"The adoption of agricultural brands in the 21st century"; as farms grow larger and producers evolve into more sophisticated, demanding buyers ... how can ag suppliers start and protect customer relationships? (Special Report).

I. Trends Affecting Sales To Larger Producers

Due To Farm Consolidation And More Businesslike Buyers, Creating And Maintaining Customer Relationships Has Grown More Difficult

Almost Three-Quarters Of The Producers Have Undergone Significant Operational Changes (2) ... Making Them More Elusive Sales And Marketing Targets

Size of operation changed                 45%
Merged with another operation              2%
Acquired additional farms/ranches         23%
Acquired by another operation              5%
Expanded by purchasing or renting
  more acreage                            35%
Formed strategic alliances/partnerships
  with other operations                    7%
Started new farm/ranch                     6%
Closed operations                         17%
No such changes                           30%
Merging or Acquiring Farms/Ranches        28%
Involved in Operational Changes           70%

A Clear Trend Toward FEWER But LARGER Operations (2)

* 56% Of Producers Now See FEWER Operations Similar To Their Own

* 54% Now See LARGER Operations Similar To Their Own

Compared To The Previous Generation, Today's Farmers And Ranchers
View Themselves As More Sophisticated And Open To Change

                                       Less/Much              More/Much
                                         Less       About       More
                                       Advanced    The Same   Advanced

* Level of education                      4%         20%         76%
* Knowledge of ag technology              6%          9%         85%
  (genetics, computerization, etc.)
* Understanding of ag's critical          5%         30%         65%
  issues (consumerism, trade, etc.)
* Business skills required for            6%         27%         67%
  success (finance, marketing, etc.)
* Willingness to try new approaches,      6%         27%         67%
  technologies or relationships

(1) Average annual gross receipts of survey respondents = $272,400 in
sales from crops and/or livestock

(2) Compared with the mid-1990s

Note: Table made from bar graph.
Today's Producers Are More Demanding Of Suppliers ... Seeking Greater
Accountability And Returns On Investments (1)

Now have a more businesslike relationship   55%
with suppliers (rely less on personal
attributes)

Now make more objective decisions about     55%
products/brands (performance, ROI, etc.)

Now require reps to stay involved after     49%
the sale (training, consulting,
implementing, etc.)

Now require reps to develop more custom     43%
solutions to our problems/situations

Feel Their Relationships With Suppliers     91%
Are Changing

Note: Table made from bar graph.
Many Producers Are Now Less Loyal To Suppliers ... They're Searching
For Solutions Beyond Those Offered By Current Vendors (2)

Less Open         6%
About The Same   47%
More Open        48%

* Willingness To Evaluate New Suppliers

Note: Table made from bar graph.
Suppliers Must Now Work Harder To Demonstrate Their Company's
Stability (2)

Less Concerned         4%
Much More Concerned   17%
More Concerned        42%
About The Same        37%

* Producers' Concern About Vendor Stability

(1) Compared with previous generations of producers

(2) Compared with the mid-1990s

Note: Table made from pie graph.

II. The Ability Of Reps And Dealers To Make Contact

Sales Reps And Dealers Need Substantial Support In Branding Products And Building New Customer Relationships

Almost Half The Producers Now Have Less Time To See Sales Reps (1)

* Avg. No. Contacts With All Of Reps (in person & via phone): 0.6 per week

More Time        12%
Much Less Time   12%
Less Time        33%
About The Same   43%

Note: Table made from pie graph.

* 80% Of Producers Don't Regulary See COMPANY/MFR. Reps At Their Farm/Ranch

* 41% Don't Regulary See DEALER Reps At Their Farm/Ranch

In Responding To Suppliers' Ads ... Buyers Often Sidestep Reps By Going To A Vendor's Web Site For More Information (2)

Respond By Going Online (2) To Avoid Reps   83%
Frequently/Very Frequently                  44%
Rarely/Never                                17%
Sometimes                                   39%
Frequently                                  28%
Very Frequently                             16%

Note: Table made from bar graph.
Before Visiting Ag Dealers For New Products
Or Equipment, Buyers Usually Have
One Or Two Brands Already In Mind
(those they've seen, read or heard about)

Very Freq. Have Brands in Mind   16%
Frequently Have Brands in Mind   48%
Sometimes Have Brands in Mind    29%
Rarely/Never                      7%
Freq. Very Freq.                 64%
Freq. Very Freq. Sometimes       93%

Note: Table made from bar graph.
Producers Feel Dealers
Usually Don't Have The Time To Discuss
A Category's Multiple Brands, In-Depth

Sometimes/Rarely/Never       81%
Never                        10%
Rarely                       28%
Sometimes                    43%
Frequently Very Frequently   19%

(1) Compared with the mid-1990s

(2) Based on producers now online; 46% online as of 3/02 + 13% plan to
do so (within avg. of 9 mos.) = 59%

Note: Table made from bar graph.

