Creating an Integrated and Cohesive Marketing Strategy
As marketing managers know, creating an integrated and cohesive marketing strategy has many moving parts. They must continually examine where they are and where they need to be, while trying to efficiently and effectively allocate limited resources across multiple functions related to the marketing plan.
Betty Jones-Bliss, associate director for Purdue University’s Center for Food and Agricultural Business, recently asked Scott Downey and Justin Funk a few questions regarding elements important to a successful marketing strategy.
Jones-Bliss: The root of any marketing strategy begins with segmentation. Justin, what are some of the ways segmentation can be used to develop meaningful marketing strategies?
Funk: Years ago there was a saying: “If you know one farmer, you know them all”. Today the fact of the matter is, if you know one farmer, you know one farmer. Every customer situation is different, and good salespeople are used to working with individual customers. But marketing activities are typically designed to appeal to a broader group, so the idea of segmentation becomes very important. By thinking through effective segmentation strategies, companies can find uniqueness that exist within groups of customers using factors such as demographics, attitudes, or behaviors. With this, marketers can prioritize which segments they feel have the best “fit”, and then design more focused marketing strategies to appeal to these groups. This is why segmentation is at the root of the strategy – because it directs all other marketing efforts including branding, pricing, distribution, and promotion.
Jones-Bliss: Distribution channels continue to change in terms of firm size, more technical products and services, and more knowledgeable buyers. Scott, you utilize a four-step approach to channel management. What value does this approach provide?
Downey: When we think about channel management it is easy to get caught up in whether we are looking at channel management from the manufacturer perspective or the dealer/retailer perspective. Those four steps, which include things like distributor/dealer compensation, motivations, evaluations, and modifications, are important because they are the tools by which relationships are governed between manufacturers and dealers or retailers. If these four areas aren’t managed effectively, they can be sources of conflict in relationships. If I’m a dealer, it can feel like I have little control over these topics. If I’m a manufacturer, it can feel like no matter what “policies” I put in place the results are the same. Communication and MUTUAL ownership of these four areas opens the door to maintaining the right focus – which should be on the positive potential impacts these policies can have on end users.
Jones-Bliss: When thinking about the value creation companies offer, thoughts may immediately jump to brand strategies. Managing the many layers involved in the implementation of brand strategies can be quite complex. Scott, please give us perspective on how marketers can approach creating consistency in the buyer’s mental perceptions of a company’s brand.
Downey: I love this topic because it really gets at the core of buyer perceptions and how they are shaped. It may be crass to liken the process of branding to training a puppy, but there are a lot of similarities. Buyers and puppies both have a lot of distractions. The world is a bright shiny place with all kinds of sights (and smells for puppies) that are competing for attention. Only a very few of those inputs ever get through, thankfully; we’d go crazy if we paid attention to all of them. Over time, the puppy or human gets desensitized to those distractions. This is a paradox for marketers. On the one hand, we’re trying to be one of the bright shiny objects that is flashy enough to get attention and on the other hand there are so many objects that the people we’re trying to reach want to ignore us. Building a brand requires the same things as the puppy… communication must be relevant, regular, and consistent. Relevant has to do with who we’re talking to, regular has to do with the frequency, and consistent has to do with what we’re saying. There are tools to help marketers with this process. In our marketing programs, for example, we often talk about brand mapping as a tool — understanding what all the shiny objects (different value propositions in the market) that our customers see and considering the ways our shiny objects may be perceived to be the same or different from others.
Jones-Bliss: Pricing may be the most strategic decision that any company can make; yet it is often treated tactically. As pricing has an immediate effect on company performance, it’s critical to ensure pricing decisions do not undermine the strategic decisions being made with regard to the overall strategy. Justin, what are some of the tools that can assist marketers understand qualitative and quantitative issues when making pricing decisions?
Funk: First of all, it’s important to point out that even though pricing involves numbers, its not just a quantitative decision. Certainly, there are many quantitative considerations that must be taken into account, but there are also many qualitative factors that matter. A good marketer is able to leverage quantitative tools, such cost analysis, elasticity of demand, forecasting, and breakeven analysis – but also recognize how the qualitative factors such as positioning, customer perception and competitive substitutes may influence how you manage pricing. Of all of the marketing decisions a marketer must make, pricing is probably one of the more tedious.
Beyond the Blog
Learn more from Justin Funk and Scott Downey during the Strategic Agri-Marketing program October 3-5, 2023 on Purdue University’s West Lafayette, IN campus. They’ll help you develop a more strategic approach to your marketing strategy, build marketing models with measurable results and integrate variables that meet both the marketing and financial objectives of your agribusiness.
Non-traditional Lenders in the Ag Credit Markets
Commercial banks and the Farm Credit System have been the dominant lenders to farmers for the past century, but new participants have entered the ag credit markets in recent years. This group includes ag input suppliers, and in more recent times, specialized collateral-based lenders that use land or other assets as the collateral for their farm loans. These “non-traditional lenders” have been consistently capturing market share in the agricultural credit markets since the 1980s financial crisis in agriculture. In 2019, they held almost 13% of the total farm sector debt (USDA) and accounted for 30% of the active loans based on data from the Kansas Farm Management Association. We know little about these non-traditional lenders because they do not face the same public reporting requirements as traditional lenders. The purpose of our study — Strategic Behavior of Non-traditional Lenders in the Agricultural Credit Markets — was to examine the credit products, operational performance and business models of these new players in the ag credit markets.
Farmers’ Purchasing Behavior and Implications for Suppliers’ Go-To-Market Strategies
Every four years, the Purdue University Center for Food and Agricultural Business conducts the Large Commercial Producer (LCP) survey, which collects data from approximately 2,000 farmers across the U.S. This survey has consistently shown that farmers behave differently when buying different inputs, meaning suppliers should be cognizant of these factors when designing their go-to-market strategies.
Creating Social Impact with an Eye Towards Profitability
One thing that has always been clear to those in agribusiness is how closely our communities and businesses are united. While other industries are beginning to realize that managing the ecosystem’s health is the right thing to do to sustain long-term business, farmers and food production organizations inherently understand this.