Barb Baylor Anderson, Contributing Editor
A sluggish economy might encourage some industries to pull in the marketing communications reins, but agencies working with agricultural companies say just the opposite is true right now. Given consolidation among competitors and a shrinking customer base, companies are as focused as ever on managing their brands and demonstrating to producers that their products are the right fit for today’s agricultural environment. And they are relying on marketing communications agencies to help them do the job.
"Maintaining brand value is critical under any condition, and it is becoming more critical in a competitive market going through depressed times," confirms R. Mark Perrin, president of McCormick Co., Fort Worth, Texas. "We will see brand value become more important tomorrow than it is today because companies will find that it is increasingly difficult to develop and introduce new brands. Existing brands are just going to keep getting stronger."
Like companies in any industry, agricultural businesses need to maintain brand value to retain current customers and attract new ones. Mike Minford, senior counselor, brand development, for Morgan & Myers, Minneapolis, says the shrinking pool of ag customers needs to be reassured that they have made the right brand choices, especially during tough economic times.
"Companies in the auto industry reinforce and reassure customers routinely. They know that branding doesn’t stop once the sale is made. Agriculture can take the same strategic approach," Minford says. "We have a whole toolbox full of tactics, from mass communications to scripting for customer service and salespeople - to help us be in touch with producers on a regular and consistent basis."
TRENDS TRIGGER AGENCY AID
Agencies are drawn more and more into the mix to help agricultural companies manage brand value with producers as those companies address the challenges of farm economics, industry consolidation and producer demographic changes.
David W. Maaske coordinates Charleston|Orwig Inc.’s corporate business services division in Hartland, Wis. He helps clients manage the impact such trends have on brands.
"Producers want to improve their productivity, and we need to be cognizant of customer ownership of brands and at the same time communicate the value of brands as a way to enhance that productivity," he says. "Agriculture has fewer customers now, so from a manufacturer’s standpoint, one way to maintain the customer base is with brand value."
Minford agrees. "With a shrinking dollar, you have to work harder to communicate your strengths vis-à-vis your competition," he says. "With consolidation among producers likely to continue, fewer people will have more purchasing power. Person-to-person branding is now more important, and we must deliver more consistent communications and more consistent service as companies get more one-on-one."
Minford contends that leading agricultural companies understand that value and are willing to invest the right amount of resources into proper brand management. "As many of the majors have consolidated and reorganized, especially in crop protection, seed and animal health, they have had to practice good branding and keep their customers and channel members on board," he says.
"Many are creating new identities and adapting more pieces to their businesses," Minford continues. "As more companies aggregate and consolidate, it will become more critical to maintain consistent service and messaging. That’s where company-agency relationships can pay off."
BRAND MANAGEMENT MECHANICS
Many agency officials agree that the best brand management strategies involve a strong company-agency relationship. Perrin says McCormick’s clients have placed a tremendous importance on growing established brands with a combination of company and agency support.
"Brand management is a comprehensive entity. It’s not just about brand perception in marketing communications. It’s about the whole company - from product performance to people," he says. "We (at the agency) take a holistic view together with the company to make sure people understand the brand both within the company and with customers."
Charleston|Orwig puts a strong emphasis on company and agency strategic alliances as well. The agency serves as a strong advocate of the brand and fills in gaps at client companies in areas that include market research, strategic brand management and strategic employee alignment.
"About 80 percent of a brand is intangible, and each person’s perceptions are different based on experiences. That can include experiences with value, quality, service and reputation," says P. Lynn Balinas, Charleston|Orwig executive vice president. "To maintain that brand, you have to manage it as a living, breathing entity."
Maaske adds, "From a company perspective, having a strong internal marketing structure and a brand champion is important. Strong companies have someone in house where ‘brand management’ is part of their job description. Where companies do not have brand proponents in-house, the agency can help fill that gap with the right support."
Morgan & Myers provides strategic communications counsel to clients, including opportunity identification and brand analysis. "Branding and integrated communications are nearly synonymous terms," Minford says. "Although my position is relatively new (formalized in the last two years), our company has always been instrumental in working with new product introductions and helping companies improve producer relationships. The ideal company-agency partnership is one where both sides collaborate."
More specifically, Morgan & Myers uses a behavioral mapping process to identify brand opportunities and brand strengths. The agency first helps facilitate brainstorming sessions and interviews key client stakeholders and customers to get a handle on the brand and match that with changes in the marketplace. Then the agency develops tactics, including messaging and developing a "brand bible" for the brand platform.
"After the agency has done its part, the client communicates and instills the key aspects of the brand throughout the organization using internal and employee communications," Minford says. "Everyone in the company must be equipped to reinforce the brand’s position."
