i TRƯỜNG ĐẠI HỌC MỞ TP.HCM UNIVERSITÉ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL MBMM4 NGO LANH MARKETING PLAN FOR LAUNCHING ROUNDUP READY SYSTEM IN VIETNAM MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor’s name: Dr Le Thanh Long Ho Chi Minh City (2010) ii COMMITMENT This is my original work, I trust the legality of all references, information and materials used to complete the project This thesis contains some information and materials from the Monsanto Company and Dekalb (Vietnam) Co., Ltd It is limited to internal business purpose use and not allowed to be spread out excepting for the jury of Solvay Brussels School, Hochiminh City Open University and some marketing professionals including the tutor 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 INTRODUCTION 1.1 Rationales of the project 1.2 The objective of the project 1.3 Scope of the project 1.4 Limitation of the project 15 Research outline CHAPTER LITTERATURE VIEW CHAPTER RESEARCH DESIGN 3.1 Assumptions 3.2 Research objectivities 3.3 Metholodogy 3.4 Findings CHAPTER STITUATIONAL ANALYSIS 4.1 External analysis 4.1.1 General information 4.1.2 Macro environment (PEST analysis) 13 vi 4.1.3 Micro environment (Poter’s 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 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 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 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 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 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 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 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 Đại Học Quốc Gia Tp Hồ Chí Minh Nguyen Dinh Tho (1998), Nghiên cứu Marketing, NXB Giáo Dục Niên Giám Thống Kê 2009, Tổng Cục Thống Kê 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 41 Sales force The company will still use the same sales force to sell RRC, but create a new position of RRC Product Manager in charge of RRC market development, report to marketing manager Create and hire additional Market Development Officers (MDO) to help the current Sales Representatives (SR) to promote RRC, this position will report to SR Figure 5.3 Sales and marketing organization chart 42 CHAPTER CONCLUSION AND RECOMMENDATION -The new weed management solution really brings much value to both corn growers and the company For corn growers, they not only receive tangible benefits but also the intangible ones that would make corn production easier So the strong communication process should be done to convey the benefits of the RRC system, make customers can perceive full of its value - The South region tends to have fast adoption of RRC than of the North, if the resources are not available, the company should concentrate on the South first To promote in the North, the company should have strong engagement activities to corn growers in order to break their hand weeding habits -The adoption the RRC system is also much replied on pricing policy, the lower price the faster adoption is So the company should monitor relations between price and adoption rate after or years of launching to adjust price accordingly -The competitors also have the product system, and may aggressively follow the market, thus the company should take advantage of brand equity of “Monsanto”, “Roundup” and “Dekalb”, and keep always building brand value proposition to gain more loyalty from corn growers -The other seed companies who not have the similar RRC system, may approach the company or the competitors to ask for technology license So the company should take this matter into account to have proper reactions A.1 APPENDIX FOCUS GROUPS DISCUSSION AND INTERVIEW GUIDE (CORN WEEDING MANAGEMENT) Key objectives: - To understand if weeds is problem in the corn production - To understand their weed management methods - To know the cost for weed management - To know their perception on Monsanto new weed management solution INTRODUCTION AND GROUND RULES My main objective today is to learn about your experiences with corn planting practice, especially would like to understand your current weed management But before that, let me lay down some ground rules: a Ask for everyone to be honest about their thoughts and feelings, no right or wrong answers as their responses are based on their personal opinions, experiences and perceptions; all answers are acceptable b Assure confidentiality and anonymity (for focus group) c Overview of what to expect: use of imagination, memory triggers d Informal set up; chance to relax and enjoy e Relax and enjoy the session DISCUSSION GUIDE -Please describe the corn field management, how you manage weeds in your corn fields? -Please name all the problem that you think can affect your corn crop production A.2 -Are weeds a big problem for you? -How concerned are you with weeds? -How you control weeds? -Do you use herbicides? -How long does it take to spray Ha if use Paraquat? -How long does it take to spray Ha if use Atrazine? -How many applications you use per season? -How effective is the chemical control (herbicides)? -What is the cost per application: herbicide and labour to spray the herbicides? -How satisfied are you with your current weed control on corn? -Do you have any difficulty or problem with your current weed control? -Are there other ways to control weeds in corn fields? Which ways you know? How effective are they? Are they normally used? What is the future for these alternative systems? -If you don’t control weeds, what happens to your corn field? How big the