2014 NAMA Student Marketing Competition. Executive Summary. Presented by The University of Florida NAMA Student Chapter

Transcription

1 2014 NAMA Student Marketing Competition Executive Summary Presented by The University of Florida NAMA Student Chapter Austin Blais-Bishop Oran Lott Bullock Thomas Cawiezell Caroline Dailey Frank Peter Dola V Andy Escobar Michael McQueen Edwin Lawson Mozley III David Myers Andrea Paniagua Monica Petrella Nathaniel Tyner Austin Blais-Bishop Oran Lott Bullock Thomas Cawiezell Caroline Dailey Frank Peter Dola V Andy Escobar Michael McQueen Edwin Lawson Mozley III Editorial Advisors: Dustin Bass Jennifer L. Clark

2

3 According to Honey Bee Research and Extension Laboratory at the University of Florida, varroa mites are considered to be are considered to be a primary contributor to the recent decline in honey bee health and increased colony losses worldwide. By feeding on their hemolymph, this mite directly damages bees and vectors numerous honey bee viruses. The USDA reports that 10 million bee hives at an approximate value of $200 each have been lost since The Public Broadcasting Service (PBS) has stated that since 1986 varroa mites have created an economic impact of more than $12 billion for the agricultural industry. The loss of colonies for honey producers, as well as more traditional agricultural producers who depend on bees for pollination of their crops, is a critical issue facing the bee industry today. The current situation consisting of declining bee colonies, as well as an increase in the value of many agricultural crops, has led to a burgeoning market for beekeepers pollination services. These services facilitate $19 billion worth of crops annually according to U.S. Fish & Wildlife Service. In California alone, the almond industry demands 1.6 of the 2.62 million bee colonies in the U.S. annually to support pollination of almond groves. Beekeepers who currently are replacing up to a third of their hives annually desperately need an effective solution to the varroa mite epidemic. - Joseph Roberts, CEO, SecureAg SecureAg, based in Atlanta, Georgia, has been producing chemicalbased solutions to meet agricultural industry needs since We are excited to introduce a integrated solution to the commercial beekeeping industry designed to combat the negative effects associated with varroa mite infestations. CheckPoint is a miticide delivery system aimed at eradicating the varroa mite infestations plaguing commercial beekeepers. CheckPoint incorporates a permanent housing mechanism designed to easily mount onto the entrance of each beehive. Replaceable panels permit bees to enter and exit the hive through premade holes delivering a safe dosage of miticide to each individual bee, eliminating over-application and toxicity problems. Three separate chemicals rotated annually and infused into the panels will prevent resistance issues. CheckPoint will decrease labor costs, require no hive modifications and provide beekeepers with an opportunity to solve their varroa mite problems. Beekeepers in the U.S. will be buzzing about the simple, efficient, and reliable CheckPoint varroa mite control system. Randy Oliver, creator of Scientificbeekeeping.com and owner of owner of a 500 colony migratory operation in California, states that 300,000 beekeepers manage 2.6 million colonies of bees within the U.S. Beekeepers can be categorized into three primary groups: commercial beekeepers, sideliners, and hobbyists. Commercial beekeepers are a concentrated group making up less than one percent of the total number of beekeepers in the U.S. They are responsible for managing more than 60 percent of active hives in the U.S. Commercial beekeepers depend on bees and bee-related products as their primary source of income. The sideliner group in the beekeeping industry typically manages less than 500 hives per beekeeper. This group does not exclusively rely on bee products and services as their primary source of income, instead they are diversified into alternative incomeproducing activities. The hobbyist group typically manages between one to ten hives each and does not depend on beekeeping as a source of income. However, in sheer numbers, the hobbyist category, according to Buzzing Across America, comprises 95 percent of the beekeeper population in the U.S.

