GUELPH, Ont. — Farmers need to enter the modern era of marketing and focus on what their customers are asking for, said a marketing expert with the agricultural economics department at Purdue University.
The time when a producer or manufacturer could produce a product and concentrate on taking orders disappeared with the Second World War, he said.
Then came a period that focussed on the art of persuasion, which he called the sales era when product knowledge and the ability to deal with objections closed deals.
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Today, producers must understand the needs, goals and beliefs of their customers, Downey told the Ontario Seed Growers Association here Dec. 13.
“This is the biggest shift in marketing in recorded history and it’s happened in the past 10 to 15 years. This is the market era. It’s about customers being tailored to.”
He used an example of two farming brothers from the United States Midwest to illustrate his point. Their need was obvious as stated by brother Number One: “good used equipment with low hours.”
The same brother also talked about the farming operation’s goal — building their land base for the future. Brother Number Two talked about their desire to include small dealers from their community in their search for equipment.
Downey interpreted this to mean that the brothers believed in stewardship.
However, one member of his audience suggested the brothers’ belief might better be described as their desire to support the community surrounding them.
Downey said this example shows there’s more to making a sale than just understanding goals, needs and beliefs. Sellers, farmers included, need to understand their customers’ perception of value, the combination of how they understand the costs and benefits of any particular product.
“We make our decisions based on the perception of value,” he said.
“The role of today’s marketers is to figure out how the perceptions of their customers are shaped. It’s that simple.”
Equally important is to understand the three main ways products can be positioned for sale, he added.
Sellers may have the best product available but one that’s difficult and time consuming to achieve. In the seed industry, Downey said it takes an average of 20 years of research and $125 million to introduce a new genetic trait.
A second position is to have the lowest cost. However, this comes with its own challenges as Downey illustrated with a story about Walmart.
Walmart’s business is about selling shelf space to suppliers who need to be price competitive and able to improve on that competitiveness over time, he said. It was brutally competitive for the company’s suppliers, many of which went out of business. As a result, Walmart began managing the profit of some of its suppliers.
With cotton products, the retail giant began to work with primary producers in the U.S. to lower the price. Farmers were encouraged to include a short-season crop in their rotation to make up the difference. Walmart then went again to farmers, asking for a shift to organic production for both radishes and cotton. In the process, a new market for organic cotton products was developed.
Seed growers and other farmer may wish to emphasize the third marketing position: customer intimacy, which is about trust and credibility, Downey said. This type of relationship takes time but is possible for sellers who know their products and customers’ needs.
