SWOT Analysis of the Truffles Market in Greece

British Food Journal SWOT analysis of the truffles market in Greece Vaia Tsitsipati Christodoulou Athanasios

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To cite this document: Vaia Tsitsipati Christodoulou Athanasios , (2014),"SWOT analysis of the truffles market in Greece", British Food Journal, Vol. 116 Iss 12 pp. 1976 - 1997 Permanent link to this document: http://dx.doi.org/10.1108/BFJ-12-2012-0293 Downloaded on: 17 September 2015, At: 08:42 (PT) References: this document contains references to 89 other documents. To copy this document: [email protected] The fulltext of this document has been downloaded 630 times since 2014*

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BFJ 116,12

SWOT analysis of the truffles market in Greece

1976

Department of Forest Economics, Faculty of Forestry and Natural Environment, Aristotle University of Thessaloniki, Thessaloniki, Greece

Vaia Tsitsipati and Christodoulou Athanasios Received 3 December 2012 Revised 16 December 2013 Abstract Accepted 17 December 2013

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Purpose – The purpose of this paper is to investigate the suitability of Greece as a possible market for truffles. Primary data were collected and analysed in a systematic and detailed way to highlight the strengths, weaknesses, opportunities and threats of this prospective market development. Design/methodology/approach – A multi-stage survey was conducted using qualitative and quantitative research methods. The data obtained were analysed using the SWOT analysis method. Findings – The survey highlighted the market characteristics of truffles in Greece. These were sorted into four categories: strengths, weaknesses, opportunities and risks. Results show that truffles have an attractive mix of qualities; however, issues such as the lack of intermediary and customer knowledge and the limited communication of their benefits need to be overcome. Research limitations/implications – Findings showed that the use of SWOT analysis in specialized food products provides marketers and professionals’ insight and guidance into designing their marketing activities. Practical implications – Truffles production or trading requires strong commitment by professionals who want to succeed in this market field. Social implications – Truffles market growth could contribute to the social welfare through the creation of supplemental income, the cultivation of arid fields and the conservation of natural resources due to their environmentally friendly manner of production. Originality/value – For the first time, SWOT analysis is used to investigate the factors that shape the market of specialized products in the food sector. Keywords Marketing strategy, Specialized products, SWOT analysis, Truffles Paper type Research paper

British Food Journal Vol. 116 No. 12, 2014 pp. 1976-1997 r Emerald Group Publishing Limited 0007-070X DOI 10.1108/BFJ-12-2012-0293

Introduction Forests are the source of a variety of commodities. Besides wood, which is the basic forest commodity with commercial value, there are several other non-wood forest products. Some of these, such as truffles, have a high economic value; however, for many years they had been ignored (Gold et al., 2004). This happened because these products are usually characterized by unique attributes and, thus, require special treatment. However, cultivation of such products creates opportunities for local people to earn supplemental income, in many cases greater than the cultivation of conventional agricultural products. Simultaneously, their cultivation in environmentally friendly ways contributes to protection and conservation of natural resources. Truffles are one kind of specialty forest products. They are hypogenous edible fungi that undergo a complex life cycle during which their mycelium establishes a symbiotic interaction with the roots of trees, such as oak, poplar, willow, hazel and some shrubs. They are known worldwide as a commercially valuable delicacy, which are characterized by their unique taste and their distinctive aroma resulting from a blend of hundreds of volatile compounds (Mello et al., 2006). These special traits – together with a number of others such as their scarcity, their limited availability and their delicate nature – mean that truffles are prized as a unique and luxurious delight in international food markets (Ciani et al., 1992). In Greece, truffles are not widely known among consumers; however,

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recently their high profitability has stimulated the interest of businessmen, who recognize truffles production and trading as an activity with high earnings potential. Nevertheless, truffles have raised controversial opinions among people concerned. The most optimistic of them regard this business activity as positive for rural economies and as contributing to the remedy of the economic crisis experienced by the country at present. Others forecast that truffles cultivation and trading are high-risk activities, despite their worldwide popularity. The lack of market information and the limited experience in methods of production cause additional confusion or concern among interested parties. SWOT analysis is a research methodology that can help in understanding the environment of emerging and potential markets (Kotler, 1997). Usually, this method investigates macro – and micro – environment factors influencing such markets (Beckeman and Skjo¨ldebrand, 2007). In addition, this method is popular among marketers who want to analyse the forces influencing markets of specialty products (i.e. niche markets). Unlike traditional markets where marketing practices are used, niche markets are characterized by limited information, confusion over quality standards and absence of established institutions. Therefore, such markets are difficult to decode. The truffles market presents most of these characteristics; for this reason, SWOT analysis is suggested to be the most appropriate research method by this study. The increasing demand for truffles in Greece, together with their importance for the rural economy, have prompted the present research, which seeks to explore the suitability of the Greek market for truffles. The SWOT analysis method was applied to thoroughly investigate the truffles market in Greece, offering valuable information and strategic guidelines for managers and researchers. Theoretical framework Specialty products (in general) Consumer products are classified in categories based on some criteria. Copeland’s (1923) classification is the most accepted by researchers and managers. He proposed a classification of goods in three basic categories: convenience, shopping and specialty. The main criteria in which his classification was based were price, quality, image and shopping effort. According to him specialty goods have some particular attraction for the consumer. Consumers do not compromise with substitutes of specialty products, on the contrary they insist on buying the original (Nia and Zaichkowsky, 2000). Murphy and Enis (1986) referred to some particular attributes of specialty products, the most important of which are the higher perceived buying risk and the high degree of effort during the buying process. Examples of specialty goods are expensive cars, clothes by well-known designers, hand-crafted products, foods and wines produced by specialty manners or originated from specific places. Reaching the specialty product category is a major objective of many marketing managers (Murphy and Enis, 1986). But, enterprises that would like to cope with specialty product category are faced with uncertainty and market risk associated with the unique and specialized nature of specialty food products. However, the marketing of the specialty products could provide them with a competitive advantage by being early entrants in a prospect innovative sector (Zahra and Covin, 1993). According to Murphy and Enis (1986), the identification of the specialty attributes is the most critical stage for a successful product strategy. Then, the adoption of practices customized both to the particularities of products and the special needs of consumer segment, is necessary (Beverland, 2005).

