2. Overview
Market Research
Customer Analysis
Our Product
Pricing
Branding
Promotion and Advertising
Press Release
References & Questions and Answers
3. Facts and Figures
UK agriculture makes up a mere 0.5% of GDP
451,000 people employed in agriculture
Agriculture contributed to 61% of the nitrogen in rivers,
84.1% of nitrous oxide emissions, and 82% of ammonia
emissions – so it has a negative impact on the
environment.
Also uses up 70% of UK land, whilst producing 83% of
indigenous (naturally occurring) food production.
AEA, 2012
Defra, 2014
5. PESTLE Agriculture Analysis
Political factors
Climate Change Act 2008: aims for 80% less greenhouse gas emissions
by 2050.
The Farming and Conservation Guide 2012
Necessary insurance to be in place: Crop Insurance, Plant Machinery
Insurance and Pollution Insurance
Economical
Revenue and Wages for UK farmers are low: e.g. Wages for cereal
farmers for 2013/2014 was £50,000
Difficult economic times have an impact for the agriculture industry
DairyCo, 2012
Mbakwe,2015
US Department of State,2015
GOV UK, 2013
6. PESTLE Agriculture Analysis
Socio-Cultural
Dietary trends
Criticisms against Genetically Modified (GM) food
Technological
£160 million government investment to construct higher
end technologies
Precision technology for UK farmers
Johnson,2010
Foster and Lunn,2007
Raphael and Weinberger,2014
Farmers Weekly, 2014
Griffiths,2014
Figure 2: Combine Harvester
7. PESTLE Agricultural Analysis
Legislative
If the Animal Welfare Act 2006 changes, without insurance
a firm may have to either get rid of some of their stock,
or build suitable shelter.
If Climate Change Act 2008 was abolished: farms would go
back to using cheaper and environmentally harsher
machinery
GOV UK, 2013
The Committee on Climate Change, 2013
Figure3: Multiple choice question on Risk
8. PESTLE Agricultural Analysis
Education
People has become more educated especially when buying
goods and services
We will aim our product at a niche section of the insurance
industry (e.g. Crop Insurance)
Environmental
If global warming is an issue: Crop Insurance and Extreme
Weather Insurance will be needed
If Environmental Pollution is an issue: Pollution insurance is
needed.
Bloom, 2015
The Committee on Climate Change, 2013
11. Competitors & Their Policies
Livestock Insurance – covers for diseases, fatality, injury, transit,
straying.
Motor Vehicle Insurance – covers for the driver and any parties
involved in an accident. Also includes the vehicle and its contents.
Crop/Income Insurance – this covers for damage or loss of crops. Can
include a revenue guarantee.
Building Insurance – this covers damage to the building and its
contents.
Environmental Insurance – covers the clean up costs in case of
accidental contamination.
General Liability – bodily and personal injury.
Figure 5: NFU Logo
(NFU Mutual, 2015)
12. Competitors & Their Policies
Rural Insurance
Offers insurance for wide range of sectors: dairy, crops,
hill farming and livestock.
They offer similar products to NFU: livestock, renewable
energy and farm motor insurance.
In 2012, they launched an environmental liability product.
(Rural Insurance, 2011)
15. Research Results
Main concern is getting value for money – own many assets
that need insuring.
Value vs. Risk – unless it is legally required.
They are wary of “small print” and being caught out.
Making claims needs to be easy
Small holdings needs to be considered
16. Demographic Factors
The majority of farmers are male.
In the UK farms are often run throughout the family and
therefore they are of British origin.
17. Initial Product
(Extreme Weather)
Considered global warming and big environmental factors
Recent events such as flooding and drought
Too complex
Not enough interest country-wide compared with other
ideas
Would many farmers actually need this insurance?
Figure 6:Sheep in snow
19. New Product (Tractor insurance)
A total of 10,553 tractors over 50hp were sold in the first 9
months of last year
An increase of 3.5% on the preceding year
The medium-sized models from New Holland cost from
£25,000 to £ 40,000
Consultation with former farmers
(Cousins, 2014)
20. How we stand out
Personal service
Repair and Replacement within 3 days
Road side and on farm assistance
28. The Calculations
Based our prices according to competitors prices: Rowett
Insurance and NFU Mutual.
Other factors used to calculate a quote:
Vehicle’s Worth
Damage and Parts cost
Repair Times
Claims History
Driver
Mileage
Vehicle Age
Vehicle Use
29. Estimated Revenue
Tractors in the UK has declined from 440,000 to 400,000
We estimate around 200,000 will have or want to have
insurance.
Our aim is a 2% Market Share
We plan to insure around 4,000 tractors in our first year.
Estimated Sales:
Gold Sales- 2,250. Average Price of Sale= £925
Silver Sales- 1,000. Average Price of Sale= £775
Bronze Sales- 750. Average Price of Sale= £615
Estimated Revenue= 3,317,500
(TradingEconomics,2015)
30. Costs and Profit
Costs
Payout. Estimated percentage is 80% of £3,317,500 is
£2,654,000.
Salaries and Rent to still be attributed to Falcons Insurance.
Existing Office Space and existing workers will be used.
New employees needed- £300,000
Marketing Budget- £20,000
Research and Development- £200,000
Profit before Tax= £146,000
Profit After Tax= £116,800
31. What is our Break-Even Point?
Total Fixed Costs- 520,000
Total Variable cost- 2,654,000
Sales- 4000
Variable cost per unit- 663.50
Sales Price per Unit- 829.38
829.38-663.50= 165.88= Contribution per unit
520,000/165.88= 3135 Breakeven Output
We would therefore need to sell 3,135 units out of a projected
4,000, in order to break-even.
