COMMERCIAL PRODUCER INSIGHTS.EDITOR'S NOTE Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : Following are highlights from the Commercial Producer Project about large commercial producer market segments. It is the final part of a three-part series. The previous two articles highlighted farm operation descriptions and producers' buying behaviors. With the support of sponsors (ADA/Moorman's Inc., Deere & Company, Novartis Novartis International AG (NYSE: NVS) is a multinational pharmaceutical company based in Basel, Switzerland that manufactures drugs such as diclofenac (Voltaren), carbamazepine (Tegretol), valsartan (Diovan), imatinib mesylate (Gleevec / Glivec), cyclosporin A (Neoral / Crop Protection Inc., Pioneer Hi-Bred Pioneer Hi-Bred is one of the largest U.S. companies which produces hybrid seeds for agriculture. History In 1926, farm journal editor and future U.S. Vice President Henry A. Wallace, along with a group of Des Moines, Iowa businessmen, started the "Hi-Bred Corn Company". International Inc. and Terra Industries Inc.) and an associate sponsor (Farm Journal Inc., publisher of Top Producer magazine), the Center for Agricultural Business at Purdue University Purdue University (pərdy  `, -d`), main campus at West Lafayette, Ind. collected data from more than 1,700 operators.
The project was undertaken in 1998 to provide insight into the rapidly evolving group of large commercial producers because this group accounts for the majority of agricultural inputs purchased. The commercial producers surveyed in the Commercial Producer Project were broken into three main groups: 1) mid-sized producers ($100,000 to $499,999 1997 gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. ); 2) typical large producers (85 percent of the respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. with gross sales exceeding $500,000); and 3) extra-large producers (top 15 percent of the respondents with gross sales exceeding $500,000). To order a complete copy of the study, contact Sandy Leuck at the Center for Lifelong Learning Lifelong learning is the concept that "It's never too soon or too late for learning", a philosophy that has taken root in a whole host of different organisations. Lifelong learning is attitudinal; that one can and should be open to new ideas, decisions, skills or behaviors. by phone at 765/494-2748 or via e-mail at slleuck@purdue.edu See .edu. (networking) edu - ("education") The top-level domain for educational establishments in the USA (and some other countries). E.g. "mit.edu". The UK equivalent is "ac.uk". . The book costs $49 for a single copy. The Commercial Producer Project went beyond exploring the demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. of farming operations and buying behaviors of large commercial producers. It delved into market segmentation Market Segmentation A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. using more powerful statistical techniques, which incorporated interactions across a number of characteristics. To develop market segments, the study administrators sought to identify groups of buyers who have similar interests and behaviors and who will respond in a similar fashion to a given marketing strategy. They used cluster analysis Cluster analysis A statistical technique that identifies clusters of stocks whose returns are highly correlated within each cluster and relatively uncorrelated across clusters. Cluster analysis has identified groupings such as growth, cyclical, stable, and energy stocks. to divide a large group of individuals into smaller groups so the differences between members within any group are as small as possible, but the differences among groups are as large as possible. Segments were defined based on how the responding producers rated a set of criteria used to choose their suppliers for expendable and capital items. The results from the clustering procedure provided four segments of commercial producers: a Balance segment, a Price segment, a Convenience segment and a Performance segment. Each group is explored below. BALANCE SEGMENT Producers in the Balance segment weighted the various components of the product-service-information bundle very evenly when selecting their input supplier. Balance buyers were well represented in every primary enterprise class. There were, however, some differences across classes. Balance buyers represented more than half of the beef and corn/soybean growers compared to just over one-third of the wheat/barley growers. Balance buyers had lower levels of formal education compared to that of the other three segments. Thirty-four percent of the Balance buyers had completed high school or less, and only 5 percent had any postgraduate postgraduate after first degree graduation, the registerable degree in veterinary science. postgraduate degree may be a research degree, e.g. PhD, or a course-work masterate with a vocational bias, or any combination of these. experience. In addition, Balance buyers had relatively humble Humble may refer to:
