Tài liệu Marketing plan for launching roundup ready system in vietnam master project in business and marketing management

iii ACKNOWLEDGEMENTS We, firstly, would like to express our gratitude to all of those who have given us the possibility to complete this thesis. Especially, I would like to express my profound gratitude and great appreciation to my supervisor Dr. Le Thanh Long for his valuable guidance, advice and encouragement throughout the research study. Special thanks are extended to my colleagues in Monsanto Vietnam for their attention and giving valuable information, materials needed to improve the content of this study. Taking this opportunity, I would also like to give my special thanks all professors, staff from both Hochiminh City Open University, and Solvay Brussels School. Moreover, I would like to thanks my classmates, Solvay Vietnam Alumni for their assistance and co-operation during my study of the Master in Business and Marketing Management. Finally, my gratefulness to my beloved family, friends for supporting me to complete the master course. Ngo Lanh 15 December, 2010 iv TUTOR’S COMMENTS v TABLE OF CONTENTS Content PAGE Title Page ........................................................................................................................... i Commitment ....................................................................................................................... ii Acknowledgements ............................................................................................................ iii Tutor’s comments ............................................................................................................... iv Table of Contents ............................................................................................................... v Abbreviations ..................................................................................................................... vii List of Figures and Tables .................................................................................................. viii Executive summary ........................................................................................................... ix CHAPTER 1. INTRODUCTION ..................................................................................... 1 1.1 Rationales of the project............................................................................................... 1 1.2 The objective of the project ......................................................................................... 3 1.3 Scope of the project ...................................................................................................... 3 1.4 Limitation of the project ............................................................................................... 3 15. Research outline .......................................................................................................... 3 CHAPTER 2. LITTERATURE VIEW............................................................................ 4 CHAPTER 3. RESEARCH DESIGN .............................................................................. 7 3.1 Assumptions ................................................................................................................. 7 3.2 Research objectivities .................................................................................................. 7 3.3 Metholodogy ................................................................................................................ 7 3.4 Findings ....................................................................................................................... 8 CHAPTER 4. STITUATIONAL ANALYSIS .................................................................. 9 4.1 External analysis .......................................................................................................... 9 4.1.1 General information .................................................................................................. 9 4.1.2 Macro environment (PEST analysis) ........................................................................13 vi 4.1.3 Micro environment (Poter’s 5 forces analysis).........................................................16 4.1.4 Summary of opportunities and threats ......................................................................19 4.2 Internal analysis ..........................................................................................................19 4.2.1 The company introduction ........................................................................................19 4.2.2 Summary of strengths and weaknesses ....................................................................25 4.3 SOWT analysis ............................................................................................................25 CHAPTER 5. MARKETING STRATEGIES ................................................................26 5.1 Marketing objectives ...................................................................................................26 5.2 Segmenting ..................................................................................................................27 5.3 Targeting .....................................................................................................................28 5.4 Characteristics of customers ........................................................................................28 5.5 Positioning ...................................................................................................................29 5.6 Marketing mix .............................................................................................................29 5.7 Budgeting ....................................................................................................................38 5.8 Implementation and control .........................................................................................39 CHAPTER 6. CONCLUSION AND RECOMMENDATION .......................................42 REFERENCES APPENDICES Appendix 1: Discussion guide for in-depth interview and group discussion ................... A.1 Appendix 2: Questionnaires for market research ............................................................ A.3 Appendix 3: Research findings (corn growers’ concern about their current weeding)….A.6 Appendix 1: Some pictures of the product system &samples of promotional activities . A.9 vii LIST OF ABBREVIATIONS ABBREVIATIONS MEANING COGs Cost of Goods sold DAP Day after planting EBIT Earn before income tax FAO Food and Agriculture Organization FAB Features, Advantages, Benefits FY Fiscal year GMO genetically modified organism GRC Glyphosate resistant corn ISAAA International Service for the Acquisition of Agri-Biotech Applications KPI Key performance indicator KSF Key success factor NSC None standard cost P&L Profit and Lost R&D Research and Development RR Roundup Ready RRC Roundup Ready Corn PPP Public-private partnership SGA Sales & General Administration SWOT Strength, Weakness, Opportunity and Threat US The United State of America USD US Dollar USDA United State Department of Agriculture VND Vietnam Dong; MT: Metric Ton viii LIST OF FIGURES AND TABLES FIGURES PAGE Figure 3.1: Weed management methods in Vietnam ......................................................... 8 Figure 4.1: Global area of biotech crops, 1996-2009 ......................................................... 11 Figure 4.2: Vietnam corn planted area, 2000-2009 ............................................................ 12 Figure 4.3: Porter’s 5 forces ............................................................................................... 17 Figure 4.4: Market share of conventional hybrid corn seeds ............................................ 19 Figure 4.5: Monsanto sales growth, FY’2006- 2010 ......................................................... 22 Figure 4.6: The company portfolio ..................................................................................... 24 Figure 4.7: The current organizational chart ...................................................................... 24 Figure 5.1: Levitt’s Total product concept ......................................................................... 29 Figure 5.2: Product distribution flow chart ......................................................................... 34 Figure 5.3: Sales and marketing organizational chart 2011 ............................................... 41 TABLES PAGE Table 3.1 Weed concern of corn growers ......................................................................... 8 Table 4.1 Conventional hybrid corn and biotech corn forecast, 2011-2013 ....................... 13 Table 5.1 The cost of seed and weed management for DK919 hybrid corn ...................... 32 Table 5.2 Comparison RRC with the current weeding methods ...................................... 33 Table 5.3 Promotion and advertisement budget ................................................................. 38 Table 5.4 RRC projected sales FY’2011 - 2013 ................................................................. 39 Table 5.5 The Profit & Loss analysis in 3 year for RRC business ..................................... 39 Table 5.6 The detailed promotional activity planned on monthly basic, FY’2011 ............ 40 Table 5.7 The detailed promotional activity planned on monthly basic, FY’2012-2013 ... 40 ix EXECUTIVE SUMMARY Weed management process has played an important role in corn production. And so far, the Vietnamese corn growers have been facing difficulties and have low productivity in weed management. Understanding the needs and the potential market of more than 1 million hectares of corn production per year with potential market value of more than 75 million USD, Monsanto company has a plan to bring Roundup Ready Corn (RRC) system which has been commercialized in the other countries for more than 14 years to Vietnam market. Roundup Ready Corn system is an innovative weed management solution developed from advanced biotechnology by the Monsanto. The system consist of corn seed, herbicide resistant gen and herbicide working together that can deliver high performance in weed control in corn production. The difference of RRC system from the current weeding methods is easy to use, clean weed, safe to corn plant and perhaps its cost is cheaper. As this is the first time to market this kind of product in Vietnam, a marketing plan to launch the product is needed, the objectives of the marketing plan is to make fast adoption of the product and sales volume of 1500 metric ton by 2013. The current environment is quite favorable to launch the product: the corn growers have demand of the product, the Government highly support, and create a favorable conditions to