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Go to Market

Strategy for a Crop


Protection & Seed
Production firm
Mohit Lakhotia | 2014B16 |
Marketing

Contents
Background & Business Context............................................................2
Company Overview..............................................................................2
Products and Services..........................................................................2
Problem Area..........................................................................................3
Deliverables...........................................................................................3
Solution..................................................................................................4
Customer Needs..................................................................................4
XYZs Core Competencies....................................................................5
Competition Analysis...........................................................................5
SWOT...................................................................................................6
Collaborators/Influencers and the Value Chain....................................6
Market Selection..................................................................................7
Why India.............................................................................................9
Marketing Mix.......................................................................................10
Positioning.........................................................................................14
Communication of Value Proposition.................................................14
HNI Engagement................................................................................16
Appendix..............................................................................................17

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Background & Business Context


COMPANY OVERVIEW
XYZ is an innovation-driven company with a long tradition in research
and development. They leverage their expertise to address global
challenges and aim to improve peoples lives around the world. Their
mission is based around the theme of science for a better life and this
is the foundation of what they strive to achieve within the agricultural
sector. Their contribution to society is based on helping to ensure an
ample supply of high-quality food, feed, fiber and renewable raw
materials.
PRODUCTS AND SERVICES
XYZ offers a wide variety of product mix across the areas of crop
protection, seeds and environmental science. Their customer solutions
are focused on several key themes such as:
Increasing productivity in a sustainable way: To assure sufficient
food supply for all, agricultural productivity needs to be increased.
Targeted measures to promote biodiversity, frequent crop rotation
and diversity in the active ingredients used to control diseases, weeds
and pests help assure that such growth is sustainable. The objective
is to increase yields while protecting the environment. XYZs approach
is to actively promote information and training tailored to the needs of
local farmers, both in the worlds key agricultural regions as well as in
developing countries. While fighting resistance is a top priority for
instance in some countries, farmers in some others are more
concerned about the efficient and economical use of fresh water in
the cultivation of rice.
Enhancing health, reducing waste: Good health requires proper
nutrition. Nowadays, a sufficient supply of healthy food should be a
given. But while enough food is produced to feed mankind, one third
of all food grown for human consumption is wasted while more than
two billion people are undernourished. The issue is complex and has
many causes. XYZs sophisticated and integrated agricultural
solutions are their core competency. Combining high quality seeds,
effective plant protection, agents and proven cultivation methods,

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farmers can save their harvests, increase yields and reduce spoilage
and waste.
Driving innovation: Innovation in agriculture starts with the seed and
reaches all the way to the kitchen where fruits and vegetables are
expected to stay fresh for as long as possible. What goes for apples
and artichokes is equally true for cereals, cotton or canola. High yields
and top quality start with excellent seeds, tailored to local soil and
climate conditions, well equipped to compete against weeds, diseases
and pests. To increase yields and protect the soil, crop sequences and
cultivation methods need to be adapted to local conditions. The
diligent use of agrochemicals not only serves to protect plants. Wisely
used, herbicides, insecticides and fungicides also protect farmers
against crop failures and their potentially severe economic
implications. XYZ aspires to be a respected partner to farmers around
the world, contributing to healthy crops, reliable harvests and stable
returns.

Problem Area
XYZs top management has of late been worried with the companys
latest performance reports that indicate a decline in market
penetration and lower customer share-of-wallet. This was a bit of a
surprise considering that the companys product offerings & innovative
themes had found wide spread acceptance among the global grower
community. Given this scenario, the company conducted an extensive
& detailed assessment into possible root causes and looking ahead to
the future, decided to focus on a four-pillar strategy.
1. Enhance Crop Protection
Improving portfolio through focused and integrated crop solutions
Increasing flexibility and efficiency
2. Strengthen Customer Centricity
Driving commercial excellence in marketing and sales
Connecting partners in the value chain through integrated Go-toMarket practices
3. Lead the way in Innovation
Striving for first and best-in-class solutions
Exploiting expertise in Seeds, Small Molecules, Breeding and
Biologics
4. Expand Seeds Business

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Further strengthening position in vegetables, rice, oil seed and


cotton
Extending portfolio by building up business in soy and wheat

Deliverables
Help XYZ devise a strategic marketing framework across following
dimensions:

Market analysis: Define customer needs (explore & identify),


align company capabilities, investigate competition and market
dynamics, involve collaborators/influencers
Market selection: Customer selection, segmentation &
categorization, target group selection & communication of value
proposition, positioning of product mix
Marketing mix: Focus on core products, optimize price, choose
distribution channels, advertise and promote, organize see-tobelieve demonstrations (technical products)
Customer acquisition: Create awareness on core products,
develop interest, drive action, implement follow-up touch points
Customer loyalty & retention: Deliver relevant, personalized
and on-time communications, engage customers more effectively,
provide essential customer context for moments-of-truth, incent
differently to drive behavior and build customer life time value

