Diversification is a key to business growth. Many companies which have diversified based on their respective distinctive competence have succeeded in increasing their revenues. Large manufacturers of agricultural machinery have also opted for this growth strategy. From tractors, combines, and balers, some are now also into all-terrain vehicles (ATV) and lawn mowers. Dealers of agricultural equipment have not been spared from this diversification trend either. Major dealers are now also selling second hand farm machinery, homeowner and commercial equipment, and even trucks.
This move towards diversification, especially at the dealer's level, has its benefits. Now we have a convenient one-stop-shop for most of our agricultural, homeowner, and commercial equipment requirements. This is further enhanced by the availability of used items in the offer list of these sellers.
Diversification and Commercialization
From the business point of view, the move towards diversification has its merits. Given the right product mix, the company's revenues are likely to increase. And with economies of scale, costs are reduced. The net effect is increased in profits. But is this accompanied by added value to their target market?
The mentioned one-stop-shop convenience and the second hand farm machinery option redound to additional customer benefits. Lower costs if translated into reduced prices are definite plusses as well. However with bigger sales volumes and more customers, there is a tendency for customer service to suffer, and the personal touch between the buyer and seller will be lost.
The Case of the ZTR
A ZTR is a type of ride on mower with a zero turning radius. It is designed for tight, flat lawns or those with lots of obstacles. There have been instances wherein these units have been placed on sale by the manufacturer. The lower sale price often comes with a smaller dealer margin. In instances like these, the dealer (or his sales personnel) is less likely to push the product and assist the customer regarding the particular mower since he will be making less.
This is regardless of whether or not the customer's needs are properly addressed by the particular ZTR, which in this case is a John Deere ride on mower. In fact the dealer may even go to the extent of offering high margin products like lawn tractors even if these are not appropriate. The bottom line is that customer service and concern became subservient to higher sales revenues and earnings. This of course is not good for us customers.
Choose the Right Dealer
It then becomes necessary for us to choose the right dealer, especially if he will also be the after-sales service provider. In this case, we will be interfacing with this dealer for as long as we own and operate the particular equipment.
The choice of dealership should not be based on the size of his operation or selling price of the product alone. The quality of customer service and after-sales service is paramount, and this could impact on our maintenance cost and experience. It may be well worth paying extra for these services, especially if we will be purchasing second hand farm machinery since these will likely need more servicing.
Agricultural farm equipment dealers have diversified in to selling second hand farm machinery and even homeowner and commercial equipment like john deere ride on mowers. When purchasing these products, it is best to choose a reputable dealer that will provide good customer and after-sales services. To get the best service, please vist emmetts.com.au
