Ready to rumble: AGCO kicks into high gear to sell its new line of tractors sporting the AGCO name. (Cover Story).

"Introducing AGCO brand tractors was a very significant step for us," says Randy Hoffman, vice president, sales and marketing, North America of AGCO Corp., based in Duluth, Ga. "When we decided to put the AGCO name on the side of our product, we knew it must be the best we could offer."

Therefore, the company turned to its entire team to help with the endeavor. "It was a group process involving engineering, manufacturing, marketing, sales, dealer panels and customers," Hoffman reports. "For the new line to be a success, the whole organization has to be behind the brand and do whatever it takes to satisfy our customers."

Wilbur Laker, owner of Laker Farm Implement Services Inc. in Rushville, Ind., and a member of the AGCO Allis dealer panel, says he's happy to see the AGCO name on the side of a tractor. "It's a good thing," says Laker, whose dealership has been in business since 1978. "I'm hearing very positive comments from customers who are coming in to test-drive the new tractors."

Hoffman says having the full support of dealers is key to the success of the new tractor line. "By focusing our resources on the growth of a single tractor brand rather than two, we can build one strong brand that will offer farmers the advanced technology and productivity they expect and demand," he explains.

DEALER BACKING

AGCO started working closely with its Allis and White dealer panels in 1999 on a strategy to merge the two brands into one. "What we heard loud and clear from the dealers was that it was appropriate to put the corporate name on the tractors," says Dennis Heinecke, vice president, Challenger Products and AGCO Tractor.

He adds that dealers observed that AGCO is a positive name in the marketplace and reflects a strong, financially capable company. "Because of some of the turmoil in the farm industry with other major manufacturers, dealers are looking for a company to provide clear direction to what the future is," Heinecke says. "That's what we're giving them."

Selecting the color for the new equipment was a top concern. "Color is an emotional issue with customers, particularly for farm tractors," Heinecke notes. "We wanted input from our dealers and customers."

So the marketing team analyzed market share for the AGCO Allis and White brands and researched brand recognition. "Combining the results of the research with the comments from our dealer panels, we decided to go with the corporate orange color," Heinecke says.

Jim Maciel, store manager for Tri-Counties Equipment Co. in Hanford, Calif., and a member of AGCO's dealer panel, says some White dealers resisted using orange. "But they realized we need to have a single, unified brand with one color," he explains. "Going with the AGCO name and color shows the company is committed to the brand and to our customers. Our reputation is on the line."

A lot more than a brand name and color has gone into the new tractors. "We integrated the best features from the AGCO Allis and White tractors into the new line," Hoffman says. "We addressed performance issues, standardized the Cummins engine into the new line and corrected all known reliability issues before we went into production."

The result is a brand of tractor dealers that are eager to get their customers to test-drive. "All the publicity is stirring up a lot of interest," Maciel says. "Farmers are coming in wanting to see and drive the tractors."

Maciel's first shipment of AGCO tractors was due to arrive in early 2002. An open house was set for February so customers can drive the tractors, see how they handle and get a look at the improvements, particularly the electronics. "AGCO has spent a lot of money making a very reliable, full-featured tractor that is equivalent or ahead of the industry in just about every category," he points out.

All former AGCO Allis and White dealers across North America are now AGCO dealers. Heinecke notes that the company will continue to provide long-term parts support for the AGCO Allis and White tractors, plus upgrade packages and programs for future maintenance requirements.

HITTING THE ROAD

To get its 500 North American dealers up to speed on the new tractors, AGCO sponsored 11 regional introductions in August through October. "Our goal was to get as many dealers, salespeople and servicemen to drive the tractors," Heinecke says. He adds that the company achieved close to 100 percent dealer participation in the meetings.

As soon as each meeting was over, the company shipped tractors to the dealers, Heinecke notes. Then the dealers sponsored field demonstrations, open houses or customer meetings to show off the new tractors. AGCO supported dealers with a variety of incentives to bring in customers. (GETTING THE JOB DONE.) "The message to the customer has been: You've got to drive one to experience the new features," Heinecke says.

AGCO also utilized field demonstrations at major farm shows this past fall so farmers could drive the tractors.

What's more, as part of AGCO's commitment to get all employees involved in the success of the new brand, team members recently traveled to the manufacturing plant in France to make a special presentation to employees. "It's the first time we've stopped production at the plant for such an event," Hoffman points out. "We wanted to show the team members -- everyone from manufacturing, purchasing and engineering -- how important it is to satisfy our customers. Our message was: Don't ship a tractor unless it is right."

ALL IN THE FAMILY

The full line of AGCO tractors boasts four series -- three introduced in the fall of 2001 and the ST Series of compact tractors ranging from 23 to 44 engine horsepower, which debuted in late 2000. The tractors are intended to increase productivity and ease of use for the operators. Features of the three larger series include:

AGCO LT Series tractors -- 70 to 85 PTO horsepower

* Turbocharged Cummins 3.9L engines

* Quiet, spacious cabs or folding ROPS

* 24X24 PowerShuttle transmission

* 2WD or PFA

* 540 and 1000 RPM PTO standard

AGCO RT Series tractors -- 95 to 145 PTO horsepower

* Turbocharged Cummins 5.9L engines

* Quiet, spacious cabs or 2-post ROPS

* 32X32 Auto QuadraShift or Dual Control powershift

* Closed-center, pressure flow-compensated electro-hydraulics

AGCO DT Series tractors -- 160 to 225 PTO horsepower

* Turbocharged Cummins 8.3L engines

* Quiet, spacious cabs with instructor's seat

* Dual control powershift transmission

* Up to 19,000 pounds of 3-point lift capacity

Laker points out that his dealership's customers are especially interested in the powershift on the steering column, which makes the tractors a lot more comfortable to operate. "I'm also impressed with the electric hydraulics as well as the autoshift," he notes.

