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Local dealers and their personnel are the most important off-farm influencers of growers' input purchase decisions, reports Purdue University's Center for Food and Agricultural Business. In a 2003 study, Purdue found that all classes of commercial producers rated local dealers/dealer personnel as their single most important influencer. Similarly, research conducted by manufacturers of crop protection products indicates that a majority of growers' decisions are influenced by the ag retailer.

Independent paid consultants, however, also may influence the grower's purchase decisions. According to the Purdue study, more than 40 percent of commercial crop producers use independent paid consultants and more than half expect to do so within five years.

Rob Neill, Syngenta Crop Protection
Not surprisingly, then, suppliers are increasingly focusing their efforts on marketing to the channel. "In the past two years, we've put a lot of effort into building deeper relationships with key retailers by moving away from the 'one size fits all' strategy to a more customized approach for each retailer," says Rob Neill, vice president of marketing, Syngenta Crop Protection. "With many retailers, we're working on targeting and segmenting customers, with others we're working hard to introduce 'Use Programs,' which are full-crop programs of products and services, and with all we're working to increase loyalty and customer satisfaction."

Asked why his company's involvement with the channel has changed, Neill responds, "We realize more and more that segmenting the market is key to success. The more segmenting that we do, however, the more complex the marketing and sales job becomes. This means that retailers are even more critical to our success. We won't be able to manage this complexity without them. The retailer 'owns' the relationship to the farm. We can bring a lot of resources to enhance this relationship in the form of products, technologies and support, so there is a basis for a great partnership there."

Dave Coppess, Heartland Co-op, West Des Moines, Iowa, and chairman-elect of the Agricultural Retailers Association, has seen an evolution in the marketing approach that manufacturers take with retailers. "There has been more of an effort to move from a transactional to a contractual relationship with multi-year agreements that establish targets," says Coppess. These agreements stack multi-year goals with incremental incentives for achieving two- to three-year targets, he explains.

Dave Coppess, Heartland Co-op
The growing involvement between manufacturers and retailers has resulted from industry consolidation, says Coppess. "Both growers and retailers are getting larger and more sophisticated, and suppliers acknowledge the influence that retailers have." The trend of suppliers working with retailers will likely only get stronger as retailers build their information databases. Coppess points, for example, to the instrumental role that retailers have in collecting precision agriculture data.


Andy Lee, director of business operations, BASF, notes that, while his company has always recognized the importance of the retailer, it really began to shift focus more toward a business-to-business approach with retailers at the end of 2002. "We decided to put our resources where they were going to be used most effectively. Retailers are very good at communicating with the grower, and we don't need to duplicate sources," says Lee.

When working with independent crop consultants, BASF focuses on those who are linked in some way to a retailer, says Lee, adding that crop consultants are included in training seminars, such as annual plant health training sessions.

Andy Lee, BASF
Lee points to market research conducted a few years ago that found that the retail channel values five main elements when working with suppliers: having a business "partner;" quality of service; total profitability; simple and consistent programs; and good products.

"We've used this as our approach to the market," says Lee, adding that the company has encouraged its sales representatives to think more like business partners and focus on what drives profitability for both retailers and growers.

Profitability is one of the retailers' top five "wants," and Lee suggests that the best retailers also understand the need for long-term profitability. Similarly, BASF is looking out over the next 10 years. "We're looking at what we can do together to sustain our businesses," he says. That includes focusing on services that the channel provides and introducing new products that will complement them.

BASF has increased communications to retailers about its R&D investments. "So few companies today are doing research in new herbicides and fungicides. On the other hand, we're investing in products that will be introduced over the next 10 years for corn, soybeans and other crops. Growers need new answers," Lee says.

The company also has focused on helping retailers market a current product, Headline fungicide, which helps control Asian soybean rust in soybeans and several other diseases in soybeans, corn and a number of other crops. "Fungicides have not been used so much in corn and soybeans. But there's a willingness to market them now because they provide real benefit to growers," says Lee, noting that in addition to disease control, Headline, for example, can help improve drought hardiness and crop utilization of nutrients. "On average, growers are getting about a 5-bushel-per-acre advantage. We (supplier and the channel) need to look for new opportunities to add value."

The best marketing programs reward retailers for bringing new products to market, says Lee. "You must have the element of partnership where both you and the retailer aim for the same thing. You both want growers to succeed." With this in mind, Lee says BASF has increased targeted direct mail efforts. "Getting the right message to the right grower is very important to us, so we work through the retailer. The number of new products we have to launch means this is a very effective way to support the retailer and bring a new message through to the grower," he says.


Jon Nienas, Monsanto
"One of the most important ways of ensuring that growers have a positive image and confidence in a product or company is to ensure that the front-line representatives are provided with the latest information about your products and policies," says Jon Nienas, U.S. channel strategy lead, Monsanto Company. "It's important to provide information to retailers so they can respond accordingly and accurately to questions raised by customers, as well as in other media forums," says Nienas.

These manufacturers believe it will be increasingly important to provide retailers information in a real-time format. "This ensures that they are up-to-speed on our business, product portfolio and other related news important to the industry," says Nienas.

This year, Syngenta Crop Protection began the Farm Assist Advantage program to help retailers communicate and direct market more effectively to growers. "We piggyback our message on top of the retailer's. The retailer gets a professionally managed communication program to get his message out, and it provides Syngenta a credible vehicle to co-market with our key retail partners. This has been quite successful, so we'll probably invest more in support of the retailer's communication efforts in the future," says Neill.

"We do a lot more online with retailers today than ever before," continues Neill. "Through our Ag-Biz program, a retailer can access product and program information, communicate to customer service and technical departments, and see the status of initiatives that we're collaborating on. We're also communicating with the retailer more through our customer resource contact center."


Retailers already have a strong influence on growers' buying decisions. Will this influence change in the future?

"It's difficult to speculate on how and/or how much this influence will change in the future, but we do know that retailers are uniquely positioned to provide grower customers with a total solution package, including important inputs like seed, chemistry and fertilizer," says Nienas. "Similarly, our chemistry, seeds and traits business model provides growers with benefits because of its holistic approach. But for it to be truly successful, we will continue to rely on skilled and committed dealerships, including the support and expertise of the retailers within their community."

The retailer's influence, predicts Syngenta's Neill, will likely depend on what the profitability of the industry looks like in a few years. "That will depend a lot on both our and the retailer's ability to add value," he says. "Many industries that have a high proportion of price-conscious customers got that way because either the manufacturers or the retailers failed to add enough extra value in the eyes of the customers for them to justify paying any premium price. We're working hard to create extra value, and I know a great many retailers are as well, but I can't say that everybody in the industry has a similar approach." AM

Lynn Grooms is an agricultural journalist living in Mt. Horeb, Wisc.

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