SWOT analysis of the truffles market in Greece 1977

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Specialty food products Specialty food products belong to a market sector which attracts increased attention over the last decades. The demand for them is growing, mainly because of the consumer’s exposure to ethnic and gourmet flavours and the changes of food consumption patterns. As specialty are characterized food products either because of their special intrinsic nature (e.g. distinctive features, physical and sensory attributes, raw material) (Kupiec and Revell, 1998), or because they have been submitted to technological process in order to be differentiated from other products (Niederhauser et al., 2007). A variety of specialty food products exists in the international marketplace, many of which have great economic value. Specialty and artisanal cheeses (Kupiec and Revell, 1998), regional foods including Jersey Royal potatoes and Scotch beef (Kuznesof et al., 1997), luxury wines (Beverland, 2004, 2005), Washington apples (Winfree and McCluskey, 2005), specialty coffee (Niederhauser et al., 2007), spelt (Stefani et al., 2005), salami Bergamo (Cavanaugh, 2008) and others. The specialty food products are characterized by premium quality, uniqueness and scarcity. They are produced by small scale producers or by individual farmers in limited volumes, because they are not designated for mass consumption but for special occasion use (Murphy and Enis, 1986). In most cases consumers have to pay premium prices to acquire those products (Stefani et al., 2005). Management/marketing strategies A comprehensive and consistent marketing strategy should be based upon product characteristics. Specialty food products need specific strategies in accordance to their particular nature. They are associated with consumers with a more cosmopolitan profile, which are motivated in their consumption by their unique attributes. According to Kuznesof et al. (1997) a number of personal, product-related and situational factors are interacted with during the buying decision process. Personal factors, such as existent knowledge and past experience, influence the perception about food. Consumer’s choice behaviour and decision-making process depend on quality expectation, created by the consumer’s previous satisfaction or disappointment when consuming the product (taste, smell, texture or other sensory characteristics) (Kupiec and Revell, 1998). Product-related factors such as pricing, quality, quantity and packaging could affect perception of quality. For that reason, product design, in general, needs special care in order to reflect the special needs and expectations of the consumers (Beverland, 2005). Pricing for specialty food products is particularly important because buyers link the price with the expected value or performance of the product (Stefani et al., 2005). Presentation and packaging have to be very sophisticated, made from particular materials, which highlight the distinctive character of specialty foods and give important information, such as place of origin and ingredients (Kupiec and Revell, 1998). Situational factors, like the place or the occasion, where the special food products are consumed, play an important role. That happens, because the image reflecting by these products is enhanced when they are consumed on special events or anniversaries and when they are served in gourmet restaurants cooked by professional chefs (Surlemont et al., 2005). Murphy and Enis (1986) suggested a framework that can help managers by giving them general instructions on their decision making. According to their plan, managers need to focus on buyers’ perceptions, marketers’ objectives and specific strategies for marketing mix. From consumer’s aspect, specialty foods are goods of high effort and risk, and so the buying process is for them complicated. Marketer’s main objective is to identify the appropriate consumer’s segment or market “niche”, where specialty

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food products could be successfully addressed. Then the basic task of managers is to develop the loyalty of that “niche”. The key concept in designing specialty food products marketing mix is the adjudgement of products to consumer expectations and needs. Price plays an important role. Since buyers pay premium prices for specialty products, they expect high quality level of them. Distribution and promotion policy need special attention. For specialty food products it is proposed a selective distribution only in specialty outlets and in some exceptional cases it is required an exclusive distribution by the producer (Stahle and Ward, 1996). Because of the unique nature and the range of particularities of specialty foods, consumers have to be approached either through individual advices offered by experienced personnel in speciality shops or through personal selling product display in the customer place (Kupiec and Revell, 1998). By these methods the product’s uniqueness and its exclusive image are intensified and the aim of fulfilling the particular needs of individuals is succeeded. Materials and methods In order to achieve a comprehensive study of the truffles market in Greece, a combination of qualitative and quantitative methods was employed. This approach allowed triangulation of the collect data, ensured the validity and reliability of the results, and provided the opportunity to explore various aspects of the subject studied (Tamagnini and Tregear, 1998; Scott, 2006). Triangulation is a very popular technique of research in the social sciences. According to Cohen et al. (2005), this method was used first by navigators and explorers in their attempt to locate geographical spots. It refers to the use of multiple measures to capture a construct (Campbell and Fiske, 1959). It offers a more detailed description or explanation of complex subjects by studying them from more than one standpoint (Cohen et al., 2005) and it achieves to bring into clearer focus the construct of interest (Crano, 1981). Methodological triangulation helps avoid the danger of generating biased data by using one single method (Denzin, 1989). In contrast to one single method, the multiple methodological approach provides researchers with many aspects of the subject under consideration ( Jacoby, 1978). The difficulty in achieving a good measurement reveals the importance of triangulation. Researcher’s choice, which method to use, effects on the validity of the study’s results. Advances in research force researchers to triangulate across many factors (data, investigators, theories, methodologies) in the research setting (Cook, 1985). They need to apply multiple methods to reach clarity about the concept under consideration. Pure measures and simple analysis strategies belong to the past (Iosifidis, 2003). Current trends in science suggest indicating the multiple causation and interactive patterns of studied phenomena ( Joreskog and Sorbom, 1984; Rosenthal, 1991). Qualitative research Qualitative research methods are commonly used when the subject in question is being explored for the first time and, thus, new insights and awareness are being sought (Krueger and Casey, 2000). The issues, not being defined in advance, can emerge during the course of the research. The main objective of qualitative research is to develop new knowledge rather than to collect fact and numbers (Cohen et al., 2005). Such methods may be used in combination with quantitative research methods in an attempt to capture the full complexity of a research subject. In addition, in this study, the qualitative research was used to identify issues for consideration in drafting the questionnaire of the quantitative research that followed.

