Micropropagation Micropropagation Enterprise Enterprise

Economic ConsiderationsEconomic ConsiderationsMarket AnalysisMarket Analysis

Commercial Plant Tissue Culture Commercial Plant Tissue Culture LaboratoryLaboratory

IndependentIndependentEnterprise where the finished product is the Enterprise where the finished product is the tissue cultured plant in vitrotissue cultured plant in vitro

IntegratedIntegratedEnterprise where marketing and nursery are Enterprise where marketing and nursery are integrated togetherintegrated together

Independent LaboratoryIndependent Laboratory

Determining Factors:Determining Factors: FinanceFinance MarketMarket

Research and developmentResearch and development Production managementProduction management

FinanceFinance It is possible to start tissue culture work in

the residential culture and then a few hundred plant can be produced with minimal

initial cost To start business, it is most desirable to have

an investors with an agriculture and/or biotechnological background

Venture capital has the tendency to loose patience sooner

Remember, only larger and well managed enterprises have a fair chance to survive

MarketMarket

Enterprise should have a substantial part of its production in cultivars that are demanded

in large quantities at a reasonable price Media, sterilization procedures, transfer manipulation, planting density and growing chamber conditions need large scale testing

Once a certain level of production is reached, and thus a competitive overall cost price,

enterprise can start thinking about producing both less demanded cultivars and cultivars

that are new to market

MarketMarket A long time relation between producers A long time relation between producers

and customers based on profit and and customers based on profit and mutual trust is importantmutual trust is important

Frequent discussions, visit to laboratory Frequent discussions, visit to laboratory and thorough intercourse with receiving and thorough intercourse with receiving

nurseries and even producers of the nurseries and even producers of the limited product often lead to limited product often lead to improvements in proceduresimprovements in procedures

Presentation of a well known, traditional Presentation of a well known, traditional plant as a new productplant as a new product

Importance of Market Knowledge

How are patent regulations? Which varieties are economically

suitable for tissue culture? Which cultivars can replace

another? Can tissue cultured plant open a

larger market?

Research and Development Research is very important in enterprise:

Experimental development of both technical aspect (growth media, methods of manipulation, growth

conditions) and aspect related to production planning and cost price calculation of a production system

Tacking problem arising in the course of the production process

It is necessary to stay well informed about new evolution by reading scientific or professional

literature Formal and informal contact with researchers and

colleagues on an international level are crucial

Production Management

An appropriate system to produce a required number of identical plants at a given time at a

competitive price

The desired time of delivery Phenotypic fidelity

The original material Multiplication with a minimum of variation

A competitive price

Minimum Variation

Starting with fresh material from the original plant on a regular basis

Safe stock on a zero branching medium or limited axillary branching

Positive selection of samples in vivo Avoid indirect regeneration through

callus or cell system

Competitive Price

High efficiency production system has to be established with large

quantities produced diluting high investment and operating cost

Expensive labor substituting technology

Reduced cost for the same quantity of labor

Price

It is of great importance to know the production cost of a tissue cultured plant It is important to keep records of all media, labor and overhead costs makes

it possible to calculate the price It is desirable to have simple formula not

only to calculate the cost price for the actual production but also to make

prediction

General Structure

1.

Labour 65

2.

Media 7

3.

Equipment + laboratory cost

17

4.

Other 11The second most important cost is

related to the space needed to grow the plants

Possibilities of lowering costs

Labor

Electricity

Planting density

LaborGood production management is needed to

reach a high efficiency

Time spent in preparing and sterilizing culture media can be diminished by

preparing larger batches

Incubation of the prepared media to allow eventual contamination to be reveal

perform experimental inoculation of some shoot on a few container beforehand to

verify the reaction before the whole batch is transferred

Using disposable containers

ElectricityTwo major constituents of

electricity cost are lighting of the shelves in the culture room

(60%) and cooling the culture room (25%)

Install lamps that are produce for less heat

Install lamps outside the shelves

Planting density It can be very interesting to investigate

whether more shoots can be grown in the same container, with the same amount of medium, while maintaining the same quality

Raising the number of units per container and/or the number of shoots per clump

If 10% less medium, means saving 10% on 7% of the total cost.

Saving in labor for the preparation and transport of the medium

Market AnalysesMarkets.

The target marketing process.Market segmentation.

Evaluating market segments.Selecting market segments.

Market positioning.

Markets MARKETS:

They consist of all the potential customers sharing a particular need or want, who are willing and able to engage in exchange to satisfy that need or want

TARGET MARKET: the group of customers (people or organizations) at whom a seller aims its marketing effort.

Distinctive Markets

ULTIMATE CONSUMER MARKET: People who buy products for their personal, non-business use.

BUSINESS MARKET: An organization that buys goods or services to resell, use in its own business, or make other products.

These markets behave differently!!

Market Segmentation

The process of dividing the total heterogeneous market for a product or

service into several segments, each which tends to be homogeneous in all

significant aspects.

Market segmentation is a basis principle of marketing.

