As your business gets worth more and more, ag companies are getting more and more sophisticated in how they’re angling for a bigger share of your wallet. Is it working? We went inside BASF’s introduction of its new kixor herbicides to find out
A decade ago, launching a major new product for Canadian farmers meant spewing out a stream of print and radio advertising. It meant giving away caseloads of hats with the logo stitched loudly on top, and it meant a kaleidoscope of signboards on fields along rural highways.
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It still does today. But in the increasingly “business-to-business” mode of modern agriculture, it means much, much more as well.
In fact, while the goal of old-generation marketing programs was simply to get you to change your behaviour (by switching your herbicide brand, for instance), these new marketing programs are having at least as big an impact on the companies that are doing the selling than on the farms doing the buying.
For the last two years, Country Guide has been telling ag chem companies that we would like a look inside at how they are launching and marketing a new product. We specifically went to ag chem companies because there’s so much riding on how they bring a new brand to market — much more than, say, a new seed variety or, in most cases, a new piece of machinery. The registration costs alone mean the ante starts at $20 million to $40 million and goes up fast from there.
Finally, BASF agreed to let us inside their kixor launch, with Heat now registered in the West and Intrepid close to registration for Eastern Canada. It wasn’t a perfect interview. The company is close mouthed about its Canadian financials and about its market-share projections. (Globally, BASF says that with recent registrations in South America, the U. S. and Canada, it is on track to sell nearly $300 million a year of herbicides containing the fast-acting, wide-spectrum active ingredient, manufactured at its Hannibal, Missouri plant.)
Even without Candian numbers, however, it’s clear that BASF believes it’s in a new strategic environment.
The challenge(s)
The one thing that’s always been clear is that kixor works. In fact, because of its fast action, its combination of systemic and contact action and its extremely broad spectrum, Canadian research lead George Annette has been hearing about and working with various prototypes of the Group 14 chemical since the early 1990s.
The question was, though, what do you do with such a kill-everything chemical in a world that already has glyphosate. It’s important to remember, after all, that when Annette started working with kixor, technologies such as glyphosate tolerance hadn’t yet gotten out of the lab.
From the outset, it was also clear that BASF would have a launch challenge on its hand, trying to show farmers that a different kind of chemical would have a role on their farms.
Eventually, the market itself created its own opportunity for kixor in Western Canada. BASF saw an opening for kixor to tank mix with glyphosate in pre-seed applications in pulses and cereals, as well as in burn-off applications in chemfallow to provide faster overall kill, plus sharper control of weeds that glyphosate can have trouble handling, including glyphosate-tolerant volunteer crops.
With the growing intensity of glyphosate usage, kixor would also give farmers a way to manage the risk of glyphosate-resistant weeds in reduced-tillage operations.
However, that means selling a tank-mix partner for a product that was also originally sold as the perfect go-alone herbicide.
In the East there was a challenge too. Kixor might have a role as a pre-emerge herbicide in corn and soybeans, but that was a market that BASF hadn’t been a major player in.
And there was another challenge too. Like some of its competitors, BASF has devoted the past decade to reinventing how it does business in a mature marketplace with fewer, larger farmers. Somehow, its commercialization of kixor would not only have to fit in with this new way of doing business, it would have to drive that branding forward.
Importantly, that would mean proving not only to farmers but to the rank and file within the company itself that it has both the smarts and desire to play better and harder in the Canadian market.
REALLY… A DRAGON?
Farmers are legendary for insisting that not only do they not read ads, they don’t learn about new products from ads, and they never, ever make decisions based on ads.
At the same time, points out Brian Denys, business manager for BASF in Canada, marketing surveys consistently show that when an advertising program is well designed, the messages sink in.
The gap could be because companies and farmers look differently at the purpose of advertising. Farmers think advertisers want every farmer across the country to get on the phone and place an order the instant they see an ad. Companies meanwhile, have much narrower goals. They simply want farmers to pick up the ad campaign’s key messages.
That uptake lays the groundwork for regional dealers to make their own sales pitches, either by driving up the laneway with a freebie that builds on the ad, or simply by building on the ad awareness by hanging some brand signs above their counters or pasting some decals on the sides of their trucks.
To Denys and his team, the key messages were clear. 1: kixor is fast; 2: kixor is broad spectrum; 3: kixor makes your farm management more sustainable. In the West, too, these messages must be absorbed within a context of kixor making glyphosate-based pre-seed or chemfallow applications even better.
The positioning also meets two other traditional branding demands. It differentiates kixor from anything else on the market and, says Denys, it conveys the brand promise, i. e. the result that the customer can depend on getting from the product.
Around the time BASF decided to go ahead with kixor in Canada in 2004, it also began a search for names. An early choice was made to have different names in different Canadian markets, largely because the use patterns would be so different.