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The scope of qualitative research was investigated through two surveys, one of all participants at professional level in truffle market such as producers, chefs, restaurateurs, distributors, retailers and the other of specialty food consumers. Several qualitative methods are referred in literature. In this study, in depth interviews were applied to investigate professionals and as well as focus groups to investigate consumers. In-depth interviews In-depth interviews are personal interviews conducting with people who are considered experts on a specified subject in order for new ideas to be expressed (Iosifidis, 2003). This method provides the opportunity for investigating and evaluating participants’ beliefs, preferences and attitudes. In addition, participants were enabled to define a phenomenon in a particular way and to state their opinion clearly. In this study, interviews were not focused on a specific theme; rather, topics and issues were discussed in a relatively unstructured sequence during the conversation. The interviews were held with individuals involved with truffles at a professional level. The sampling frame was drawn from lists obtained from the Commerce, Industry and Professional Chamber of Thessaloniki. Having identified the first participants, the snowball sampling was used in an attempt to broaden the relevant sample (Stathakopoulos, 2001). In depth interviews were conducted over four months (from 20.05.2009 to 15.09.2009). A total of 14 interviews were conducted. Each interview followed a semi-structured questionnaire making it possible to explore new and complex ideas, whilst facilitating the comparability of some responses between participants (Tull and Hawkins, 1993). All interviews were recorded, and the responses were sorted into thematic categories through the use of content analysis (Dimitropoulos, 1994). The semi-structured guide-questionnaire was divided into five thematic parts. The first part attempted to identify the level of awareness of truffles by professionals. They were asked how long they knew truffles, when and where they first tasted them and how they felt about their taste and smell. In the second part, type of products purchased (fresh or processed, different species) and seasonal fluctuations on purchases were discussed. The interviews allowed identifying the most popular types and species of truffles in Greece. In the third part, the determinants of consumer purchasing behaviour were investigated. Professionals were asked to point out the most important factors, which influenced purchase decision process and the most important reasons by which consumers were motivated to consume specialty food products in general and especially truffles. In the fourth part, professionals stated their opinions about customers’ attitudes towards specialty products in general and truffles particularly; food preferences, shopping habits, frequency of purchases, type of outlets. Moreover, they were asked to propose ways to highlight truffles specialty and unique nature and to intensify consumer’s awareness of truffles in order to increase the frequency of their consumption. Lastly, professionals stated their opinion about the truffles’ future in Greece. They referred to the further development of this sector and to the prospect profits from dealing with truffles production and commerce. Findings, of in depth interviews were compared and related with findings of focus groups interviews. Focus groups In focus groups, a number of people discuss a theme, interacting each other and under the guidance of an interviewer (Stathakopoulos, 2001). This research method is chosen

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when there is an attempt to go deeper into the motivations of participants and to reveal unexpressed sentiments and latent incentives about a phenomenon. Usually, it is used in educational research as an explanatory device to help identify variables and relationships (Cohen et al., 2005). This method’s main advantage is the production of a great number of different statements about the same topic through the interpersonal interaction. There was a loosely structured schedule by which issues were addressed during the conversation; this approach was used to organize the data and to increase the comparability of responses (Folch-Lyon and Tros, 1981). Five focus groups were with a combined total of 25 participants. Participants were people who had recently had a truffles experience (i.e. they had either tasted truffles in a restaurant or had purchased a truffle product from a specialty shop). At the end of each focus group, participants were asked to complete a short questionnaire containing demographic and psychographic data, as suggested by Folch-Lyon and Tros (1981) and Petrakis (1999). All conversations from focus groups were digitally recorded (as were in depth interviews), and they were analysed through the method of content analysis (Dimitropoulos, 1994). Focus groups were conducted over the same period with in depth interviews. The main issues discussed during focus groups were classified into three thematic categories: equity product, marketing mix, attitude and consumer’s behaviour. First, truffles perceived equity by consumers was investigated. Consumers’ preferences about taste, smell and other sensory characteristics, and their aspects about truffles role in Greek cuisine were discussed. The second thematic part referred mainly to extrinsic characteristics of truffles and to information giving the general instructions in the marketing mix design. Thus, subjects were asked to pose their opinions about price, packaging, different types of products, different ways of use and cooking combinations. Also, they were asked how frequently they buy special products in general and from where (e.g. supermarkets, specialty outlets), and if they are willing to pay premium prices for high quality food products. Finally, they were asked to mention how they were informed about the new food trends (e.g. TV shows, magazines, by word of mouth). Last section was dedicated to description of consumers’ attitude and buying behaviour, towards specialty food category. Respondents stated their aspects about gourmet products, mushrooms, French and Italian cuisine. The reasons behind the emerging trend were defined in tasting new food and the factors changing the consumer’s food patterns were determined. Quantitative research Quantitative methods are particularly appropriate in social research when investigators attempt to identify typical patterns of human behaviour and to reveal factors influencing them (Charisis and Kiochos, 1997). Usually, methods involve largescale surveys of representative samples of population (Matis, 1994). They allow the accumulation of a much larger volume of data and number variables, extending over a much wider area of knowledge than would be possible with other methods (Cohen et al., 2005). The quantitative method selected for the purposes of this study was the consumer survey, which was operationalized through a questionnaire. The questionnaire is a widely used and useful instrument for collecting data in a systematic way, providing structured and numerical results. In comparison with qualitative methods, the great advantage of a questionnaire survey is that it provides comparability of the data and facilitates their organization and analysis.

SWOT analysis of the truffles market in Greece 1981

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Consumer survey The consumer survey was conducted in the city of Thessaloniki on a sample of 303 consumers (men and women aged 18 to 75 years). Thessaloniki was chosen, as the concentration of specialty food retailers and distributors indicated it as a proper potential market for new food products (Tamagnini and Tregear, 1998). The sample collection method was the mall interception technique, which is one of the most popular methods among market researchers (Bush and Hair, 1985). Usually, this method is recommended in early stages of product entrance in a market, to help develop new concepts for additional testing or to screen out obvious product failures (Kuznesof et al., 1997). Its advantage is mainly the convenience of using a central location, visited by large amounts of customers of the target population (Nowell and Stanley, 1991). In this study, the sample collection locations were specialty shops, restaurants and the National Institute of Agricultural Research (NAGREF), where training seminars were organized for professionals who want to cultivate or trade truffles products. Additionally, other reasons, which force many researchers to prefer this method, are low costs in gathering data in comparison with other methods (e.g. door-to-door interviewing) (Bush and Hair, 1985), the absence of a sampling frame and the provision of several representative samples of the population under consideration (Tull and Hawkins, 1993; Churchill, 1995). Dupont (1987) had proved through a study that the use of mall interception technique as a method of data collection in commercial marketing and advertising research, does not affect either the demographic profile of the resulting sample or the substantive results of the survey. For unbiased estimates, in this study, shopping centres have been selected by multistage area probability sampling method (Sudman, 1986) and interception for interviewing took place in entrance of shopping malls or restaurants (Nowell and Stanley, 1991). The research was undertaken throughout the year 2010. Questionnaire The data were collected via an interviewer-administered questionnaire of five thematic sections, through which it was aimed to examine the factors influencing the truffles market in Greece. These sections were: truffles equity, consumer involvement profile, attitude and consumer behaviour, marketing mix and demographic data. The questionnaire consisted of 111 questions coded in two ways: first, a five-point Likerttype scale ( Jamieson, 2004) (1-5 signifying strongly disagree, disagree, neither agree nor disagree, agree, and strongly agree, respectively) and second, a five-point Likerttype scale (1-5 signifying not important, somewhat Important, important, very important and most important, respectively) (Siardos, 1999). Each section consisted of subsections, where the dimensions of concepts under consideration were investigated. The conceptualization of the first section, where truffles equity was examined, was based on the theoretical model of brand equity. According to Aaker (1996), the most important dimensions in measuring the brand equity of a product were brand awareness (or knowledge), brand associations (or connections), brand perceived quality and brand loyalty (or commitment). Additionally, through the study of previous research on specialty products, three more dimensions were recognized and included in the questionnaire: social acceptance (or conspicuous consumption) (O’Cass and Frost, 2002), the environmental value (or benefit) (Orth et al., 2005) and the social (or human) value (or benefit) (Tsai, 2005; Anselmsson et al., 2007). A number of items derived from the studies of Lau and Lee (1999) and Yoo and Donthu (2001) along with the findings from the qualitative research were used.

