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

ManagementARA 2016 Report and Crop Mix for 2017
December 9, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about the recent Agricultural Retailers Association meeting and the projected acreage mix for Read More
Crop InputsARA 2016: 5 Developments Worth Monitoring Into 2017
December 6, 2016
You can pretty much set your watch to it (do people even still wear watches? I know I do…but I’m Read More
ManagementCorn and soy planting update; Takeaways from Climate Corp. CEO interview
December 2, 2016
AgriBusiness Global Editor Dave Frabotta Joins Paul Schrimpf for a discussion of global corn and soybean planting trends, and a Read More
ManagementAg Industry Comes Together To Address Climate Change
December 1, 2016
Addressing climate change — and more specifically, decreasing greenhouse gas emissions from agriculture — can only be achieved through collective Read More
Trending Articles
R4023 Sprayer, John Deere
CropLife 100Ag Retail Equipment Report: The Green Party Continues
December 7, 2016
In the annual race for sales in the ag retail equipment marketplace, the color schemes for participants are a little Read More
Mike Stern
Precision AgClimate Corp. CEO Talks Retailer Support For Digital Ag
December 1, 2016
CropLife Magazine’s sister publication, AgriBusiness Global, recently sat down with Mike Stern, CEO of The Climate Corp., following the Monsanto subsidiary’s Read More
Precision AgTrimble Debuts End-to-End FMIS Platform
November 28, 2016
October’s inaugural PrecisionAg Vision Conference left this author with many thoughts and things to ponder in the coming months. Probably Read More
CHS Primeland
CropLife 100The 2016 CropLife 100 Report: Reviewing The Many Bulls And Bears Impacting This Year’s Marketplace
November 28, 2016
For virtually all of 2016, the nation was wholly focused on the big Presidential election. Some folks aligned themselves with Read More
Monsanto sign
Crop InputsMissouri Governor Meets With Bayer CEO To Discuss Monsanto Merger
November 21, 2016
Missouri Gov. Jay Nixon visited Bayer AG global headquarters in Leverkusen, Germany, on November 18 to discuss the proposed Bayer-Monsanto Read More
STS16 2017
SprayersHagie Manufacturing Releases 2017 STS16 Sprayer To Market
November 16, 2016
Hagie Manufacturing LLC’s largest full season applicator is now available with enhancements for the 2017 model year. Hagie is officially Read More
Latest News
ManagementARA 2016 Report and Crop Mix for 2017
December 9, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about the recent Agricultural Retailers Association meeting and the projected acreage mix for Read More
AgriSync
Matt Hopkins17 Agriculture Apps That Will Help You Farm Smarter In …
December 9, 2016
Ag professionals are working smarter, not harder, than ever before. Smart farming technologies have enabled them to reduce costs, maximize Read More
Ryan Bartlett
Crop InputsCompass Minerals Appoints Vice President, Innovation An…
December 8, 2016
Ryan Bartlett, Ph.D., has joined Compass Minerals as vice president, innovation and product development. Dr. Bartlett will be responsible for Read More
HerbicidesHerbicides 2017: New Cropping Systems Set For Debut
December 7, 2016
Herbicide-resistant weed are inching ever-closer to a potentially frightening saturation point here in the U.S. Heading into 2016, USDA planting Read More
CropLife 100Wilbur-Ellis Acquires Michigan Ag Retailer
December 7, 2016
Wilbur-Ellis’ Agribusiness, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed and nutritional Read More
Fertilizer storage The Andersons
CropLife 1002016 Fertilizer Report: Another Really Rough Year For A…
December 7, 2016
In many ways, the fertilizer category cannot seem to catch a break. During the early part of the 2010s decade, Read More
R4023 Sprayer, John Deere
CropLife 100Ag Retail Equipment Report: The Green Party Continues
December 7, 2016
In the annual race for sales in the ag retail equipment marketplace, the color schemes for participants are a little Read More
Winter wheat
HerbicidesTalinor Herbicide Approved For Wheat And Barley
December 7, 2016
Talinor herbicide from Syngenta has received federal registration from the U.S. EPA, giving wheat and barley growers a new option Read More
Forage Sorghum
UncategorizedMilestone Achievement Continues For Dow AgroSciences, A…
December 7, 2016
New and innovative forage products are on the horizon driven by continued collaboration between Dow AgroSciences, a wholly owned subsidiary Read More
Palmer pigweed seedhead in cotton
HerbicidesNew WSSA Factsheet Explores Weed Seeds And Their Longev…
December 7, 2016
Did you know some weed seeds can lie dormant in the soil for more than a century and then sprout Read More
Crop InputsARA 2016: 5 Developments Worth Monitoring Into 2017
December 6, 2016
You can pretty much set your watch to it (do people even still wear watches? I know I do…but I’m Read More
Tim McCardle, ARA Chairman
CropLife 100BRANDT COO Named ARA Chairman
December 5, 2016
BRANDT EVP and Chief Operating Officer Tim McArdle has been named chairman of the Agricultural Retailers Association (ARA) during a Read More
Crop InputsWilbur-Ellis Receives ResponsibleAg Certification At Mo…
December 5, 2016
Wilbur-Ellis Co., a recognized leader in precision agriculture technology and the distribution of crop protection products, announces the ResponsibleAg certification Read More
Young Corn Closeup
Eric SfiligojThe Read On 2017 For Agricultural Fortunes Is Anybody’s…
December 5, 2016
As I (and others) have written in recent months, the nation has just experienced one of the most offbeat election Read More
Acceleron B-300 seed coating
Crop InputsThe BioAg Alliance Launches New Yield-Boosting Microbia…
December 5, 2016
As part of their commitment to develop and commercialize innovative microbial solutions for farmers through The BioAg Alliance, Monsanto Co. Read More
ManagementCorn and soy planting update; Takeaways from Climate Co…
December 2, 2016
AgriBusiness Global Editor Dave Frabotta Joins Paul Schrimpf for a discussion of global corn and soybean planting trends, and a Read More
Radish cover crop taproot
Crop InputsSoil Health Institute, Datu Research Receive Grant To E…
December 1, 2016
The Soil Health Institute (SHI) and Datu Research have announced a $626,000 grant from the Walton Family Foundation to quantify the Read More
Mike Stern
Precision AgClimate Corp. CEO Talks Retailer Support For Digital Ag
December 1, 2016
CropLife Magazine’s sister publication, AgriBusiness Global, recently sat down with Mike Stern, CEO of The Climate Corp., following the Monsanto subsidiary’s Read More