Perceived Knowledge

How well do you, the retailer, know your customer? Before answering this question, consider the findings of a recent study of retailer perceptions regarding growers conducted by Purdue University.

“You can really get into trouble in a hurry if you make the wrong assumptions about your customers,” said Dr. Dave Downey, executive director, Center for Food and Agriculture Business at Purdue. Downey was speaking at the National Conference for Agribusiness, held in November on the university campus in West Lafayette, IN. Much of this conference featured the findings of Purdue’s 2008 Large Commercial Producer Survey.

In his presentation, Downey focused on closing the gap in knowledge within the retail channel on what retailers believe grower-customers want/think and what grower-customers actually want/think. To conduct this study, Purdue researchers selected one element of the distribution system and asked many of the same questions about buying behavior that the university originally asked of growers. These answers were then compared to one another to see if assumptions by retailers jibed with the way growers actually thought. For the study, growers were divided into three groups — extra large, commercial, and mid-sized.

“For many of you, this could be something of a reality check,” he said. “We sought to find out a few things — how well we understand what motivates growers, how accurate are our assumptions about their buying behavior, if our strategies make sense, and what adjustments might be appropriate.”

Overall Understanding

According to the study results, retailers have a good understanding of grower buying behavior and attitudes, said Downey. “But there are several important differences in the relative importance of many key factors that could significantly impact marketing strategies,” he added.

Buying behavior is one example. When asked if there was a significant difference in the quality of information from one local supplier to another, 74.4% of retailers agreed that this was the case. However, when growers were asked this same question, less than 45% believed the quality of information between suppliers was different. More telling, when asked if growers think they know more about many input products than their local suppliers, only 14.5% thought this was true. But among growers, more than 30% of respondents agreed with this statement.

“Retailers strongly believe there are larger differences in the quality of information among suppliers and their own product knowledge compared to what growers believe,” said Downey.

The same disconnect in assumptions occurred regarding loyalty to crop protection products. When retailers were asked if growers would consider themselves loyal to the brands they buy, 12.8% agreed that this was true. But when growers were asked this, almost 40% considered themselves brand loyal. Likewise, when asked if growers would consider themselves loyal to their primary local supplier of crop protection products, 45% of retailers believed this was true. But for growers, this same question had an agreed percentage ranging from 53.8% to 58.6%.

“Growers consider themselves far more loyal to brands than retailers believe them to be,” said Downey. “There appears to be more loyalty to the retailer, but that loyalty is perceived stronger by the grower.”

The Price Is Right?

Among specific crop inputs, the Purdue study found very little difference between how retailers and growers view their seed and fertilizer purchasing behaviors. Crop protection products, however, are another matter. When retailers were asked if growers think most brands of crop protection products are more or less the same, 48.3% agreed with this assessment. But when growers were asked this question, only 31% to 34% agreed that this was the case. More telling, when retailers were asked if growers usually purchase their crop protection products based upon the lowest price, 34.1% agreed that this was true. Among growers, however, 31.4% of extra-large growers agreed with this statement, but less than 24% of commercial and mid-sized growers thought this was the case.

“Retailers are more likely to believe that growers think all brands are about the same than do growers,” said Downey. “Retailers are more likely to believe that growers buy on price than growers say they do.”

This belief also probably explains the study’s finding regarding generics. When retailers were asked if growers will increase their use of generic products during the next five years, 54.1% agreed. For growers, however, the percentage that agreed with this statement ranged from 38.3% for large growers to 43.8% for commercial ones. Furthermore, when asked if generics offered a good trade-off between price and performance from branded products, 34.1% of retailers agreed this was the case. Among growers, however, the percentage that agreed with this question was approximately 43% across all three groups.

“Retailers expect generic crop protection products to grow considerably faster than growers expect them to grow,” said Downey. “Retailers feel more strongly than growers that branded crop protection products are not better.”

In conclusion, retailers should reevaluate their assumptions about grower-customers, particularly in certain key areas, Downey said. “Faulty assumptions create major problems for retailers because they leave money on the table, spend money on the wrong services, and prioritize the wrong projects,” he said. “Our research may not be directly applicable to any given product or market area, but it does give us an indication that our assumptions about our customers need to examined and adjusted from time to time.”

