Executive Summary
2015 National Agri-Marketing Association Student Competition
Presented by Gopher Marketing
Ancel, Broderius, Church, Culbertson, Donnay, Durhman, Gallik, Haggerty,
Houdek, Nelson, O’Toole, Siemers-Peterman, Wente, Wingert
Audience Profile
[
]
The University of Minnesota NAMA team, Gopher
Marketing, is proud to present a comprehensive
marketing plan for Bio-Cover. The plan is presented
to the Ag Smart Solutions Board of Directors. Ag
Smart Solutions is an established service provider
with exclusive patent rights to Bio-Cover.
Introduction
After a hot, humid day in the field, a Minnesota farmer was preparing to cover his silage pile. Tired of
carrying heavy tarps and tires, he was seeking a more efficient way to cover the pile. Luckily, he found the
smart solution: Bio-Cover.
Bio-Cover is an effective and safe solution for covering a pack or bunker. It is a liquid spray-on silage pile
cover that seals silage within minutes. 80 percent of the 350 farmers surveyed said they are ready to try BioCover, a significantly less labor-intensive way to cover silage.1 Bio-Cover is for large and small conventional
farmers who raise dairy or beef cattle and store silage on the ground or in bunkers.
Bio-Cover can help farmers eliminate a huge “hassle-cost.” It works by covering silage with a food-grade,
corn-based spray product made with Bio-Cover’s proprietary chemical formula. The spray hardens and seals
immediately, providing an efficient and environmentally safe solution. Farmers are able to use Bio-Cover
while completing their daily chores by mixing it directly into the rations and feeding it to their livestock.
Bio-Cover is safe for cattle to consume and does not affect the feed’s nutritional quality. An added benefit
of application is that there is no need for traditional removal practices. 81 percent of the farmers surveyed
reported they currently burn or throw away their traditional tarp covers after just one use.1
By combining technological advantages with traditional service, Bio-Cover is ready to emerge
into the market as a leader in the silage storage category. Bio-Cover will benefit farmers with an
innovative, hassle free, cost effective and environmentally friendly liquid cover.
Market Analysis
market size The recent spike in cattle prices combined with a decreased corn price from 2013 have
incentivized producers to utilize more corn for silage feed. According to the 2012 Census of Agriculture,
there are 13,547 beef farms and 4,746 dairy farms located in Minnesota alone.2 In order to feed the nearly
2.36 million total head of cattle found in the state, approximately 6.65 million tons of silage were produced
during this time.3
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target market Bio-Cover’s target market is dairy and beef cattle
farmers in the Midwest between the ages of 21-50.
farms:
• Utilize silage as feed sources.
• Encompass multiple generations of families.
• Do business with a cooperative at least once per month.
1 Gopher Marketing Survey. December 2014.
2 Johnson, Andrea. “Abundant Resources Make Minnesota a Great Place to Raise Beef.” Minnesota Farm Guide. Retrieved from http://www.minnesotafarmguide.com/news/regional/abundant-resources-make-minnesota-a-great-place-to-raise-beef/article_780786dc-e2a5-11e3-aee5-0019bb2963f4.html
3 USDA. “Minnesota Ag News – 2013 Corn Silage County Estimates.” Retrieved from http://www.nass.usda.gov/Statistics_by_State/Minnesota/Publications/County_Estimates/2014/MN_CtyEst_CornSilage_%2012-13.pdf
target desires According to the Gopher Marketing survey, beef and
dairy farmers have a desire for a more efficient way to preserve their
silage without wasting feed.4 With the liquid Bio-Cover, farmers can cover
their packs with ease while keeping the feed underneath free from mold
and away from the elements. One of the biggest benefits of Bio-Cover
is that the stress of removal is eliminated. Bio-Cover is made from 100
percent food-grade materials, meaning that it can be fed right into your
cattle’s ration. Simply work with your nutritionist to ensure that Bio-Cover
is providing the perfect nutritional mixture to add to your ration. By
displacing plastic tarp manufacturers, Bio-Cover has the potential to take
control of the market, making it the premier source of silage covering
material. Bio-Cover provides an efficient and eco-friendly alternative to the
popular plastic tarp. Within three years, Bio-Cover will become the industry
leader of silage sealing products, convincing even the most traditional
farmers to make a change.
with Bio-Cover farmers will:
1. Avoid hiring extra help
during harvest
2. Reduce the time spent
on covering
3. Improve work safety
conditions on the farm
4. Minimize feed loss
5. Eliminate environmental
damage
competitive environment The current market for silage preservation consists of three main competitors:
plastic bags, plastic tarps, and silos. As silos have become more outdated and plastic products have
become a hassle, Bio-Cover has the perfect opportunity to enter this market with ease.
