by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Agrimarketing : October 2012
106 Agri Marketing October 2012 Dave: So here we are planning our 2012 Strategic Agri Marketing Seminar, our 27th consecutive SAM program here on the Purdue campus. Tom: Yep! We've both been working with agri-marketers for well over a quarter of a century. Time goes fast when you are having fun! Dave: It is hard to believe. And things are so much different now. Just the other day I looked back at our manuals from the first program we did together in the late '70s. What a difference! Tom: It is fun to think back about some of the changes that have occurred since we started our careers in agri-marketing. MARKET ENVIRONMENT Dave: Well, for one thing, the market environment is so much more complex than it was in the "good old days." Regulations, government policy, political shifts, liability concerns, market volatility, global competition ... are all so much more formidable. We used to think it was complicated, but in retrospect, when we first started in this business, it was pretty simple. Tom: Think how much bigger the stakes are today. Everything, at every level, is much bigger ... customers, dealers, distributors and manufacturers are multiples of what they were when we started. In most agribusinesses we have felt the impact of the 80-20 rule ... that 20% of the customers account for 80% of the business. That puts lots of eggs into one basket whether we like it or not! And, or course, this needs to be factored into marketing strategies. Dave: The competition has really ratcheted up too. Surviving firms are smarter, tougher and often have deeper pockets, resulting in fierce competition for fewer and fewer larger customers who know what they want and have the ability to negotiate to get it. Tom: And don't forget the tremendous volatility we face today. Daily commodity prices frequently are "limit up or limit down." Extreme weather conditions drastically alter purchasing behavior and can override the impact of market decisions (good or bad). Managing risk has become an important part of marketing strategy as suppliers offset risk with new technologies or sharing risk with their customers. SEGMENTATION, TARGETING Tom: One huge change that has occurred is the increased fragmentation of the market and the corresponding need to understand this and then use it in targeting. I remember when we first became acquainted you used to say, "If you know one farmer, you know them all." I think you have changed your tune on this. Don't you now say "If you know one farmer ... you know one farmer?" Dave: That's right. Thirty or forty years ago all farmers were about the same. In any area, they had similar sized farms, grew the same crops and had the same kind of disease and weed problems just to name a few similarities. So it didn't take a genius to come up with products and services for this kind of homogeneous market. Tom: Boy has this changed! I can't think of one market that cannot be segmented in some useful way. For many years agri-marketers have been doing obvious segmentation based on things like farm size, farm type, age and education. But you and I both know that this is changing too. Now a lot of marketers are starting to see that much more effective segmentation is related to benefits buyers want to achieve, price sensitivity and psycho-graphics. Thanks heavens there are research tools that can be used to measure these segments. Dave: Once these segments have been measured, marketers can now use this information to develop very precise marketing programs for groups they want to target. It is so much more effective! BUYER BEHAVIOR Dave: For me, changes in buying behavior, have been a major factor in shaping our marketing strategies. It is not only that farmers are generally a lot larger. It is that their whole approach to buying has undergone major changes. A growing portion of farm inputs are purchased by customers who are truly "business buyers"... acting much the way we would expect industrial buyers to function. When we began our SAM seminars, we used the Business-to- Consumer model to explain farmer buyer behavior. But in recent years we have shifted almost entirely to the Business-to-Business model. Tom: That is a major change, Dave. Of course relationships have always been ... and still are important in successfully selling to farmers, but the nature of that relationship has rapidly morphed HOW MARKETING HAS CHANGED by Dr. Dave Downey and Dr. Tom Funk (more on page 108) Dave: The market environment is so much more complex than it was. Tom: Think how much bigger the stakes are today.
November December 2012