1

INFOSYS.110 BUSINESS SYSTEMS: DELIVERABLE 2: BUSINESS SECTION SUMMER 2014 Name NetID Group Number: Website Link: Tutorial Details Yvonne Hong Time Spent on Assignment: 20 hours Tuesday/Friday 12pm Word Count: 1648 Jessica Honey jhon062 22 http://infosys1102014ssgroup22.blogspot.co.nz/ Tutor: Day: Time:

SOIL ACIDITY (PH) CONTROL SYSTEM

INTRODUCTION

An automated soil pH control system is a product which does not currently exist. The companys key task is to convince growers of the usefulness of this innovative system in reducing labour and increasing crop output. This report looks at how marketing management through analysis of customers and an efficient sales process can help the company to sell the product.
3. BUSINESS SECTION 3.1 Vision

To combine a reliable high quality product with excellent customer service to assist growers in increasing output.
3.2 Industry Analysis: New Zealand Horticultural and Agricultural Supplies Industry

Industry: New Zealand Horticultural and Agricultural Supplies industry. The industry supplying both commercial and home growers with supplies to assist their crop growth.

Force:

High/Low:

Justification:

Buyer power:

High

Commercial growers have access to commercial suppliers in addition to regular garden centres. There are several big chains of garden centres to choose from to source their supplies. Recent research (Retailers Association of New Zealand, 2013) found that in February 2012 in New Zealand there were 437 outlets in Garden Centre Retailing.

Supplier power:

High

One of the main suppliers to the industry are fertiliser companies. In New Zealand, The Fertiliser Association (2014) found that Ballance Agri-Nutrients and Ravensdown Fertiliser Cooperative are the current members, which manufacture, distribute and market around 98% of all fertilisers sold in New Zealand. This large market share by only three companies suggests that for one of their main inputs, the industry has little bargaining power.

Threat of new entrants:

High

Franchise New Zealand (2013) found that a Palmers Garden Centre franchise could be purchased for around $1 million. Such franchise opportunities help new entrants into the industry by sharing expertise.

Threat of substitutes:

Low

Growers require horticultural supplies; the only substitute would be to let crops grow without fertilisation and interference. For commercial growers this is economically undesirable as output would likely fall. The Fertiliser Association (2012) suggests that It is estimated that without fertiliser use, New Zealand's soils would be capable of supporting less than half, and possibly as low as 25% of the animals grazed or crops grown.

Rivalry among existing High competitors:

Retail chains like Palmers and Kings Plant Barn have strong market power and use substantial
3

price competition. Recent advertising (Bunnings Warehouse, 2014) of a 15% price beat guarantee is an example of the degree of price competition.

Overall attractiveness of the industry: The industry is not very attractive for competitors who wish to enter with a product with which there is already substantial price competition from retail suppliers, however; there is no substitute for agricultural and horticultural supplies and so if growers wish to take a proactive approach to crop growth, they must source these supplies. Therefore the prospects within the industry depend on whether rivals can provide a close product. In the case of this companys product; the product is unique and so the unattractiveness of the industry as a whole is not a big problem. Overall however the industry is not very attractive.
3.3 Customers and Their Needs

The main customers will be commercial crop growers. Other customers will be home gardeners. DairyNZ (2012) state that dairy farmers also need to control soil pH and thus they are potential customers. All of these customers require soil pH to be kept at a relatively constant level, at the pH at which their crops, or grass, grow best. They require a way to control soil pH. Because many commercial growers are in remote areas; they require the product to be delivered to them and installed for them and for ongoing support in case any issues arise to be provided onsite where their farm is located.
3.4 The Product and Service

The system controls pH by releasing nutrients into the irrigation system, and monitors it to keep it at ideal levels. The business would also provide onsite installation and ongoing onsite support to meet the needs of growers whether in rural or suburban areas.
3.5 Suppliers and Partners

A partner would be a unique irrigation system provider, such as Parkland Irrigation. This is because their could be gain for both sides of the partnership if the company uses the same

irrigation system provider and operates the system through an adjustment to their irrigation system. Another partner would be the unique delivery company used to get the parts to the customer for installation. In both cases the company could receive a discount through bringing all of their business through the same irrigation company and delivery company. The irrigation system provider and the delivery company would receive more business through this arrangement and so it would be mutually beneficial. A supplier would be mineral companies which sell the calcium and sulphur in powdered form which the soil pH control company requires to change the pH of the soil. Another supplier would be companies who make the probes used to test the soil acidity.
3.6 Strategy: Focused High Cost

The competitive scope of the market is a narrow market- there are only a limited number of consumers who will be interested in conrolling soil pH so they are selling to a small range of people. The cost strategy of the company will be high cost because the company aim to create a high quality, reliable product which can operate on a large scale. Therefore the product will require high levels of technology and so will be expensive to create. To make a profit, the product will need to be priced accordingly. There is also no product identical so they can force consumers to pay more if they wish to buy the product. The overall strategy is therefore Focused High Cost.
3.7 Value Chain Activity: Market and sell the product or service

The most important value chain activity for this business is market and sell the product or service. The company need to convince consumers that their product will benefit the growth of their crops therefore marketing will be essential. Because it is a new product the task of raising awareness will be challenging but it is vital. Because most consumers will also be in remote
5

locations it will be important to go to the customers to make it convenient for them to buy the product, by installing it for them. This links to the vision of providing excellent customer service, and is consistent with the strategy of focused high cost because successful marketing enables the business to sell the product at a higher price by making it appear more desirable.

