| Summary: | Master of Agribusiness === Department of Agricultural Economics === Arlo Biere === E-commerce is changing the purchase habits of businesses, globally. The potential
for agricultural input manufacturers to develop an online business-to-business (B2B) model
may provide a new source of revenue by reaching an underserved market. Underserved
markets are those which a company’s primary brand is not reaching a certain customer
base.
The following thesis was conducted for a client (Company A) to determine the
feasibility of increasing one point of market share in corn seed through an online and phone
based sales model. In recent years, consolidation among agricultural seed companies,
along with product performance, has driven swings in market share. Gaining one point of
market share in corn seed is equivalent to 376,000 units. Company A believes there is
opportunity to gain one percentage point of share in the corn seed industry through online
and phone-based sales. FC, an online and phone based seed company, held approximately
one percentage point of share before being purchased by Company B in 2007. Company B
then retired the FC brand in 2012.
FC was once successful in their e-commerce based strategy; however three
dominant factors impacted the development of agriculture companies conducting business
online. Those factors are: 1) industry structure, 2) product complexity, and 3) the hightouch
nature of transactions in agriculture.
Research regarding e-commerce in agriculture has been limited over the past few
years. With the increase in Internet access through wireless modems and mobile
broadband data plans, opportunity exists for agricultural businesses to develop e-commerce
B2B marketing. Research reported here focused on exploring the feasibility of selling a
corn seed brand online and by phone, only. The steps to address the feasibility were to
identify the target market and market opportunities and, then, address opportunities and
challenges a company could face developing such a business.
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