bring the product to Vietnam. Additionally, Monsanto already has a office in Vietnam long time ago with full of skillful sales and marketing staff and also has a big market share of conventional hybrid corn seeds which will be footprint for RRC system to fast adoption. In order to achieve the objectives in the first few years, a proper marketing strategy is needed to be in place. The competition expected to be hard later on, since competitors also have the same product solution. However, with careful preparation in launching process, it is believed that Monsanto will success to fast make adoption of the new weed management solution. The success of the plan will bring benefits to the corn growers and Monsanto as well as it would help accelerate the modernization of agriculture industry of Vietnam. x REFERENCES Nguyen Quoc Binh (2008), “Market research on Vietnam corn production”. Duong Van Chin, Suk JinKoo 2005,Common Weeds in Vietnam, Saigon Pesticide Company. Nguyen The Phu 2000, Basic Marketing, NXB Ñaïi Hoïc Quoác Gia Tp. Hoà Chí Minh Nguyen Dinh Tho (1998), Nghieân cöùu Marketing, NXB Giaùo Duïc. Nieân Giaùm Thoáng Keâ 2009, Toång Cuïc Thoáng Keâ. Clive James (2009) “Report on Global Status of Biotech Crops”, ISAAA. Donald W. Henedon (2004), Marketing Failures, NXB Tổng Hợp Tp. Hồ Chí Minh. Jay Conrad Levinson (2007), Guerrilla Marketing, Houghton Mifflin Company. Philip R. Cateora and John L. Graham 2007, International Martketing, McGraw-Hill Philip Kotler (1994), Marketing Management, Prentice-Hall International, Inc. Philip Kotler, Gary Armstrong, Swee Hoon Ang, Siew Meng Leong, Chin Tiong Tan, David K. Tse (2005), Principles of Marketing - an Asian Perspective, Prentice-Hall Technology Development Team 2010, “The protocol of corn biotech field trial in Vietnam”, Monsanto Company William A. Cohgen (1998), The Marketing Plan, John Wiley & Son, Inc., www.biotechknowledge.com www.monsanto.com www.fao.com www.vcn.vnn.vn 1 CHAPTER 1. INTRODUCTION 1.1 Rationale of the project Corn (maize), is the world’s third leading cereal crop, behind wheat and rice, and is grown in over 25 countries worldwide. The majority of grain and forage derived from maize is used as animal feed, however maize also has a long history of safe use as food for human consumption. The grain can be processed into industrial products such as ethanol (by fermentation), and highly refined starch (by wet milling) and sweetener products. In addition to milling, the maize germ can be processed to obtain corn oil and numerous other products. The majority of maize is grown for animal feed production and human food, however an increasing percentage is being used for the production of ethanol as a biofuel alternative to petroleum products from fossil sources Vietnam is considered as an agricultural country, of which total planted area of annual crops is 11.1 million hectare. Corn has been an important food crop ranking the 2nd after rice. The corn area has been increasing since 1995 when Vietnamese people started using corn as material for industrial feed for livestock, poultry production and the area reached 1.1 million hectares in 2009 (General Statistic Book 2009). Weed is one of the big factors causing yield reduction in agriculture industry. Weeds can reduce the yield potential of corn by as much as 20-40%. Under limited resource conditions, weeds compete with the plant in terms of soil water, nutrients and sunlight. Weeds also harbor insect pests and rats. The critical stages for crop-weed competition is highest at the first 1/3 of the crop life cycle or at 35-40 day after planting (DAP). Weed control must be given particular attention at this stage. So weed control is always placed as an important farming practice in corn cultivation. Currently, there has been several weed control methods in commercial corn production such as chemicals, manual. Manual weeding has been considered as one of the practices in weed control which is consuming a lot of labors and low productivity. Additionally, in the recent years, the manpower from 2 country side is moving to big cities and industrial parks to work, this movement has created the shortage of labor resources in the countryside who could do farming. For herbicide application, due to there is no efficacy chemical for weed control in corn production so far, so the current herbicide application practice is difficult and less effective. Therefore, the challenges for the corn growers are getting bigger, meanwhile corn cultivated area is still increasing. To solve the problem Monsanto has an intention to bring an innovative biotechnology which has been commercialized in the other countries to help the corn growers in controlling the weed more effectively. In together with support from the Vietnam Government, especially Ministry of Agriculture and Rural Development who is accelerating in issuing policies to modernize the farming practices, this has created a favorable environment to for biotechnology acceptance. The innovative weed management solution is so called “Roundup Ready Corn (RRC) System” which was developed by Monsanto. Roundup Ready Corn is a genetic modified corn crop containing a gen that produce protein which can be tolerant to a none-selected Glyphosate herbicide under Monsanto trade name “RoundupTM” – a chemical has been largely used in weed control for the none target crop area. The gene encoding a glyphosate tolerant form of the enzyme 5-enolpyruvlyshikimate-3-phosphate synthase (EPSPS) was isolated from the soil bacterium Agrobacterium tumefaciens strain CP4 and introduced into corn plant using recombinant DNA techniques. This tolerant gene protects the plants from being harmed when sprayed with Roundup herbicide. RRC system is combination of Roundup herbicide and Roundup Ready Corn seeds. RRC works as a system because it requires the use of both RRC seed variety and a Roundup herbicide. With this technology, the grower can simply use Glyphosate (Roundup) to spray on top of the corn without any plant injury. Normally, the Glyphosate chemical can kill any kind of the plant that touches the chemical. So the growers will easily than ever control the weed in their farm more effectively. 