Marketing into chaos: manufacturers and purveyors of animal identification technology and services are using collaboration and good old-fashioned competition to get the ball rolling.

Herding cats. Herding wild-eyed cats through a cactus patch at midnight. That's what development and adoption of a national animal identification program in this nation has been like.

Marketing the products and services for such a program, one that likely will be mandated by the government, can be worse.

"We've said for many years in our business that our biggest challenge in marketing is inertia, getting that stationary object to start moving," explains Glenn Smith, USA country manager for AgInfoLink. The company provides hardware, software, data management and service that enables the beef industry to identify and track cattle and beef products from the ranch of origin to the retail counter.

Companies like AgInfoLink had just about gotten the rock of inertia to budge based on the intrinsic added-value opportunities of livestock identification and traceability.

For simplistic perspective, by using animal ID and tracking, some cattle producers have begun aggregating cattle of similar production types together to be managed similarly, creating a more consistent beef product. By tying production information back to individual identification, producers like these have been able to ferret out the bad apples, reduce variation and increase returns. That, as opposed to trying to shift the production attributes and bell curves of an entire population by shooting at mill-run averages as has been done traditionally.

Bottom line, the allure and the reality--and in some cases added net value--of this scenario have driven market growth, albeit slowly. That's the commercial marketing side of animal ID and tracking.

Then, Uncle Sam stepped in. When a Canadian import cow was discovered to be infected with bovine spongiform encephalopathy (BSE) almost two years ago, USDA accelerated its efforts to establish a national animal identification program. It was needed because the success of disease eradication programs (such as brucellosis and bovine tuberculosis) that had served as defacto national animal ID programs have about run their course. The result is the National Animal Identification System (NAIS). Problem is, NAIS is a plan in the making. USDA has yet to finalize the rules and standards for the program, though it continues to suggest it will make the program mandatory by Jan. 1, 2009.

"By every business metric, our business has grown. The number of producers involved in value creation by using identification and traceability has grown, but not at the pace we originally projected. It's not even on the same trajectory it was two years ago," says Smith. "In the past two years, discussions revolving around NAIS have placed enough uncertainty on the minds of customers that they have delayed making buying decisions."

REACHING THE UNREACHABLE

It's not like marketing animal ID products and services was easy to begin with.

For one thing, Kathy Cornett, chairman of McCormick Company, a leading agricultural marketing and communications firm, explains, "The identification devices themselves fit a fairly classic marketing model. They're manufactured products with quantifiable attributes, products you can see and touch. But, the electronic devices, the data services and information-capture products are more difficult to market, especially when you consider they are being marketed to a producer audience largely unfamiliar with the technology."

Plus, there are still a significant number of producers who haven't yet embraced animal identification for any purpose.

Brian Bolton, president and CEO of Allflex USA, the largest manufacturer of physical and electronic animal identification tags in the world, estimates 60 percent of all cattle in the United States wear an ID ear tag at some point in their production lives. Of that population, though, he says fewer than 10 percent receive electronic ear tags. These tags--an electronic chip contains a unique animal ID number that can be accessed with an electronic reader--are what the cattle industry is lobbying USDA for in the NAIS program.

"That helps you understand one of the hurdles with NAIS," says Bolton. "There are market signals telling producers that individual identification is part of receiving the added value that accompanies programs such as source verification or the government's Beef Export Verification program. These value-added opportunities will drive an increasing number, but still a small percentage, of producers to do this. It won't touch any of those other 40 percent who haven't yet embraced animal ID. And, you need that other 40 percent for epidemiological purposes."

Bolton is referring to the ultimate goal of NAIS, which is to be able to track any head of livestock in the U.S. back to all previous locations of residence within 48 hours, for the purpose of animal disease surveillance and animal health monitoring.

MARKETING TO THE MISSION

Given the current lack of NAIS program standards and the resulting confusion and delay in buying decisions, the product and service companies mentioned in this article continue to focus on marketing the reasons for their existence, as much as the products and services they sell.

"Allflex's mission globally is to assist in the implementation of animal identification systems," explains Bolton. "We have experience with both commercial marketing, where producers determine the management value of ID, and with animal identification within mandatory systems."

Incidentally, Bolton says 35 nations and states currently have mandatory animal ID programs in place around the world. The United States will be the last developed country to adopt one.

"No marketplace has achieved epidemiological compliance through commercial programs (value-added incentives) because not everyone is interested in making the last dollar available," says Bolton.