Personnel at Morgan & Myers and other agencies also help manage the brand with such tools as market research and evaluation. McCormick’s Perrin says ongoing tracking of the brand, especially given the acquisitions that have taken place, can measure the ultimate value of the brand as it is perceived in the marketplace.
SOLID FUTURE PROSPECTS
Perrin and others predict that agencies will continue to aid companies in the future with brand management, using strategies that already have proved successful and adding new strategies as agriculture continues to evolve.
"The trends we see now will continue. Agriculture will become more consolidated and vertically integrated," Minford says. "Brand value strategies may not change, but the technological delivery systems to reach younger producers may. The key will be to continue to take a holistic approach and cover all of the bases with integrated communications."
Even the introduction of generics in the marketplace may have little impact on brands, Perrin adds. "Not everyone agrees with that perspective," he says. "Some believe a price market is possible with generics, but I don’t see that coming. Producers perceive value with the brands they use and are willing to pay a premium for that."
Charleston|Orwig’s Balinas shares a similar philosophy. "Strong brands remain strong with customers regardless of the circumstances," he explains. "End users have a relationship with a brand, and the partnership and trust that develop with that brand are important. Even with generics and other competitors in the marketplace, producers do not want to make a decision twice when it comes to choosing a brand. Something really has to go wrong before a producer will switch."
In the future, Balinas contends that perception of a brand may remain constant, even as the economics and technology of the brand change to cater to end-user needs. "Even with changes to the products, producers will know they can trust the brand if we keep the brand fresh," he says. "Just as our agency develops a ‘brand’ about what we can or cannot do, companies must maintain an image."
As such, Charleston|Orwig plans to add a step to brand management that Balinas refers to as advocacy. "We want to develop advocates for brands," he says. "Just as Harley® motorcycle riders advocate their brand, we want to develop customers who will be proud of the brand they choose and want to talk about the benefits of the products they use." AM
For agency-company chemistry to work for brand management, both parties must share similar philosophies.
When it comes to crop protection, Valentine Radford Inc. and Bayer Corp. have found they share more than a Kansas City, Mo., location - they have discovered how to mix agency brand management with company product know-how.
"Maintaining brand value is important for long-term market share of the brand within a market, as well as brand preference and image among customers and, ultimately, profitability of the brand for the company," says R. Kelly Schwalbe, account supervisor for Valentine Radford. "Maintaining brand value helps the product maintain sales during downturns and maximize sales during strong economic periods."
Schwalbe works closely with Scott Welge, corn market manager for Bayer. "A combination of experience shapes the customer’s final decision in choosing the specific brand of product, so it is especially important to have a positive brand image during times of increased competition or when easily substituted products are available," Welge says.
Investment in brand value during competitive times is easier to do, Welge adds, while an investment in the brand when sales are growing and uncontested is more difficult.
"But what you lose by not investing in the brand with the latter is a tremendous opportunity to endure more competitive times," he says. "The crop protection industry is highly competitive, and the benefits of brand value are realized with such things as extended product life cycles and defense strategies with established products."
Schwalbe agrees that brand management is especially important in the crop protection industry, given tremendous research and development investments made by companies.
"That investment has to be recouped over a longer period of time," Schwalbe says. "Basic manufacturers sell into a market that may be significantly smaller than other segments of agriculture, depending on the product sold, crop involved and how that product is used."
In maintaining brand value, Schwalbe says the role of the company should be to ensure tangible, intrinsic characteristics of the brand, such as product performance, dealer margins, packaging, price/value, distribution, legal and regulatory compliance, and retail and internal sales. The agency’s role is to generate brand awareness and communicate benefits of the brand to the marketplace.
"The company and agency must work hand-in-hand to identify market opportunities, position the product and generate sales relative to the competition and to the size of the market," Schwalbe says.
"An effective plan utilizes both company and agency as strategic input partners," Welge adds. "Each brings their own strengths in creating and supporting brand value, as Kelly outlined. A consistent message created and delivered in all communications by the agency is necessary to support the value in the customer’s mind. The company’s (responsibility is to) ensure activities with customer support and that build brand value."
In the future, Schwalbe predicts that market changes will impact brand value strategies. "Consolidation at grower, retail and basic manufacturing levels makes it difficult to maintain value at each step of the process," he says. "Changes in registrations, Environmental Protection Agency regulations, availability of generics, biotechnology and trade issues can all directly and indirectly impact brand value."
"Brand value strategies will need to adapt to changes in the future," Welge says. "A growing number of products and technology will make it more difficult to maintain brand value, but the successful strategies that support the brand today should also be effective down the road, with minor changes, to reflect the new market environment." AM
Barb Baylor Anderson is a freelance writer from Edwardsville, Ill., who covers a wide variety of ag issues. AM