John Deere conceived the idea for its Frontier Equipment line in 2000 during strategy meetings with its Dealer Advisory Council. According to Michael Horrell, marketing manger for Frontier Equipment, it wasn't about increasing profits. "There's not a whole lot of technology in selling box blades," he says.
The idea for Frontier came about from a desire to improve the business model across the board for its dealers.
"We realized that our dealers already had a very complex business model," says Horrell. "For the ag dealer who's on the edge of a city, customers range from the traditional farmer who needs a combine, to the customer who wants a walk-behind mower and everything in between. Now, throw in municipalities and government agencies, and it's very complex when you think about all of those customer segments.
"Now think about it from the supply side. John Deere and all of the majors have always been challenged to provide commodity-type products at the right price and do it in a profitable manner," Horrell explains.
In most cases, says Horrell, John Deere dealers had to deal with many different suppliers to get what they needed to service their rural lifestyle customers. "That meant not only did the dealer-principal have to deal with maybe 5 or 6 suppliers, but so did the salesmen, their parts and service people, and accounting departments. Now include 5 or 6 different ordering and warranty programs, and a complex business model became even more complicated."
He adds that John Deere, recognizing the need for its dealers to grow also meant allowing dealers to consolidate in multiple locations. "So, now you're adding another layer of complexity."
Being publicly traded companies where stockholders demand a return on their investment, it's difficult for the major farm machinery manufacturers to profitably invest in the assets required to produce all of the products its dealers require. This, says Horrell, is particularly true with the equipment for the large property owners and hobby farmers.
"If we couldn't provide it for them, our dealers had to go to someone else for these products."
The Frontier Equipment line is focused on two customer segments, according to the line's marketing manager. These include the large property owner who doesn't intend to generate revenue from his activities and the part-time producer who generates some income from farming but has other sources for their principal income. Between the two of these is the "sweet spot" for Frontier business, says Horrell.
"We do get into some of the government business with some of our mowers and touch some traditional customers with manure spreaders and hay tools. But it's the hobby farmer type of customer that we focus on through Frontier."
Horrell offers that Deere intends to continue growing its Frontier brand, both in terms of product and geography.
"We believe there's opportunity to do more business with the John Deere dealer network in the U.S. and Canada and we've also identified strategic prospects in Mexico and Europe, as well. There are still opportunities with the product and we intend to continue expanding our portfolio of equipment for our dealers," says Horrell.