What's up with JD?

[Ledgemere Farm]

My dealer say sthere's alot of backbiting going on at Deere right now. I know one dealer was told by Deere they ddint have enough floor space. The Dealer had been in business for a long time. They sold out to a "chain JD dealership" that is building a bigger place down the road.

Just curious if anyone knew what the word on the street was.

 

[fgross335_2210]

There have been several discussions in this forum over the past 2-3 years about JD consolidating smaller dealer points into larger dealers. Probably just more of the same. Sad...

 

[JDPN]

Yea, it's called the new corporate America.....

 

[sixdogs]

I think the idea might be to encourage the big dealer to have a number of locations and discourage/squeeze out the smaller guy that has the potential to or is providing price competition. Should one dealer then own all the nearby outlets, prices will hold much better--meaning higher--than they normally would otherwise.
That's why I have JD stuff but also Kubota so I am not bound to one dealer and their retail price.
It's a good monopolistic strategy without appearing as such and will either work big-time---or--- give further rise to upstart manufacturers. The start of Kubota was fed by the desire of the majors to force the consumer to take their product at their price and like it. Yeah, that worked .
Rural folks are smarter than that.

 

[unreconstructed]

Parts man at the local JD dealership told me JD had tried to get the owner of his store to buy a couple of stores in the surrounding area--smaller stores. He would not do it.

 

[Ledgemere Farm]

I have seen several instances in Maine whereas one John Deere dealer owns several franchises. I can't think of a Kubota franchise...

 

[billb3]

JD just bought the dealership 30 miles from me to keep it from going under.
6 months later and they are still Kubota dealers as well.

There were 4 dealers within 30 miles, now there is two.. The other one used to have good deals a football sized field of new and used equipment. The field is empty and they have just a 2520 and 2305 out front outside.
Agway and the other feed store is gone, too.

 

[sunnyside360]

Haven't heard anything official, but as of two/three years ago all the smaller local JD dealers within about 100 mi radius from here are now owned by two very large dealerships. All the smaller single ones are gone. So, one can connect the dots on this question.

 

[MessickFarmEqu]

The start of Kubota was fed by the desire of the majors to force the consumer to take their product at their price and like it. Yeah, that worked. Rural folks are smarter than that.

At Kubota's beginings they where actually more expensive than just about anyone. Their rise was really two things, 1st - quality that was not offered by other companies, 2nd - building what the customer wanted rather than building what you think they should have. Their explosion really came in the last 10 years when they started bringing compact tractors to the mass market, rather than the farming community. Unless your Walmart, you don't win the war simply by being cheap. You do it by offering the best value, and no one can question that they've done that better than anyone else.

Deere has had a policy of consolidation for awhile. Its caused alot of hard feelings. They have ranked at the bottom of the AEM chart of dealer to manufacturer relations for awhile. What they are after is a Catapilar like business model where the OEM has more control over retail prices because they are using few large "distributorships". That business model is amazingly profitable when customer blindly buys your products without considering other brands, the goal is to control inline competition and preserve the profit margin.

 

[keerym]

Deere has had a policy of consolidation for awhile. Its caused alot of hard feelings. They have ranked at the bottom of the AEM chart of dealer to manufacturer relations for awhile. What they are after is a Catapilar like business model where the OEM has more control over retail prices because they are using few large "distributorships". That business model is amazingly profitable when customer blindly buys your products without considering other brands, the goal is to control inline competition and preserve the profit margin.

Messick is partially correct when he says Deere is persuing a Cat (spelled Caterpillar) business model. What works for Cat is their customer base. Its not that they purchase blindly, there is plenty of competition on products. Their customers are pretty demanding and don't usually want to deal with mom and pop dealers. The bigger stationary customers like mines and quarries have large service needs that aren't easily satisfied without the major investments of mega dealers. Smaller landscapers and construction contractors also benefit from the parts and service capability of these large dealers. This is also becoming the case with technology being incorporated into farming practices - Deere's real focus.

Kubota has done well focusing on the property owner. They have grown just as this segment of the market has grown. Kubota does not always have the best products, but they typically offer a trustworthy value. Their distribution system (dealers) also works well with the market segment they target. They too could use a little more consistency from dealer to dealer and a little bit better parts availability.