III. The Role Of Communications Programs

Customer Relationships Are Initialed By Communications Media ... Primarily Via Ag Magazines And Newspapers

Two-Thirds Of Producers First Learn About A Supplier's Capabilities And Products Through The Vendor's Communications Programs

First learn of them through communications   68%
programs (magazine/newspaper/TV/radio ads,
Internet promotion, publicity, etc.

First learn through sales reps and dealers   32%

Note: Table made from bar graph.
Communications Programs
Pave The Way
For A Rep's Sales Calls

No     9%
Yes   91%

* Whether Prior Knowledge
Of A Supplier Makes Granting
Appointments More Likely

Note: Table made from pie graph.
Producers Select Ag Publications
As Their Primary Medium
For Continuing Education

                                               Usefulness in Staying
Medium                                       Current With Change (1)

* Agricultural magazines/newspapers                              82%
* Ag newsletters                                                 69%
* Farm shows (exhibits/seminars)                                 68%
* Ag dealers/retailers                                           63%
* Ag supplier sales reps                                         51%
* Ag conferences (not part of trade shows)                       50%
* Ag radio shows                                                 48%
* Ag television programs                                         43%
* General daily newspapers                                       34%
* Web sites from ag magazines                                    30%
* Web sites for ag not affiliated
  with ag magazines                                              30%

(1) Very useful + useful
Ag Publications Are The Principal Way
Producers First Learn About
New Products, Equipment And Suppliers

                                                  First Learn About
Medium                                       New Products/Suppliers

                                                      Ranking As #1

* Ag publications (either ads or
  news/articles)                                                59%
* Ag supplier/dealer sales reps                                 19%
* Farm show exhibits                                            11%
* Direct mail announcements/brochures
  from suppliers                                                 4%
* Ag reference publications (directories,
  buyer's guides)                                                2%
* Ag television programs                                         1%
* Ag radio shows                                                 1%
* Radio programs (not ag specific)                               1%
* Web sites from ag publs. (with product
  nows/databases)                                                1%
* Web sites for agriculture not affiliated
  with publications                                              1%
* Ag supplier/dealer Web sites                                   0%
* Broadbased search engines (Yahoo, etc.)                        0%

IV. Trends In Producer Involvement With Ag Publications

To Meet An Array Of Challenges, Producers Now Rely Even More Heavily On Ag Magazines And Newspapers

Across Producers Of All Ages,
Ag Publications Will Be Even More Important In The Future

Less/Much Less Important    8%
More/Much More Important   58%
The Same Important         34%

* The Importance Of Ag Publications In The Next 3-4 Years

Note: Table made from pie graph.
By Age
("Just As"/"More Important")

20-29   99%
30-39   96%
40-49   91%
50-59   89%
60+     95%

Note: Table made from bar graph.
Producers Recognize
That The Magazine
Format Offers
Distinct Advantages

Convenience; can reach for/get into them quickly               68%
Portability; can read at work, at home, etc.                   67%
Constructive; they contain useful information                  60%
They're credible source of ag information                      58%
Very visual, bringing info to life with photos, charts, etc.   54%
"Tangible"; enjoy thumbing through them                        44%
Offer "random access" to any article                           40%
"Personal"; relevant to my areas of interest                   37%
They do the research for me                                    37%
Easy to remove articles/ads                                    33%

Note: Table made from bar graph.
Into The Future ...
Larger Producers Expect To Continue Investing
Significant Time With Ag Publications

By Age
(time spent reading per week)

                                 % Who Will Spend
                 Time Now        The Same Or More
     Age       Spent Reading   Time (Next 3-4 Yrs.)

* 20-29 Yrs.      5.3 hrs.             99%
* 30-39 Yrs.      3.4 hrs.             87%
* 40-49 Yrs.      3.0 hrs.             85%
* 50-59 Yrs.      3.7 hrs.             87%
* 60+ Yrs.        3.0 hrs.             85%

Total             3.3 hrs.             86%

V. Advertising In Ag Magazines And Newspapers

Publication Advertising Continues To Be A Primary, Powerful Medium For Starting And Protecting Customer Relationships

Across All Media--Your Sales Messages Will Be Exposed Most Frequently
In Ag Publications

% Ranking As The #1 Medium For Frequent Exposure To Advertising
(% Ranking in Top 3)

