Agriculture Reference
In-Depth Information
customer's mind. Al Ries and Jack Trout, in their marketing classic
Positioning: The Battle
for Your Mind
(1982: 2), state: “Positioning starts with a product, a piece of merchandise,
a service, a company, an institution or even a person.…But positioning is not what you do to
the product. It is what you do to the mind of the prospect.”
Note that the emphasis is not on the product itself but on customer perceptions. The idea
is to secure a place in the customer's mind for your product based on some factor or factors
that differentiate your product from the competition. For example, you may want a place in
the customer's mind that says that you are the yield leader, that you have the most complete
line of products, or that you have best product support.
When an agribusiness brings a product or service to the market, it is important that they
be very clear on what image or position they are trying to create. The desired position of the
product or service becomes the bridge between the needs and wants of the target market and
the specifi c actions the fi rm will take to satisfy those needs and wants (the marketing mix).
In many cases, the fi rm summarizes the desired position with a simple statement that
captures the essence of what the fi rm is trying to accomplish. Some examples include:
'Nothing Runs Like a Deere'—John Deere
'Science with Service' — Pioneer Hi-Bred International
'Beef, it's what's for dinner'—National Cattlemen's Beef Association
Deere is communicating reliability and quality. Pioneer is telling producers their products
use the latest science to put bushels in the bin, with the support needed to get it done.
The National Cattlemen's Beef Association is urging consumers to choose beef for their
next dinner option. In every case, these statements of position communicate a specifi c
message to the customer—hopefully about a trait, characteristic, or feature that is important
to the customer.
To better understand the idea of position, it is important to understand the idea of
competitive advantage. An agribusiness fi rm's
competitive advantage
is that set of compe-
tencies where the fi rm has a clear and distinct advantage over the competition. Competitive
advantage is the fi rm's edge in the marketplace, it is the reason customers choose to do
business with the fi rm as opposed to buying from another organization. How you convey
that to the customer is key to the sale. Customers want a competitive advantage that benefi ts
them and their operation. Clearly establishing those competitive benefi ts relative to the cus-
tomer's needs and wants allows you to earn a place in the mind of the customer—effectively
positioning your product/services.
Harvard Business School Professor Michael Porter suggests there are two ways to build
a competitive advantage. First, the fi rm can attempt to provide customers with unique
products and services unavailable from other fi rms. This approach is called a
differential
advantage
. Pursuing a differential advantage means that you focus on being a value added
fi rm by providing services that enhance your product and capitalize on what makes your
fi rm unique. Agribusiness fi rms differentiate themselves in a tremendous variety of ways,
including product performance, delivery, product quality, taste, packaging, customer serv-
ice, technical expertise, image—the list could go on. Any area that customers perceive to be
important becomes a potential basis for differentiation. Firms pursuing a differential advan-
tage stress their uniqueness in their positioning.
The other way to claim a competitive advantage is to be a low-cost leader.
Cost leader-
ship
involves meeting the market's product offering with an offering of comparable quality
and features, but beating the market on price. Hence, cost leaders work hard at running