3 Roundup Ready Corn System has been successfully introduced and adopted more than 10 years in the world, especially North and South America. In the Asia, it was commercialized in Philippines 6 year ago. The benefit of RRC system has been proven through the area of RRC has been increasing year by year. 1.2The objective of the project The purpose of this project is to develop a marketing plan for launching Roundup Ready Corn System in Vietnam. 1.3 Scope of the project It is a marketing plan to launch Roundup Ready Corn System in Vietnam for three year from 2011 to 2013. 1.4 Limitation of the project As the project is conducted in a very short period of time and with limited resources, it contains several limitations such as: - The market research was just conducted in some main corn provinces, the number of samples was only limited to 120 samples. - The project is made basing on collected data and assumptions in the period of project implementation - No much future research data available of the corn weed management, the future data, or other data are presented in this thesis based on the best estimation of the Monsanto in Vietnam 2010. Due to the limitation, if the company has available resource, should continue doing market research to have more proven data. 1.5 Research outline - Define the company objectives - Data collection: Secondary and primary data - Situational analysis 4 - Define marketing strategy - Implementation and control - Conclusion and recommendations CHAPTER 2. LITERATURE REVIEW A marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives. It can be for a product or service, a brand, or a product line. Marketing plans cover between one and five years. A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use (Wikipedia definition, 2010). The importance of a marketing plan: marketing plan plays an important role in business success, it is essential for every business operation and for efficient and effective marketing of any product or service. This is true for a brand new business, or even for marketing a product, service, or product line within a company. Seeking success for any project without the use of a marketing plan is like trying to navigate a ship in bad weather, through stormy water, while under torpedo, and with neither a compass nor clear idea of where you are going to (William A Cohgen, 1998). Theory of marketing planning process in this project is referred to theory mix of authors: McDonald, Philip Kotler and Jean-Pierre Baeyens. To develop a marketing plan, it requires a lot of information from both internal and external of the organization which the marketing plan is applied to. Starting from knowing company vision, objectivities, then analyze the situation to find the SWOT, the competitive advantage, as well as added value to customers (marketing value proposal). A typical marketing plan is consisting of following key elements: implementation and control. Situational analysis, creating marketing strategies, 5 Situational analysis is process to gather and analyze the data, information or all the situations that we are facing with the proposed a product or service to be marketed. It is including external environment such as market, customers, competitors, environment, and the trends. The external environment analysis comprises of opportunity and threat analysis. The company needs to identify the main threats and opportunities that their company faces. Internal analysis is to analyze the organization culture, strategies, resources, constraints as well as company performance. Internal analysis tend to focus on the strengths and weaknesses in the present and past, and on internally controlled factors such as product, price, channels, promotion, people, etc. One of the results of situational analysis is to define the target market, it is to describe the customers market which we are going to serve, define who are the core customers or potential customers. As long as the target market can be defined, the proper tactics, resources are established to approach the market. The problems and opportunities are also determined in the situation analysis process, though the problems and opportunities may already expose during the situational and target market analysis or they are still at implicit. It is good to restate the problems or opportunities that to have a plan to capture the opportunities and actions to prevent or minimize the problems. Some problems or opportunities may not exist at planning stage, but it may occur during the implementation process due to some consequence of some actions, competitors’ reaction or accidental change of business environment, so to foresee the potential problems