Agriculture Reference
In-Depth Information
extremely effi cient operations. Cost management is a central focus, and every potential area
of effi ciency that does not undermine the product/service offering is pursued with a venge-
ance. Firms positioning themselves as cost leaders will emphasize price in their message,
while assuring the market that their quality is acceptable.
If an agribusiness fi rm's product/service offering is perceived as identical to that of
another fi rm, the sale will go to the fi rm with the lower price—a commodity transaction. In
the end, the challenge is to identify just what things add value for the customer and then to
deliver them fl awlessly. Such a fundamental understanding of the market combined with
superb execution can put distance between an agribusiness fi rm and its competitors.
Note that the position is generally built on the fi rm's differential advantage—i.e., things
like yield advantage, breadth of inventory, quality of sales force, etc. The challenge here is
to take those things that make the fi rm unique—the competitive advantage—and turn them
into the desired image with the target customers—the position.
Positioning/differential advantage in practice
How does this work in practice? Let's take a look at how a seed fi rm might apply some of
the ideas to develop its position. Consider the following scenario. A turfgrass seed company
markets seed lines that are primarily proprietary. The fi rm's research department has fi n-
ished work on a new variety of dwarf fescue. The variety has fared very well in public
evaluations. This variety has a distinctive dark green color, produces a dense, durable turf,
and is hardier than other varieties. The fi rm has decided to try to build on these features
and establish a differentiated product that will command a premium price over commodity
fescues. How can the concept of positioning be used to accomplish this objective?
The fi rst question to ask is what position does the fi rm own? That question is followed by
what position does it want to own? Ries and Trout call this “thinking in reverse” because
when answering the questions you don't focus on the product, but on the target market.
How do customers see your fi rm? To return to the turfgrass example, let's say that after some
serious thought and several long focus-group sessions with the potential customers, the fi rm
fi nds their current position is based on their ability to provide premium varieties of seed
which meet the changing needs of customers. This position has been developed through a
heavy emphasis on research that has enabled the fi rm to consistently release high-performing
new products.
Here, the current position is consistent with the desired position, given the goals for the
new variety. The next question relates to the competition—is this a position the fi rm occu-
pies by itself? Here, the fi rm may fi nd that two of their competitor's positions overlap their
own. This is important information—the fi rm will want to make sure their marketing plan
strengthens and enhances their position and puts some distance between their fi rm and the
competition.
In the case of the new dwarf fescue, what position should the fi rm take? For the residen-
tial market, two key ideas seem to surface—easy care and environmental awareness—and
the position could build on these two benefi ts. The variety does not grow as fast or as tall
as other varieties. The fact that the homeowner spends less time mowing is an important
benefi t. To complement the easy care benefi t, the fi rm could also position the product as
environmentally sensitive. The variety needs less fertilizer and water than other varieties
and the slow growth of the product means fewer clippings to dispose of. This new product
could be positioned as the grass that delivers more free time to an environmentally conscious
consumer.
 
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