While being an eco-friendly alternative to plastic tarps, Bio-Cover is also easier to manage. No more heavy
tires to carry or additional employees to hire, Bio-Cover eliminates the need for both. Bio-Cover is naturally
mixed into a ration, making it the smart solution. Its “crumble and feed” approach allows farmers to save
time by eliminating bulky plastic tarps and heavy tires, making operations safe and profitable.
Bio-Cover is also a nutrient-dense asset. Made from all food-grade products, it not only preserves feed,
but adds to it as well. Gone are the days of calling the veterinarian due to plastic ingestion, Bio-Cover is
completely palatable and digestible, making it the ultimate silage preservation product. Bio-Cover increases
operational efficiency and is an easy alternative to throwing tires.
•
•
•
•
Safe and easy application
No removal cost or hassle
Reduces feed loss
Air-tight seal
S
O
• Few competitors
• Rapid market share growth
• Farmers utilizing sustainable solutions
Factor
Bio-Cover
Feed Loss Minimized
x
Service
x
Efficient Storage
x
No Removal Need
x
Reputation
Location
x
Appearance
x
Cost
Advertising
4 Gopher Marketing Survey. December 2014.
W
• Limited brand awareness
• Small distribution window
• The need of a qualified applicator
T
• Mature silage covering practices
• Traditional farmers reluctant to change
• Growth limited by displacement
Plastic Tarp Plastic Bags
x
x
x
x
x
x
x
x
Silos
x
Business Proposition
Bio-Cover is a spray-on liquid corn material that is applied directly onto the silage. This durable material can
be used on the ground or in a bunker. It preserves silage and its food-grade ingredients are combined in the
cattle’s ration.
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strategy statement: Bio-Cover strives to be the preferred silage sealing product
for Midwestern dairy and beef farmers. By utilizing an established cooperative
system, Bio-Cover will gain access to the broad market across the Midwest.
]
key planning assumptions
1. Cooperatives will have access to storage
and transportation within the designated sales
regions around the Midwest.
2. Bio-Cover will arrive ready for application on
site in specialized equipment applied by trained
professionals.
3. Bio-Cover ensures that the material is durable
enough to withstand weather extremes and
pests.
4. Bio-Cover’s ingredients will be readily
accessible at all cooperative locations, ensuring
price consistency.
5. Bio-Cover will be palatable and digestible,
allowing it to be fed with the silage as an asset to
the operation’s current rations.
Action Plan
placement & positioning Initially,
Bio-Cover will be sold throughout central
and southern Minnesota. By years two
and three, Bio-Cover will provide services
throughout the majority of the upper
Midwest. Cooperatives will house service
trucks, hoses, and formula mix. Customers
can contact their local sales representative
to purchase. Cooperative representatives
will provide a convenient Bio-Cover
service via tank trucks and professional
application.
price The Bio-Cover will be sold at
a competitive price of $0.053/sq.ft.
This price covers Bio-Cover’s material
expenses.
5 NASS. USDA. Retrieved from http://www.nass.usda.gov/Statistics_by_State
717,605 head of cattle
2,132,865 head of cattle*
4,394,975 head of cattle*
*total includes previous year’s numbers
5
promotion Gopher Marketing’s promotional strategies will establish Bio-Cover in the marketplace utilizing
both traditional and contemporary approaches. As the sales region expands, so will promotion. Sales
representatives will play a key role in introducing farmers to Bio-Cover. The target market resides in a very
connected industry; once farmers try the product, Bio-Cover sales will rely heavily on customer approval.
radio Advertisements will be placed strategically based on location and audience rate of radio stations.
