Pictured Above: Todd Stucke, Senior Vice President, Kubota
Kubota’s been a company on the move in recent years, diversifying its product lines and expanding its reach into the large ag equipment market. In 2012, the manufacturer acquired European-based manufacturer Kverneland, adding a line of hay tools to its product offering, and calling the acquisition “its first major step toward becoming a comprehensive manufacturer of agricultural machinery.”
The company’s next big move came in 2016 when it acquired Great Plains Manufacturing, which expanded Kubota’s long-standing partnership with Land Pride and included all five Great Plains divisions with multiple facilities in Kansas. Since 2007, Kubota has worked closely with Land Pride to produce quality, performance-matched implements for Kubota dealers and customers across the U.S. and Canada.
Partnering with Kubota dealers to give them the tools needed to strengthen their businesses has always been the number one priority for Kubota – and that strategy is yielding results. According to the Equipment Dealers Assn.’s 2018 Dealer-Manufacturer Relations survey, Kubota dealers are highly satisfied with the manufacturer. Of the full-line manufacturers, Kubota scored the highest in Overall Satisfaction (5.78), Marketing & Advertising Support (5.47) and Manufacturer Response to Dealer Needs/Concerns (4.88). It also received impressive scores in Parts Quality (6.00, just 0.09 points behind Claas’ top score) and Product Quality (5.77, also behind Claas).
Todd Stucke takes great pride in this approach as he oversees Kubota’s marketing, product support, strategic projects, training, and dealer development. Prior to taking on his current role, Stucke led Kubota’s Ag & Turf division from 2013-2015. Before Kubota, he spent 23 years with AGCO in various roles including director of marketing for the hay and harvesting division. In addition to his experience with farm equipment manufacturers, he is a part owner in his family’s farming operation in Ohio.
Segment Diversity Helps Balance the Business
Stucke says Kubota dealers are well-positioned, despite the current challenges they face in this economy. Kubota’s diverse product portfolio, serving residential and consumer markets, small construction and the commercial farm segment all remain strong. “Our residential and consumer markets — with our small tractors — have been doing quite well because the economy is good,” he says.
However, low commodity prices, low net farm income and now the added challenges of trade disputes have put pressures on all aspects of the agriculture industry — for farmers, dealers and manufacturers alike. “There are some segments that are really hurting, dairy for instance. In the row-crop segment, prices aren’t good, but it looks like we're going to have some very good yields. Stucke says.
“We regularly work across competitive lines, and our attitude is that Kubota will earn their business by providing value and brand support for the long haul…” — Todd Stucke, Senior Vice President, Kubota
Overall, with strong turf and a growing small construction segments, he explains, “The average Kubota dealer can leverage these strong segments to offset the challenged farm and hay segments that are tied to livestock and dairy.”
For all manufacturers, tariffs have caused the price of steel and some other components to go up. Over time, Stucke says, some of those cost increases will have to be passed on through price increases. “While costs are going up, there is also a negative impact on revenue, especially on soybeans and exports, so net farm income could be affected,” he adds talking about the tariffs China has placed on U.S. crops, particularly soybeans.
To help them stay focused on the future, Stucke says dealers need to look at what they are selling, diversify their equipment into other segments, watch their used equipment and focus on product support. “It’s all the things that dealers need to do to run a solid, prosperous business,” he says.
Strengthening the Dealer Network
For Stucke, one of the most important things he wants from Kubota’s dealers is for them to fully support the Kubota products they carry and the customers they serve. In terms of Kubota’s dealer network, Stucke is focused on strengthening its presence in the upper Midwest. “With our expansion of the M7, skid steer loader and hay tool product lines, our market opportunity expanded in the Midwest. That’s why we put our fifth division near Kansas City in hopes of expanding deeper into that market.”
Todd Stucke, senior vice president, says Kubota is focused on supporting and strengthening its dealers in three priorities areas: building a strong pillar of service, introducing and training on new technologies, and sharing dealership best practices for the benefit of all dealers.
The Kansas City-area facility, currently under construction, will have two, 1-million square foot warehouses for parts distribution and wholegoods distribution, a divisional office and a training center, all to help better support dealers in the upper Midwest, Stucke says. “Now we can react to their needs faster and, ultimately, support the customer better in those markets.”
The number of Kubota dealers has remained steady over the last several years. When Farm Equipment last sat down with the heads of the major line OEMs back in 2009, Greg Embury, then vice president of sales and marketing for Kubota said, “We’ve got 1,100 dealers today and we had 1,100 dealers 15 years ago so we’ve been earning a lot more of their business.” Nine years later, that number remains at 1,100.