Importance of Marketing Marketing is the heart of a nation’s

economic system. Demand for industrial goods is

derived from consumer purchases. Marketing is important to

organizations and must be part of the corporate planning process.

Marketing Planning

Based on short and long-range organizational goals

Begins and ends with the customer Interprets consumer needs and links

the organization and its environment a critical part of the Business Plan

Marketing Plan Outline Executive Summary

Environmental Analysis Strengths and Weaknesses Opportunities and Threats

Marketing Objectives Marketing Strategies

Marketing Implementation Evaluation and Control

Executive Summary A synopsis of the plan

Includes an introduction, explanation of key points, statement of costs

Very important and useful as it is often given to people outside the organization

Environmental Analysis

A comprehensive analysis of the company and the environment

relevant to the target market and the competitive situationMost difficult part of the plan

Requires information from the internal and external environment

Accomplished through secondary and primary research

Must have an ongoing way to collect and organize environmental data

Marketing Information System is critical

Environmental Analysis

It must consider:

External Macro-environment

Internal Factors

Target Market

Firm’s current marketing objectives and performance

SWOT analysis

Strengths and Weaknesses

come from inside the company and only exist when the company exists

must be analyzed relative to market needs and competition

helps to determine what you do well and what needs to be changed to meet the needs of the firm’s target market

Opportunities and Threats

focus on factors external to the focus on factors external to the organizationorganization

both opportunities and threats both opportunities and threats exist independently of the exist independently of the organization but greatly affect organization but greatly affect operationoperation

must differentiate O&T from must differentiate O&T from S&WS&W

Opportunities and Threats opportunities are favorable

conditions in the environment that could produce rewards for the organization if acted upon properly

threats are conditions or barriers that may prevent the firm from reaching its objectives

O&T stem from many sources in the environment

Marketing Objectives state what is to be accomplished through

marketing activities should come out of the SWOT analysis need sales volume, market share and

profitability objectives need objectives that specify the behavior you

want from the target market need objectives stated in each marketing mix need objectives stated in each marketing mix

areaarea product introduction, product improvement or product introduction, product improvement or

innovationinnovation pricing, distribution and communicationpricing, distribution and communication

Marketing Objectives It should be: expressed in clear simple terms written, so it can be measured

accurately for a specific period of time consistent with the organization’s

corporate strategy

Marketing Strategies

must outline how the organization will manage its relationships with customers so that it gains

an advantage over the competition

Elements in Marketing Strategy

Product Communications Price Distribution Service

Market segmentation:1. Identify bases for segmenting the market.2. Develop profiles of resulting segments.Market targeting:3. Develop measures of segment attractiveness.4. Select the target segment(s).Market positioning:5. Develop positioning for each target segment.6. Develop marketing mix for each target

segment.

Step in Marketing strategy

The process of dividing a market into distinct groups of buyers who might require

separate products and/or marketing mixes.

1. Geographic segmentation (geographic units).

2. Demographic segmentation (demographic characteristics).

3. Psychographic segmentation (social class, life-style, or personality characteristics).

4. Behavior segmentation (knowledge, attitude, use, or responses to a service).

Market Segmentation

1. 1. Measurability: degree to which a segment’s size and purchasing power can be measured.

2. Accessibility: degree to which a segment can be accessed and served.

3. Substantiality: degree to which a segment is large or profitable enough.

4. Actionability: degree to which programs can be designed to attract and serve the segment.

Requirements for Effective Market Segmentation

Segment size and growth: current segment sales, growth rates, and expected profitability.

Segment structural attractiveness: presence of many strong and aggressive competitors, relative power of buyers, presence of powerful suppliers.

Organization’s objectives and resources: do not mesh with organization’s objectives or philosophies.

Evaluating Market Segments

Selecting Market SegmentsMarket Coverage Strategy Alternatives

1. Undifferentiated marketing strategy: ignore market segmentation, go after whole market with one service offer.

2. Differentiated marketing strategy: target several market segments and design specific service offers for each one.

3. Concentrated marketing strategy: try to get a large share of one or more small market segments.

Market Targeting

Choosing a Market Coverage Strategy1. Company resources: the less the company’s

resources, the more likely a concentrated strategy is the best option.

2. Product homogeneity: the greater the differences in the services, the better it is to use either differentiated or concentrated.

3. Market homogeneity: the greater the homogeneity in customers, the better it is to use undifferentiated.

4. Competitors’ strategies: it may be wise to use the same strategy or a different one.

Market Targeting

The way organization services are defined by consumers on important attributes. The place

these services occupy in consumers’ minds relative to competitors’ services.

Positioning Strategies:1. Specific attributes of the services.2. The need the services fill or the benefits they

offer.3. For certain groups or classes of customers.4. Against an existing competitor or competitors.5. Against another product class.

Market Positioning

Choosing and Implementing a Positioning Strategy

Three Steps in Positioning

1. Identify a set of possible competitive 1. Identify a set of possible competitive advantages.advantages.

2. Select the right competitive advantages.2. Select the right competitive advantages.

3. Communicate and deliver the selected 3. Communicate and deliver the selected position to people in the selected target position to people in the selected target market.market.