So, industry-wide adoption of animal ID has required governmental mandate in other countries. Even then, marketing isn't a snap. Consider Allflex. They have 70 to 100 percent market penetration in every nation utilizing national ID. "Simply having a technological mandate does not give you the right to own that market. You have to earn market share every day of the week," says Bolton.

As the tag manufacturer in this equation, BoRon explains, "It's the agency or company involved in implementing ID systems that has to communicate the value of the system to the producer, be it for biosecurity and market access or value-added opportunities. That messaging doesn't come directly from the tag manufacturer."

In a nutshell, the companies marketing systems incorporating the manufacturer's device demonstrate the need for using the system. The manufacturer's marketing focus revolves around demonstrating why their particular product should be a component of the system.

"So, you still have a need for brand messaging in this market environment," says Cornett.

While each player in the ID system has different marketing and communications responsibilities, Bolton is quick to point out, "It's a collaborative marketing process. The collaboration may be less formal in the open (non-contractual) market, but you still have the duty of prudent care to make sure your promotions don't contradict or take liberty with the message of the company involved. It's part of your responsibility in the marketplace. No one likes to have their brand taken for granted or misused."

Likewise, Smith emphasizes that there remains the age-old need to differentiate. "We have to provide a clear choice in the market place," he says. In fact, he explains this need will grow when the products and services become more of a commodity, given the price-sensitive nature of the industry.

"And, we definitely have to stratify our market," explains Smith. That means producers, feeders, processors, retailers and service organizations each represent distinct target audiences. In addition, each of these audiences is segmented further.

"There are different products and messages for each of these audiences," says Smith. "But a common theme runs through all of those messages that there is value in traceability. Our focus has been and will continue to be on helping producers find opportunities through individual animal identification with or without a regulatory mandate."

SHARING THE CHALLENGE FOR COMMON OPPORTUNITY

As competing companies work to market their missions and differences, however, companies like these are also banding together to leverage the educational part of marketing.

"Fiercely competitive companies have found ways to develop relationships and alliances," explains Smith. "That doesn't mean we won't continue to be competitors, but it has fostered cooperation."

As an example, Beef Information Exchange (BIE) is a coalition of animal ID data service companies (including AgInfoLink) that banded together to facilitate development of information-sharing standards. "BIE is a classic example of competing companies coming together to help reshape national discussion," says Smith.

This type of collaboration is in addition to alliances being forged through pilot projects funded by USDA to test hardware and data exchange protocols.

For that matter, the blessing and curse of animal ID has been the number of different entities communicating what at times seems a disparate message to producers. Besides companies, USDA, state animal health departments, extension services and producer organizations are all weighing in about how producers should handle ID.

More specifically, Cornett remembers, "You'd go to a cattle trade show eight or 10 years ago, and you'd hear a lot about ID as it related to data capture and the value of it. Most of the talk the past two years has been about ID as it relates to NAIS. From a marketing standpoint, I think that's why some producers are doing a double-take with NAIS ... Animal ID has not traditionally been thought of by producers as part of animal health programs."

In other words, if what you were telling me was important then, why isn't it as important now? Like the need for ongoing brand messaging in such an environment, Cornett says this underscores the need for companies to constantly restate their core message and benefits.

Add to this the additional need for market presence as new players enter the marketplace. "An interesting dynamic to the evolution of the market has been the number of companies without livestock industry history looking to enter this sector," says Smith. "We don't mind the competition, but it does create another layer of confusion."

Moreover, if NAIS becomes mandatory, collaboration may be helpful in countering disgruntled producers. "If your market category gets shoved down the customer's throat by government, does that make you a bad guy?" wonders Cornett. "The marketer gets placed in an unnatural position with a very skeptical customer."

Bolton doesn't necessarily think a mandate forces that to happen as long as the products and services bring solutions to the customer that offer value and responsibility to the end user.

Smith is one of those who always sees what's left in the proverbial glass of life, rather than what isn't.

"In a mandatory situation the opportunity exists to provide a reasonably priced product or service that minimizes the producer's regulatory pain. That gives me the opportunity to be the good guy. Then I can show the producer the opportunity to create value that is provided by the regulation," says Smith. "At first it may seem like a negative marketing environment, but it's really not."

Wes Ishmael is owner of Clear Point Communications, Benbrook, Texas, and former LPC president.