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The second section, which was dedicated to consumers’ involvement profile definition, was constituted of six dimensions. Consumer’s involvement profile provides stakeholders with valuable information about their buying intentions and gives notions about weaknesses in a strategy which needs to be improved (Mittal and Lee, 1989; McWilliam, 1997). Consumer’s involvement in a product could affect considerably their reactions in marketing and advertising activities. According to Kapferer and Laurent (1985), consumer’s involvement profile was determined by five criteria: personal interest, hedonic value, symbolic value, risk importance and risk probability. Drichoutis et al. (2007) found that in the case of food products more factors need to be assessed, in order to estimate consumer’s profile involvement, such as country of origin, nutrition value, price, taste and ways of cooking. So, one more dimension, named product characteristics, included in the questionnaire. Consumers’ attitude and behaviour were examined in the third section of questionnaire. Past experience had proved that the study of consumers’ lifestyle could shed more light on latent stimulus and motivations of an expressed behaviour (Miller and Ginter, 1979). Probably, it could also explain the causal associations which result in particular attitudes and the most important could forecast consumers buying intentions (Padberg and Westgren, 1979). Given the lack of existent, research about buying behaviour and attitudes towards truffles, in configuration of this section dimensions, findings of other studies on consumer behaviour and attitudes towards luxury, gourmet and specialty products were applied. So, this section separated in six parts, examining the basic dimensions of attitude and behaviour, which were self-directed pleasure (Sweeney and Soutar, 2001), self-gift giving (Tsai, 2005), quality assurance (Tsai, 2005), spontaneity (Bauer et al., 2006), variety seeking behaviour and innovative behaviour in the food purchase and preparation (McCarthy et al., 1999; Broderick, 2007). In the fourth section, four elements of marketing mix in the case of truffles were investigated. According to Kotler (2000) managers need to plan a set of actions in order to succeed in a market sector. In particular, they need to design a marketing mix plan, where these actions are determined. The aim of a marketing mix plan is first to find and then apply the best practices for succeeding in four strategic axes: product design, price definition, promotion and place policy (McDaniel and Gates, 1995). A number of items, originated from previous studies (Dodds et al., 1991; Mitchell, 1998; Laroche et al., 2001; Moon et al., 2008), included in the questionnaire in order to reveal the particularities of truffles, which managers need to take into account for designing a marketing mix plan. In the last section, questions about consumers’ demographical characteristics were comprised, which, on previous studies, have been found to influence consumers of specialty food in general (Ling et al., 2004). In many surveys, demographic characteristics were used as a basic segmentation criterion of markets (Montgomery, 1971; Lockshin et al., 1997). These characteristics are considered to be helpful in the definition of the typical consumer of a product category (McDonald, 1993). Additionally, some demographical variables have been found to correlate with behavioural and social variables in causal models intending to explain purchasing decision process (O’Cass and Lim, 2001; Verhoef et al., 2002). The variables included in this section were age, gender, marital status, educational level and family annual income. Data analysis Questionnaire items were subjected to a Principal Component Analysis in order to evaluate the validity of the scale measurement (Kim and Mueller, 1978; Johnson and

SWOT analysis of the truffles market in Greece 1983

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Wichern, 1992; Norusis, 1992). Ratings of items were factor analysed using the method of maximum likelihood with varimax rotation (Siardos, 1999). The criterion of eigenvalue was used in order to determine significant factors (Hair et al., 1995; Sharma, 1996). To check internal consistency the correspondent discrimination indexes were calculated, which were the corrected linear correlations (Pearson) of items with ratings of the consumers’ answers (Siomkos and Vasilikopoulou, 2005). The internal reliability of the whole scale was tested by Cronbach’s a (Kim and Mueller, 1978; Spector, 1992; Norusis, 1992; Hair et al., 1998) and each factor was tested by the reliability coefficient CCR (composite construct reliability – reliability advanced conceptual structure) (Bagozzi, 1980). Statistical indexes were estimated via statistical package SPSS v. 15.0 with the installed subsystem exact tests (Bryman and Cramer, 1997). Results were considered significant at po0.05. SWOT analysis SWOT analysis is one of the most commonly used theoretical tools in the science of marketing (Kotler, 1997). By this method, a systematic analysis of strengths, weaknesses, opportunities and threats in the environment of a new or prospective product is conducted (Reynolds-Zayak, 2004), highlighting the main factors influencing emerging and potential markets and indicating a viable framework for marketing activities. According to Kotler (2000), when this method is applied for a firm, the strengths and weaknesses, which usually characterize its “internal” environment, are examined in regard with issues like: resources, production methods, marketing decisions, skills and management. The opportunities and risks describe the “external” environment, which is distinguished in terms of macro- and micro-environment (Beverland, 2005). Kotler (2000) reports that the macro-environment of a firm formed by demographic, economic, political, legal, technological, social and cultural factors and the micro-environment consists of customers, competitors and distributors. In the present study, this categorization was not followed strictly; the method was adapted to the specific case of the truffles market in Greece. In this case, the strengths and the weaknesses are issues determined by people involved with the business activity of producing and selling truffles. In contrast, the opportunities and the risks are issues determined by institutional forces; thus, marketing strategies should adapt to them. The continuously changing attitudes and social patterns stress the importance of managers identifying and taking advantage of the strengths and opportunities, while simultaneously avoiding risks and improving weaknesses. Results Qualitative research Stakeholders-state of the truffle sector in Greece. Producers have reported that truffles in Greece are collected mainly in natural forests and less in plantations, because the majority of the last are newly established. Organized truffle associations do not exist, and for that reason truffle collectors usually operate alone. There are no official records about the real amount of truffles being collected or produced in Greece each year for two main reasons: first because of the small amount of the collected truffles and second because of the unofficially way of trading. Additionally, the lack of a national frame law, which would allow the control of the collection, the cultivation and the commercialization of truffles, has as a result to allow collectors to operate in public and private areas too, without having a license and without respecting the private properties.

