FarmLogs: Marketing Analysis of AgTech in Agriculture

Analysis, Pages 14 (3279 words)

Views

When you think about agriculture, technological advances probably aren't the first things that come to mind. Most people think about a horse dragging a plow, windmills, barns, etc. However, technology is shaping the agricultural industry just as much as it's shaping the rest of the world. A company that is beginning to change how technology is used by farmers is FarmLogs. Many farmers are older men who are learning to use apps on their phones because of this company. FarmLogs is offering the agriculturalists something that they can't turn down.

Don't use plagiarized sources. Get your custom essay on

“ FarmLogs: Marketing Analysis of AgTech in Agriculture ”

Get custom paper

NEW! smart matching with writer

In order to understand this company, we must research the service they offer and conduct a marketing analysis of FarmLogs.

FarmLogs is a company that allows farmers to see pictures of all of their fields on an app through satellite maps. It also keeps track of rainfall and knows how much rain farmers' fields receive. The app also shows the effects that heat will have on crops and allows farmers to see what the soil in their fields are made of.

This helps farmers make better seed and nutrient decisions by understanding whether or not the soil contains too much clay loam, loam, sandy loam, silty clay loam, or silt loam. Farmers are also able to take notes, plan ahead, monitor inventory, track the growth of crops, and view yield maps. Nitrogen levels and crop health are also monitored. All of these features are provided by satellite images, which means no soil sample is needed from the fields. i FarmLogs was created in 2012 and has already raised hundreds of millions of dollars for their company.

The company was founded by Jesse Vollmar in Michigan for his uncle after he saw that the current software was too difficult to keep track of the farm's data management. As of last year, Jesse Vollmar said that around 70,000 farms are using some elements of the FarmLogs software to keep track of important information during growing season, according to the New York Times. The upcoming company has been mentioned in Forbes every year since 2013 for raising millions of dollars to invest into their company. This shows promise that the new technology that FarmLogs offers is a necessary addition to the agricultural industry.

However, even though the company seems to be doing well in this area of expertise, they are gaining more and more competitors as other companies see the financial potential with developing technological advances within farming. Farmers now have the option of choosing between several different types of cloud based apps that offer management, show crop health, and provide budgeting. After watching FarmLogs grow in market shares, there have been several startup companies within this area of agriculture. One of these competitors is Granular, a website similar to FarmLogs that shows a lot of potential. There have been several reviews from farmers comparing FarmLogs to several competitors, and Granular is one that stands out." A problem with a growing number of competitors is that this service is targeted toward farmers, and there isn't an alternative use for those who don't grow several acres of crops. According to the Census of Agriculture from the USDA, in 2012 there were 2.1 million farms." This may seem like a large number, but the amount of farms in the United States is quickly dwindling. From 2007 to 2012, the amount of farms went down by 4.3%, or 100,000 farms. This shows that there is only a limited amount of farmers within the target market that can use this product. With a huge variety of farm data software options, FarmLogs must work harder in order to stay ahead of the competition.

Another problem with the target market being farmers is that many people who fit into this category are older men. Older generations don't typically like to try new technologies, especially those who live in rural areas. Being intimidated or frustrated with new technology could keep farmers from exploring new ways of data management and receiving crop information. In order to overcome this problem, FarmLogs must simplify their technology so the farmers are able to easily insert their data and access the features offered. Their website must also be easily accessible and easy to navigate, because many older farmers do not have smart phones and are not able to download apps. Because of this, FarmLogs, as well as their competitors, must keep a clean design for their phone applications and websites.

Within FarmLogs, there are several products that are available. These products are placed within 4 different packages that are offered through FarmLogs. The first package is FarmLogs Standard. This package includes field mapping, rainfall tracking, GDD accumulation, soil composition maps, scouting and notes, activity tracking, yield maps, input planning, inventory management, and growth stage analysis. This package is free, so it would be ideal for a farmer who is trying to save money but is still looking for some benefits from data management and crop information. The second package is FarmLogs Advantage. This package includes all the features from FarmLogs Standard but has additions of nitrogen monitoring, crop health monitoring, and automatic activity recording. FarmLogs Advantage is $500 a year and is ideal for a farmer who wants more information about his crops' health but has a budget that he needs to stay within. The third package is FarmLogs Prescriptions.

This package includes the same features as FarmLogs Advantage but also includes nitrogen prescriptions and seeding prescriptions. FarmLogs Prescriptions an ideal package for the cooperate farmer in order to learn how much fertilizer and seed they need to put on the soil within several fields. FarmLogs Prescriptions is the priciest package and could only be budgeted within a large cooperate farm. The final package offered is FarmLogs Flow. This package offers a device that allows you to be certain that your data is being captured when you need it. vii The consumer makeup of FarmLogs is younger to middle-aged farmers who enjoy using technology while they're in the fields. These farmers enjoy technological advances within the agricultural industry in order to make their tough jobs a little bit easier. They are looking for accuracy in order to produce the best yields possible at the lowest cost. These farmers also enjoy using software that prepares a financial statement and analysis for them at the end of the year. With new technology, farmers expect their crops to remain healthy and continue to be monitored by satellites and other devices.