Ad placements will follow the designated sales regions. Bio-Cover will sponsor popular farm talk programs
including Minnesota Farm Network, Linder Farm Network, Red River Farm Network and Wisconsin Farm
Report.
[
print publications Placing advertisements in weekly, bi-weekly and monthly trade journals will reach a
large portion of potential customers.
1
• The Farmer
• Minnesota Farm Guide
• AgriNews
2
•
•
•
•
Year 1 Publications
Farm & Ranch Guide
Tri-State Neighbor
Iowa Farmer Today
3
•
•
•
•
•
•
]
Year 1 Publications
Year 2 Publications
BEEF Magazine
Wisconsin State Farmer
Progressive Dairyman
Hoard’s Dairyman
online presence Innovative tactics will be used to reach younger farmers. Emphasis on visual content will
highlight Bio-Cover’s easy application and durability. Social media will drive users to the Bio-Cover website
allowing them to learn even more about this incredible product.
trade shows & sponsorship Farm trade shows are a launching ground for Bio-Cover to promote product
awareness and knowledge through sponsorship and exhibits. As they discover the product’s benefits
through brand ambassadors and video tutorials, Bio-Cover will be the smart solution.
1
• Minnesota Farmfest
• North American Farm &
Power Show
• Minnesota Beef Expo
• Minnesota Dairy Expo
sponsoring
2
• Year 1 Trade Shows
• Big Iron Farm Show
• Central Plains Dairy
Expo
• Dakota Farm Show
• DakotaFest
• Eau Claire Farm Show
• Midwest Farm Show
• Rice Lake Area Farm
Show
3
• Year 1 Trade Shows
• Year 2 Trade Shows
• Wisconsin Public
Service Farm Show
• World Dairy Expo
• World Beef Expo
Financial Evaluation
Bio-Cover will be
purchased from the
wholesaler at $0.05 dollars
per square foot. It will be
sold to cooperatives at a
marked-up price of $0.053
dollars per square foot
increasing 1.9 percent
each year. This gives the
cooperatives the chance
to sell Bio-Cover at only 20
percent higher than other
price competitive tarps.
To expand and grow to a
financially stable company,
a high investment in
marketing is required.
Spending will grow as the
market share increases.
This allows Bio-Cover to
become profitable by
years two and three.
Product
Year 1
Bio-Cover / Sq. Ft Sold
Year 2
Year 3
276,383,455
821,466,682
1,673,839,489
$0.053
$0.054
$0.055
Total Cover Revenue
$14,648,323
$44,359,201
$92,061,172
Cost of Bio-Cover
$13,819,173
$41,073,334
$83,691,974
Bio-Cover Income
$829,150
$3,285,867
$8,369,197
$273,000
$364,000
$455,000
$92,896
$376,506
$767,176
Radio Advertising
$405,000
$423,900
$459,000
Print Media
$108,825
$231,446
$647,015
Online Presence
$70,000
$105,000
$110,000
Exhibits
$16,100
$20,720
$36,180
$247,746
$394,471
$678,311
$10,000
$20,000
$70,000
$110,000
$120,000
$150,000
Total Cost
$1,333,567
$2,056,043
$3,372,683
Net Income
($504,416)
$1,229,824
$4,996,515
Price Per Sq. Ft
Marketing Expense
Sales Representatives
Early Order
Contingency Plan
Sponsorship
Marketing Agency*
*Includes development cost
Monitoring & Measuring
Monitoring &
Contingency Plan
Monitoring Methods
Contingency Plan
Brand Name
Recognition &
Market Share
Sales & Profitability
Customer Relations
& Brand Loyalty
Conclusion
As farmers seek more streamlined practices for their
operations, Gopher Marketing will strategically position
Bio-Cover to capitalize on this opportunity. Bio-Cover is the
innovative solution to one of farmer’s most cumbersome
hassles. Through a select variety of marketing tactics,
Bio-Cover will establish itself as the Midwest’s most
trusted and desirable source of silage covers.
Monitoring and measuring
efforts gauge product
performance relative to preestablished business goals.
Contingency planning
evaluates success of brand
name and market share,
sales and profitability,
and customer relations.
Bio-Cover will continually
evaluate business financial
conditions, marketing
campaign effectiveness,
and customer satisfaction to
meet the financial goals.