Agriculture Reference
In-Depth Information
the large turf seed operation in the Willamette Valley of Oregon. Good marketers understand
that a high-income, dual-career couple with no children has different needs than a young,
middle-income family with two children. While agribusiness fi rms may pursue more than
one target market, their approach to any single-market segment involves a set of decisions
tailored to the unique needs of the segment.
The fi nal key idea in the defi nition of marketing is that of profi tability. After careful study
of a particular target market, the agribusiness marketer will likely generate a long list
of products and services that the customer might be interested in. Such a list for the
small Kentucky livestock farmer might include extended credit, a 1-800 phone number for
questions, a well-trained, professional salesperson that makes on-farm calls, a staff nutri-
tionist who is always available for consultation, a website with links to useful information
sources, and so on. A large corn and soybean commercial producer farming several thousand
acres in Iowa may be looking for an entirely different experience. They may only want
access to superior performance in products, or want those products combined with technical
and tactical professional support from their supplier. The challenge for the agribusiness mar-
keter is deciding which of these things the customer will actually pay for. Agribusiness
marketers must provide customers with a set of products and services at prices that generate
an acceptable rate of return for their fi rm.
The evolution of marketing
Traditionally, marketing was viewed as “selling what you have” and some agribusinesses
still approach marketing in this way. More effective agribusiness marketers, on the other
hand, focus on “having what you can sell”—anticipating customer needs. The starting point
for any marketing program must be the identifi cation of customer needs—and satisfying
customer needs is the primary focus for any market-driven organization. However, market-
ing has evolved in agribusiness fi rms over time and most of today's effective agribusiness
marketers didn't start with a focus on customers.
Many agribusinesses that achieved early success usually did so because they had a suc-
cessful and unique product that satisfi ed a specifi c customer need. And, some agribusiness
fi rms continue to operate with a central focus on the product. Here, the idea is to create a
product that is so good customers will seek it out. This approach to marketing is known as
being
product-driven
. The old saying “build a better mousetrap and the world will beat a
path to your door” refl ects this marketing philosophy.
In a product-driven organization, product development, research, engineering, and opera-
tions are the primary focus. These fi rms produce a product in high demand and sales
are good, so customer needs aren't a primary concern—at least in the short run. Given this,
what is the problem with this marketing philosophy? Make no mistake—great products and
services are a fundamental part of any agribusiness fi rm's success. But it is not uncommon
for a product-driven organization to become so focused on producing its product or service
that it becomes insensitive to changes in farmer or consumer needs. The drive for internal
operating effi ciency may get more attention than new features customers may want. Sales
may slow as competitor products that are similar are introduced to the market. Marketers in
these fi rms then begin a search for ideas to help generate increased sales.
Product-driven marketing continues to evolve due to web-based access to products and
services. Historically, many agricultural customers were limited to obtaining products within
a short drive of their operation. Today, web-based sales make more products more readily
available to farm customers. Purchases of parts, animal health products, even seed and
