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Market Segmentation Practices Of Retail Crop Input Firms

Author

Listed:
  • Jay Akridge
  • Mike Boehlje
  • Allan Gray
  • Aaron Reimer

    (Department of Agricultural Economics, College of Agriculture, Purdue University)

Abstract

While market segmentation and the associated idea of target marketing are not new, there are questions about how the strategy of market segmentation and target marketing is being used in retail agribusiness firms. Previous research has demonstrated that distinct groups of farmers/customers exist (Alexander). However, retail crop input firms tend to be of modest size and are geographically bound. Both lack of resources and confinement to a specific geographic market present challenges for successful implementation of a market segmentation/target marketing strategy (Stolp). In this study, market segmentation/target marketing practices were explored in two types of crop input retailers: independently owned and operated firms (9 firms) and agricultural cooperatives (11 firms). A number of questions related to market segmentation/target marketing strategy were assessed via a web-based survey and telephone interviews. Referencing Best's seven-step framework, market segmentation is compared and contrasted by firm type; gaps in market segmentation strategy execution are identified; and challenges to implementing a market segmentation strategy are considered. Results show that market segmentation/target marketing was employed by 85% of the crop input retailers in the sample. Key gaps identified in market segmentation strategy execution include measuring market segment attractiveness; evaluating market segment profitability; developing a product-price positioning strategy for a tailored offering; expanding the positioning strategy to include promotional and sales elements of the marketing-mix; and evaluating the progress/success with each target market segment. Addressing these key gaps will aid industry professionals as they work to serve the needs of a continuously evolving farmer/customer base.

Suggested Citation

  • Jay Akridge & Mike Boehlje & Allan Gray & Aaron Reimer, 2007. "Market Segmentation Practices Of Retail Crop Input Firms," Working Papers 07-03, Purdue University, College of Agriculture, Department of Agricultural Economics.
    • Handle: RePEc:pae:wpaper:07-03
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    File URL: http://ageconsearch.umn.edu/bitstream/6713/2/sp070003.pdf
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    References listed on IDEAS

    as
    1. Gloy, Brent A. & Akridge, Jay T., 1999. "Segmenting The Commercial Producer Market For Agricultural Inputs," 1999 Annual meeting, August 8-11, Nashville, TN 21592, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Gloy, Brent A. & Akridge, Jay T., 1999. "Segmenting The Commercial Producer Marketplace For Agricultural Inputs," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 2(2), pages 1-19.
    3. Alexander, Corinne E. & Wilson, Christine A. & Foley, Daniel H., 2005. "Agricultural Input Market Segments: Who Is Buying What?," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 23(2), pages 1-20.
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    Cited by:

    1. Murekezi, Abdoul & Oparinde, Adewale & Birol, Ekin, 2017. "Consumer market segments for biofortified iron beans in Rwanda: Evidence from a hedonic testing study," Food Policy, Elsevier, vol. 66(C), pages 35-49.
    2. Nathanael M. Thompson & Courtney Bir & Nicole J. Olynk Widmar, 2019. "Farmer perceptions of risk in 2017," Agribusiness, John Wiley & Sons, Ltd., vol. 35(2), pages 182-199, April.
    3. Feeney, Roberto & Berardi, Valeria, 2013. "Seed Market Segmentation: How Do Argentine Farmers Buy Their Expendable Inputs?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 16(1), pages 1-24, February.
    4. Zainuri, Ahmad & Wardhono, A. & Sutomo & Ridjal, J. A., 2015. "Competitiveness Improvement Strategy of Soybean Commodity: Study of Food Security in East Java - Indonesia," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(3), pages 1-8, September.

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    More about this item

    Keywords

    market segmentation; target marketing; crop inputs; distribution channel; retailer;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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