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Truffle collectors carry on this activity for reasons of pleasure, interest of the environment, new gastronomy experimentations and earning additional income. They use trained dogs for the detection of the spot where truffles are laid, and they have special instruments for taking them out from the soil carefully, without injuring the vulnerable routing system of the hosting trees. Professionals interviewed have reported that there has been a demonstrated interest in trading and consuming special food products in general. This trend would be perceived to be highly attractive under the light of economical crisis, which several industrial sectors experience in many countries, because it offers opportunities for promising business activities. However, consumers’ and professionals’ level of knowledge and experience in truffles is low. Many of them have just learned about them and some of them have not even tasted them. Therefore promotional strategies need to be designed in order to increase products awareness and to stimulate truffles purchases. The price of truffles is increasing every year. The prices also vary between the species, the season, the year of production and the place of origin. Very high quality white truffles could be sold for h3.000/kg. Consumers, who had not tasted truffles not even once, hesitate to buy them because of their high price. Therefore, first it is needed for consumers to learn about truffles, and if they feel satisfied from their taste, then they are willing to pay their premium price. Also, retailers consider as very important to inform consumers about the possible ways of cooking truffles, in order to buy and prepare them home alone. All participants interviewed in the course of this study such as stakeholders (producers, retailers, distributors, chefs, restaurateurs) and consumers have indicated that truffles is a promising business activity, as the expressed interest by all potential industry and commercial consumers is continually growing. Discussions with professionals indicated that there would be no problems in selling any amount produced, as long as, the truffles are in good quality. If that is achieved, then it is needed to target specific consumers’ groups, where truffles are promoted and to use a minimum of advertising in order to increase the level of awareness. The adoption of a limited distribution policy will also contribute intensifying uniqueness to the product. Consumers. The changes in food consumption patterns are mentioned as the main reason of rapid growth of specialty food sector in Greece. Professionals described truffles consumers as people who express an interest in tasting specialty food in general. They show a preference on gourmet foods and mushrooms in general and they are keen on French and Italian cuisine. An endless request for new experiences and adventures is a basic characteristic of modern consumer attitude. It seems that the contemporary consumer has developed sensory skills and for that reason he can appreciate the individual and unique characteristics of specialty products in comparison with industrial manufactured products resulted in creating of new marketing opportunities. They are usually informed about new trends in food from magazines. Also, some of them travel a lot abroad and for that reason they are influenced from ethnic cuisines. They are motivated in purchasing and consuming truffles by their specific sensory characteristics (taste, smell, texture) and they can perceive slight differences among various truffles species. They focus on their unique characteristics and distinctive character and therefore factors, such as price, packaging or nutritional value are of less importance, for them who are characterized by a variety seeking behaviour. Products. Stakeholders’ survey has provided information about the truffles characteristics mostly preferred by customers. The most purchased products were

SWOT analysis of the truffles market in Greece 1985

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1986

Tuber aestivum and Tuber magnatum in processed form. Fresh truffles were scarcely purchased, because of their limited availability and their high price. Among processed products truffle oils were most popular and presented a strength growth in sales. They are primarily used in salads and cooking at home, and they are also used by the catering, restaurants and food industry. Creams, butters and honey flavoured with truffles were reported to be very popular both for domestic and commercial use. Greek truffles have to compete with species originating from countries with a long tradition of truffle culture. Italy and France are the major producers of truffles, who supply the international market with large amounts of truffles every year. Moreover in some areas of these countries, precious species are growing, which can not be found anywhere else (e.g. white truffles from Alba in Piedmont). In addition to that, competition is arriving from the neighboring countries like Serbia and Albania where a lot of species are found (mainly Tuber aestivum). China truffles appeared in the market in the last years, too. They have lower prices and they are preferred by customers, a lot. Quantitative research Truffles equity. Results showed that the consumers’ perception about truffles quality was positive. Although, their product awareness was low, they considered truffles as a high quality food with a high economic value. The most referred associations of truffles by them were their particular way of gathering from nature, haute cuisine, gourmet meals, luxurious restaurants and the celebration of special occasions. Also, some of them were aware of the mysterious way in which truffles grow in forests. Although, the frequency of truffles purchases was occasional, consumers expressed a high level of loyalty to truffles as a gourmet product, without being always their first choice. They were not motivated in their purchases by truffles luxurious image, in order to impress their social environment, but they were interested in merits derived from their cultivation and commerce for society and environment. The opportunities for new business activities and source of income for local people through environmental friendly cultivation methods exerted great influence on their buying decision. Consumers’ involvement profile. Consumers attach a high symbolic value on truffles. They are renowned as a symbol of luxury and conspicuous consumption. These associations can be used by marketers to evoke consumers’ interest towards truffles. Most buyers expressed a median level of personal interest in truffles, probably because truffles are a new ingredient in Greek cuisine and they are not familiar with them. A lot of them have not tasted them. A significant proportion of buyers felt disappointment from truffles’ taste and aroma, resulting in a median level of hedonic value. This may have happened because chefs or housewives are not familiar with the cooking methods which better reveal the taste and aroma of truffles. Truffles are related with a high perceived purchase risk importance. This probably happens because of their premium prices and their high value of money ratio. Therefore consumers’ expectations about quality standards are high. It is therefore inferred that a lower quality product than expected, could cause a great disappointment. Some of truffles’ characteristics seem to exert a great effect on consumers’ choice, such as the country of origin, the price, the taste and the cooking methods. Countries of origin exert a great influence, as buyers prefer truffles originated from countries with a long tradition on truffles sector. Price operates positively as a link with high quality and stimulates consumers’ curiosity. Good taste drives consumers’ choices. They prefer products with good taste from past experience. The easy ways of cooking in both

