SALES AND INSIGHTS FROM PURDUE UNIVERSITY
BUILDING SUCCESS THROUGH SERVICE
Growing an already strong brand and product portfolio is the daunting task that faces John Deere, says Doug DeVries, John Deere Company's Sr VP of Agricultural Marketing in North America, Australia and Asia. His perspectives on the future challenges and opportunities in agriculture and the critical issue of how to grow in a mature, competitive marketplace are based on more than 30 years as a marketing executive.
DeVries shared some of his thoughts and opinions during a bi-annual meeting of senior leaders and executives from companies in the seed industry, hosted by Purdue University.
Growing a Strong Product Brand
DeVries talked about the challenges of growing the business at John Deere. Agricultural producers strongly consider how investments in capital items contribute to efficiency and the profitability of their operations, rather than simply focusing on horsepower and features. In addition, there might exist a large segment of potential customers who do not know Deere's reputation as well as agricultural producers. This segment includes urban-oriented property owners with only a lifestyle interest in agriculture.
DeVries also suggested that acquisitions and partnerships can be vehicles for growth, but that in their core business, acquisition opportunities remain difficult. It is business partnerships, therefore, that often provide an arrangement for sharing risk and exploiting growth opportunities. He cited a partnership with a seed company to improve yields and reduce variability in production. It is this type of partnership where increasing amounts of services are offered and information is shared that is one of the current focuses of growth at Deere.
Building a Suite of Services and Information
Deere has had a history of providing service in addition to its 'horsepower,' but newer service offerings are becoming more sophisticated. Investments in information technology aid the management of large-scale agricultural operations. Deere is working to develop systems that will bring together information management, risk management, and data collection products.
DeVries expressed caution that the fit of these products isn't always obvious. Cooperating firms must have access to the correct capabilities to leverage their strengths.
For example, Deere's expertise in production practices allows them to be able to offer crop insurance and risk management tools through John Deere Risk Protection. Working with an insurance provider partner, Deere can select agents and adjusters that will be familiar with producers' operations and the unique risks in agriculture.
John Deere Intelligent Mobile Equipment Technologies is another example of a suite of products that leverages Deere's production expertise. This collection of guidance systems and tools can improve the yields of crops while minimizing costs of inputs by reducing waste.
Deere is aware of the high value placed on information and works carefully to ensure that customers' data are well guarded and used. Deere's philosophy is that customers own their own data. Deere uses that data only when their expertise can transform the data into valuable information that will inform the farmer's decision making process. DeVries emphasized that information will only become more valuable in the future, due to the increased demand for traceability of foods and commodities.
Implications to Marketers
There are three broad implications of DeVries' comments for marketers. First, marketers might want to emphasize that not only must the products and services of cooperative ventures be compatible, but so too must be the images reflected in the cooperating brands. With a 169-year old reputation to uphold, Deere is appropriately cautious in co-branding products and services with less-well-established brands.
Marketers must also build services that are aligned with their product offerings. A company like Deere with a superior reputation for product quality will certainly want to be sure its service offerings are also of a higher standard. Managing these service offerings will pose challenges different than managing physical product lines.
Finally, marketers need to be more sophisticated in messages that build awareness of new services offering information solutions. In the past, advertisements could use a colorful photo of a large tractor to communicate a "thousand words." It is unlikely that a photo of a computer spreadsheet will have the same impact.
UPCOMING AGRIBUSINESS SEMINARS
Sales Management and Leadership
June 5-6, 2007
Precision Selling: Building Relationships with Large Farmers
July 10-11, 2007