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Jan. 16, 2023 Source: Purdue University 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. Below, Dr. Luciano Castro discusses how this survey has consistently shown farmers behave differently when buying different inputs, meaning suppliers should be cognizant of these factors when designing their go-to-market strategies. Check out part of his write-up below regarding results from the latest LCP survey or read the full article Here One area of the LCP survey explores farmers' purchasing behaviors. More specifically, it explores the different levels of importance farmers place on (a) supplier relationships, (b) product performance and (c) price when making decisions around fertilizer, crop protection, and seed (graphs can be found in the full article Here) The survey found farmers seem to make decisions almost solely based on price when thinking about fertilizer, but the importance of product performance is extremely important to them when it comes to crop protection, and even more so for seed. The perceived level of product differentiation may be behind these differences. For example, if farmers see variability in seed performance, this may impact the profitability of their crops, making it important for them to place a heavy emphasis on product performance. Another factor that may have impacted these results lies in the recent increase in the cost of seed relative to total crop production costs. Looking further into farmer purchasing behaviors, the LCP survey explored brand loyalty. Farmers were asked if they consider themselves loyal to a brand, if they would recommend it, and if they would switch brands for a 5% or 10% discount, Similar to the discussion on purchasing criteria, farmers ranked brand loyalty levels for fertilizer, crop protection and seed categories (graph can be found in the full article Here) The survey found farmers are least loyal in the fertilizer category and most willing to change from a brand if there is a discount. When offered a small discount, farmers in fertilizer and crop protection can be easily swayed to change from one brand to another; however, seed is drastically different. Understanding the customers' purchasing criteria and brand loyalty is of paramount importance when designing marketing strategies. There are certainly opportunities to be sharper in the design of marketing strategies if we can effectively define our target segment and truly understand farmer loyalty to brands, as well as what criteria farmers use to decide on one brand over another. Tweet |
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