Farm Industry News Blog

Lessons from a product rollout

Every time I do an event I learn interesting stuff they never put in the press kit.

As we get to know each other many of you will find that I love farm shows and I get paid to go to a few...really. Of course there's work to be done there as well. And I get to keep up on the latest in agriculture technology from companies by attending their media events - another perk of the job I guess, but I have a responsibility to you as well. To relay what I learned about the new ag technology in ways that help you make smart decisions.

As I write this on the plane headed home from the big Case IH launch I am pondering what I learned beyond what equipment I saw. They're calling it the largest launch of new equipment in the company's history - and with all those new machines with final tier 4b engines there was plenty to see.

Yet there was word from Jim Walker, Vice President, North America, about the market. You see the company has seen tremendous growth in the past six years jumping from $1 billion to $4 billion in sales over that time. Walker tells us they have been pushing hard to keep up, and given long term demand the recent slide in crop prices is almost welcome news for the company.

That's right he sees a positive in a little slow down, a chance to catch up. I understand how he feels, but the underlying messages were interesting.

First he tells us that a slowdown won't be on the scale of the mid-1980s slump where equipment sales fell off a cliff. There's too much farm income out there - third highest and a multi-year record for farm profits.

Also, global demand may slacken a bit but that long term challenge that Case IH touts with its Be Ready campaign for feeding the 9 billion is a sign of how the company sees things.

In the farm equipment business, traditionally, it's about volume and moving machines. It's a challenge when the dealers who sell and the companies they sell for are at odds over that. But Walker explained why building market share is about more than adding profit to the bottom line.

The more machines a dealer sells in a territory increases the 'machine footprint,' which is actually important to the long term life of the local dealer. The more machines with the company colors in the field the better off the dealer is even if whole goods sales slump.

A dealer with a solid sold inventory can count on parts and service business to keep the doors open even if new equipment sales slide. That's actually a win win for the company and the dealer. Companies can usually survive short term slumps. Dealers with weak market shares in their territories can have a harder time.

For farmer readers, this is important because you have a business to run. You have to count on having the support you need to keep machinery rolling. If your local dealer is weak, long term that's not good for your business.

Case IH has been building market share, which means more machines in the field, and company management wants to go farther (they always do). But the long term health of a company does depend on it, and healthy suppliers also support your business.

You can check out my gallery of the new stuff Case IH is launching, there's really something there for everyone.

I'm off to another rollout next week, it'll be interesting to see what else I learn.

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The Farm Industry News Blog features commentary from Willie Vogt, Jodie Wehrspann, Kathy Huting, Lynn Grooms, Daryl Bridenbaugh and Jeff Ryan.

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