or opportunities is also an important step in marketing planning. Marketing strategies Marketing objectives: A marketing objective is a precise statement which outlines what is to be accomplished by the service company’s marketing activities. Defining marketing objective is an action can be taken place before writing a marketing plan. The marketing objectives should also be in alignment with a company objectives either short or long term. 6 The objectives will enable to work the detailed steps, activities in the implementation process or prepare the financial budget and measure the success of a marketing plan. Strategies A marketing strategy is the means by which a marketing objective is achieved. The marketing objectives look like destinations and marketing strategy is “how to get there”. Marketing strategy is the overall route to the achievement of specific objectives and should describe the means by which marketing objectives are to be reached. (McDonald & Payne, 2006) Marketing strategies should state in broad terms how the marketing objectives are to be achieved. Operational marketing plan Just as strategy tells what should do to reach objectives, operational marketing plan tells how to carry out the strategy planned. List every action required to implement each of the strategies (William A Cohgen, 1998). So, if to apply marketing-mix, in this section tell how the marketing is implemented (product, price, place, promotion). Or as recommended by Jean-Pierre Baeyens following is some examples: - Define the target market and the satisfy that target market by: Product concept Communication Channeling Convincing Implementation and control Marketing implementation is the process that turns marketing plans into action assignments and ensures that such assignments are executed in a manner that the plan’s stated objectives (Philip Kotler, 1998). In this session, a detailed action plan is worked out, the assignment of what, when, who, how will be clearly defined. KPIs (sales volume, marker share, growth rate, profit, etc.,) and KSFs are also indicated to monitor the progress and 7 measure the success of the plan. Reviewing process is also prepared and how to take corrective actions, how do we ensure the action plan is implemented appropriately. So the sales force, marketing organization, out sourcing agencies, and other resources are prepared properly to accomplish marketing plan objectives. CHAPTER 3.RESEARCH DESIGN 3.1 Assumptions The Vietnam corn growers have been facing difficulties in weed management in their corn fields. RRC system can be a new solution which will help the corn growers to solve the problems in weed management. 3.2 Research objectives In order to understand the value of Monsanto’s new weed management system in the corn farmers, it is imperative to know the practices and costs associated with farming, and to understand the perceptions and acceptability of the farmers. This research is designed to collect data to support the launching marketing plan. 3.3 Methodology - Desk research: the secondary data have been collected from the source of Sate Government documents: General Statics Book, Hochiminh Biotech Center, ISAAA report, FAO and internal sources, etc., - Field research: a field research was designed to collect primary data, mainly focus on corn weeding practices. Focus groups were conducted in Dong Nai provinces. In- depth interview with key corn growers, agriculture officials were also conducted in Dong Nai, Baria, Daklak, Son La, Thanh Hoa (in the North, conducted by telephone). Additionally, farmer practice survey by questionnaires on weed management was carried out in the country with total of 120 samples, and 30 samples in each following provinces which are representative for North and South region: Dong Nai, Daklak for South region and Thanh Hoa, Son La for North region. 8 3.4 Findings - Weed problem status, almost corn Table 3.1: Weed concerns (1: Very concern; 9: No concern) growers have been raising a big concern on the weeds in their farms, 81% of corn growers were asked have concern at level 1-4. The problem of weeds is a matter that corn growers taking into account of the con growers. Rate 1 2 3 4 5 6 7 8 9 Total Frequency Percent 12 24 35 26 11 5 2 2 3 120 10% 20% 29% 22% 9% 4% 2% 2% 3% 100% Cumulative percent 10% 30% 59% 81% 90% 94% 96% 98% 100% - The weeding methods About 47% of corn growers have been Figure 3.1 Weed management methods using chemical (herbicide) to control the weed in their farms and other 53% still use manual methods. And in the South region the number of corn growers using herbicide is about 68% whereas in the North is only 27%. North 73, 73% 27, 27% Herbicides Mannual 9 -The cost associated with weed management On average the cost for hand weeding is about 1,600,000 VND/Ha (or 80USD/Ha) and the cost for weeding by herbicide is 980,000 VND/Ha (or 49 USD/Ha), and according to the protocol of RRC application from Monsanto Vietnam, the cost of RRC without technology fee is 312,000 VND/Ha (or 16 USD/Ha). This findings was from interview of several typical corn growers in Dong Nai province in Summer Autumn season 2010 - The grower concern about their current weeding methods. In the North and South region, it seems to have different concern level. In the North, the corn growers think they may have labors to control weed. As they mostly use hand weeding, so they do not much worry about the difficulty in weed control