3.8 Business Processes

3.8.1. MAKING CUSTOMERS AWA RE OF THE PRODUCT PROCESS This is important to the

organisation because the product is new and innovative- no similar system exists. Customers are therefore not aware that such an automated system is possible and could help support their crop growth output. Many customers will be in rural areas and thus it will be more essential to identify these potential customers and contact them directly as there is less of a chance they will hear about the product otherwise.

START

Research potential customers Marketing

Identify potential customers

Contact potential customers

Is the customer interested?

No

Return to identifying customers

Yes

Undertake sales process Sales

Follow up purchase with customer support Customer Service

END

3.8.2. SALES PROCESS

The sales process is important to the business because they need to

efficiently process orders and install the system to ensure customer satisfaction. Thus they need to minimise the cycle time between when a customer requests a quote and when the system is installed, as well as making the process simple for customers to understand.
7

START

Offer product to customer Sales

Is the customer interested in the product?

No

Return to identifying customers

Yes

Customer requests a quote

Send quote to customer No

Does the customer want to buy the product?

Yes

Install product

Distribution

Send invoice to customer Accounts Receivable

Receive payment

END

3.9 Functionalities
3.9.1. MAKING CUSTOMERS AWA RE OF THE PRODUCT PROCESS

Business identifies valuable customers Business contacts customers and markets product to customers

3.9.2. SALES PROCESS

Business offers product to customer Customer places a purchase order Business processes order

3.10 Systems
3.10.1. MARKETING MANAGEMENT SYSTEM-

The business need to market the product to

customers in order to convince them that the product will provide added value by increasing output.
3.10.2. CUSTOMER ORDERING SYSTEM -

Enables the customer to request a quote, the

business to provide a quote, then the customer can easily place an order, and the business receive the order without delay to process it, so the ordering system is reliable.
3.10.3. ORDER PROCESSING SYSTEM

The business need to process the order to identify the

items they need, and order the materials so that they can then install the product for the customer, to provide a high quality product.
3.10.4. CUSTOMER ANALYSIS SYSTEM-

The business must analyse who its potential customers

are in order to target them in marketing. They analyse who their most valuable customers are using recency, frequency and monetary value.

10

10

11

3.11. Summary Table: Value Chain to Systems

Value Chain Activity

Processes 1. Sales process

Functionalities 1. Business offers product to customer

Specific Information System(s) Marketing management system Customer ordering system Order processing system Customer analysis system Marketing management system

Broad Information System(s) Transaction processing system

Market and sell the product or service

2. Making customers aware of the product

2. Customer places a purchase order 3. Business processes order 1. Business identifies valuable customers 2. Business contacts customers and markets product to customers

Customer relationship management system

11

12

CONCLUSION

Marketing the product is key for this business because it provides customers with a new way to treat their crops to increase output. The process of making the customer aware of the product supports this. Information Systems enable the company to analyse their potential customers so they can target marketing resources and Information Systems complete the sales process so that they can deliver a reliable high quality product.

REFERENCES

Bunnings Warehouse. (2014). Price Guarantee. Retrieved from http://www.bunnings.co.nz/price-guarantee Chien, M. (n.d.). Grapevine Nutrition. Retrieved from http://pss.uvm.edu/grape/Horticulture/GrapevineNutrition.pdf Dairy Companies Association of New Zealand (n.d.). Dairying Today. Retrieved from http://www.dcanz.com/about-nz-dairy-industry/dairying-today DairyNZ. (2012). Lime and soil acidity (7-15). Retrieved from http://www.dairynz.co.nz/file/fileid/43967 Environment Waikato (n.d.). Managing soil fertility. Retrieved from http://www.waikatoregion.govt.nz/PageFiles/1189/CNM%20factsheet%20managing %20soil%20fertility_3.pdf Fertiliser Association. (2012). Why do we need to use fertiliser? Retrieved from http://www.fertiliser.org.nz/site/faq/fertiliser_use_general/why_do_we_need_to_u se_fertiliser.aspx Fertilizer & Lime Research Centre. (n.d.). Sustainable Nutrient Management. Retrieved from http://www.massey.ac.nz/~flrc/shortcourses/SNM_IntroductoryNotes&MasteryTest .pdf Franchise New Zealand. (2013). Palmers Planet. Retrieved from http://www.franchise.co.nz/article/1593 Ministry for Primary Industries. (2014). Horticulture. Retrieved from http://www.mpi.govt.nz/agriculture/horticulture Mississippi Agricultural and Forestry Experiment Station - Mississippi State University Extension Service. (2010). Soils. Retrieved from http://msucares.com/crops/soils/mgfertility.html Mitchell, C. (n.d.). Soil Acidity and Liming Part 2. Retrieved from http://hubcap.clemson.edu/~blpprt/acidity2_review.html New Zealand Retailers Association. (2013). The Retail Market in New Zealand An Analysis 2013. Retrieved from http://www.retail.org.nz/downloads/2013%20Retail%20Market%20in%20NZ.pdf Sweeney, N. and Sweeney, L. (2010). Soil pH Part 1- what is it and why is it important? Retrieved from
12

13

http://www.underthechokotree.com/index.php?option=com_content&view=article &id=133:soil-ph-part-1-what-is-it-a-why-is-it-important&Itemid=37 Vossen, P. (n.d.). Changing pH in Soil. Retrieved from http://vric.ucdavis.edu/pdf/Soil/ChangingpHinSoil.pdf

13