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domestic and commercial occasions encourage consumers to buy them. Least of all, nutrition value is important to consumer’s decision. Attitude and consumer behaviour. The investigation of consumer’s attitude and behaviour showed that customers buy truffles mainly for reasons of personal self-gift giving and pleasure and not for fulfilling needs about social acceptance and conspicuous consumption. Luxurious character of truffles does not exert great influence on their buying behaviour. Consumers’ buying intention is motivated from truffles specialty and unique nature. They express a variety of seeking and innovative behaviour in the food purchase and preparation. However, they mention that they need guidance on how to cook them, because the majority of consumers in Greece have neither tasted them nor cooked them home alone. They like to experience new tastes especially when they originate from international cuisines. They avoid buying truffles for personal use because they do not know how to handle them. On the contrary they prefer to taste them in a restaurant, where truffles will be personally prepared by an experienced chef. They seek quality in their nutrition and they need to feel sure about their choices. Therefore they avoid spontaneous purchases. Marketing mix. In abroad, and mainly in countries with large amounts of truffle production, open-air markets and fairs, where truffles are sold, take place every year. At these markets farmers personally sell their products directly to the customer. There both retailers and consumers could see truffles and judge their quality and then decide if they will buy them. In Greece the small amounts of truffles are sold directly to local mushrooms traders. Consumers can obtain truffles from specialty outlets and specialty food departments of supermarkets. This exclusive distribution reinforces their authenticity and uniqueness. Because of the limited shelf life of truffles, a great proportion of the production is processed to preserved products. Fresh truffles’ prices vary a lot and are influenced by several factors: species, flavour, lack of damage, season, availability and country of origin. Prices of preserved truffles are relatively lower than of those of fresh truffles, and therefore they are accessible to larger group of consumers. Retailers have reported that despite their high prices, if Greek truffles achieve a high standard quality, then any price should seem reasonable. Conventional methods are not recommended for truffles’ promotion strategy. Because of the great range of their particularities, personal sales and event marketing there are more appropriate methods. Activities, such as conferences, trade displays, cooking truffles nights in luxury restaurants offer a great chance for advertising truffles to large crowds of targeted consumers gathered in the same place, sharing a common interest, e.g. specialty food. Demographic characteristics. Socioeconomic and demographic characteristics of truffles customers derived from the quantitative survey were in accordance with that reported by professionals in their attempt to describe their clientele. A typical truffles consumer’s age average is 38 years old, had a household with children, was the main shopper of the family, and its annual income was higher than that of the middle class and was rather well educated. There was no gender stereotype. SWOT analysis The results obtained from the qualitative and quantitative research were analysed using SWOT analysis and are presented in order of the four thematic categories: strengths, weaknesses, opportunities and risks.

SWOT analysis of the truffles market in Greece 1987

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1988

Strengths. The main finding of the research was that the special attributes of truffles resulted in the creation of their unique and authentic nature. Thus, these attributes operate as the strength points guiding marketing managers’ attempt to promote truffles in the Greek market. Many products succeed in the marketplace primarily because of their specific attributes. The special flavour and the strong aroma are truffles’ most renowned attributes, associated with a high quality, which differentiate them from other edible mushrooms. These characteristics help them stand out in the category of gourmet products, emphasizing their high-end social image. As a result, people’s interest is stimulated, resulting in premium prices of the product being considered fair. Premium pricing is the key concept for the endorsement of truffles by consumers as specialized and luxurious food products. Additionally, their luxurious nature is reinforced by the fact that truffles are mainly consumed in luxurious restaurants or at special events, enhancing perceptions of their authenticity. Moreover, the results showed that Greek consumers express a strong preference for indigenous raw materials for their nutrition. They believe that products farmed and produced in their region are of superior quality for two reasons. First, they are preferred because of the unique climatic and geomorphologic environmental conditions, which resulted in the flourishing of agricultural commodities with a local flavour. Second, they are preferred because local natural resources such as water, soil and indigenous crops are not polluted due to the limited industrialization of the country. These beliefs are of great importance for the growth of the truffles market in Greece, where indigenously produced truffles are in competition with imported truffles. The importance of the concept about foods produced in domestic areas is crucial in overcoming the international competition, offering a unique strength be used in the marketing strategy. Weaknesses. In contrast to conventional agricultural products, specialty products like truffles often need a particular treatment. Results of the present study showed that truffles production and marketing in Greece present a unique set of challenges for new producers. First, truffles require specialized methods of production because of their distinct features. Farmers who choose to cultivate truffles have to deal with more complex production systems than those required for traditional agricultural commodities in order to grow, harvest and profitably market those goods without having previous experience. Additionally, the high installation cost presents a significant entry barrier. Moreover, with products in this category, there is inconsistency in the quality and volume of production due to the dependence of the cultivation on climatic variables. Second, there is a lack of detailed market information for issues of intermediary and customer knowledge. Producers and retailers already active in this market sector are reluctant to share their sources of information and knowledge for these issues, because these are so valuable. Instead, their attitude reinforces the fears and uncertainty, making it more difficult for newcomers to enter this new product enterprise. Third, the truffles market, like other markets for specialty products, has a relatively small amount of customers. Specialty product markets differ from others in that they require a personalized approach to customers and not mass sales techniques. Managers have to carefully explore and target this small-scale market in order to gain acceptance and to choose the appropriate communication methods for stimulating customer interest. Further, customers purchasing truffles are mainly attracted by their quality. For that reason, success in this market relies upon the concept of the “value-added” chain, where producers seek to increase benefits of the product to the customers and to build a strong reputation for their business.