Leave a Reply

Management Stories
ManagementMACA 2014: The State Of The Agricultural Industry, And Then Some
October 9, 2014
The trade association’s annual gathering featured speakers from across agriculture and beyond. Read More
StewardshipA Multi-Layered Approach To Water Quality
October 6, 2014
Illinois event highlights research and technology designed to better monitor and improve water quality — and the benefits of cooperative, coordinated effort. Read More
StewardshipMichigan Agriculture Leaders On Toledo Water Ban: We Want To Be Part Of The Conversation
August 8, 2014
Leaders of Michigan agricultural organizations said Thursday that the government should not have a “knee-jerk reaction” based on last weekend’s water ban in Toledo due to fertilizer run-off in Lake Erie. Read More
ManagementRussia Bans U.S. And EU Ag Product Imports In Ukraine Sanctions Battle
August 7, 2014
Russian President Vladimir Putin has banned the import of agricultural goods from countries that have imposed sanctions on Russia. Read More
Top 100 Articles
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Grain Shuttle Loading Facility
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
CropLife 100GROWMARK Acquires Missouri Refined Fuels Terminal
April 2, 2015
Bloomington, IL-based GROWMARK and Magellan Pipeline Co. have entered into an agreement in which GROWMARK will acquire the refined fuels Read More
CropLife 100Wilbur-Ellis Acquires South Dakota Retailer
April 2, 2015
Wilbur-Ellis Co.’s Agribusiness Division, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed Read More
CropLife 100The McGregor Co. Closes Smith-Kem Acquisition
April 2, 2015
The McGregor Co. — ranked No. 16 on the CropLife 100 list of largest U.S. ag retailers — has completed Read More
CropLife 100BRANDT Commemorates National Ag Day
March 20, 2015
The Illinois agriculture community gathered at BRANDT global headquarters on March 18 to celebrate National Ag Day behind this year's theme Sustaining Future Generations. Read More
Latest News
FertilizerSimplot’s Gal-XeONE Technology Moves West
April 27, 2015
The J.R. Simplot Co. remains committed to creating customer value through technology. In 2013, Simplot purchased the Gal-XeONE controlled release Read More
Eric SfiligojThe Need To Defend Production Agriculture
April 27, 2015
Last week, I spent the better part of my time on the road visiting with ag retailers and market suppliers Read More
FertilizerStarter Fertilizers Show Value In Stressful Spring Cond…
April 27, 2015
From wet, cold conditions in the eastern Corn Belt to excessively dry, cool soils in the Plains states, spring field Read More
StewardshipTFI Announces Renewed Financial Commitment To Fertilize…
April 24, 2015
Today, The Fertilizer Institute’s (TFI) President Chris Jahn announced that TFI and over 100 partners will more than double existing Read More
Industry NewsMACA Names New Ambassador Coordinator
April 23, 2015
The Mid America CropLife Association (MACA) has named Michelle Kilper as its new Ambassador Coordinator. Michelle is a graduate of Read More
ManagementAg Retailer’s Role In Local Policy Making; Raising The …
April 23, 2015
CropLife’s Paul Schrimpf and Eric Sfiligoj review their recent travels, precision ag efforts in Washington, DC, and the role of Read More
TMX-2050 In-Cab Display Launch Run Screen
Precision AgIn-Cab Computing 2015: Connectivity, Compatibility Take…
April 23, 2015
In terms of in-cab computing solutions for the agriculture market, companies like Case IH, Topcon, Trimble, John Deere and Raven Read More
USDA
StewardshipUSDA Outlines Building Blocks For Climate Smart Agricul…
April 23, 2015
Today, the USDA has announced a comprehensive and detailed approach to support farmers, ranchers, and forest land owners in their Read More
Industry NewsArysta LifeScience Welcomes New Territory Sales Manager
April 23, 2015
Arysta LifeScience North America recently announced the addition of Kaitlyn Acaster to the Canadian sales team. Acaster will fill the Read More
Crop InputsMarrone Bio Innovations Opens New Research Greenhouse
April 23, 2015
Marrone Bio Innovations, Inc. (MBI), a leading provider of bio-based pest management and plant health products for the agriculture, turf Read More
Crop InputsDuPont Acquires Taxon Biosciences
April 23, 2015
DuPont has agreed to acquire Taxon Biosciences, Inc., a leading microbiome discovery company. This acquisition will build on DuPont’s in-house capabilities Read More
Farmer on tablet
ManagementStudy: Consumers Don’t Care If U.S. Farmers Feed …
April 23, 2015
“We’re feeding the world” is a mantra often used by those involved in farming and food to build support for Read More
Industry NewsCorporate Responsibility Magazine Names Monsanto One Of…
April 22, 2015
Corporate Responsibility Magazine (CR Magazine) named Monsanto Co. to its 100 Best Corporate Citizens List for 2015. This is the Read More
FertilizerSpring Nitrogen Management: Form And Timing
April 22, 2015
Most corn producers have planned their spring nitrogen program for 2015, and many have already started to implement their program. Read More
FMC 3Rive 3D
Industry NewsFMC Corp. Completes Acquisition Of Cheminova
April 22, 2015
FMC Corp. has completed the closing of its acquisition of Cheminova A/S, a multinational crop protection company based in Denmark Read More
SoftwareSyngenta Expands AgriEdge Excelsior Nationwide For 2015
April 22, 2015
Growers across the country can now take the guesswork out of improving their farm’s production, land value, farm stewardship and Read More
Cornfield near Sioux City Iowa
HerbicidesU.S. Regulators May Start Testing Food For Glyphosate R…
April 21, 2015
U.S. regulators may start testing food products for residues of the world’s most widely used herbicide, EPA told Reuters’ Carey Read More
FungicidesBRANDT Adds Zonix Biofungicide To Portfolio
April 21, 2015
BRANDT has added Zonix biofungicide to its rapidly expanding line of organic and sustainable products. Zonix is a contact fungicide that Read More