Balance buyers were heavy users of communication technology, with the highest use of cell phones, computers and e-mail among the four segments. This group of producers tended to rely more heavily on the local dealer than did the other segments when making expendable purchase decisions. Balanced buyers were the most focused on finding sales representatives and dealers who were familiar with their operations. In short, Balance buyers are demanding customers. They want a comprehensive value bundle as well as a carefully evaluated price. PRICE SEGMENT The Price segment accounted for 19 percent of the commercial producers surveyed. These producers were much more focused on price when choosing their suppliers than were farmers in any other segment. On average, Price buyers were more likely found among the larger operations than among the smaller operations -- 30 percent of the extra-large producers were categorized cat·e·go·rize tr.v. cat·e·go·rized, cat·e·go·riz·ing, cat·e·go·riz·es To put into a category or categories; classify. cat as Price buyers compared with only 18 percent of the mid-size producers. Higher proportions of the wheat/barley and beef producers were Price buyers compared to other types of enterprises. Price buyers were the most likely to have completed postgraduate work. Yet there was still a good mix of all educational levels. About one-third of the group had completed some college, but not a four-year degree, and nearly 30 percent ended their formal education after completing high school. Price buyers had the most aggressive growth plans of the four segments. They expected to grow their operations an average of 37 percent during the next five years. One-fourth of the Price buyers planned to grow by becoming more diversified diversified (di·verˑ·s . Compared to the other three segments, farmers in the Price segment were least likely to use a consultant. The local dealer was least important to Price buyers when they considered the various off-farm influencers in purchase decisions. Other farmers and manufacturer/sales representatives were slightly more important to Price buyers than to other segments. CONVENIENCE SEGMENT Producers in the Convenience segment differed from the other segments in terms of their farm businesses and buying behavior. Convenience buyers were driven most by convenience and location when choosing their supplier. Convenience segment farmers had smaller operations and were much more likely to be mid-size producers relative to the other segments. Wheat/barley and corn/soybean producer classes had the highest proportions of Convenience buyers, with more than 20 percent categorized in this segment. Yet Convenience buyers were spread across all enterprise types. Convenience buyers tended to be older than buyers in the other segments. There was no difference between the education level of the Convenience segment and the average education level of the total group. Compared to the other segments, Convenience buyers' growth plans were the most limited, with an average five-year growth estimate of only 23 percent. Convenience buyers perceived themselves to be less innovative and tended to be the least likely to use communications technologies Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems engineering, technology - the practical application of science to commerce or industry . Convenience buyers tended to feel that off-farm influencers of the decision process had the least impact on their purchase decisions for both capital and expendable items. They also tended to buy products from one supplier and valued the information and service of the local dealer much more than manufacturer technical representatives and salespeople sales·peo·ple pl.n. Persons who are employed to sell merchandise in a store or in a designated territory. . PERFORMANCE SEGMENT The final segment, the Performance buyers, was the smallest group in the commercial producer project. Farmers in this group focused on product performance when choosing an input supplier. Performance buyers were found across all the primary enterprise types and sizes, but they accounted for a slightly greater proportion of the cotton and swine swine, name for any of the cloven-hoofed mammals of the family Suidae, native to the Old World. A swine has a rather long, mobile snout, a heavy, relatively short-legged body, a thick, bristly hide, and a small tail. segments than did the other enterprise types. They represented the youngest market segment, with almost 50 percent under 45 years old. Only 5 percent of the Performance buyers were 65 years or older. Performance segment buyers also were the most likely to have completed a four-year college degree, with 39 percent completing a college degree and an additional 11 percent completing some postgraduate education
Postgraduate education (often known in North America as graduate education, and sometimes described as quaternary education . Performance buyers planned to grow their farm businesses by an average of 34 percent during the next five years. These producers were more likely to say their operation would maintain the current mix of activities and become neither more diversified nor more specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. . Overall Performance buyers were the most likely among the four segments to employ an independent, paid consultant, with some 72 percent of these producers using the services of at least one consultant at the time of the study. Off-farm sources had the greatest influence on Performance buyers' purchase decisions. And this group often was more aggressive in seeking information off the farm relative to the other three segments. [GRAPHS OMITTED] |
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