Assignment 1 Case Study 3 Tractor Supply Company Targets the Part-Time Rancher PDF

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Tractor Supply Company (TSC) was founded in 1938 and is the largest operator of rural lifestyle retail stores in America. Currently, they operate over 1,500 stores across 49 states. The large and fast-growing retailer has more than $6 billion in annual sales. TSC is known for being the inventor of the “do-it-yourself” (DIY) trend. The sales of TSC became stagnant when large farming and ranching corporations entered their niche market. These large agricultural companies buy supplies and equipment directly from manufacturers rather than through local farm supply stores, such as TSC (Levy, M., Weitz, B. A., & Grewal, D. 2019). Currently, the company has repositioned and therefore markets towards recreational farmers. Customers can find everything need to maintain farms, ranches, homes, and animals. Products being sold include clothing, equine and pet supplies, tractor/trailer parts and accessories, lawn and garden supplies, sprinkler/irrigation parts, power tools, fencing, welding and pump supplies, riding mowers and more (Tractor Supply Co., 2019). The problems faced by TSC are minor problems. The company is not doing bad, at all. Nonetheless, all companies have room for improvement and should grow to stay relevant. Issues found were: their target market, mission statement focus, shipping costs, and its current name. TSC had a previous issue with their target market. The company lost its initial target market of full-time farmers to large agricultural companies. In the early 1900s, they decided to change the target market of TSC, as their sales became stagnant. Emerging from this by innovating to keep up with the growing market place, they shifted their target market towards consumers interested in recreational farming and ranching, but the current amount of these are low. Now, they face a similar problem. It involves their niche market, they are limiting their opportunity to grow into new markets. Levy, M., Weitz, B. A., & Grewal, D. (2019) stated: “today less than 10 percent of

1 TSC’s customers classify themselves as full-time farmers or ranchers, and many of its customers do not farm at all,” in the Retail Management textbook. Meaning, there aren't many people specifically farming, many do not farm at all. However, they are also not only selling farming supplies anymore. They have expanded their merchandise and continue to do so, by testing new merchandise in stores. Therefore, TSC has an opportunity to expand their target market. They should keep targeting the recreational farmers but also the DIYers. The DIYers are everywhere and also in metropolitan areas. The expansion could increase sales, leading to an increase in market share. Opening smaller specialty stores in metropolitan areas could be the solution to connecting with the additional target market. Since many of their consumers do not farm. Before doing this, market research should be conducted. Moreover, discovering what metropolitan area consumers are interested in buying. The research can be conducted through various ways. One of them being, asking consumers at check out, in already existing stores, for their email. TSC would send an email survey to these emails, with a short survey asking for: their age, their employment position, to what degree they farm, and what they purchase at TSC. This information could be used to decide what items would be going into these specialty stores. Based on what their employment is and if they farm. This being most people metropolitan areas do not farm. Furthermore, only the answers of the non-farming consumers would be used, of what they are buying. These specialty stores could then be stocked with the merchandise that is being bought by non-farmers. Typically TSC stores have around 15,000 square feet of inside selling space and a similar amount of outside space (Levy, M., Weitz, B. A., & Grewal, D. 2019). The specialty stores should be around 8,000 square feet, with no outside space.

2 The company has changed over time, yet its mission statement has not. Their mission statement is “being a great place to work enables the company to be a great place to shop and invest (Levy, M., Weitz, B. A., & Grewal, D. 2019).” This seems to be a problem, as today customer oriented companies seem to do and work better. Yet, their mission statement does seem to start with the employees, which should make it a satisfactory workplace. The company claims to be customer oriented, yet their mission statement does not reflect this. The customer should become their mission statements priority. TSC management claims that the first discussion with new employees centers around the company's mission. The consumers are the ones keeping the company in business. The mission statement should be along the lines of: Our mission is to be a place where employees feel safe and comfortable, while our customers can come to find and discover anything they might need to construct. The mission statement of a company should be clear and relevant to the present time as they are a way to correctly direct a business. Without a good mission statement, businesses may struggle when it comes to planning for the future. With the new mission statement, the company would be going towards the direction of building a relationship with its consumers. Customer relationship management is beneficial as it is a strategy to learn more about customers' needs and behaviors in order to develop stronger relationships with them. There is a cost associated with finding new customers while retaining existing customers is easier and cheaper. If TSC were to focus on their consumers through their mission statement, this would lead the company into the direction of obtaining brand loyalty from the consumer. Today, e-commerce is the future and the answer to increasing profits. Moreover, every company should now be focused on its online presence. This being as it has a larger reach and is

3 a low cost for the company to maintain. TSC has a website with extensive merchandise, yet they have very high shipping costs. This becomes an issue when shopping on their website since consumers do not like to pay high shipping prices. The shipping expenses are probably high for the company itself, leading them to expensive for their online consumers. One solution includes using pick up points. Assuming the company does not open specialty stores in metropolitan areas, small pick up points can be developed in metropolitan areas. They could decide on owning that pick up point themselves or pay rent to another store to host their pick up point. Moreover, giving the consumers that do not have easy access to their current location in rural communities, is an alternative. The company saves money by shipping a large number of items in a single shipment and also save on packaging costs. The online consumer then has the choice. Another option, but a big investment, would be to develop their own distribution centers near specific regions that are primarily being shipped to. From these locations they could have their own trucks, making deliveries. These two solutions would be an effort in keeping their consumers satisfied and returning. The name is the first and most powerful part of a company. The company's current name has nothing to do with the companies current state. TSC is its name because it started as a mail order tractor parts business. Currently, the name is misleading for its consumers, adding no brand value. When looking for an item that is in the category of merchandise sold by TSC, potential consumers would not know if what they are looking for is being sold, by its name. A name change could also be a powerful way of marketing. It drums up attention to a company and gives the old company a fresh new life.

4 TSC profits have increased at an annual average of 9 percent since 2012. This shows us that the company is doing extremely well. Companies doing well, still have room for improvement and growth. When companies get comfortable and do not fix the minor issues, is when companies start to fail. Issues were found in the company's: target market, mission statement focus, shipping costs, and its current name. These issues were carefully chosen after a thorough analysis of their current situation and past experiences. The recommended solutions to these issues have been extensively laid out.

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5 References “About Us.” Tractor Supply Company, ir.tractorsupply.com/CustomPage/Index?keyGenPage=1073749530&cm_sp=footer-_-navi gation-_-about+us. Levy, Michael, et al. Retailing Management . McGraw-Hill Education, 2019....