Ads in farm publications                            69%   (94%)
Ads on farm radio programs                           9%   (34%)
Direct mail adv. from ag suppliers                   9%   (56%)
Ads on farm directories (print)                      5%   (64%)
Ads on farm TV programs                              5%   (28%)
Ads on indp't. Internet sites                        1%    (9%)
Ads on ag supplier Web sites                         1%    (8%)
Ads on Internet search engine sites (Yahoo, etc.)    1%    (6%)
Ads on online service provider sites (AOL, etc)      0%    (2%)

Note: Table made from bar graph.
85% (1) Have Positive Perceptions Of Ag Suppliers Who Communicate
Regularly Via Publication Advertising

Likely to be a more well-established company                53%
Likely to be one of the more stable companies               44%
Likely to be one of the more successful companies           41%
Likely to be a more reliable supplier                       37%
Likely to offer more innovative/state-of-the-art products   36%
Likely to have more significant resources                   35%
Likely to be more customer-oriented                         33%

(1) Unduplicated

Note: Table made from bar graph.
Response To Ag Publication Advertising Continues To Remain Strong
... Especially Via Direct Methods Of Response (Phone, Web Sites, etc.)

Less Often   14%
More Often   30%
Same Level   56%

* 86% Of Producers Are Seeking Out/Requesting Information More Often Or
At The Same Level (Vs. 3-4 Yrs. Ago)

Note: Table made from pie graph.
Return reader service cards                          55%
DIRECT METHODS OF RESPONSE (Unduplicated)            96%
Telephone manufacturers/dealers                      84%
Discuss products with manufacturers'/dealer' reps    80%
Visit suppliers' show exhibits                       75%
Send back a specific suppliers' reply card           50%
Visit manufacturers' Web sites                       37%
Visit dealers' Web sites                             31%
Go to distributors' Web Sites                        15%
E-mail                                               14%
Write/Fax                                            19%
Save ads for reference                               64%
Suggest products be used                             61%
Discuss advertised products with staff               52%
Pass on ads to others for action                     40%
(unduplicated) Electronic Methods                    41%
(unduplicated) Are Using Direct Methods Of Contact   96%

* Based on using each method very frequently, frequently or sometimes

Note: Table made from bar graph.

VI. Conclusions

* Today's ag market continues trending toward fewer but larger producers ... operations managed by ever-more astute, businesslike buyers who have less brand loyalty. These shifts require ongoing contact and branding efforts ... but reps and dealers need considerable support in starting and protecting customer relationships.

* Clearly, it's a supplier's communications program that initiates these bonds. And by a wide margin, ag publications remain the #1 communications medium. Not only are they the producer's primary source of continuing education, but they're the principal way buyers learn about suppliers' products.

* From establishing initial contact to generating awareness, positive perceptions and creating a willingness to meet with reps ... publications will remain an essential medium for building customer relationships in the ag product adoption process.

STEPS IN BUILDING CUSTOMER RELATIONSHIPS           EFFECTIVE ROLES

1.  Establish Initial Contact
2.  Create Company/Product Awareness               Ag Communications
3.  Develop Positive Perceptions                   Media (especially ag
4.  Develop Preference For The Company/Product     magazines/
5.  Create A Willingness To Meet With Reps         newspapers)
6.  Stimulate Direct And Indirect Sales Leads

7.  Position The Company/Product Vs. Competitors
8.  Customize The Product To Client's Needs
9.  Create And Present Custom Proposals            Personal Selling
10. Negotiate                                      (Reps & Dealers)
11. Follow Up
12. Close The Sale

13. Keep Customer Sold: Generate The Next Scale    Ag Communications
                                                   Media

VI. Methodology

* Date Conducted/Medium: March, 2002; mail survey.

* Universe Studied: 7,000 unduplicated names were selected at random from the crop and livestock databases of 11 ABM/Agri Council member organizations.

* Types Of Producers Surveyed: To generate results from larger producers, each publication's list reflected minimum crop or livestock sizes (e.g., 250+ acres of corn, soy or cotton, 100+ head of beef, etc.). Titles surveyed: owners/operators/managers/supervisors.

* Incentive: $1.00

Effective Mailing: 308 undeliverable, unusable or late returns. Effective mailing = 6,560.

* Response Rate: 2,418 usable returns = 36.9%. Maximum overall sampling tolerance (95% confidence level) = margin of error of +/- 2.0%.

* Weighting: The results in this report (reflecting all segments combined) have been weighted to reflect the agricultural universe. See complete report for details.

EXECUTIVE SUMMARY

* Market trends affecting suppliers

* Producer attitudes about suppliers

* Making contact through reps/dealers

* The role of communications media

* The role of ag publications

* Advertising response trends