SIGNS OF SUCCESS

Hoffman says AGCO has been overwhelmed by the success of the new tractors. "We're very pleased with the sales and dealer activity," he notes.

Heinecke reports that close to 1,000 initial tractor orders have been written so far. "That's a significant number," he says. "Plus, the retail sales are exceeding our wildest expectations."

In addition, the new AGCO line is expected to provide the opportunity for the company to double its market share in North America, Hoffman notes. "We expect to realize a 10 percent improvement in margin over the two tractor brands the new line replaced," he explains. "These cost savings will be attributable to focusing energy and capital resources into one product."

Heinecke adds that the new line of AGCO tractors will allow the company to carve out its own piece of market share. "AGCO will now build market share with its three major tractor lines -- AGCO, FENDT and Massey Ferguson," he explains. "Each has its own unique position in the marketplace and will contribute to the company's continuing growth."

The task: Merge two established farm equipment brands (AGCO Allis and White) into one brand that will delight dealers, excite buyers and stimulate sales.

The strategy: Use AGCO Tractors as the flagship brand for a new line of tractors from AGCO Corp. The line replaces the prior two brands.

The result: Strong interest in the new tractors -- ranging from 70 to 225 PTO horsepower -- from dealers, current customers and prospective buyers alike.

RELATED ARTICLE: Company acquisitions.

AGCO Corp. was organized in June 1990 by an investment group formed by management to acquire the successor to the agricultural equipment business of Allis-Chalmers, a company that began manufacturing and distributing farm equipment in me early 1900s.

Since then, AGCO has grown substantially through a series of 19 acquisitions. The company now offers 18 brands, including the newly launched AGCO[R] signature tractor line. Other brands in the product line include Massey Ferguson tractors, Gleaner combines, Hesston hay tools and the recently acquired Challenger[R] tractors.

"Adding the Caterpillar Challenger machines to our brand line-up puts AGCO in a strong position to respond to the growing customer need for high-horsepower track-type tractors that can maintain more efficient traction under full loads than conventional rubber-tire tractors of similar size," says Randy Hoffman, AGCO's vice president, sales and marketing, North America. "The versatile new MT Series not only addresses that need, but also provides the latest technology to tackle a wide variety of farming applications."

Hoffman adds that Caterpillar's innovative tractor technology gives AGCO a leading entry into high-technology farming and large-acreage farming market segments. "AGCO will provide Caterpillar dealers with additional products that will broaden their equipment offerings and enhance their competitive position in the agricultural equipment market."

Overall, Hoffman says AGCO's acquisitions during the last dozen years have allowed the company to broaden its product line, expand its dealer network and establish strong market positions in North America, South America, Western Europe and the rest of the world.

RELATED ARTICLE: Getting the job done.

Creating a marketing communications program that matched the uniqueness of the introduction of the AGCO brand was both exciting and challenging for the company's in-house communications group. "We had to put together a communications plan that really delivered a great brand promise to support what is now our flagship brand," says Doug Durand, AGCO's manager of marketing communications for North America. "We had to do it in a way that we really hadn't done before."

As such, the company turned to Woodruff & Co., an advertising and marketing agency in Columbia, Mo., for assistance with the marketing communications efforts. "To go into an established marketplace with a new brand was quite an undertaking," says Mike Kane, vice president/account supervisor for Woodruff. "We needed a campaign that would stir up curiosity about the AGCO brand and tell farmers that they owe it to themselves to drive the new tractors."

Durand says the goal was to develop an image for the AGCO brand of tough, rugged, powerful tractors. And the "Ready to Rumble" tagline has helped the campaign do just that.

"We wanted to be aggressive and let dealers and customers know that AGCO is in the tractor business to stay," he says. "We wanted to demonstrate that the tractors are strong enough to compete head-to-head with established brands."

That's why the promotional materials and ads portray the tractors hard at work in the field -- complete with mud and crop stubble on the tires. "We wanted to show that the tractors are workhorses," Kane points out.

Durand says the marketing communications efforts have four target audiences: internal, dealers and the two end user groups (current and prospective customers). "We particularly wanted to appeal to a younger generation of farmers," he notes.

The communications efforts included print, television, radio, direct marketing, the Internet, point of sale, launch meetings and a significant trade show presence this past fall. The company made regional buys and offered cooperative advertising opportunities for dealers. Dealers also received new product literature and an extensive product training CD to make sure they understood all the new product features, their benefits and competitive product comparisons, Durand says. "We covered all the bases."

A direct mail loyalty campaign targeted at customers who purchased tractors from AGCO during the past 10 years also has proved to be especially valuable. Recipients received a certificate offering a $2,000 rebate on the purchase of a new tractor by the end of 2001. "This campaign has been very successful at getting farmers to go to a dealership to check out the new tractors," says Dennis Heinecke, vice president, Challenger Products and AGCO Tractor.

The company also wanted to make a big splash at the fall farm shows and get farmers thinking about year-end buying for tax purposes. Kane notes that AGCO sponsored a sweepstakes at six farm shows offering winners 300 hours with the AGCO tractor of their choice. A total of seven tractors were awarded, six from the farm show entries and one from a promotion done in conjunction with AgWeb, Durand notes.

Debbie Coakley is a freelance writer based in Warrenville, Ill.