Plant Nutrients Inc
Case 10: Plant Nutrients Inc.
Plant Nutrients Inc. (PNI) is a medium-size retailer of crop supplies in Lancaster, Pennsylvania. Brian Dunwoodie, the general manager, is preparing a proposed operating statement for 1999, to send to management at PNI’s parent company. This statement must reflect an increase in volume of two percent while maintaining the required 13 percent return on investment in the business. He is considering a number of ways of improving performance including: achieving better utilization of fertilizer blending capacity, adding a new line of seed, adding “precision agriculture” services, and changing prices.
Aims for Learning 1. To introduce issues associated with growing a customer base when this may involve moving into new target markets or segments.
Segmentation is an attractive approach in marketing because it allows a business to develop a competitive advantage by tailoring its marketing mix to the needs of a particular segment. Every segment is a limited market, and sometimes the business is no longer able to achieve the growth it needs by continuing to concentrate on existing segments. The challenge then becomes how to increase sales by serving new segments without jeopardizing those aspects of the business that have made the company successful. 2. To illustrate key issues involved in evaluating new business opportunities, especially when the technology has uncertain potential.
A new technology can redefine the business and how it makes money. Precision agriculture is such a technology. It could have a major impact on sales of fertilizer, seed, and agricultural chemicals. At the present time, however, it is largely a potential that is creating an interesting challenge for any manager. There is a market development and strategic timing problem. The business could be put at a serious disadvantage either if it adjusts to deal with the technology before the market is developed, or if it adjusts to the new technology after
Plant Nutrients Inc. (PNI) is a medium-size retailer of crop supplies in Lancaster, Pennsylvania. Brian Dunwoodie, the general manager, is preparing a proposed operating statement for 1999, to send to management at PNI’s parent company. This statement must reflect an increase in volume of two percent while maintaining the required 13 percent return on investment in the business. He is considering a number of ways of improving performance including: achieving better utilization of fertilizer blending capacity, adding a new line of seed, adding “precision agriculture” services, and changing prices.
Aims for Learning 1. To introduce issues associated with growing a customer base when this may involve moving into new target markets or segments.
Segmentation is an attractive approach in marketing because it allows a business to develop a competitive advantage by tailoring its marketing mix to the needs of a particular segment. Every segment is a limited market, and sometimes the business is no longer able to achieve the growth it needs by continuing to concentrate on existing segments. The challenge then becomes how to increase sales by serving new segments without jeopardizing those aspects of the business that have made the company successful. 2. To illustrate key issues involved in evaluating new business opportunities, especially when the technology has uncertain potential.
A new technology can redefine the business and how it makes money. Precision agriculture is such a technology. It could have a major impact on sales of fertilizer, seed, and agricultural chemicals. At the present time, however, it is largely a potential that is creating an interesting challenge for any manager. There is a market development and strategic timing problem. The business could be put at a serious disadvantage either if it adjusts to deal with the technology before the market is developed, or if it adjusts to the new technology after