Marketing Strategies: Flexibility

By Daniel W. Block
D.W. Block Associates

Much is said today about the importance of "flexibility" in the development of marketing strategy. Consultants and marketing managers preach it to their clients and sales forces.

Nevertheless, I have found that in spite of all the proclamations about the critical need for flexibility, translating the concept into day-to-day, operational terms is very elusive. In order to be truly flexible, there must be a certain satisfaction in finding and killing sacred cows.

Distribution flexibility

Flexible thinking can be really useful when designing a distribution system. It is vital that large seed suppliers, in efforts to minimize confusion and maximize efficiency, not let the desire for standardization prohibit them from capitalizing on market opportunities.

Too many companies feel that they must be either a direct organization (selling directly to growers) or a dealer/distributor oganization. This black and white view of the world limits their abilities, and puts an unnecessary constraint on what should be a flexible operation.

An agribusiness firm that once was strictly a dealer organization wanted to get more penetration in selected markets. They were sensitive to their dealers’ needs of independence and control of individual marketing areas, and didn’t want to do anything to interfere with the harmonious relationships that already existed. But they saw sales opportunities that were being missed – either by some of their dealers or because of inadequate dealer coverage.

Initially their options seemed to be:

• Maintain the dealer organization as it is and hope for the best, or
• Go directly to the growers and bypass their dealer organization

These two choices did not show flexible thinking. Eventually they realized that a diversified channel of distribution was a viable option. It allowed them to have the best of all worlds, and maximize the good in each outlet.

Each market was different, and had certain unique characteristics. The farmers in the various areas varied according to their acreage, financial condition, cultural practices, and buying habits. The firm wisely decided not to dictate to the marketplace what kind of distribution it would receive, but rather let the marketplace dictate what was appropriate.

What emerged was a very flexible network of independent dealers, direct outlets, and outlets that were joint ventures between independent dealer/distributors and the firm. Market share increased in many individual markets, and overall.

Making a hybrid

As seedsmen we should be familiar with the concept of hybridization. It’s uniquely suited for the development of marketing strategy and marketing management.

By analyzing what are the good and desirable qualities of the various traditional options, one is free to create a hybrid which integrates those advantages into one unique option. I am convinced that the distribution channels of agriculture are fertile soil for such thinking.

The use of the dealer structure, capitalized and owned by both the supplier and the independent seedsman, will very likely be a development in the ag input distribution system. Although this seems like a relatively new innovation, it is really reminiscent of the old "branch house" idea that Charles Deere, of Deere and Co. farm implements, had back in 1869.

Dealing with new customers

Flexibility manifests itself in how we deal with various new buyers and customers we find today. With the increase in buying "clubs" in the Mid-West (groups of farmers who seek discounts by purchasing large volumes together), it is interesting to note which firms tend to be better suited to these transactions. It is typically the middle-sized seed companies that handle these buyers, as they are sizeable enough to deal with the larger orders, but still can adapt to the unique needs of the various farmer groups.

Flexibility should abound in the management of a sales force. One salesperson for an agribusiness found that potential prospects and customers were just not available between the hours of 10am and 3pm. He asked his supervisor if he could "play" during those unproductive periods, and sell during the early morning hours and in the late afternoon and early evening.

Rather than resist such a non-standard work schedule, the sales manager agreed, and the result was a highly motivated and very productive salesperson.

Doing what you do best

Referring back to distribution again, it is well to remember that there are some dealers out there who do a far better job of selling seed than any supplier will ever do. Anyone who eliminates such an outlet from their network for the sake of standardization and simplicity is very short-sighted.

On the other hand, there are markets that warrant more supplier involvement and vertical integration of the distribution system. There a direct or quasi-direct outlet is needed. Whether you’re a dealer, distributor, or in top management of a major supplier, be on guard for an attitude that shows up in phrases like "We don’t do things that way," or "This is our normal procedure."

Maintaining rigid procedures and structures in today’s ever changing marketplace is a prescription for failure. To survive and thrive, firms of all sizes must create innovative environments where there is no fear of killing sacred cows.