In order to meet the expectations of their consumers, FarmLogs has created software that is easy to navigate and customize. Their software is cloud based so their consumers are able to access their information at home or in the field. The app takes inventory of how many bushels of a crop farmers have in the field, in the grain bin, or at the buyer. FarmLogs also has a feature that gives farmers the accuracy of knowing how much seed to plant and how much fertilizer to put down in specific areas. In order to produce accuracy, FarmLogs uses satellites, statistics, and algorithms that are customized to each field that the farmer has added to their account. The app also keeps track of all of the expenses and income of operating the farm and creates a financial statement and analysis at the end of the growing season.

FarmLogs has also created several features that help track the health of the crops and alert farmers of any problems right away.

For promotion of their app, FarmLogs has done a lot on social media and at agricultural conventions. FarmLogs' Twitter page includes several retweets of their customers promoting the app. The company has several promoters that attend agricultural conventions that older farmers typically attend. By having a strong social media presence, FarmLogs is able to inform the younger generation of agriculturalists about their product. A Trackalytics statistic shows that August 2015 through March 2016, FarmLogs received more than 2,000 likes on Facebook posts every day. They also received more than 600 shares on their posts.

They are also able to reach the older generations by attending conventions across the nation.

The company also has several advertisements online that they collect ad revenue from. According to Trackalytics, these advertisements collect more revenue during the growing season than they do during the winter. viii The price of this product ranges from customer to customer. The FarmLogs Standard package is free for 10 features. For 3 extra features, the FarmLogs Advantage package starts at $500 a year. For 2 extra features, the FarmLogs Prescriptions package starts at $500 a year and has an additional charge of $8.50 per acre. This means if you have 100 acres, the bill would be $1,350.IX If you had 7,000 acres, the bill would be $60,000. This shows that the FarmLogs Prescriptions package could cost a large sum of money, which means consumers will weigh their options more before they invest in FarmLogs. For the FarmLogs Flow device, the cost is $749 per device for every year that it's used. Because these products cost so much money, farmers are more likely to look at the competitors of FarmLogs in order to find what the best option for them is.

Distribution to customers is the easy part that FarmLogs has figured out in order to make their customers' experiences hassle free. The consumers only need to go onto a website or download a phone application in order to use the product. In order to buy the FarmLogs Flow device, the customer needs to contact FarmLogs. After communicating with FarmLogs, they ship the device to your doorstep. The only inconvenient part of the distribution process is having to contact FarmLogs in order to buy the FarmLogs Flow device. It could also be inconvenient for a non-smart phone user to access the information anywhere but a computer.

Now that the product, placement, promotion, people, and place has been introduced, a detailed analysis of FarmLogs can be conducted. Even though FarmLogs has multiple obstacles to overcome, they have done a great job as a startup company within the agricultural industry. In regards to the five factors listed above, FarmLogs has a great foundation. There are still several aspects that the startup company needs to improve on within each category. In the following paragraphs, a detailed analysis of how successful FarmLogs is within product, placement, promotion, people, and place will be given.

Regarding the actual product, FarmLogs has done a great job with adding several features that farmers enjoy. In an interview with Chad Kuhlman, a user of FarmLogs, he mentions that he likes that FarmLogs keeps track of all of his expenses and his inventory of crops. The farmer uses the FarmLogs Prescriptions package and says that he appreciates the feature that advises him how much seed to put in better soil compared to worse soil. Chad Kuhlman explained that the satellite imagery creates extremely accurate prescriptions for fertilizer and seed. However, because the farmer grows 7,000 acres of crops, the FarmLogs Prescriptions package quickly becomes an expensive investment. Chad also complained that the financial statement and analysis portion of the app isn't as accurate as he would like.

Because of this, Chad also uses Granular, a competitor of FarmLogs.

Even though FarmLogs has a huge variety of what farmers can do within their app, they need to remember that several of their competitors offer the same features that they do.

Their competitors also may do certain things better than FarmLogs does, and at a cheaper price. My recommendation to improve their product would be to continue to perfect each of the features, specifically the financial statements portion of it. I would also recommend that they continue to create new features that set them apart from their competitors by researching and asking farmers what else they want.

Product placement is one of the best aspects that is covered by FarmLogs. By using a cloud server, FarmLogs is able to keep their expenses to a minimum and distribute their product to thousands of people. Being accessed online is a positive feature for the company, as well. The internet can be accessed by most, if not all, Americans. Just by having a website, FarmLogs opens their product up to the entire nation. However, the company focuses mostly on their phone application, and not everyone in America has a smart phone - especially the older generation of farmers. According to the Pew Research Center, 64% of United States adults owned a smartphone in 2015. This leaves 36% of Americans without access to applications through a smart phone, and many of these Americans are most likely farmers that are a part of the older generation.

In order to improve their product place, I would recommend that FarmLogs focuses more on controlling the quality of their website. The phone application is important to younger and middle-aged farmers, but the website is accessible to all farmers. The website should also be simplified in order to make it seem less intimidating or frustrating to older farmers. FarmLogs should also improve how costumers go through the process of buying their FarmLogs Flow device. Having to contact the company and wait for a reply is considered a hassle to several Americans who are used to online shopping. When shopping online, the customer chooses what item they want and pay for it in order for it to be delivered.

