Benefits of Cooperative Advertising Among Farm Credit Institutions Term Paper

Pages: 30 (7610 words)  ·  Bibliography Sources: ≈ 80  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business - Advertising

¶ … E-Mail Survey Sent to Farm Credit

Systems Institutions

Figure 2 Results from Received Questionnaires

Figure 3 Questionnaire Response Institution #1

Figure 4 Questionnaire Response Institution #2

Figure 5 Questionnaire Response Institution #3

This research was conducted to address a serious problem in the Farm Credit System industry. Currently, due to the diversity of the institutions that make up the System, there are numerous disparate marketing messages being conveyed to the consumer. This is neither efficient nor effective for all parties involved.

In addition, institutions currently must utilize a variety of vendors to fulfill their marketing and advertising needs. Again, this is neither efficient nor effective. As such, three hypotheses are proven. 1) That most associations do not have an in-house, centralized service to accommodate these needs for the use by others. 2) That the institutions would benefit from a single source for all of their advertising and marketing needs. and, 3) that a 'national brand' advertising campaign, unifying the System associations holds value.

In the end, it is recommended that a single-source resource for advertising and marketing needs be established. It is also recommended that a unified campaign be developed as well. Both must take into consideration all of the unique needs of the different associations to be successful, and further research is needed to confirm these findings.

Finding Common Ground

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Can Farm Credit benefit from a single source provider for advertising and marketing services to clearly refine its message and develop a national brand?

Background Information:

Term Paper on Benefits of Cooperative Advertising Among Farm Credit Institutions Assignment

The Farm Credit System is the oldest Government-sponsored enterprise. It was created by an act of Congress in 1916. Today, the System is a "nationwide network of borrower-owned lending institutions and affiliated service entities that lends to agricultural and rural America" ("Overview"). The system's primary mission has not changed since its founding nearly nine decades ago, to ensure agricultural producers, cooperatives, and farm-related businesses would continue to have access to sound and dependable funding.

The System is currently comprised of approximately 102 financial institutions. The 102 institutions are comprised of 5 banks and approximately 97 associations. As of December 31, 2003, the five System banks included: AgFirst FCB in Columbia, SC; AgriBank, FCB in St. Paul, MN; CoBank, ACB in Denver, CO; FCB of Texas in Austin, TX; and U.S. AgBank, FCB in Wichita, KS. The borrowers themselves cooperatively own these banks and associations, either directly or indirectly. Each institution is governed by a board of directors, which is elected by its borrower/stockholders ("Banks").

These institutions service all 50 states and Puerto Rico as they provide a continuous stream of capital.

Typical products and services offered by System institutions include real estate loans, operating loans, rural home mortgage loans, leases, credit-related life insurance and crop insurance, and various financial services, such as farm record-keeping and financial planning ("Banks").

It is estimated that more than 30% of real estate and non-real estate lending is fulfilled by the System ("Overview").

Financing is used for a variety of purposes. The purchase or improvement of real estate is one of the most common, as is the refinancing of debt on real estate, typically serviced through long-term loans. In addition, short -- and intermediate-term loans are provided to finance processing and marketing the production of food and fiber, and purchasing equipment and livestock ("Banks").

The institutions that make up the System are chartered under the Farm Credit Act. The Farm Credit Administration is the independent Federal agency, in the Executive Branch of the Government, that regulates the System. The joint and several obligations of the System are the Farm Credit Debt Securities ("Overview").

An added layer of protection was created in the late 1980s, with the creation of the Farm Credit System Insurance Corporation. Its primary obligation is to insure that timely payment of principal and interest on the Farm Credit Debt Securities is made. By the end of 2003, the Farm Credit Insurance Fund had more than $2 billion in assets for this purpose ("Overview").

The primary difference between traditional lending institutions and the financial institutions of the System is that System institutions do not take deposits. Instead the funds for lending are obtained through the issuance of global Farm Credit Debt Securities. At the end of 2003, the System reported a net income exceeding $1 billion, as it had reported for each year for the past decade, and had approximately $117 billion in assets. These funds are used to help finance "operations that provide America with high quality agricultural products and services" ("Overview").

A secondary difference, between traditional and System financial institutions, is the limited clientele System institutions service. Marketing is typically aimed at thousands of potential consumers, as opposed to millions. As previously described, the Farm Credit System was established to service agricultural producers, cooperatives, and farm-related businesses. These two differences equate to the need for more targeted marketing, more effective marketing, and more efficient marketing, for System institutions.

Organization of the Study:

The main elements of this study are organized so that the reader is first given a basic understanding of the Farm Credit System, which is foreign to many who are outside of the agricultural community. The next element is the statement of the problem that has been observed by the researcher, which primarily includes the lack of a singular marketing message for the Farm Credit System. As it is comprised of 102 unique banks and associations, this lack of consistency in marketing efforts is ineffective and inefficient.

The scope of this research is the next element described. As noted, the primary research is a qualitative study, focusing on how the System institutions currently acquire their marketing and advertising programs and materials, as well as the value they would place on a singular, one-stop organization for this material, and a unified theme for the Farm Credit System as a whole. Secondary research includes review of literature on the Internet regarding the benefits of utilizing a single source for marketing and advertising materials. This information is then related to the Farm Credit System segment.

The next elements of this research are the limitations of the research itself. There are two primary limitations noted that affect the scope of the research as well as the conclusions that are obtained. With these limitations in mind, the three hypotheses, of this study, are then overviewed. and, this is followed by the secondary research that is comprised of a complimentary literature review.

Data collection and the methodology utilized are next covered in this paper. And then, given the specialized nature of the topic of the Farm Credit System, several key definitions. This not only enhances the reader's understanding of specific terms, but also gives them a clearer overview of what the Farm Credit System is comprised of and their mission.

The purpose of use of the study is detailed next. This includes the general need for research, as none has been specifically undertaken regarding the Farm Credit System and single-source marketing, as well as the more specific use of this study to confirm AgFirst's decision to initiate an in-house marketing and advertising service for the other association's to utilize. Again, the aim is to show that there is value in the use of a single-source entity for this purpose, as well as the development and implementation of a unified and consistent marketing message from Farm Credit institutions across the board.

The next element to be covered is the questionnaires that were utilized for this study. This section gives detail to not only who received questionnaires but also what questions were asked and why. As the reader will discover, the questions presented were asked in order to validate the hypotheses of this study.

The final section of this study includes the results, conclusions and recommendations for this research. The results that were received from the institutions will be detailed, and the conclusions that can be made, due to their consistency will be covered. and, then, recommendations for action for System institutions, as well as future research, will be discussed at length.

Statement of the Problem:

There are 102 institutions comprising the Farm Credit System. Each of these institutions is cooperatively owned and governed, either directly or indirectly, by the participating members of the agricultural community. As such, each institution is unique.

It is their unique voices that have given rise to a disparate conglomeration of messages being given to the agricultural community. and, it is this dissimilarity that causes discord in the System as a whole, and may be impeding its growth and development. Although each institution is individualistic by nature, they are all part of a larger family, the Farm Credit System, which needs to operate as effectively and efficiently as possible in order to ensure its survival.

Scope of Research:

With the growth in importance of marketing in business today, it should come as little surprise that there is increased interest on the part of the researcher. Upon initial researching of the topic, it was discovered that little to no research had been performed in… [END OF PREVIEW] . . . READ MORE

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