The network staircase – marketing and sales collaboration for small food producers

Abstract

Small food producers are often advised to collaborate with other small food producers to solve marketing and sales activity jointly. The small food producers have to operate many different activities to run their company, so the idea to collaborate may help them to work more efficient. However, good ideas is not always enough and many network of small food producers struggle to succeed.
In a case study of different small food producers and producers of food specialties and local food, we studied the collaboration between the producers. We found networks, which had developed over time and seemed to function well while other networks still struggled after years with collaboration. A closer look at the different participants in the network uncovered that the different producers had different goals or opinions of what function the network should have. It became even more difficult when the activities in the network had a price label, because the producers conduct the functions themselves without calculating the costs.
The findings resulted in the development of the network staircase model. We identified five different steps of collaboration based the function/goal of the network, producer requirements and obligations. We labelled the steps as community of interest, marketing collaboration, sales collaboration, distribution collaboration and a fifth step of sales management. The farther up the stairs, the more commitment will be on the participants. When they start sales collaboration, someone have to conduct activities and need salary.
The investigations revealed that struggling networks seemed to have participants on different steps in the stair; some wanted marketing collaboration and other wanted distribution collaboration. They had never asked the fundamental question of what each of them wanted and if the network could help them solve these functions. The more successful networks had made statements of what kind of functions the network should perform.
The network staircase model may help small food producers and even other small firms to discuss and clarify what function the network can have for them. Small food producers are diverse and we cannot expect everyone to fit into a particular network, and certainly should everyone be able to choose a network appropriate to their needs. This also indicates that there may be good reasons for small food producers to stay outside seemingly suitable network in their area. The network staircase may serve as a tool for advisors to help the small food producers in their development processes. Different producers have different opinions of the purpose of the network, and they will find themselves at different steps of this staircase.