Ordinarily, searching for names can be a complex, time-consuming quagmire, says Michael Schaad, eastern business manager for the company. Names can run afoul of local trademarks or they can mean unfortunate things in different languages, or in different communities.
BASF, however, has put together an international list of names that it has pre-approved, essentially the same way that many companies have acquired the rights to website addresses that they may or may not ever use. On that list, Schaad says, “Heat” jumped out.
The challenge then was how to convey the key messages in an advertising image that would work for Canadian farmers. The choice was the dragon — an image that BASF wants to own in western agriculture. But look at the image again. True to the subtleties of modern advertising, the dragon isn’t simply flying over the field. It’s balanced on top of a high-performance, high-efficiency sprayer (which happens to be painted green) which is the kind of sprayer that high-performance, high-efficiency farmers would use.
BASF looked at five concepts from its Canadian agency Quarry Integrated Communications, which also does work for heavyweights including Research in Motion, Bell and FedEx. Some of the Heat concepts were bold, some were conservative. But, says Schaad, the dragon was the easy pick.
The harder job was to pick the tagline, and for this, as for the dragon image, BASF vetted its choice with farm panels called focus groups across the West. The result: “For the ultimate burndown.”
When farmers get telephone surveys this year, they’ll be asked if they saw the ads. Then they’ll be asked what they know about Heat. If this year is like all others, farmers will say
they don’t read the ads, but then when asked what they know about the product, they’ll repeat the messages from the ads, almost word for word.
That’s the impact BASF is looking for the ads to produce. Farmers sometimes allege that ag companies waste too much money on promotion and advertising, Denys says. From his side of the desk, it looks entirely different, he says. “We’re trying hard to be as efficient as we can possibly be.”
As part of that drive for efficiency, they’ll be measuring the ad impact. They’ll want to know how far it nudges you along the sales process. They’ll want to know if you remember the ad, and what you remember about it. If you tell the survey team that the dragon is breathing fire, the ads will score a point. If you report remembering the phrase “the ultimate burndown,” that means the ad itself, well, breathes fire.
Transforming business
In this case, the drama in the advertising campaign may obscure what are likely to prove even more dramatic developments in how kixor has helped BASF change the way it wants to do business with Canada’s farmers.
Like other multinationals, BASF has a complex web of international processes that get kicked into action when their research labs come up with a potentially valuable new compound.
In Canada, that means the sales and marketing team has to work with the research team toward developing 10-year sales and market-share forecasts for new and existing products. A decade can be a lifetime in agriculture, Denys agrees, but the company has developed sophisticated in-house ways to cut the risks of forecast errors, and the message from on top is consistent. Good forecasting is essential for good business.
Based on global forecasts, together with early input on whether the molecule can actually be produced cost effectively in a modern chemical plant, BASF then decides whether to pursue registration in which countries. It co-ordinates health and safety trials and soon even begins work on the development of formulations.
The complexity is daunting, especially because the technology is getting more mature. A generation ago, most crops had major gaps. The West lacked wild oat control, for instance, so it was fairly easy to estimate sales for a new herbicide that could control the weed. With the notable exception of some of its disease products, however, most new BASF products aim to improve on existing use patterns, which farmers may or may not be unhappy enough with in order to change… and they replace products which competitors might vigorously defend with price cuts, new blends or other tactics.
In Canada, BASF has had separate research and sales teams. Now, says Denys, the emphasis is on creating cross-functional teams, a move that kixor has helped ignite. It may sound bureaucratic, like rearranging the chairs around a table, but Denys says it is helping transform the company.
Now, local crop teams feed into a Growth Planning Team that meets at least quarterly to decide what products to back and how to resource them.
With kixor, similar thinking has gone even further. If there used to be separate research and marketing silos within BASF, there were even more silos outside of the company separating different parts of the industry. As a result, BASF set up an official advisory council with Canadian and U. S. weed scientists to get their input into how the chemical would best be used on-farm.
Not only does this mean BASF gets expert advice on the development of their product, Annette says, it also means that the researchers that farmers turn to for their own advice have a huge amount of background on kixor that they could use as soon as it was launched.
Also new for BASF was the strength of their on-farm research program with kixor, with some 97 trials in farmers’ fields last year, and kixor was applied by 500 farmers for on-farm comparisons.
The biggest change of all
For kixor’s launch to be successful, however, it must also help BASF rebrand the company overall. Fundamentally, says Denys, that means it has to help BASF become recognized as a company that is based on what in bizspeak is called CRM — i. e. customer relationship management.
It also means that the company will decide whether its launch succeeded based not on sales, but on whether individual farmers are recommending Heat to other farmers.
