the producer to the markets. In the case of other fish such as salmon chill chains are used. As a result of this, a quid pro quo is established and so the cost of this high level of freshness, is reflected in the price the consumer is expected to pay.

#.