losses can be? -How should the ideal weed control be? Please describe what your expectations are and why such control cannot be adopted at present -If we can spray herbicide–Roundup (Glyphosate) at any post-emergent stage to control the weeds without affecting the corn plants How you think? -If the cost of seeds is higher than you buy now, you really want to purchase? A.3 APPENDIX FARMER’S PRACTICE SURVEY ON WEED MANAGEMENT For Master Thesis – Marketing plan for launching new weed management system (ROUNDUP READY CORN SYSTEM- RRC) Respondents: 120 corn growers (60 in the South and 60 in the North) In order to understand the value of Monsanto’s new weed control system 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 Conducting interviews is one way of determining these factors, thus this study is proposed OBJECTIVES Identify and understand the current weed management practices Determine the value of all farmer’s practice as it relates to Monsanto RRC System Understand the perceptions of the farmers on the value of RRC System METHODOLOGY To train and have sales representatives to interview farmers using a standard questionnaire Each interview would last about 30 minutes to one hour The answers for the questionnaire should represent their regular practices The survey conducted in main corn provinces (2 in the South: Dong Nai, Daklak and in the North: Thanh Hoa and Son La) A.4 FARMER’S PRACTICE SURVEY QUESTIONNAIRE A Farmer Respondents Profile Date: Sales Rep name: Farmer Name (optional)/Location: _ B Survey questions Have you planted corn since last years? a Yes b No If Yes, continue Question 2; If no, stop interviewing Have you involved/known corn planting process from planting to harvesting? A Yes b No If Yes, continue Question 3; If no, stop interviewing How would you rate your concern to the below problems in your corn fields in a typical year (1: Very concern; 9: No concern) Problem Rank from to Trend (please tick or encircle the answer) Insect pests decreasing, same, or increasing Weeds decreasing, same, or increasing Diseases decreasing, same, or increasing Drought condition decreasing, same, or increasing Flooding condition decreasing, same, or increasing Did you control weeds in your corn farm? If Yes, how much did you spend to control weeds (herbicides and labor cost), please use the table below? Cost of control per hectare Pest control If yes, what is control method (VND) Herbicide First a Hand weeding weeding b Animal-drawn weeding Labor/machines A.5 c Machine weeding Yes or No d Herbicides 2nd weeding a Hand weeding Yes or No b Animal-drawn weeding c Machine weeding d Herbicides Third a Hand weeding weeding b Animal-drawn weeding Yes or No c Machine weeding d Herbicides How would you rate your concern about the below problems that you experienced to control weeds in your farm by encircling the number (1:Very concern; 9: No concern) Problems Difficult to find enough labor or manpower to remove the weeds in the corn field (1 9) Hassle to apply herbicide because it is applied selectively or directly to the weeds but not to the corn plants (1 9) Concerns on continuous re-growth or flushes of weeds due to poor weed control (1 9) Concerns on the damage caused by machines on the corn plants that might cause corn plants to become susceptible to diseases (1 Herbicide cost (1 9) 9) If there is a new weed control system which is much more convenient, safe to corn plant, but initial investment for seeds may be higher than what you have spent now, will you have intention to buy it? a Yes b No c No idea A.6 APPENDIX (Research findings) The corn growers express their concern with their current weeding methods Difficult to find enough labor or manpower to remove the weeds in the corn fields (1: Very concern; 9: No concern) North Region Prequency Percent Cumulative percent Rate 5% 5% 15% 15% 15% 35% 12 20% 55% 10 17% 72% 10 17% 88% 3% 92% 5% 97% 3% 100% 60 100% Total South Cumulative Region percent Prequency Percent Rate 16 27% 27% 12 20% 20% 13 22% 68% 13% 82% 7% 88% 8% 97% 3% 100% 0% 0% Total 60 100% A.7 Hassle to apply herbicide because it is applied selectively or directly to the weeds but not to the corn plants (1: Very concern; 9: No concern) North Cumulaive Region Prequency Percent percent Rate 5% 5% 15% 15% 11 18% 38% 11 18% 57% 15% 72% 10 17% 88% 5% 93% 3% 97% 3% 100% Total 60 100% South Cumulative Region Prequency Percent Percent Rate 12 20% 20% 13 22% 22% 10 17% 58% 12 20% 78% 12% 90% 5% 95% 5% 100% 0% 0% Total 60 100% A.8 Cost of herbicides (1: very concern; 9: Not concern) North Cumulative region Prequency Percent percent Rate 15% 15% 12 20% 20% 13 22% 57% 11 18% 75% 10% 85% 8% 93% 5% 98% 2% 100% 0% South Cumulative Region Prequency Percent percent Rate 10% 10% 12% 12% 11 18% 40% 14 23% 63% 11 18% 82% 6 10% 92% 7% 98% 0% 98% 2% 100% Total 60 100% A.9 APPENDIX ROUNDP READY CORN SYSTEM Weed Control Technology Alternative A.10 Components of Roundup Ready® Corn system Weed control Herbicide Corn seed Trait Crop performance A.11 Roundup Ready® Corn system vs hand weeding Applying Roundup Ready Corn System Hand weeding A.12 Roundup Ready® Corn system vs Paraquat herbicide application Roundup Ready Corn at 35 DAP, 15 days after Roundup application at 2L/ha Crop injury due to careless application of Paraquat herbicide A.13 Promotional activities Field day activities Roundup Ready System Demo plot ... 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... 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... 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