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Ripple Effect11-01-98 | 16
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According to a market survey conducted by the Farnsworth Group, as irrigation manufacturers, distributors and contractors continue to be affected by mass retailing, it will eventually change the way they do business in order to compete-- thus starting an industry-wide ripple effect which will soon be felt by irrigation designers.

Relationships between mass retailers and consumers is changing the way commercial partners work together, because as large chains encroach into typically commercial markets, they are taking over a traditional service offered by independent irrigation consultants. A recent irrigation market study indicates that the top issues landscape irrigation consultants believe will impact their business are issues that relate primarily to products and services, rather than market dynamics.

ASIC respondents were surveyed to discover the key issues facing irrigation designers in the future. Irrigation consultants were asked to rate the above issues on a 1 to 5 scale, with five representing the high likelihood and high impact on the irrigation design and construction market. Water conservation and environmental concerns topped the list of key issues, followed by product liability issues and a shift away from construction observation and contract administration.

According to the results of a national research study among irrigation consultants, those who will be profitable in the future will be those irrigation consultants who understand market changes and develop marketing strategies to adapt to these changes. This is just one of the conclusions of the study that was commissioned by the American Society of Irrigation Consultants (ASIC) through a grant from Weathermatic, a manufacturer of landscape irrigation equipment. The study, conducted by the Farnsworth Group-- a research-based consulting group specializing in manufacturing and industrial markets,was presented at the 15th national ASIC conference in Santa Fe, NM.

While a majority of irrigation designers are not feeling the impact mass retailing is having on the irrigation industry, the author of the research report believes changing industry dynamics will have far reaching implications on the future of irrigation designers. The survey revealed that while 42% of respondents feel concerned about products being sold through "non professional outlets," the majority of irrigation designers believe that mass retailing has no real effect on their business.

This is in direct contrast with a study conducted by the Farnsworth Group in 1997 among landscape irrigation distributors and contractors that found 40% of respondents reported that retail sales from large chains were having a negative impact on their sales. Distributors are most likely to be affected with one-third stating they had noticed a large effect on their sales. Contractors most often stated that the effect was not large, yet they showed concern for future impact. "As manufacturers, distributors and contractors continue to be affected by mass retailing, it will eventually change they way they do business downstream in order to compete-- thus starting an industry-wide ripple effect which will soon be felt by irrigation designers," explains Brad Farnsworth, President of the Farnsworth Group.

Mass retailing is affecting distributors, the traditional channel for selling of products to irrigation designers and contractors. Farnsworth reports that Home Depot controls 15-20% of the do-it-yourself (DIY) home improvement market. "As Home Depot and other large chains begin to reach saturation in the DIY market, they will begin to look elsewhere for growth opportunities through new product categories usually served by commercial and industrial supply houses," maintains Farnsworth. "The irrigation industry is certainly an area ripe for change."

He maintains retail is exposing more consumers to the benefits and availability of irrigation products, thus growing the market for irrigation products overall. However, as the importance of consumer market volume increases, traditional market segments will decline. "The distribution structure and resulting relationships within the total channel will change as manufacturers chase the expanding consumer market," he explains. "This will change the way channel partners work together because they will begin to encroach into each others traditional markets, like distributors and mass retailers offering free irrigation designs-- a service historically provided by designers."

"An important implication of this research point is that irrigation consultants need to become more focused on evolving industry trends and develop marketing activities to counter balance these changes," Farnsworth concludes. The respondents were surveyed to discover the key issues facing irrigation consultants in the future (see chart). Water conservation and environmental concerns topped the list, followed by product liability and a shift away from construction observation and contract administration. ASIC Immediate Past President Stephen Smith adds," This research clearly shows irrigation designers need to look at how we market our services and how we further recognition of the value we bring to the industry." Consequently, there are several critical success factors irrigation consultants should consider when developing strategic business plans for the future:

• Shift from a "product" driven orientation to a "market" driven orientation (i.e. internal perspective to an external perspective

• Clearly identify and position viable/needed value added services in the marketing process

• Unbundle services and related fees to meet various market segments' expectations

• Identify targeted niche markets and focus communication efforts

• Develop and support channel partners (i.e. distributors and

manufacturers) with similar goals and programs.

Smith concludes," We professionals, as a group, need to broaden our perspective to see the underlying magnitude of change. Even more importantly, we need to align ourselves with irrigation manufacturers and distributors who support our goal of increased professionalism in the industry. Such alignment will, in a positive way, help us combat the "free" distributor-provider irrigation designs that are so prevalent." lasn

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