Product Differentiation Strategies In Horticultural Cooperatives: UNICA Group Case Study

Horticultural cooperatives’ concern for marketing their members’ produce and the fact that they are at the start of the agrifood chainhave meant that they are production-oriented rather than market-oriented. Consequently,... [ view full abstract ]

Horticultural cooperatives’ concern for marketing their members’ produce and the fact that they are at the start of the agrifood chainhave meant that they are production-oriented rather than market-oriented. Consequently, they are not always aware of the signals being transmitted by the end consumer. This has been exacerbated by the fact that the agricultural sector has traditionally been regarded as dealing in undifferentiated products for which the only valid sales argument is the price, due to the high level of competition.

Nevertheless,by differentiating their products, horticultural marketing cooperatives can play a leading role in the appropiation of value generated in later stages of the supply chain. In this way, they reduce the number of actors in the chain and establish direct purchase links with the large retail distribution firms or even with the end consumer.

Initially, horticultural cooperatives centred their attention on the concept of “quality” as a means to differentiate their products, creating new brands or counter-brands and obtaining quality certifications. However, new differentiation strategies are arising, promoting a different, fun way to consume vegetables, and these will surely attract the attention of large numbers of consumers.Indeed, strategic product differentiation decisions need to go a step further; innovation, market research and knowledge of consumer preferences should allow firms to offer novel products and to reach new segments of the population.
In this context, aspect as the introduction of products in the fresh-cut and pre-cooked food ranges, developing new varieties or launching new snack-type formats are all ways to open up the market, creating a scenario in which horticultural cooperatives can implement differentiation strategies in direct competition with retail distribution.
The present work analyses the above-mentioned aspects in the context of horticultural marketing cooperatives and presents a case study of the UNICA GROUP cooperative. This entity constitutes a clear example of this new approach towards differentiation in the marketing of horticultural produce on a cooperative level in Almería (Spain), an area which is pioneering change thanks to constant innovation.