Farmers as Co-Designers of the Differentiation Strategy

A tractor manufacturer faced the exciting challenge of achieving vertical differentiation for its Eco, Advanced, and Premium brands. The goal was to precisely target farmers in Europe, North and South America with varying usage profiles and willingness to pay. Important here: The performance profiles of the brands should be clearly distinguishable for the target groups and not cannibalize each other.

Purchase decisions for tractors are highly complex. Even for technically experienced farmers, it is impossible to consider every technical specification and configuration option in detail. Our client therefore wanted a deeper understanding of what truly drives the buying decision. What really matters to farmers when choosing a tractor? How should tractors be configured and how should the brand be emotionally positioned to appeal to both the rational and emotional sides of the target group?

Translated into research questions, this meant:

1. Analyze product features: Which attributes have the greatest impact on purchase decisions? How is their value perceived by the target groups?
2. Understand user segments: Which customer segments exist, and how do they differ in terms of preferences and needs?
3. Simulate purchase scenarios: How do different product configurations perform in realistic buying situations?
4. Shape distinct brand personalities: How should features be combined to create compelling product brands with a clear and differentiated personality?

The special challenge for our researchers and data analysts was to realistically depict decision-making processes while also considering criteria that are less relevant from a rational standpoint but crucial for brand perception from a psychological perspective. These include characteristics such as colors, design, or specific infotainment packages.

Experience shows that in traditional item queries or conjoint analyses, respondents tend to make particularly rational decisions and overlook aspects that are emotionally or intuitively effective. We therefore decided to turn the participants into creative product designers. To achieve this, we developed a configurator that allowed target groups to assemble their ideal tractors. This placed them in realistic decision-making situations where they could select from various features, sometimes thoughtfully, sometimes instinctively.

To avoid overwhelming the participants, we reduced the number of configuration levels to 16, each with 3 to 5 variants. This was based on secondary data and a joint expert workshop with our client.

Our client contacts ventured into new territory with the survey method. Previously, they relied on methods like Conjoint, MaxDiff, or traditional item inquiries for similar studies. Understandably, there were some skeptical voices. However, even during the survey phase, it became evident how effortlessly the configurator was used by participants across all 9 countries. Respondents described the configurator as intuitive, found the survey engaging, and overwhelmingly confirmed that all features relevant to purchase decisions were considered in the configuration.

Our client received their "aha" insights following the data analysis.

 

1. Differentiated Variants: We were able to clearly distinguish between the Eco, Advanced, and Premium variants based on the survey data. This enabled the client to assign a performance and equipment profile to each model, exactly as the target groups had configured them themselves.
    
2. Cannibalization: The final decision on the variant profiles was made by management. Our analyses provided an important foundation for this. We demonstrated the potential as well as the risks of cannibalization associated with each differentiation solution. This allowed the manufacturer to simulate and secure the impacts of alternative decisions.
    
3. User Segments: By diving deep into the individual configuration data, we discovered which customer groups prefer which features and how they combine them. This was helpful for our client, as it became clear that the 3-brand strategy was not sensible in every region. In some regions, the potential for certain variants was lacking. In others, the farmers' requirement profiles were too homogeneous to justify segmentation.
    
4. Brand Positioning: By allowing participants to make both rational, well-considered decisions and quick, intuitive preference decisions, we laid the foundation for brand positioning that appeals to both the mind and heart of farmers. This provides the best conditions to support product differentiation with emotional brand communication.