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Finally, the high price of truffles and their processed products is a basic weakness that prevents truffles’ widespread adoption by consumers. High quality is the main feature of truffles, as reflected in their premium price. However, consumers do not always want to pay a premium price for attributes or benefits that are not considered necessary. Thus, they do not consider it necessary to buy innovative and different food, especially when it is prohibitively expensive. However, this is strength of Greekproduced truffles. Due to their lower price than imported truffles, more consumers will have the opportunity to try them, increasing their awareness. Simultaneously, promotion programs need to be applied in order their specific attributes be recognized and valued by consumers. Opportunities. The analysis of the truffles market environment showed the existence of a small segment of potential consumers, who would be interest in them. However, this feature is not necessarily a disadvantage, as one would think at first. In contrast, their unique and specialized nature presents a competitive advantage for high profits compared to mass markets products. Truffles, like all specialized and luxury food products, fulfill a specific need for authentic taste, and for that reason are not suitable for mass consumption. Thus, a small market segment could be proven adequately profitable. Moreover, the limited consumption and distribution of truffles is required for protecting their specialized character. Based on the statements of professionals, the demand for specialized and continental food is growing. This is happening due to the changes in lifestyle and eating habits among Greeks. The amelioration of living, economic and educational standards has had a major impact on demand for more sophisticated tastes, while the rise of holidays and travelling abroad by younger people have led to the growth in demand for ethnic foods. Thus, these current trends combined with social and cultural changes encourage the rapid promotion of truffles in the Greek market. The various processing possibilities of truffles constitute another great opportunity of this market. Truffles, like most agricultural commodities, because of their delicate nature, have to be consumed within a few days; otherwise, they will be unsuitable for consumption. The possibility of truffles to be processed enables the better utilization of excess production and production of lower quality. Processed truffles products are of high quality and have lower prices than the fresh product, making them affordable to more consumers. Risks. Substitute products could be a serious risk for new markets. As in all cases of unique, rare and luxury products, there are close substitutes, which can have an effect on market prices by providing another option to consumers. In the case of truffles, there are some species of similar features and very close in general appearance; however, they do not have the same marketable properties as the original. This happens because truffles species are very difficult to be identified by sight (only microscopic examination can provide reliable results); thus, consumers could be misled into buying substandard substitute products. Most recorded cases of misleading sales practices have been made with the north African origin specie “terfezie”, which is often sold as the original valuable white truffle (T. magnatum) and with Asian black truffles, which are mixed with authentic melanospori truffles (T. melanosporum). In order to avoid the potential threat of loss in market profits by substitutes, information regarding these substitutes is required; this will help develop the proper strategies. The strong competition from imported products could be another obstacle for the widespread marketing of Greek-produced products. This implies that local producers have to apply the production practices based on experience knowledge and technical

SWOT analysis of the truffles market in Greece 1989

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1990

know-how previously gained in cultivation of truffles to ensure that domestic commodities will be of high quality in terms of flavour, aroma and other organoleptic characteristics. If the eating experience does not meet with expectations, consumers will likely not buy this product again. Consistency in quality is of great importance for consumers who want to have the same eating experience each time. Otherwise, it would be very difficult for local producers to compete with the high quality imported truffles with established reputations. As stated before, like many specialty forest products, truffles lack established marketing institutions and legislative frameworks to regulate the activities of cultivation, harvesting, protecting and marketing. This causes even more confusion among young professionals and increases the level of risk involved in this marketplace. Moreover, the absence of official rules in Greece has resulted in the widespread phenomenon of collecting truffles to sell from foreign property without the landowner’s permission, often causing damage. Only if a legislative framework is established will truffles cultivation and marketing became a profitable opportunity and more attractive to newcomers. The above results of the SWOT analysis are summarized in Figure 1. Conclusions – implications Various products with highly economic value are produced inside forests and about them little is widely known. Markets of these products provide an option for success for small producers and are proved to be highly profitable. However, many of them need special treatment; thus, they are characterized by high levels of risk. Often, a wrong management decision could lead to serious economic consequences. This implies a strongly required commitment by new professionals who want to deal with either the production or trading of truffles.

Particular cultural treatment Lack of consistency in the quality and volume of production Lack of market information Small in size High price Need for a “value-added” strategy

Special attributes Unique and authentic nature High quality High-end social image Locally produced from unpolluted soils

Truffles market environment Strengths Opportunities

Figure 1. SWOT analysis: the factors that shape truffles market in Greece

High economic value Great international demand Possibility of being processed Better utilization of excess production Production of lower quality product

Weaknesses Risks

Substitute products International competition Lack of established marketing institutions

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This study has attempted to investigate the suitability of truffles for the Greek market and to highlight the areas of interest on which managers should focus for a successful business process. The specific goal was to identify critical market characteristics influencing the possible development of this sector in Greece and to give through SWOT analysis notions about strategic guidelines which should be followed by major stakeholders. Strengths and opportunities were highlighted, from which farmers, managers and other stakeholders could benefit. Also, weaknesses and risks were identified, which should be overcome. As such, the study is intended to be a contribution to strategic management and marketing of specialty foods. Results show that there is an emerging market, which is small in size, with special characteristics; this promises high profits, given the latent consumer demand. Due to the specific features of truffles, particular treatment is needed not only in the stages of production and cultivation handling, but also in all stages of the distribution chain, like marketing, promotion and sales. The main aim of a market plan should be to convert these particularities into a competitive advantage against other special foods for consumers. The results suggest that farmers should try to produce products of high quality in order to successfully compete with the imported products of established reputation. This result is consistent with findings of Stahle and Ward (1996) study, about truffles industry installation in New Zealand. But, in the case of Greek market, the lack of knowledge about methods of production and the limited information about the truffles chain complicates this. The same constraint was mentioned by Gold et al. (2004), who referred to the “black box” on which all valuable information were hidden. This fact, in combination with high cost of cultivation installation, presents considerable entry barriers to would be truffles farmers (Vollmers and Vollmers, 1999). However, success in this market segment is heavily dependent upon the ability of entrepreneurs identify the forces, tools and methods which influence this market and to integrate the scientific expertise and market knowledge linked with this new business activity in their practices. The success of truffles product in the marketplace is primarily based on their unique attributes. Consumers who are not aware of the specific attributes of truffles would not appreciate them. The role of communication is essential for increasing levels of recognition and appreciation of the product among consumers. Therefore, a communication program is essential in promoting truffles. Traditional methods of promotion are not suitable for specialty food products (Beverland, 2004). Event marketing is proposed by Nicholls et al. (1999) as an effective way of promotion through which is succeed the exposure of a product to the desired target group gathered at the same place for the same reason. Trade displays, special occasions, cooking evenings are some activities during of which truffles could be effectively promoted. However, others suggest (Murphy and Enis, 1986) that specialty products category could rely only on their reputation to be promoted to consumers. Publicity gained by other consumers in combination with advertising could on one hand reinforce the image of specialty foods and on the other hand help reduce the high levels of buying risk strongly associated to specialty products (Winfree and McCluskey, 2005). Additionally, truffles specialty imagery could be intensified through their exclusive distribution on specialty food outlets and luxuries restaurants (Kuznesof et al., 1997). In an attempt of profiling possible truffles consumers, it was found that consumers expressing innovative food behaviour are the most likely to be consumers of truffles. Specialty food customers would be more innovative and involved within the food