Solution
CUSTOMER NEEDS
For Seeds
Increase Yield
Value for Money
Seasonality
Reduce waste & spoilage
Specialized products
Augmented benefits
For Crop Protection
Education

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Assistance
Complementary to seeds
Secure harvests
Environment Friendly

For Environmental Science

Water retention
Fertilizers
Resistance to natural calamities
Promote biodiversity
Soil Management
Land Husbandry

XYZS CORE COMPETENCIES

Increase Productivity
Environmental Sustainability
Provide information and training
Supply of healthy food by integrated agricultural solutions
Driving innovation

COMPETITION ANALYSIS
On doing a Porters five forces analysis we found:

Power of
customers low,
mainly B2B. GM
crops
controversial
Threat of
substitutes low
as Biotech
industry highly
regulated and
has highly
valued
intellectual
property.

Competitive
Rivalry High
with
multinational as
well as regional
players
Threat of
entrants
medium and
increasing as the
industry matures
and more
regulations
come
about

Power of
suppliers is
limited no. of
small chemical
manufacturers,
medical
instruments
suppliers very
high

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PAGE 6

SWOT
The SWOT analysis of XYZ showed

Strengths
R&D
Environment
protection
standards
Integrated
agricultural
solutions
High quality seeds
Effective plant
protection products

Weakness
Limited product
portfolio
Decline in market
penetration
Not able to cater to
local needs

Threats
Lower customer
share of wallet
Competition
VUCA environment
Protests against
genetic engineering

Opportunities
Licensing
Strengthening
positions in
vegetables, rice, etc
Extending portfolio
in wheat and soy
Biotechnology
industries like
biofuel(ethanol)
bioplastics

COLLABORATORS/INFLUENCERS AND THE VALUE CHAIN


Value chain members for the business include:

Retailer
Wholesaler
Distributer

Collaborators and Influencers are:

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Rural institutions like Gram Panchayats


Agriculture associations like ICAR, All India Organic Farmers
Society
Corporate like HUL,ITC
Media like Radio
Word Of Mouth among farmer community

MARKET SELECTION
The Ansoff Matrix for XYZ showed the following prospects:

The overall split of


market potential
given
data
C h e m ic a l
M a n u fa c tu re r
s & M a c h in e
s u p p lie r s

D is t r ib u t o r s
& R e t a ile r s

XYZ
XYZ

potential in
AsiaPacific,
Middle
East
and
Latin
American

revenue

R e ta ile r
s

Fa rm e r s

Im p o r te r s
&
E x p o r te r s

and
as per the
denotes

P ro c e s s o r s

End
C onsum er
s

markets.

North America and Europe have a negative CAGR indicating


maturity. The other two regions are potential markets

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Agricultural output per capita in Africa -0.6% p.a. while that of Asia
has risen by 80% in last 45 years
Crop Protection: North America highest market share in terms of
revenue followed by Asia Pacific. North America and Europe are
mature markets with few dominant players
Diversification of food consumption: Diets in APAC and Latin
America shifted away from staples to vegetable oils, fruits etc.
owing to increase in income
Urbanization: Establishment of large supermarket chains, more
FDI, advertising from global corporations, trade liberalization, nontraditional foods becoming popular

WHY INDIA

Per capita consumption of agrochemicals in India has a potential to


grow

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Consumption of herbicides is low because it is labor intensive


country. The trend is now changing

Domestic crop protection market growth potential is very high

Reducing arable land availability per capita leads to need for


increased yield per hectare

On the basis of aforementioned reasons,


geographies have been recommended:

these

two

strategic

Phase 1- Asia Pacific region, choose India as the pilot market (highly
agro based economy)
Phase 2- Countries with similar economic portfolio like Brazil, China
and Mexico

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Marketing Mix

Products
We recommended a three strep product strategy to XYZ depending
upon their competencies and their alignment to the sub continental
market.

Innovate
Instead of focusing upon single product category, be more crop
specific. E.g. offering integrated crop solution for wheat and
wheatworm.

Synergize
Create unique solutions to grower needs with an integrated offer
based upon knowledge and understanding of agriculture.
Draw synergies between the financial, sales and management
structure to decide efforts for improvement to a crop at a global
level
Supply Chain efficiency

Excel
Product Leadership obtained through product differentiation
Beating competitors by thinking like a grower and exploiting
expertise in small molecules, seeds and biologics, etc.

The overall recommendation was to move from a product based


strategy to a crop based strategy

Pricing
Pricing in the seed business is dependent affair, since there is high
price uncertainty due to varied crop prices.