4 Target Market Our primary target market consists of large-scale commercial beekeeping operations within a regionalized market segmentation, concentrating primarily on states with the largest commercial beehive populations that share similar climatedependent honey flow seasons. Market Situation Commercial beekeepers dominate the market value ($) and market share (number of hives) demanding beerelated products and services. This group represents the early adopters and primary influencers of new products and technologies promoted in this industry. Commercial beekeeping can be defined as a niche market that creates the need for companies to heavily invest in brand value and product loyalties. Because commercial beekeepers represent such a substantial influence in the adoption and use of new products they are considered to be our primary target market. Sideliners and hobbyists in this industry tend to follow the lead of commercial producers and represent a secondary market for new products and technology. Primary Influences Commercial beekeepers use several reliable sources of information when researching new products and husbandry practices. Trade shows and educational conferences allow input suppliers and servicers the ability to reach customers face-to-face and disseminate educational product materials. These trade show and conferences are typically hosted by beekeeping and honey production associations such as the American Bee Federation (ABF), the American Honey Producers Association (AHPA), and the American Beekeeping Federation. These associations work nationally on behalf of the beekeeping industry on issues affecting the national interest and economic growth within the many sectors of the bee industry. In addition to national beekeeping organizations, there are three regional-level apiculture societies: the Eastern Apicultural Society (EAS), the Western Apicultural Society (WAS), and the Heartland Apicultural Society (HAS). Locally, each state has their own beekeeping federations, as well as several local and regional-state associations. An example of such is the Florida State Beekeepers Association (FSBA), which has nearly 700 members in over 28 counties in Florida. Like many other state associations, the FSBA publishes a quarterly newsletter, The Florida Beekeeper. This publication includes current local news and advertisements, representing an important educational resource that is a popular way for beekeepers to obtain relevant market information. Other popular national-level magazines include the American Bee Journal and Bee Culture Magazine. Commercial beekeepers depend on established relationships with independent beekeeper supply distributors to receive information about the newest products on the market. This interpersonal dynamic permits independent distributors and commercial beekeepers to build and maintain strong relationships based on reliable word-ofmouth production experiences and experimental field trial results. Smaller beekeepers, such as hobbyists and sideliners, also receive new product information through word-of-mouth, but tend to follow commercial operations methods and adopted management strategies. Market Size The top five commercial beehive populations are located in: North Dakota, South Dakota, Florida, California, and Minnesota. States in close proximity to these substantial commercial beehive populations form SecureAg s regional distribution areas. Commercial beekeepers in these regions currently receive products from established independent suppliers who have shipping, stocking, and wholesaling logistics already in place.

5 *Restricted usage in CA, NY, FL, MS, WA, TX; prohibited in NM **Annual Cost/Hive is 3 year depreciated housing plus panels CheckPoint is a revolutionary miticide delivery system consisting of a housing component and i n s e r t ab l e p o l y m e r p a n e l s designed to provide a more effective and less toxic varroa mite treatment. SWOT Analysis Industry standards dictate that chemically-formulated trays, strips, or panels be sold in packages of ten units. Non-synthetic miticide treatments within the beekeeping industry, typically used by hobbyists due to labor intensity, include formic acid and sugar-cinnamon combinations. Strategy Statement SecureAg will provide a simple, efficient, and reliable varroa mite control method by launching Checkpoint, a complete miticide delivery system. We will meet existing demand by using our established position as an agricultural chemical supplier capitalizing on existing relationships within the commercial beekeeping industry. Key Planning Assumptions All commercial beekeepers in the U.S. use hives with standard entrance dimensions. Industry standards exist for treatment of pests and diseases following published best management practices. CheckPoint housing has a useful life of 3+ years. Goals Attain 75% brand recognition by year 3 Achieve $5 million in sales by year 3 Achieve 35% profit margin by year 3 Achieve 93% customer satisfaction