by the current chemical. And it seems that they not willing to spend money to buy herbicides. In the South, as compared with the North, they are concerning the labor availability for weeding, as well as they worry the difficulty of the current chemical method. However, they not much care about the cost of the herbicides (more detailed in the Appendix 1.3) - Willingness to use new weed management method. Overall for the whole country respondent is 67% say “Yes”, 4% say “ No”; 29% answer is “Neutral” CHAPTER 4. SITUATION ANALYSIS 4.1 External analysis 4.1.1 General market information Overview on the global biotech crop and glyphosate resistant corn It is good to refer to the global status of biotech corn crops and Glyphosate resistant crops. The first biotech corn crop was commercialized in 1996 in the US and in 1999 in Canada and Bulgaria. This was considered an evolution of in corn weed management. The 10 advantage of Roundup Ready crops is that they greatly improved a farmer's ability to control weeds, improve the crop productive and soil erosion. After 2 years of commercialization of Roundup Ready Corn, in fact, 96 percent of surveyed U.S. Roundup Ready corn growers reported they were satisfied with the Roundup Ready corn system overall. In addition, 89 percent of Roundup Ready corn growers (Monsanto survey 2000) indicated Roundup Ready corn was a some-what or much better value compared to nonRoundup Ready corn. In Canada, where 2000 was the second commercial year for Roundup Ready corn. Nearly 100 percent of surveyed Roundup Ready corn growers there reported equal or better weed control with the Roundup Ready system as compared to conventional systems and rated crop safety as good to excellent (2000 Monsanto grower survey, www.biotechknowledge.com). The adoption biotech crops generally and glyphosate resistant corn in particular have been increase year by year. In the US, 63% of glyphosate resistant crop has been used as of 2009 (USDA Economic Research Service 2009). Farmers have rapidly adopted glyphosate resistant crop or glyphosate technology for three main reasons: cost savings, better weed management, and simplicity of use. In Asia, the first GRC (Roundup Ready Corn) was introduced in 2004 in Philippines and it has brought significant contribution to corn production and benefit to corn growers. There was about 500 thousand hectare of GRC or 40% of corn cultivated area had been planted in 2009 (ISAAA report 2009). According to the data of ISAAA (figure 4.1), the biotech crops have been almost “straight line” increasing in both crop and trait criteria. The biotech corn area is increasing from zero hectare in 1996 to 42 million hectares in 2009. In term of trait, the planted area of glyphosate resistant crop is reaching 82 million hectares in 2009. Base on this trend, the area of biotech crop will be increase more and more in the near future. The global growth of the RRC system in the last decade can be an indication that RRC system is benefit. 11 Figure 4.1: Global area of biotech crops, 1996 - 2009 Source: Clive James, 2010- ISAAA report 2009 Overview on the current corn production and weed management in Vietnam In Vietnam, the cultivated corn area has been increasing since year 2000, from 730 thousand hectares and reached 1087 thousand hectares in 2009 (General statistic book, 2009). So the consumption of seeds for commercial corn production would be about 15,000 MT per year. And the Government has plan to expand corn area up 1.2 mil hectares by 2015 to have output to meeting local consumption of feed mills, it means there should be 18,000MT of corn seed is needed for production. Weed management is a must in crop production, and it is one of corn grower concerns in the corn production, the weeds not only competes nutrition with corn but also being a vector to transfer diseases and pest insects to corn plants that causes yield reduction. In the current corn production, different from rice production, there is no efficient chemical nor the way that can easily to control weeds. Currently estimated that 53% corn farmers control 12 weeds by manual, 47% use chemicals (market research findings). For control by chemical, there is chemical namely Atrazine that is recommended to control weed in the corn field by spraying on top of the corn plants, but this chemical can not control all the weeds, and just control the small weeds but it has side affect that causes corn plant turning yellow for several days after application. The 2nd chemical that many of corn growers have been using is Paraquat, a herbicide but can kill all the plants, weeds which are touch with the chemical, so corn grower has to spray very carefully to avoid chemical touching corn plants, thus it is very difficult to apply and takes a lot of time (focus group in Dong Nai province). If corn growers don not use chemical to control weed they have no choice to use manual weeding, for this method it takes a lot of labors to do. The current weeding methods are not only costly but also inconvenient. Therefore, it is obviously that an advanced technology which can improve the benefit, convenience and be safe is needed. It can be verified by a research result conducted by Hochiminh Biotech Center in 2008, in Vietnam that more than 70% of corn growers willingly pay higher price to purchase genetic modified corn. Figure 4.2: Vietnam corn planted area 2000 - 2009 Source: Vietnam General Stactiscal Book, 2009