Question 1

How is market research used in agribusiness?

Accepted Answer

In agribusiness, as in other industries, market research is used to measure and track trends, size and segment markets, forecast demand, craft messages, and design products and services. Market research is particularly important to agribusiness for two main reasons. First, with over 600 million family farms in the world which are also geographically disperse, it is difficult to gain intimacy and build relationships with each, so effective segmentation is critical. Second, most agricultural products and services are expensive to produce and deliver, their performance is mission-critical, and failure can have catastrophic consequences. Imagine the difference it makes to a producer’s bottom line if one type of seed results in 2% greater yield than an alternative or the losses that would be incurred if a producer’s only combine broke down and sat idle for a week waiting for parts during harvest. Results of product testing for consumable inputs or major equipment may not be known for a year or more, so it is important to be certain of market needs and preferences before committing the capital to them. Market research is also critical for managing the agricultural brand and loyalty to it. Consumable inputs and large equipment are huge expenses for a producer, and the brand must reinforce trust among producers that they will work as effectively as expected and, where possible, justify a premium over other brands. Because of the size of the investments, the lifespan of equipment, and dependence on the dealer, inertia against switching brands can be high. Customer satisfaction and loyalty studies are important to ensure that brand inertia remains high and justifies its price premium, and competitive assessment and product design studies are critical for determining whether your offering can overcome a prospect’s inertia for a competitive brand. In addition, CX/UX studies are also of particular urgency in agricultural market research. For example, operators of equipment such as planters and combines, many of whom also own the farm, spend many hours every day for months on end inside and on the equipment. For them, comfort and ergonomics are top-of-mind purchase decision factors because they contribute not only to the experience within the cabin but also to their health, safety, and productivity.

Question 2

What are the important methods and approaches for agricultural market research?

Accepted Answer

Historically, agricultural market research data collection has been telephone- and internet-friendly. Because of their geographic sparsity, agricultural producers have always responded well to these remote methods. Online methods have been particularly effective because farmers are traditionally early adopters of technology, especially when it helps them to connect outside their local area or mitigate potential feelings of isolation, particularly in winter. Because of the seasonality of crop types, market research with agricultural producers can be feast or famine. During planting or harvesting season, farmers are generally not available for non-critical activities. They may be more available during the growing season, and are generally available in the winter. Some farmers, however, also plan winter crops, and they may be the most difficult of all to engage. Trade shows and industry events may also be attractive for research. Advantages include a high concentration of producers within a defined time frame, the relative ease of identifying qualified respondents, and the ability to use in-person methods. Challenges include gaining cooperation of the trade show’s sponsor, producer’s willingness to take time away from other activities, and the risk of exposing confidential material to competitors. Especially for CX/UX studies, it can be impossible or undesirable to execute the research from a remote location. In such instances, site visits may be necessary, and it is also common to invite producers or groups of producers to a dealership or a manufacturer’s location. The latter can be especially practical for research involving equipment. When research in a central location is desirable, either to manage a group event or to avoid having to transport materials from place to place, hotels are sometimes used because they are more likely to exist in rural areas than are research facilities.

Question 3

What are the key market segments in the agriculture industry?

Accepted Answer

As with any industry, there are many ways to segment agriculture market participants, and the ideal segmentation may change according to the business issue and circumstance. With respect to conducting market research the following segmentation dimensions can be essential to consider: Type of business: Most research is likely conducted among producers, but research could also target dealerships, seed and feed stores, or manufacturers of consumable or capital inputs. Producers may be further segmented by size and crop versus livestock focus. Roles: Because so many farms are family-owned, it is obviously important to talk to the owner because the owner is likely also the equipment operator, financial manager, service technician, and so on. At large industrial producers, you may have a choice of roles from which to choose. For example, if you are offering financial services, you may want to talk with the business manager, but if you are trying to define comfort, you may want to speak with an operator. However, it is important to remember that although these personnel can give the most insight into the finer points of crop insurance or tractor cabs, their input may ultimately be worthless for product or experience design if the owner is not willing to buy them. Business structure: While it might be straightforward to identify the decision-maker at a small family farm, other producer types may require more effort. A larger institutional producer may operate across many individual farms, and the decision-maker may be several layers deep inside the organization. In some countries, such as France, individual farms may be organized into collectives which might make the capital input decisions for its members. In communist countries, such as China, the state may play a major role in a farm’s decisions. Crop type: It is important to know the crop type that matches to the market issue you are researching and to target producers appropriately. For example, different crop types within a region may have different planting and harvesting seasons. If you schedule your research for a generic time frame, the producers you need to engage may not be available.