6 Product For commercial beekeepers across the U.S., Checkpoint will be positioned as the simple, efficient, and reliable solution for the treatment and prevention of varroa mite infestations. CheckPoint is the only system for varroa mite control that effectively addresses the resistance problems plaguing the industry today. Checkpoint consists of a bolt-on housing unit installed on the front of each hive and designed to easily receive the replaceable polymer panels infused with miticide. Both housing and panels will be sold in packages of 10 units. Checkpoint will be produced and packaged by Atlanta Plastic Injection Molding at a cost of $0.91 per panel and $1.38 per housing. Each polymer panel is manufactured with pathways designed to coat each bee with miticide as they enter or exit the hive. The panel s polymer matrix is infused with an annual rotating formulation of miticide negating resistance issues. Treatment is renewed after each bee passes through the opening. Due to the self-contained, polymer panel matrix design, use of Checkpoint is less noxious to bees that may already be in a weakened state and does not require chemical or pesticide licensing prior to sale or use by beekeepers. Each polymer panel is used for 42 days, twice a year, effectively eliminating mite infestations. Price CheckPoint will be provided wholesale to distributors in packages of 10 at a competitive price of $50 for housing and $31.50 for replaceable panels. Using our value-based pricing strategy, we determined CheckPoint will retail at $65 for housing and $45 for replaceable panels. Place CheckPoint will be available at independent distributors located throughout our targeted geographic regions. In our three-year distribution rollout, SecureAg will target three regions that contain the highest populations of beehives, using JB Hunt s ICS brokerage service to deliver our packages. CheckPoint will be shipped in cardboard boxes on standard 48 x40 pallets that will hold 480 packages. In year one, our efforts will focus in the Southeast which is closest to our longstanding manufacturing and distribution facilities. Our rollout strategy will allow CheckPoint to enter the market and gain commercial beekeeper attention before we target our primary, and largest, market segment in the North Central in year two. In year three of our promotional rollout, SecureAg will expand to the west coast region including: California, Oregon, and Washington. Promotion Our promotional strategy is focused on ensuring product awareness for our three geographic regions by directly targeting commercial beekeepers and independent distributors. We will accomplish this through: Sales Force: Our sales representatives will collaborate with independent distributors and commercial producers throughout each respective region, maintaining relationships and receiving feedback on our product. Test Trials: CheckPoint has completed test trials with major commercial beekeepers in each of our three regions. These trials occurred at the largest beekeeping operations in the country located in Florida, North Dakota, and California. Results have been published in scientific journals, industry publications, and promotional materials. Trade Shows & Bee Health Events: SecureAg will maintain a presence at annual beekeeping and bee health conferences. Sales representatives will promote CheckPoint among major producers as the simple, efficient, and reliable solution to varroa mites. Direct Mailings: CheckPoint trial data effectiveness, testimonies, competitive comparisons, and environmental impact information will all be included in print materials that will be mailed to commercial beekeepers.

7 Magazines: SecureAg will target our customers through advertisement in two nationally-based beekeeping magazines, as well as several regionally-based publications. The Bee Culture magazine and the American Bee Journal are nationwide monthly publications that are read by commerical beekeepers across the U.S. Web Advertisements: Through our efforts, we will guide consumers to the CheckPoint homepage designed to provide educational resources and customer support. The website will link users to articles, press releases, promotional literature, and videos on the installation and benefits of CheckPoint. Social Media: SecureAg will use social media as an additional source of advertising to reach our tech-savvy customers. Primary outlets will include: Facebook, Twitter, Youtube, Instagram, and Pinterest, allowing us to share treatment calendars, promotions, and educational videos to a wider consumer base. CheckPoint will provide the relief beekeepers have been demanding for a simple, efficient, and reliable solution to the varroa mite problem. Our product will decrease the rapid loss of bee colonies and support continued productivity of agricultural operations across the U.S. With beehive populations reaching all-time lows, CheckPoint will offer commercial beekeepers an effective solution to stabilize their declining bee populations and also generate additional profit lines for SecureAg. SALES Year 1 Year 2 Year 3 Housing Sold $ 135,000 $ 1,145,400 $ 1,799,100 Panels Sold $ 170,100 $ 1,613,304 $ 3,880,170 Total Sales $ 305,100 $ 2,758,704 $ 5,679,270 COGS Housing $ 74,520 $ 632,261 $ 993,103 Panels $ 67,500 $ 640,200 $ 1,539,750 Operating Costs Distribution/ Packaging Monitoring/ Measuring $ 2,835 $ 28,706 $ 65,459 $ 27,000 $ 57,270 $ 53,973 Test Trials $ 10,126 $ 10,126 $ 10,126 Total COGS $ 171,855 $ 1,358,437 $ 2,652,285 Gross Profit $ 133,245 $ 1,400,267 $ 3,026,985 Marketing Expenses Website/Design $ 23,000 $ 17,000 $ 17,000 Tradeshows $ 30,000 $ 30,000 $ 30,000 Display Booth/ Materials $ 20,000 $ 10,000 $ 10,000 Magazine Ads $ 24,000 $ 24,000 $ 24,000 Print Material $ 70,000 $ 125,000 $ 150,000 Direct Mailing $ 15,000 $ 20,000 $ 25,000 Promotional Materials $ 35,000 $ 80,000 $ 95,000 Sales Force $ 120,000 $ 240,000 $ 360,000 Total Marketing Expenses $ 337,000 $ 546,000 $ 711,000 Net Profit $ (203,755) $ 854,267 $ 2,315,985 Profit Margin -67% 31% 41% Return on Marketing -60% 156% 326%