Demand for
Agricultural
Chemicals

Demands for
Crops

Demand for
Seeds

Crop prices

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Our recommendations primarily focus on cost optimization rather than


price settlement

Integrated crop solution can be sold at a price greater than some


of its components

Since they increase growers yield substantially they will be sold


at a premium price

Reduction in manpower, competitors with thrice the revenue are


operating on less than half of XYZs manpower

Seed price can be 25-100% over the commercial grain price for a
particular crop (reverse logistics)

Price Pressures - Due to the nature of the clientele, pricing is


very market driven and there can only be limited alterations
(government regulations). Therefore, focus should be more on
reducing costs

Differential branding to vary prices as per demand (variety)

Pre-selling of seeds (before harvesting) at lower prices to ensure


sales

Sons of soil to be hired for Kisaan Mitr

Place
For the recommendations on channel and distribution we found that
managing channel member at each level is the biggest concern for the
seed business.

Channel members are managed by territory in-charge

The
distributors dealers and retailers should have proper
licenses for selling products as per government regulations

Stock only items


for which the company has given them
permission to stock

Cooperation among channel members in same territory

Taking feedback from members and addressing grievances

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Clear boundaries for authority and operation

Three important aspects that are considered by any channel partner


are:

Product knowledge
Willingness &
Financial capability

Other recommendations made were as under:

XYZ can license seed treatment technologies to small seed


producers, thus reducing competition, generating immediate
revenue and long term partnerships
Catalogues or Brochures can be provided to give information
about the wide range of product portfolio available
Packaging - Look and feel of the packaging can be made
attractive

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Better Storage - long term and short term to prevent spoilage


and waste
Reverse Logistics - The growers can sell back their seeds to
the same wholesaler, which will come back to us for treatment
and conditioning. This rotation of money creates synergy
between the wholesalers and the growers, further increasing
loyalty of both the channel members
Connecting with the retailers - Kisaan Mitra collect the
information about the farmers from the retailers so that they can
provide after sales support to the farmers. The retailers will in
turn get word of mouth publicity and can also be offered some
incentives based on the amount of data they provide

POSITIONING
We see XYZ as a brand with the flowing parameters of recall

Superior Yield
Supportive & Reliable
Sustainable
Innovative
Rewarding products

Thus positioning it as Trustworthy Wealth Creator

COMMUNICATION OF VALUE PROPOSITION


We recommend a CDC model for communicating the brands value
proposition:

Clarity
o Bring forth XYZ advantages, accessibility etc.
o Information to be provided through Krishi Vigyan Kendras,
Kisaan Melas, Gram Panchayat , Farmer associations
o Publicity and PR
o Krishi Vigyan Kendras as a touchpoint where XYZs
solutions can be showcased via catalogues, brouchures
etc.

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o Kisaan Melas, Haats or gram panchayats can be used to


increase visibility about advantages of our products
o Agricultural institutions like ICAR and AOFC can act as a
platform for training the growers about techniques like pest
identification etc.
o Publicity through radio ads and jingles, pamphlets in
newspapers etc. to spread awareness about high yielding
ingredients

Differentiation
o Customer centric through Farm Representatives or Kisan
Mitra who provide after sales support
o Integrated and focused crop solutions bundled together
o Retailer to compile details of customers and provide to
kisaan mitr
o Subsidized prices offered to farmers giving best yield
o A plan of action was recommended to help farmers
overcome price uncertainty as undermentioned:

Approach
farmers

Perform
fertility test of
soil

Find average
yield of the
area

Recommend
suitable seed
type

Recognize and
reward the
farmers giving
highest yield

Council
throughout
the crop
lifecycle

Bundle with
complementar
y crop
protection
product

o We also recommend to maintain a farmer scorecard for


keeping a track of consumer behavior and increased
customer engagement

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Credibility
o See to believe demonstrations, wet dry sampling etc. done
at aggregation points (e.g. milk cooperatives or grain
collection centers)
o Distribution of free samples along with mass FMCG
products like toothpastes, TATA Salt etc.
o Financial institutions like NABARD can help to provide
loans to the farmers for buying our technical products
o Provide free samples to the growers in form of dry and wet
sampling during different village events like farmers
markets, haats etc.

HNI ENGAGEMENT
In order to attract maximum High Net-worth Individuals,
recommend the following action items to be taken care of:

we

Farmers in developed countries are more educated and


connected to social media
Dedicated Support App for FAQ
Personalized solutions for HNI
Position as strategic Partners rather than solution providers
Creating a prospective pipeline with companies which go for
corporate farming

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Output based hybrid seeds. E.g. Seed potatoes specially bred for
potato chip producers
Extend scope for Biofuels and Bioplastics
Co-marketing for a sustainable brand image

PAGE 17

Appendix
1. XYZ - Key Financial Figures (MUSD = Million USD)

2. XYZ Sales by Region

3. XYZ Sales by Business Group

4. XYZ Employees by Region and Function

5. Key Performance Indicators (all values are in %)

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