 

[dirt ditch]

John Deere did the same thing back in the late 1970s early 1980s, forcing smaller dealers to grow, consolidate, or close. Back then our local dealership was sold to a larger one. It was sold again to a partnership that now owns 5 of them.

 

[arrow]

I often wonder where some of these corporate heads are stuck into. Controling profit margins by narrowing your dealer scope sounds like a good idea at first but if you can't control something even more important such as dealer -consumer relations, service and product availability coupled with product reliability, you're barking up the wrong money tree IMO. Look at Kubota. There are 3 dealerships within 20 mile radius of me. Unless you say "deliver that tractor to my house right now, you are invisible to any of them. They each give you the impression that they do not have the time of day if you need to figure out which tractor is right for you on their lot let alone compare someone elses product with theirs. After you come from any three of them, you don't feel you want a tractor anymore. Kubota makes a great product. It is not enough to think you make the best product so here it is, take it or leave it. If I were regional manager, I'd begin to wonder what my full potential of selling Kubota tractors would be if I did not have arrogant dealerships. JD corporate needs to redefine on how to establish increased sales. They also should concentrate on the quality of the dealer as opposed to the size of the dealership. If a dealership cannot ingratiate themselves to the buying public, that dealership would be gone in my world. Customer satisfaction is one enduring quality to have to sustain selling anything. Unfortunately it seems all Corporate America has now are bean counters.

 

[prosperity]

Well said arrow.

I find myself at the wrong end of this effort of Deere's.

I'm a small operator - maybe spend $10K-$15K every 2-3 years on new equipment. My smaller family owned dealer has been great, and I find now that I have been spoiled.

About 2 years ago, I heard that they had to buy more branches, or be bought out. Well, they were bought out by a company that now has 11 branches. My main contact with my dealership left with the transition.

Now, the customers service (to me at least) is horrible. For parts I pay a strict list price (used to get 12% off which to me was just a nice gesture for a regular customer). When I say anything about a discount, they just about laugh at me.....

I'm contemplating upgrading one tractor, with a trade in (Deere). I gave the salesman the exact specs on the compact I wanted, and showed him my trade (perfect condition). It's been 7 weeks now, with 3 different phone calls from me, and still no price.

Just all very frustrating - I would have had my price within 5 minutes from the old place.
One more week, and I just might visit a Kubota dealer, even though they are 30 miles farther away.

[end rant]

 

[deere755]

The main dealer that I deal with has a large chain of dealerships in Illinois and Wisconsin. When they bought out our local store the old owner stayed there as the manager so I still get the same service that I always did. One thing that has improved with the buy out is I can look at a piece of equipment on any of their lots and deal with my salesman.This gives me more to choose from and still be able to deal with someone I trust. The other dealership that I deal with occasionally suddenly bought up 2 other dealerships after owning 1 for as long as I can remember. Now I know why. As sad as it may seem and I don't really like it but the day of the Mom and Pop stores is all but gone. Seems to be this way in all industries.

 

[gamble77]

It is easy bash the "big dealer groups", but facts are there to support what Deere is doing. Larger dealerships with multiple locations generally have better customer service scores (which Deere measures VERY closely). The larger the orginization the more of a focus Deere has for them and their customer support and the more they are judged on it...and trust me Deere puts a LOT of value into this.

Sure, we are all going to hear of people that went to the "big JD dealer" and didn't get treated right, that happens at the best dealerships. What Deere is doing makes great business sense for them and the dealerships...

 

[AKfish]

There are many positives for the "bigger is better" business model - both for the consumer as well as the manufacturer.

Better training and educational opportunities for both sales and management and technical/ repair staff.

Larger and more readily available equipment and parts/repair inventories - less turnaround time for new purchases and repairs or replacement equipment.

Greater flexibility for dealerships to maintain economic viability during regional or national slumps or downturns - less likely to lay-off experienced and valued employees. Good, experienced, knowledgeable employees are the bedrock of any company and one of the main reasons consumers stay with a company and it's product line.

That said --- it's very, very easy for a company to "forget" the individual consumer --- the "little guy" as they get BIGGER AND BIGGER.