SWOT analysis of the truffles market in Greece 1991

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1992

domain (McCarthy et al., 2001). They often seek after refined culinary experiences; they are more interested in the good taste and the authenticity of the product, than the price (Catry, 2003; Reynolds-Zayak, 2004). Managers should stress their promotion activities on that segment of consumers, which seems to be the most profitable. Truffles face constraints to growth in the current domestic market. The Greek market is not yet ready to absorb large volumes of product because of its lack of recognition by consumers. However, the international demand is great and it is expected to continue increasing (Mello et al., 2006). Thus, farmers should look to foreign markets to ensure sale of their products. If Greek truffles are of high quality standards, then they will compete successfully with products originated from countries with long tradition in truffles industry. Anything less than a high quality product could lead truffles’ economy to disaster. The high price of truffles is the basic constraint in their widespread development in marketplace. However, Bettman (1973) found that product quality seemed to be associated with increased price paid. Therefore, premium pricing is the key concept concerning the perception of truffles by consumers as specialized food products. Greekproduced truffles are expected to have lower prices than imported truffles, because they are cultivated locally. This fact, in combination with the preference expressed by local people for indigenous products (Lampert and Jaffe, 1998), will result in increased preference of Greek produced truffles by consumers. Moreover, the various possibilities for processing truffles provide another option for better utilization of excess production and production of lower quality. Also, this option offers producers the advantage of providing truffles in a relatively lower price, in a stable standard quality and with continuous availability. Thus, the disadvantage of premium priced is moderated and the potential risk involved in this business activity is reduced (Kupiec and Revell, 1998). Lastly, a legislative framework, which would regulate certain issues – such as season and places of cultivation, methods of harvesting, rules of conserving and protecting of the natural resources and rules of marketing – is required. The existence of institutions will encourage new producers to enter into this profitable business activity, reducing the level of risk involved in this relatively unknown market (Petennella et al., 2004). Additionally, a legislative framework could help to diminish the potential threat of lower-quality substitutes entering the market. Social implications Truffles are commercially valuable products, which gives rise to a specialised market, characterized by high marginal profits and international demand. None can doubt that their cultivation and trading offer an option for supplement income production; furthermore, this is possible without harming the natural environment or diminishing natural resources. As others suggest (Vermeir and Verbeke, 2006), business activities with positive effects on society attract peoples attention, who are sensitive on ethical and social issues, influencing their buying decisions. Additionally, some people rightly regard this business activity as contributing to a way out of the economic crisis experienced by the country at present. This is because of the suitability of the Greek territories to this type of production and because of the long agricultural tradition of the country, which indicate truffles business promising. Due to consumers increasing interest in specialty food truffles in general, the development of the truffle sector in Greece seems to be profitable in terms both of production and processing, giving rise to a new industry.

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Further research Results indicate a lot opportunities for future research. The database derived from the multimethodological survey is long enough for extended analyses. First of all, more analysis is needed to identify and assess the marketing opportunities for truffles in Greece. Although the findings of this study highlight the areas on which managers and professionals should concentrate, extended primary research must investigate potential consumer segments, with greater consumer samples from more places of country. Second, consumer attitudes and behaviour have to be determined, because they are of essential importance for specialty products to achieve significant market growth. Research must be also undertaken in forecasting consumer purchase intention, determining the variables influencing it. This would make it easier for managers to promote truffles and to increase their demand. It is also needed to identify ways of making consumers more involved within this product category. If people are more familiar with (and, thus, appreciative of) the product and its attributes, they are more likely to become consumers. Finally, this research showed that specialty markets, like that of truffles, can be effectively investigated by the use of SWOT analysis. However, empirical analysis of this method needs to be extended in the field of specialized food management strategy. This method allows a systematic analysis of internal and external environmental factors, which interact each other. It is hoped that this study will encourage other investigators to conduct more intensive use of SWOT analysis in their own attempts to study systematically the strategic relationships within forestry, agricultural and food industries. References Aaker, A.D. (1996), Building Strong Brands, Free Press, New York, NY. Anselmsson, J., Johansson, U. and Persson, N. (2007), “Understanding price premium for grocery products: a conceptual model of customer-based brand equity”, Journal of Product & Brand Management, Vol. 16 No. 6, pp. 401-414. Bagozzi, R. (1980), Causal Models in Marketing, Wiley, New York, NY. Bauer, H.H., Sauer, N.E. and Becker, C. (2006), “Investigating the relationship between product involvement and consumer decision-making styles”, Journal of Consumer Behaviour, Vol. 5 No. 4, pp. 342-354. Beckeman, M. and Skjo¨ldebrand, C. (2007), “Clusters/networks promote food innovations”, J Food Eng, Vol. 79, pp. 1418-1425. Bettman, R.J. (1973), “Perceived price and product perceptual variables”, Journal of Marketing Research, Vol. 10 No. 1, pp. 100-102. Beverland, M.B. (2004), “Uncovering theories-in-use: building luxury wine brands”, European Journal of Marketing, Vol. 38 Nos 3/4, pp. 446-466. Beverland, M.B. (2005), “Crafting brand authenticity: the case of luxury wines”, J Manage Stud, Vol. 42 No. 5, pp. 1003-1029. Broderick, A.J. (2007), “A cross-national study of the individual and national–cultural nomological network of consumer involvement”, Psychology & Marketing, Vol. 24 No. 4, pp. 343-374. Bryman, A. and Cramer, D. (1997), Quantitative Data Analysis with SPSS for Windows. A guide for social scientists, Routledge, London and New York, NY. Bush, A.J. and Hair, J.F. (1985), “An assessment of the mall intercept as a data collection method”, Journal of Marketing Research, Vol. 22 No. 2, pp. 158-167.

SWOT analysis of the truffles market in Greece 1993

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1994

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SWOT analysis of the truffles market in Greece 1995

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SWOT analysis of the truffles market in Greece 1997