Serving multiple market segments effectively: while the number of large farm operations is increasing, agribusiness firms still depend upon business from all segments to remain profitable.The concepts surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. 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. sound easy and straightforward when studied in theory in the classroom. However, when one moves from theory to practice, what was once a straightforward concept becomes a complex management phenomenon. In today's market environment, managing multiple market segments is a reality--it is not a choice. The business marketplace is changing. Managers who serve farmers know all too well how the size distribution of farmers is shifting towards fewer and fewer small farms, while the number of large farms increases and the total number of farms decreases. So, one conclusion when considering this phenomenon is that larger, or commercial, producers are becoming more important and agribusinesses will be well served by focusing attention toward them. However, this would not be an effective strategy. An Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the survey of agribusiness agribusiness Agriculture operated by business; specifically, that part of a modern national economy devoted to the production, processing, and distribution of food and fibre products and byproducts. representatives was conducted by Purdue's Center for Food and Agricultural Business in the fall of 2003. 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. were asked to indicate the percent of total profit or gross margin that they receive from doing business with customers in different size categories. Considering the farm operations with sales of over $2.5 million, more than 80 percent of the agribusiness survey respondents indicated they received less than one-fourth of their profits or gross margins from this group. It is also interesting to note that less than 5 percent of respondents indicated that these large or commercial farm operations yielded over 75 percent of their profits or gross margins. So, while the number of large farm operations is increasing, agribusiness firms still depend upon business from all segments to remain profitable. What does serving multiple market segments really involve? First, consider your customers: how do you identify needs, develop and deliver unique value propositions and channel these through sales to multiple segments? Second, there are questions related to your business: * How do you implement systems to deliver to multiple market segments? * How do you devise flexibility for company representatives in the fields? * How do you handle the internal politics within your company? * How do you handle questions related to differential pricing of the same products and marketing one brand to different segments? * What do you do when questions of integrity arise related to the fact that you are treating some customers (in one market segment) differently than other customers (in another market segment)? * How do you serve smaller clients economically? In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke" put differently , can you actually deliver to multiple segments at the same time? * Another overriding (programming) overriding - Redefining in a child class a method or function member defined in a parent class. Not to be confused with "overloading". question is: when does too much complexity impact effectiveness? HANDLING MULTIPLE MARKET SEGMENTS As noted above, size is an important and often-used method of segmenting different markets. In the Internet survey mentioned previously, respondents were asked how they interacted differently with large (or commercial) producers versus other producers. Figure 1 illustrates how the respondents maintained information on commercial producers versus other producers by respondent In Equity practice, the party who answers a bill or other proceeding in equity. The party against whom an appeal or motion, an application for a court order, is instituted and who is required to answer in order to protect his or her interests. firm size. In the graph, the categories on the vertical axis correspond to collecting different amounts of information (1=less; 5=more) on commercial producers compared to other producers. The four bars in each category correspond to the size (in annual sales) of the responding firms. In general, respondents kept more information on commercial producers than other producers. [FIGURE 1 OMITTED] Figure 2 illustrates how respondents felt they negotiated with commercial producers compared to other producers. The same five ategories (1=less; 5=more) and the same four firm size categories hold as described for Figure 1. Respondents indicated that they negotiated to a greater extent with commercial producers compared to other producers. The responses to other questions provided consistent results: respondents were more likely to have frequent contact with commercial producers compared to other producers, and they were more likely to have personal relationships. [FIGURE 2 OMITTED] DEALING EFFECTIVELY WITH MULTIPLE MARKET SEGMENTS Dealing effectively with multiple market segments is consistent with good strategic business planning. Begin by identifying who you are and what your business is. Referring back to your vision and mission statement is a great strategy here. Evaluate your business strengths and assess your competitors' strengths and weaknesses. After evaluating your customer base you will be able to determine logical breaks or customer segments. Next, develop your marketing strategy around your strengths and consistent with the logical breaks or segments. However, Andy Miller Andy Miller may be:
The Weavers are small passerine birds related to the finches. These are seed-eating birds with rounded conical bills, most of which breed in sub-Saharan Africa, with fewer species in tropical Popcorn POPCORN - AI system built on POP-2. "The POPCORN Reference Manual", S. Hardy, Essex U, Colchester, 1973. , Indianapolis, provided an important caveat during his presentation at Purdue's 2003 National Conference for Agribusiness. He noted that a difficult part of developing your strategy is deciding which customers / groups / segments you are willing to walk away from or ignore. Tim Kavanaugh, general manager of Federated Connected and treated as one. See federated database and federated directories. Co-ops Inc. in east central Minnesota Central Minnesota is the name of the region consisting of the central portion of the state of Minnesota. Although no specific boundaries of the region exist, most definitions of what makes up the region would generally consist of the vast swath of land north of Interstate 94, east and western Wisconsin, is successfully serving multiple market segments in a diversified diversified (di·verˑ·s supply cooperative. While speaking at Purdue University's National Conference for Agribusiness, he provided some specific ideas. In particular, he found that profitably serving the lifestyle farmer required being open later hours, employing a different kind of employee for the weekend business, and having better storefronts that had the feel of a farm store but the look and convenience of a city store. As you are planning your strategy for dealing with multiple market segments consider the following questions: * What is your company's mission/core and secondary business? * What is the nature of your customer base and what are the logical segments? * What are the strengths and weaknesses of your competitors? * What opportunities are afforded to you in this marketplace? * What customer segments do you need to walk away from? * What products and services can you offer that provide unique service to your target customer segments and afford you a competitive advantage? Remember that managing multiple market segments is not a choice--it's a reality! Dr. Joan Fulton is an associate professor, Center for Food and Agricultural Business, Department of Agricultural Economics Agricultural economics originally applied the principles of economics to the production of crops and livestock - a discipline known as agronomics. Agronomics was a branch of economics that specifically dealt with land usage. , Purdue University Purdue University (pərdy  `, -d`), main campus at West Lafayette, Ind. .
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