Question 4

What are the 3 major challenges to agricultural market research?

Accepted Answer

With respect to agricultural market research, the three major challenges are identifying qualified participants, executing and scheduling the research, presenting the research stimulus. Identifying and contacting producers have always been challenges due to a lack of comprehensive, accurate lists, a problem exacerbated by closures, mergers, and acquisitions in the industry. Further, some smaller farms may not be on anyone’s radar because they may be a producer’s side business or a hobby. Yet, these producers can still be targets for equipment, seeds, and other products and services. As difficult as identification can be, qualifying producers for research may be even more of a challenge, and the challenge starts with defining the qualifications. Suppose you want to target farms based on revenue bands. Assuming they are willing to provide that information, you may have a difficult time distinguishing between a large producer and a medium or even a small producer because the factors that determine revenue can vary greatly from year to year. The definitions need to be monitored and adjusted year to year. It can also be challenging to define criteria to match your needs as the product or service you need to research may be appropriate for some producers and not others. If you are doing international research, certain crops may be feasible in some regions but not others, and this can be true even in countries with smaller land areas. If your product or service is only appropriate for certain crops, this needs to be built into the targeting to make the recruitment more cost effective and into the screening to exclude irrelevant prospects. Farm size can also play a role because certain producers may be too small to benefit from a service or technology even if they could afford it. You must also decide on which individual to target and develop screening questions to qualify them. The owner is the ultimate decision-maker for aggregate issues, but may not be the most informed source of information for detailed issues. For example, if you need to understand how much a 5% increase in reliability impacts willingness to pay, you need to talk to the top financial decision-maker, such as the owner. However, if you need to understand which set of improvements could result in a 5% increase in reliability, you need to speak to someone who is closer to the technology, and, at larger farms, this may not be the owner. Executing and scheduling the research is also a key challenge because the research instrument must be accessible to the producer in their location and at the time they are available. Remote methods such as telephone and online are effective for all locales, but in-person research requires the identification of a facility or facilities where producers can meet with you, or might even require site visits. Because of the seasonality of their work, producers will be absolutely unavailable to you for months at a time. To have the best chance of engaging them, you need to understand what crops they grow, when planting and harvesting takes place in their locale, and how that timing may be altered by current weather conditions. Presenting the research stimulus is obviously challenging if you are doing CX/UX work for large equipment because that needs to be conducted in person. However, many topics that don’t require in-person research can be difficult for producers to understand and visualize without some kind of support outside of the questions themselves. For example, the primary drivers of equipment sales have been well-known for decades, and major manufacturers have reached equivalent levels of performance on them, generally speaking. More and more, product differentiation is driven by new technology, and researching it requires educating participants regarding the benefits and explaining enough about how it will work so they will believe the claims. In some cases, such as coordinating different pieces of equipment, the concept may be impossible to understand without some kind of video, so this stimulus must be produced and provided to them.

Top Agriculture & Agribusiness Market Research Companies

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Qlarity Access

Qlarity Access

Focus Crossroads - East Rutherford, NJ

Focus Crossroads - East Rutherford, NJ

The Directions Group

The Directions Group

SIS International Research

SIS International Research

AgMetrics Research & Consulting

Qlarity Access

Vernon Research Group

iMAD Research Inc.

Strategic Research Initiatives LLC

Bloomfire

SIS International Research

Starlight Analytics

Tobii

Shelton Group, an ERM Group Company

Provoke Insights

Matrix Sciences International Inc.

The Directions Group

Focus Crossroads - East Rutherford, NJ

Revelations Research Solutions

Avant Marketing Group

Bazis B2B Field

Cathaya Research

Rosenthal Research