The CRM approach has multiple impacts on farmers. Working with its dealers, BASF is analyzing its sales data to identify key customers and key prospects. If you’re on that list, the company and the dealer are already driving up your laneway, instead of expecting you to go see them.
As well, if you’re on the list, those reps will be doing more than talking to you about weed and disease control. They’ll want to introduce you to tools to look harder at your farm as a business, and how crop protection and cropping choices can help make that business more successful.
Heat is already figuring in those discussions as a critical launch tactic, Denys says. The goal is to use kixor to broaden the relationship and move the company’s customer-loyalty strategy beyond traditional tactics such as volume discounts.
Says Denys: “That’s really the goal, to be good enough that farmers become our advocates.” CG
they don’t read the ads, but then when asked what they know about the product, they’ll repeat the messages from the ads, almost word for word.
That’s the impact BASF is looking for the ads to produce. Farmers sometimes allege that ag companies waste too much money on promotion and advertising, Denys says. From his side of the desk, it looks entirely different, he says. “We’re trying hard to be as efficient as we can possibly be.”
As part of that drive for efficiency, they’ll be measuring the ad impact. They’ll want to know how far it nudges you along the sales process. They’ll want to know if you remember the ad, and what you remember about it. If you tell the survey team that the dragon is breathing fire, the ads will score a point. If you report remembering the phrase “the ultimate burndown,” that means the ad itself, well, breathes fire.
Transforming business
In this case, the drama in the advertising campaign may obscure what are likely to prove even more dramatic developments in how kixor has helped BASF change the way it wants to do business with Canada’s farmers.
Like other multinationals, BASF has a complex web of international processes that get kicked into action when their research labs come up with a potentially valuable new compound.
In Canada, that means the sales and marketing team has to work with the research team toward developing 10-year sales and market-share forecasts for new and existing products. A decade can be a lifetime in agriculture, Denys agrees, but the company has developed sophisticated in-house ways to cut the risks of forecast errors, and the message from on top is consistent. Good forecasting is essential for good business.
Based on global forecasts, together with early input on whether the molecule can actually be produced cost effectively in a modern chemical plant, BASF then decides whether to pursue registration in which countries. It co-ordinates health and safety trials and soon even begins work on the development of formulations.
The complexity is daunting, especially because the technology is getting more mature. A generation ago, most crops had major gaps. The West lacked wild oat control, for instance, so it was fairly easy to estimate sales for a new herbicide that could control the weed. With the notable exception of some of its disease products, however, most new BASF products aim to improve on existing use patterns, which farmers may or may not be unhappy enough with in order to change… and they replace products which competitors might vigorously defend with price cuts, new blends or other tactics.
In Canada, BASF has had separate research and sales teams. Now, says Denys, the emphasis is on creating cross-functional teams, a move that kixor has helped ignite. It may sound bureaucratic, like rearranging the chairs around a table, but Denys says it is helping transform the company.
Now, local crop teams feed into a Growth Planning Team that meets at least quarterly to decide what products to back and how to resource them.
With kixor, similar thinking has gone even further. If there used to be separate research and marketing silos within BASF, there were even more silos outside of the company separating different parts of the industry. As a result, BASF set up an official advisory council with Canadian and U. S. weed scientists to get their input into how the chemical would best be used on-farm.
Not only does this mean BASF gets expert advice on the development of their product, Annette says, it also means that the researchers that farmers turn to for their own advice have a huge amount of background on kixor that they could use as soon as it was launched.
Also new for BASF was the strength of their on-farm research program with kixor, with some 97 trials in farmers’ fields last year, and kixor was applied by 500 farmers for on-farm comparisons.
The biggest change of all
For kixor’s launch to be successful, however, it must also help BASF rebrand the company overall. Fundamentally, says Denys, that means it has to help BASF become recognized as a company that is based on what in bizspeak is called CRM — i. e. customer relationship management.
It also means that the company will decide whether its launch succeeded based not on sales, but on whether individual farmers are recommending Heat to other farmers.
The CRM approach has multiple impacts on farmers. Working with its dealers, BASF is analyzing its sales data to identify key customers and key prospects. If you’re on that list, the company and the dealer are already driving up your laneway, instead of expecting you to go see them.
As well, if you’re on the list, those reps will be doing more than talking to you about weed and disease control. They’ll want to introduce you to tools to look harder at your farm as a business, and how crop protection and cropping choices can help make that business more successful.
Heat is already figuring in those discussions as a critical launch tactic, Denys says. The goal is to use kixor to broaden the relationship and move the company’s customer-loyalty strategy beyond traditional tactics such as volume discounts.
Says Denys: “That’s really the goal, to be good enough that farmers become our advocates.” CG