And when that kind of behavior becomes endemic... well, those companies are found as references in history books - no longer listed in the S&P 500.

AKfish

 

[Farmwithjunk]

I've started a few wars with my opinions of SOME of the Deere product line. (over-rated in many instances) but no one can deny Mother Deere has a VERY accurate crystal ball when it comes time to see what the future holds for their marketing stratagies. For the last 50 years, they've been one step ahead of the game. Not to say they do EVERYTHING right, but it's hard for anyone to question their overall game plan after viewing the results.

In an off-handed way, AGCO is doing something very simular. (Reducing the numbers of small dealers in favor of larger, more centralized parts/service/sales outlets.

It's quite simply, the new way of doing business. The "BIG BOX" store.....

Sure, some old dealers are being left out. But they had their opportunity. Had they taken on the initiative towards becoming a bigger, higher volume dealership, they might be the one still standing. I believe in loyalty. Being a loyal customer, being a loyal business owner, and being loyal to a brand that's served me well. But, Deere is a big business who's loyalty is, among other places, firmly rooted with their shareholders. They have to do what's in the best interest of BIG PICTURE. Sometimes that means changes that don't set well with everyone.

 

[Spudland_Dave]

You talking about the Former Delekto Bros? IF so, my 3520 was one of the last tractors to leave under the Delekto banner....

As to the topic...I think that the problem with the multi chain stores is that if you end up with a BAD one, you're bad off cause its not like you can travel 20 miles in the other directon to a better dealer..... I think most of the people moaning about the "Cat" model fall into that classification.....years back people knew who were good dealers and which ones to avoid...now they own a territory the size of Rhode Island, you either get good service or bad service....Wasnt bad before cause like I said, you avoided the bad ones and went 10 miles down the road to the next town over to the "good dealer" and life was good...

All that being said....not too many people bash the CAT model because Cat has industry leading service, I dont see it as "Blindly buying" ...... a Neighbor to my Parents bought a Challenger...dealer is 4 hours away...field service goes right to his door and takes care of issues for cheaper then I can my Deere which is 9 Miles away from the Deere Shop...He pays standard shop rates for whatever service is being done, I get to pay shop rate plus hauling?.Luckily my 3520 hasn稚 had to go down to the shop since I致e bought it, but I don稚 see why my green dealer couldn稚 do it "free"....

IMO, if Deere wants to play like Cat, they need to play the same game?

 

[AKfish]

Deere has already "put their toes in the water" with the CAT "home service" option for lawn tractors and mowers. Many areas of the country offer the services of JD mobile technicians that will pull up to your driveway and replace your mower blades and change your oil, too.

As well, I noted on the JD website using the configurator - "build your own" - that Deere is offering prospective utility and CUT buyers the option of paying more upfront (as part of the warranty) for "home service" visits for their new tractors.

So, if the CAT guys can do that - and do it well - then, look out; cause here come the Deere's!!

AKfish

 

[unit40]

Interesting that Deere is now selling Stihl equipment in their dealerships. No more "John Deere" chainsaws, trimmers, and back-pack blowers? And interesting that the "new" John Deere Landscapes has purchased Lesco. The poor guys down at my local Lesco now sell the Lesco stuff with the Lesco labels, but now wear the John Deere Landscapes uniforms. Now Lesco has always been a turf/control product store for me, and here they are with 4 John Deere snowblowers parked inside. Snowblowers at Lesco???? Deere meant something a long time ago, and there is now but a flicker of that fire. The old farmer from Vermont couldn't envision the Corporation of today with his name, building stuff in China, India, buying up equipment companies from Finland, selling italian tractors, painting it all green'n'yellow and putting his name on it. I guess we almost had a green'n'yellow BR600 back-pack blower, but Stihl will never let that happen.....unless the price was right....Pretty soon A Deere dealership will have to be the size of a Super Wallyworld. Get your grass seed and termite control here, small ride-ons over at isle 3, and far back your combines and 5000 series tractors. With a freakin showroom, pile of rocks out front like a Land-Rover dealer with a tractor traversing the trail, put a quarter in the kid ride out front and let them scoop dirt with a vibrating play back-hoe. Food and pizza and maybe a little restaurant like an Ikea store......crazy!!!!