CAPTURING A PIECE OF THE RURAL LIFESTYLE PIE
by Barb Anderson
You may be one of them. A middle-aged, educated, married individual with traditional values who may or may not still have children at home. You may work full-time away from your rural home, as well as work on your "farm." Chances are also likely you have a higher-than-average income, with the bulk of your income and assets off the farm.
You've been labeled a lifestyle farmer, a hobby farmer, a ruralpolitan and a sundowner. And you are a lucrative market for a growing number of agricultural companies, perhaps even your own, that want to capture sales and service allegiance.
MARKET SEGMENT LOOMS LARGE
Market Directions Inc., Kansas City, Mo., recently analyzed this booming country living population. The study reports the group totals approximately 1.6 million farms, has major occupations other than farming and is not motivated by generating farm income. Members of this group spend more than $2,000 annually, on average, on a wide variety of products and services that support a rural lifestyle.
BRAND CAPTURES CUSTOMERS
More and more companies are recognizing the country living trend and setting marketing strategies to target the group. Spaulding recognizes Tractor Supply Company as one retailer that is clearly interested in serving country living folks. Because of this focus, it saw a sales increase of more than 18 percent in 2004.
Bayer Animal Health also recognizes the value of retailers such as Tractor Supply to its sales.
"Our new QuickBayt disposable fly bait strip is a convenient, ready-to-use disposable fly bait strip that is packaged in a pouch for easy distribution and display in farm supply stores," says Mitch Johnson, Bayer brand manager, livestock products, Shawnee Mission, Kan. "The product was specifically designed for this customer. We work with organizations like Tractor Supply, Southern States Co-op, Universal Co-op and Orschelns, where we can generate excitement in the distribution chain and do point-of-sale advertising. We also work through distributors who serve independent farm supply stores, especially in the southeast part of the country from Texas to the Carolinas, where many of these smaller farms are located."
Johnson says the QuickBayt fly strips are a new application of Bayer's granular fly control product used in more traditional ag settings around animals.
"This is a new market opportunity for our division," says Johnson. "We did some market research to understand the needs of our target customer. Also, many of us here at Bayer are also part of the rural lifestyle market, so we know what attracts us as customers."
Spaulding's research shows that those brands that formed relationships with rural living consumers prior to those consumers moving to the country can extend brand relationships with new products and services that address their needs. "The Bayer brand already has equity with farm supply companies and this group of consumers," confirms Johnson. "That makes it easier to identify with us in our targeted print advertising in such magazines as Country Living, Hobby Farmer, equine, and lawn and garden publications."
RURAL KNOW-HOW A PLUS
Keegan says many rural residents are unaware of the differences that exist with buying or building a home in the country versus the city or suburbs. He says buyers are unprepared for such unique features as the impact that outbuildings, wells, unpaved roads and few comparable properties to appraise against can have on mortgage options.
"For various reasons, many country homes and acreages do not easily conform to secondary loan market requirements. Many lenders do not want to complete these types of mortgage transactions," Keegan explains. "We understand these risks better."
Farm Credit Services of America has developed a consumer-oriented identity for Country Home Loans, separate from its existing identity on financial products and services for agriculture. To create awareness with consumers in target markets, the company uses public relations, advertising and special promotions.
"The retail office network is key in reaching potential Country Home Loans customers through referrals," says Keegan. "We also market the program through direct contact with realtors, home builders and other professionals."
Keegan expects to see continued growth in the rural lifestyle market. More than 2 million potential customers live in towns of less than 2,500 in the four states served â€" Iowa, Nebraska, South Dakota and Wyoming. He estimates more than 41,000 households will be in the market for a new home mortgage in the next 18 months, a potential mortgage market of $2.8 billion.
"In 2004 we closed nearly $100 million in Country Home Loans â€" a 90 percent increase over 2003," he says. "In the first three months of 2005 we have originated a record $66.5 million in new applications and closed a record $27.8 million."
MATCH PRODUCT WITH NEED
Matching product and services to the unique rural lifestyle market is one of the keys to marketing success. Spaulding says products frequently must be scaled to fit their rural acreages, which are often considerably smaller than traditional farms.
Carroll says the needs of this market segment are similar to the commercial market, just on a smaller scale. "These consumers can afford to indulge themselves. Even when there is doom and gloom in the economy, this segment is doing its own thing. We have experienced growth nearly every year since we came to the U.S.," she says.
Spaulding says marketers can reach customers with on-target messaging through the preferred media, including print, radio, TV and even the Internet. Kubota takes a niche approach to national print advertising and does some TV and radio advertising. Targeted publications include Progressive Farmer, Organic Gardening, Mother Earth News, American Small Farm, and hunting and fishing magazines.
"We also reach customers through our dealers by making it easy for dealers to advertise. We have very strong brand loyalty," Carroll says. "We participate in trade shows and co-op programs and do regular surveys to keep us more responsive to the marketplace."
WANT TO TAP IN?
Spaulding says other companies interested in tapping into the market should focus on the fact that rural lifestyle customers bring a variety of specific interests and needs to the table, are motivated to invest in their lifestyle and have income to support their purchases.
Since purchases are frequently tied to interests and hobbies, finding the right product is the driver rather than cost consciousness. "Supporting their country lifestyle drives many purchases and includes maintenance and improvement of their home and property, specific interests and hobbies including horse ownership and gardening," she says. "Familiar brands simplify choices and reduce perceived risks. Combining familiar brands with retailer expertise can increase confidence when making purchasing choices."
"One of the unique things about these customers is that they do not expect a return on their investments the way traditional agricultural producers do," says Bayer's Johnson. "Companies that get into this market will find it is a journey all the way. You need to do your research, understand the demographics and geography, and choose the right media channels in order to be able to continue to grow with this very interesting market." AM
Barb Baylor Anderson is a freelance writer based in Edwardsville, Ill.