Positioning on value: Learning from meat industry

In a hyper competitive world, positioning commodity products only on pricing is a risky proposition. Companies always try to sell the ‘value’ tag to differentiate themselves from competition. Meat industry in developed countries is no exception. What can meat industry teach others on positioning based on value?

Traditionally meat suppliers would buy the meat from farmers, process, package and sell with a profit margin. One of the integral aspect in the entire value chain is the pricing of the meat.

In Australia, meat is priced based on an ‘average pricing’ mechanism using a reference ‘price grid’, where farm animals are grouped into different categories based on size, type, breed etc., and a price is set.

There is nothing wrong in this approach until competition comes in and it’s hard to justify the products only on price.

Teys Australia, a leading meat processor has taken the initiative to move the whole industry from ‘average pricing’ mechanism to a newer ‘value based payments’ method.

Teys argues that for surviving in a highly competitive export industry and to truly reflect the intrinsic value of meat, it is important to position meat based on its ‘value’ – measured in terms of actual weight/ yield and quality.

Teys understands the challenge involved in allowing everyone to change the conventional behaviors when it comes to meat pricing, however, they are committed to drive the change.

Teys has also introduced a new automated way to measure actual yield using dual energy x-ray absorptiometry (DEXA), which the company viewed as a prerequisite for automation.

Check out news coverage on DEXA technology here.

Teys initiative provides interesting insights to other industries who are keen to differentiate in a commodity market and position their product as premium.

ResonVate Thought
Using a new value based payment method leading Australian meat provider is challenging the conventional pricing mechanism of meat.

I would like to ResonVate
with ideas on staying competitive, decisions with data,  challenging status quo, competing to succeed
which can be applied in product positioning, changing perceptions
in areas like Technology, Retail, Manufacturing, Healthcare


Building producer education and trust next big challenge in move to VBM

Pricing Grids

Image: http://www.cyberstoep.co.za/pecking-south-african-meat-market/