INDIAN INSTITUTE OF MANAGEMENT RAIPUR

CALGENE INC. AND THE PURE FOOD CAMPAIGN

CONSUMER BEHAVIOUR ASSIGNMENT
GROUP MEMBERS: ASHWINKUMAR NARAYANKAR (17) CHIRANJIT DUTTA (19) DEBMALYA KAR (20) GOVIND GOPINATH (22) SAURABH KUMAR CHAUBEY (56) VINAY PRABHAKAR (67)

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PROBLEMS FACED BY CALGENE INC. : For developing the marketing strategy it is very important to know, what are current problems faced by CALGENE INC. These are the problems currently faced by Calgene: 1. Cost is the first problem: require a 30-100 percent premium at retail. 2. Many consumer skeptical of modern science and are convinced that artificial products are inherently inferior/dangerous.(Endless series of discoveries that products which are once considered safe, can cause cancer or other problems) 3. Even farmers are concerned and are conservative. 4. More difficult situation because of similar product i.e. bovine growth hormone (BGH) developed by Monsanto, which when injected into cows can enhance milk production by 15%. The potential health risk associated with BGH, though small or nonexistent, have made it very 5. Pure food campaign by Jeremy Rifkin: he oppose biotech in agriculture on philosophical, religious and scientific grounds. (Rifkin has created concerns about flavor savor, which are not justified, slicing of animal gene violates natural law, urging farmers, retailers ,shippers and other to boycott the product. )

Segmentation: Available Segments: a) b) c) d) e) Farmers Retailers Consumers Large Scale Buyers Restaurants

Targeting: We should use multi segmented marketing, we should target farmers, Retailers and consumers they are very critical for gaining acceptance.

Availability should be ensured through retailers and farmers. Retailers should be provided with: 1) Mac-Gregors tomatoes 2) given cash discounts 3) store demonstration of product in every retail stores 4) Sampling, hoardings and customer displays demonstrating product comparison and highlighting each benefit of flavr savor seeds/Macgregors Seeds vis a vis present popular /normal tomatoes.

Customer targeting through media, local cookery shows, local health awareness camps , programs in TV explaining, the process of making and each effects associated with it.

Positioning: Even though our budget is limited we dont have any option because the food habits of consumers are very difficult to change as food is something that customer will consume and if they are provided with a new type of food they will be naturally skeptical because of the fear of unknown, so changing it will require a lot of effort and resources For initial acceptance, we have to position it in the same price category to overcome the initial entry barrier. Explain how different companies produce tomatoes produce tomatoes differently and how we have done it. Health benefits of fresh tomatoes, Highlight the following : a) Through our tomatoes we are actually avoiding the use of harmful chemicals b) FDA approval c) Voluntarily submission for all possible tests imaginable d) Highlighting each of the above using pamphlets, TV ads etc to attract quality demanding customer. GM crops have been successful and people are already consuming GM crops and what they are consuming is not natural. Pool in other biotech companies to have programs on TV about the relevance of GM foods, these programs will be educational in nature and not promotional, It will benefit whole industry.

4 Ps : Product: Packaged Macgregor and flavor savor, packaged tomato curries highlighting in each product just a new improved version. We know that Product is already superior to existing tomatoes. Basically we need to educate our target about our product how it is better than the rest.

Price: Price at the level of normal tomatoes for initial phase and giving cash discounts, to incentivize each producer in the value chain to start using our products. Once they will start using our product we can charge margins after then and they will be happy to pay because of the benefits they will get due to productivity.

Place: The place for sale of Macgregor tomatoes is retail stores. The customers should feel the advantage of having Mac-Gregors at the same prices as of ordinary tomatoes when displayed side by side in stores. Promotion: TV shows (educational as well as promotional, cookery shows, awareness camps with dignitaries and experts in every locality (for farmers as well as customers) Pamphlets, hoardings, launch of ready to eat tomato curry, free supply of tomato to restaurants for a day. Highlight the relevance of FDA approval in promotions.

Value Chain of CALGENE:

Value Chain: Formers: Formers can have more fresh tomato production. They have less waste tomato so their profit margin will be now higher for same yield. They dont need to treat tomato with ethylene. As these tomatoes will be fresh for more time so they can send their tomatoes to areas which are at more distant. Result of this they have more bargaining power with their buyers. Retailers: Retailer has stock of better, fresh, reddish, firm tomatoes. So, it will be easier for them to sell these tomatoes. They have less storage problems as product life of these tomatoes are longer so inventory turnover time period is high. They also have better profit margin with this tomatoes. Institutional Buyers: Institutional buyers such as sauce manufacturing company or soup companies will have supply of more firm, fresh, better flavoured tomatoes, which will make them less dependent on chemical flavours. They can promote their product as more natural and fresh. Also, Macgregors Tomatoes will help them to assuring intake of good quality tomatoes. Restaurants : Restaurants have highly pressure to keep only good quality of vegetables in their items. Macgregors Tomatoes provides them this high quality with more essence with less usage. This high quality tomatoes could be a good image for restaurants. Customers: Customer will be benefited by getting more fresh tomatoes. They have more firm, tasty, colourful tomatoes. Presently formers are using ethylene to make tomatoes more red, which is not good for health. By Calgene tomatoes they will get fresh tomatoes without any harmful chemical. Although Tomatoes is not of very expensive vegetable but it is a good source of vitamins and proteins. Health conscious customers will get benefitted by it.