Dealer Purity: Nice, Not Necessary
Unlike some of the other major manufacturers, Kubota isn’t set on dealer purity. That said, the Kubota-only dealer does exist. According to the 2019 Dealer Business Outlook & Trends Report published by Ag Equipment Intelligence, 12.8% of respondents identified Kubota as their mainline supplier.
With the addition of hay tools, the 5 x 6 round baler, the M7 tractor (128-168 horsepower) and a skid steer loader to the construction side, Stucke says the company has the right products in play to support a Kubota-only dealer.
While there’s appeal to all-Kubota dealerships, he adds that it is more important for Kubota dealers to meet customer demand and be profitable, and that may require carrying complementary brands of equipment. “We regularly work across competitive lines, and our attitude is that Kubota will earn their business by providing value and brand support for the long haul,” Stucke says.”
Develop the Workforce
Among the biggest challenges currently facing dealers is finding — and retaining — good people, especially technicians. “This is something all dealers will have to keep their eye on,” says Stucke.
According to the 2019 Dealer Business Outlook & Trends report, 71.4% of Kubota dealers are looking to hire more service techs in 2019. That’s up from the 65% who were planning to hire techs in 2018.
One of the Assn. of Equipment Manufacturers strategic initiatives is workforce development. Stucke sits on the AEM board of directors. From his perspective, Kubota dealers — and the industry as a whole — need to attract a workforce that wants to work with their hands and learn new technologies.
“Now we can react to their needs faster and, ultimately, support the customer better in those markets…” — Todd Stucke, Senior Vice President, Kubota
“It’s not everybody’s calling to go to college and then get a white-collar job. There’s a need for welders, plumbers and mechanics. Our industry must attract them and let them know you can make a good living working in the trades,” he says.
Today’s service technicians are expected, and required, to do more than turn wrenches, he says. “More technology is embedded into our equipment and we are looking at how we leverage it for diagnostics to make it easier to identify issues,” Stucke says. For example, he says, augmented reality, virtual reality, and how-to-fix it videos are all examples of service support tools.
While developing technicians is the most talked about employee need, Stucke says, there is also a need for department and store managers. “It’s imperative to find managers who understand what operational excellence means in parts or in service and develop them into a general manager or store manager,” he says.
Kubota provides training for service technicians, but typically leaves management training to expert third parties, such as dealer associations, Spader Group and Bob Clements International.
Priorities Over the Next Three Years
According to Stucke, Kubota will remain focused on supporting and strengthening its dealers by staying the course in three priorities areas: building a strong pillar of service, introducing and training on new technologies, and sharing dealership best practices for the benefit of all dealers.
- Service: In the past, Kubota’s residential and consumer products didn’t require much service and support. But, with 2.5 million units sold as of July 2018, Kubota is now finding that supporting these units requires more product support. “If a dealer once had 1-5 mechanics, they now need 5-10 to keep up with the demand,” Stucke says. The whole infrastructure of the service department — stocking parts, training technicians, and selling maintenance programs — is at the core of building a strong pillar of service, Stucke explains. “Kubota will focus internally to better support our dealers and customers,” he says.
- Technology: Kubota’s focus on technology will range from telematics and guidance to customer apps for parts and service and e-commerce for dealers. Kubota is looking at technology from all angles to provide value for each customer segment, product line and dealer. For construction equipment, Kubota is also working on telematics to meet the demand to know, track and trace equipment. For Ag, Kubota has opted for an open source strategy, Stucke says. “That means we’re letting the ag customer choose what system he wants to use, be it Ag Leader, Topcon, Trimble or anything else.”
- Dealer Best Practices: It is imperative that Kubota share dealer best practices, processes and activities across its network so each can benefit from success, Stucke says. Adding, Kubota needs to be the conduit for sharing these practices across all aspects of the customer journey – particularly for the residential homeowner. Making a purchase decision today requires dealers to employ multiple customer touch points beyond traditional print, radio and TV. “The website is the new storefront,” he says. “Years ago, to attract customers you used print advertisements and TV commercials. Well, now it's that and digital marketing — online marketing, emails, and social media. Where do customers go first? They don’t walk into the store. They go to the website, their new storefront.”
In addition to these initiatives, Stucke says Kubota will continue to focus on expanding the breadth of its product lines. Does that mean a Kubota combine in North America? “No, we have a Kubota combine in Asia and we do quite well with it, but unfortunately it doesn’t work here in North America because it is too small,” Stucke says.
Instead, Kubota will focus on perfecting its existing product lines, including the M7. “We’re going to perfect our lines, and that’s exactly what we’re doing with the M7. We’ve been in the market for a couple years now, and we’re adding value to our dealers and customers with this model. But, we’ve still got work to do and we have to get it right before we do anything else.”