The value of market segmentation is well understood by Agriculture Marketers. By identifying key attributes such as attitudes, perceptions, and buyer values, you can craft customized marketing messages that are highly targeted to each segment. If utilized properly, segmentation can greatly increase the impact of your overall marketing efforts.

However, market segmentation is not as simple as it seems. Avant Marketing Group utilizes its DABT Model for segmentation. The model focuses on defining the Demographic, Attitudinal, Behavioral and Transactional characteristics of customers for your brand or product category.  We have years of experience in segmenting agricultural markets using this model.  In nearly every segmentation, two psychographic differentiating characteristics are consistent with farmers: Product/Service Adoption and Risk Adversity.

When introducing a new product or service, gaining the interest and support of Early Adopters is extremely important.  Yet, there are sub-segments to this group that can be further defined by understanding how members of that segment manage risk within their operation.

To illustrate, suppose you have identified two different customers for your product, John Smith and Adam Johnson. John and Adam are both Early Adopters with the following profiles:

John Smith Adam Johnson
Location Iowa Illinois
Age 57 34
Farm Size 5,000 acres 5,000 acres
Crop/Livestock Corn/Soybeans Corn/Soybeans

At first glance, both John and Adam appear to be ideal candidates for your new product introduction.  In fact, Adam may appear to be the better candidate based on his age and future sales potential.
But through further analysis, these two farmers have less in common than you would think.

John Smith is a very successful third generation Iowa farmer. He has a son working in the operation and is looking forward to turning the farm over to him. In terms of business management, he is very conservative and self-finances his operation each year. He also knows that the operation needs to keep up with advances in farm practices and technology. Therefore, he is willing to try new concepts – not on the entire operation but willing to allocate new practices to a small percentage of crop acreage each year for trial. Though he may be viewed as slow in making key changes, he is an early adopter of new products and technology.

Adam Johnson has been farming for 10 years. He sees himself as a cutting-edge progressive and tries to maintain that image in his community.  He wants the newest and the best of everything for his farming operation – including technology that he does not fully utilize or truly understand.  He is highly leveraged, and his profitability is at the mercy of commodity market prices at harvest time. Good years keep him afloat, but a bad year simply means he goes further into debt. 

While both customers are willing to adopt new products and technology, John is a good manager of risk. Simply put, he won’t “bet the farm” on farm practice changes. On the other hand, Adam is a risk taker to maintain his progressive image. Putting these two customers in the same “early adopter” bucket without understanding the psychographic subsegments could lead to a weak and unsustainable market strategy.

For more information about Market Segmentation, contact Senior Partner, Mark Vogel, at: [email protected].