A customer never has to contact the company in order to ask permission to buy the product. I believe that FarmLogs would sell more of these devices if they simplified how customers purchased them.

With regards to promotion, FarmLogs is doing a great job reaching all of their intended targeted market. Their social media strategies are working in order to get the attention of younger and middle-aged farmers. Xi They also continue to attend several agricultural conventions located throughout the country in order to inform middle-aged and older farmers. The company has placed advertisements in popular agricultural magazines, such as The Progressive Farmer. FarmLogs also has advertisements on the internet that they generate revenue from. xii In order to improve the promotion aspect of their product, I believe FarmLogs could do more within their social media accounts. Their tweets often show happy customers using their product, but they rarely have actual information that pertains to the product itself. It would also be helpful if they partnered with a farmer that has a large social media presence in order to gather more followers. Typically, when popular pages on social media tweet or share information about another user, their followers will visit the site that they mentioned. If a farmer with a large amount of followers were to continuously share information about their products, they would gain more customers. Therefore, my recommendation for FarmLogs would be to develop a stronger social media technique in order to improve promotion.

The target market, or people, for FarmLogs is harder for the company to change because their product is specifically for farmers. In November of 2015, FarmLogs' website had more than 15,000 page. xiii According to Forbes, FarmLogs is used by over 20% of the farms in the United States with over $15 billion in crops under management. The main target that FarmLogs is trying to reach in order to further grow their customer base is middle-aged to older farmers that are well established with their farm. Although large farms are a challenge for FarmLogs, they also bring in the most revenue with the FarmLogs Prescriptions package. They also target farmers from younger generations, but the company doesn't need to work as hard to convince them that technology is helpful in agriculture. The younger generation of farmers already implements technology into their farms. FarmLogs only needs to convince these farmers that their product is the best out of their competitors. A problem with the target market for FarmLogs is that the number of farmers is continuing to dwindle as farms go out of business or sold, and anybody else that doesn't own a farm would not be interested in the website.

Because FarmLogs is only targeted toward farmers and their target market is very narrow, I would recommend that FarmLogs should branch out from focusing on only farming. In order to gain a larger target market and customer base, FarmLogs should begin to explore new areas of agriculture after they've established a foundation for their company.

They could create software that allows ranchers to keep track of how many head of livestock they have and keep inventory of expenses and incomes. The app could also link up with the new GPS tracking microchips placed in cattle tags in order to show movement of the cattle.

Another idea is to set up software that helps all Americans with gardening. Similar to FarmLogs, this website would prescribe fertilizer and keep track of rainfall on a smaller scale. By implementing these ideas, FarmLogs would open up their target market from only farmers to farmers, ranchers, and anyone in America that has gardening access.

Finally, price also makes a huge difference for FarmLogs. Because the FarmLogs Prescriptions Package is so expensive, it receives the least amount of purchases. Granted the two extra features added from the FarmLogs Advantage package are helpful to farmers, they are not worth thousands of dollars to many agriculturalists. In fact, several farmers have switched from FarmLogs to a cheaper competitor in order to get the same service at a lower price. xiv Allowing the FarmLogs Standard package to be free of charge could also hurt the company. Several farmers will most likely sign up for the FarmLogs Standard package, which contains 10 features, instead of buying the two larger packages that only offer the farmer 3 to 5 more features.

In order to fix these problems, my recommendation for FarmLogs is to lower the cost of the acreage charge within the FarmLogs Prescriptions package. By lowering the cost, more farmers will sign up for the service and will create a larger customer base for FarmLogs. The company could also start charging a small fee for their customers to sign up for the FarmLogs Standard package. Another option would be to continue offering the FarmLogs Standard package free of charge. However, FarmLogs would include less features within the FarmLogs Standard package and more features within the other two packages in order to promote farmers to purchase the other packages and gain more than 3 to 5 features as they invest their money. In order to be a successful business, FarmLogs needs to understand and follow the marketing mix so that they can gain more sales and, in return, more profit. Although my recommendations may not be the solution to all of the company's problems, I believe that they would help gain a larger targeting mix and customer base. After growing up on a farm for 18 years, I have developed a knowledge for what farmers need and want after watching my father make business decisions. Since the target market of FarmLogs only consists of farmers, they need to spend more time listening to what these people want. They also need to need to promote their product in a way that the older generation understands what a huge investment technology can be on an American farm.

In conclusion, conducting a marketing analysis of FarmLogs made it evident that the company is changing the agricultural industry with technology. FarmLogs is helping to make the growing process easier and more efficient so that farmers can continue to feed the world's population. The company is changing the ideas of farmers across the world in what is possible to achieve in the agricultural industry, and the technology used on farms will shape the rest of the world. Soon, when people imagine a farm, they will no longer think about a horse dragging a plow or barns. They will see a vivid picture of an industry continuously changing thanks to advances in technology.