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Unformatted text preview: FICA Seeds, Inc. Laura Cramer Inna Kuvich Doug Lempa Joe Degraft Oppong Luke Siwula Agenda Problem Statement FICA Seeds, Inc. Background Situational Analysis Alternative Solutions Recommendation Problem Statement FICA Seeds, Inc. needs to create a marketing strategy that differentiates their product offering from the competitors and communicates its benefit to the consumers FICA Seeds, Inc. Began seed production in 2000 Marketing seeds since 2001 Aims to be a "one stop shop" for the commercial and non-commercial farmer Committed to creating affordable and quality inputs 20% market share Aims to increase current seed production Can produce its own seed Has production and storage facilities Strong national distribution network Market Size 85% small-scale farmers Food grown for sustenance purposes not necessarily for profit 12% medium-scale 3% large-scale Only 30% of farmers use improved seeds Only 15% of that group use superior hybrid seeds FICA Seeds, Inc. CEO FICA Seeds, Inc. Situational Analysis Industry is known for unscrupulous business practices High interest rates and a lot of bureaucracy Low farmer adoption rates Discriminatory pricing Political Under-development of the regulatory environment Lack of national seed policy Agencies lack funding and staff to oversee seed certification processes Fake seeds present in market NARO's monopoly on seed research creates dependence on them for variety Lack of plant breeders' rights Discourages foreign and private investment Extension service is non-functional Economic Liberalized Ugandan market has crowded the seed market Competitive pricing has resulted in narrow margins and profits Large unexploited market potential Inadequate funding at all levels of government programs has negative effects 39% poverty rate in rural areas Agriculture comprises 40% of GDP and 60% of government revenue Employs 80% of labor force Social Population growing at 3.4% Life expectancy of 42 years Literacy rate (67%) limits potential promotional options Substantial wage increases recently Higher purchasing power 85% of population engaged in agricultural activities Technological Expensive to develop new seed varieties Seed companies have little say in breeding program Uganda has a breeding advantage Maize varieties are adaptable to other regions No consolidated agricultural research policy Fragmented legislation limits R&D Potential Alternatives
Current Products Current Markets New Products Market Penetration
Increase sales to small farmers through personal selling Product Development
Find an outside institution to partner with and fund private product development New Markets Market Development
Establish sales presence in neighboring countries (e.g. Kenya, Tanzania) to increase sales Diversification
Establish financial services to help customers afford product Alternative 1 Focus on increasing sales to small farmers Provide seed to key farmers in select areas to directly demonstrate product value Employ personal sales force to bypass current distribution network Advantages Cost efficiency Directly show benefits to entire community Increase sales through word-of-mouth Alternative 1 Disadvantages Transportation costs Giving away potential profits Investment in training of personal sales force Alternative 2 Partner with an outside institution E.g. CIMMYT, universities, multinational companies Advantages Provide funding to develop varieties better suited to farmer needs Reduce costs Source of differentiation from competition Bypass national breeding program restrictions Alternative 2 Disadvantages Unsold products in the market already Product development is costly and takes time Lack of control Stretches resources Does not focus on improving the market conditions Alternative 3 Establish sales channels in other nations Kenya and Tanzania as potential markets Advantages Seeds developed in Uganda are easily adaptable to other nations Increase sales Increase international presence Alternative 3 Disadvantages Increasing sales does not necessarily mean increasing profits Higher costs of distribution and transportation Unable to compete with local seed companies Does not resolve problem of ineffective communication of product benefits Alternative 4 Establish financial services to help farmers afford product Advantages Help farmers afford product Increase demand and sales Disadvantages Microfinance institutions may already exist Requires resources that FICA does not have Costly, time consuming, and removes focus from the original business Recommendation Pursue market penetration strategy Increase sales to small farmers through personal selling Potential for higher sales in existing markets Can do this while continuing to sell in the traditional channels as well FICA Seeds, Inc. Today In 2006: Total Seed Production Maize Seed Sales Other Seed Sales 4,300 MT 1,950 MT 2,350 MT Domestic market share = 45% Questions? ...
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This note was uploaded on 05/11/2008 for the course AEM 4420 taught by Professor Christy,r. during the Fall '06 term at Cornell.
- Fall '06