Agriculture Reference
In-Depth Information
barge-loads of fertilizers can be ordered online. Acquiring farm inputs online poses both an
opportunity and a challenge for the customer. You order and receive a product, but typically,
the support stops there.
When sales growth slows, many fi rms will adopt a new approach to marketing which
centers around intensifying the sales effort. Organizations that focus primarily on communi-
cating the benefi ts of their products are called
sales-driven
. This approach may involve
taking the fi rm's core product to a new level, and introducing a number of variations or
extensions to serve existing customers better or serve an entirely new group of customers. It
may involve a search for new geographic markets where the fi rm has not been before. The
sales-driven organization may add more sales people and ask them to work harder selling the
features and benefi ts of the fi rm's products and services. Or it may spend increasing amounts
on promoting the fi rm's products through a variety of advertising activities.
The idea behind the sales approach to marketing is that customers just don't know enough
about the product—if the message is delivered effectively, sales growth will occur. Like
good products, effective sales and market communications efforts are important to the
success of any agribusiness. But, sales-driven agribusinesses fail to ask one important
question—do we have what the customer wants to buy? Failure to carefully consider this
question leaves a sales-driven organization highly vulnerable to competitors who are more
in tune with changing customer needs.
Frustrated with sales efforts that are ineffective, successful fi rms ultimately turn their
total attention to customer needs. Truly understanding what the customer needs to run their
farm or agribusiness more effi ciently and profi tably or how consumer food tastes and con-
venience demands are changing becomes central to everything they do. This focus on cus-
tomer needs drives all decisions in the organization, from product development efforts, to
production location decisions, to asset allocation—decisions are made with a clear vision of
how the fi rm intends to satisfy the customer in mind. Ultimately, these fi rms are looking to
establish a deep and lasting relationship with their customer. This type of organization is
called
market-driven
.
A market-driven agribusiness is one with a good product and a good sales effort, but also
one with a clear understanding of what type of customers it is trying to serve and what these
customers want and need from the fi rm both now, and over the lifetime of the relationship.
It is a fi rm that takes ideas like “the customer is king” and “getting close to the customer”
Table 6.1
Characteristics of product-driven, sales-driven, and market-driven organizations
Characteristics of Product-Driven, Sales-Driven, and Market-Driven Organizations
Product-Driven
Sales-Driven
Market-Driven
Focus on product
Focus on making the sale
Focus on what the customer
needs/wants
My product is great—you
should want it
Communicates benefi ts of
products/services.
Develop and provide solutions
for the customer
Reach the people and they
will buy
Understands what “type” of
customer most values their
offerings
Combines good product and good
sales effort — plus incorporates
customer understanding