45. Press release (i)
Launching a new product
New product for tractor owners
Tractor cover
Importance of insurance
What we offer
Why should tractor owners choose us?
Importance of tractors for farmers
Product options
Variety
Monthly payments
46. Press release (ii)
How the product development team
completed the project and what they
learned throughout the process
Product development team
Completion process
Coming up with a suitable product
Sub groups
Project manager
Tasks relating to individual strengths
47. Opportunity for Expansion
The relationships created with tractor manufactures and
resellers will also be expanded outside the UK for a world
wide market
Potential expansion in the US
Our tractor insurance products will allow us to obtain the
customer base
Future target Market- Younger Farmers
(Meyer, 2012)Figure 14: Nurturing a plant
48. Conclusion
Tractor insurance
Competitive prices
Loyalty: Good customer service
Intriguing marketing strategies
What we aim to do-potential expansion
49. Thank you for Listening
We are open to any questions
51. References
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Editor's Notes
The areas we looked at in our market research were actions of a, political, economic, socio-cultural, technological, legislative and educational nature in relation to UK agriculture.
Main economic pointers; UK agriculture makes up a mere 0.5% of GDP
Political Economic Social Technological Legislative Educational and Environmtal Factors of the current agricultural situation.
one act of government that has affected uk agriculture is the Climate change Act 2008. This act forced the Agriculture industry into lowering the emissions on their farm. The farmers had to put more money into reducing these emissions so this has had reduced the amount of produce farmed and had also caused a slight raise in the price across the market
Now I will be talking about the Socio-cultural factors that can affect the agricultural industry.
The most important current trends that can have a major impact on agriculture are: dietary trends and Criticisms against GM Food.
The first factor is dietary changes. People’s diet has changed dramatically over the years to encourage them to have a healthier lifestyle. UK Farmers have advantages and disadvantages for people’s consistent change in diet. For example, farmers who supply meat will most likely to have less revenue than farmers who supply vegetable and fruits.
Next we have, Criticisms against GM Food. Most people prefer organic food rather than GM food. The trend of people wanting more crops to be non-genetically modified has forced some farmers to change their crops even if it means growing less purely because there will be a lack of demand if they stay with GM goods.
The insurance that would be useful to aid with socio-cultural impact would be insuring both the consumer and anyone visiting the farms.
Now we will be moving on with the technological factors that can affect the agricultural industry.
The first factor is the £160 million government investment to build newer technologies for the agriculture industry to produce ‘’sustainable, healthy and affordable food’’ for everyone and to produce cancer-fighting products. This can affect the farmers in the UK as this will be the new trend of that era and bring efficiency to the trade. This can also increase the UK export.
Another factor is the precision technology:
Precision farming tools are used to make farming process as efficient as possible. According to Mr. Beecher-Jones, ‘’60% of the UK farmers use precision farming tools’’, the most common farmer tools are: GPS steering systems, robot milking machines and smartphones.
Precision Farming helps to create good quality products to satisfy the demand of the ever-growing population.
All of these new machineries need to be insured to minimize machine being damaged and for the employee’s safety a good example would be: Plant Machinery Insurance
A change in any legislation could have a minor or major affect on an agricultural business, it may be wise to obtain relevant insurances to protect your business.
For example, if the Animal Welfare Act 2006 changes and results in animals being granted more space per unit, without insurance a firm may have to either get rid of some of their stock, or spend thousands on the rebuilding of suitable shelter. Whereas with insurance, this could be provided for and appropriate subsidies may be available or help with holding the animals until suitable shelter is provided.
If Legislation changes, this could also affect the product we offer.
For example:
If legislation changes then it can affect the product we offer in many different ways. One example of this is if the climate change act of 2008 was abolished then farms would most likely go back to using machinery, which is cheaper rather than costly. Using this cheaper equipment may mean that farmers will not feel that it is necessary to insure their equipment
Now I will be talking about Changes in educational, environmental and legislative factors that can impact our potential product.
Changes in education might influence the product that we will offer.
In recent times most people have become more educated especially when buying goods and services. Some assumptions of this are that people will seek out product where the information is simple, detailed and easily accessible. Another assumption is that they already have a good amount of insurance.
So in general, this means that we may want to aim our product at more of a specialist section of the insurance industry such as crop insurance instead of the more commonly available health insurance.
When it comes to environmental factors, If global warming were to become more of an issue, then farms may want to invest in 2 types of insurance. The first would be crop insurance to make sure they have a source of money if their crop is destroyed. The second would be extreme weather insurance to protect any other property or belonging damaged by any of the extreme weather.
Environmental pollution which can cause illness and injury to both humans and produce.This is why it would be a good idea for any farmer to buy pollution insurance which covers any property or live damaged or killed as a direct result of pollution.
There are two main segments in the agricultural sector:
Livestock – This is the production of domestic animals such as cattle, sheep, pigs and poultry. These are used for meat and other food production.
Crop Production – This is the production of cultivated plants such as cereals, vegetables and fruit. These are then sold as food products or used in food production.
Both these segments include small scale production and large scale. Some may be commercial, whereas as there are many small holdings that are primarily for personal/local use.
Our product needs to meet the needs of the customer, but at a reasonable price.
On the forum one person said that the quote they received was five times more than their current policy.
In 2012 they expanded their business by launching an environmental liability product, We could consider a product similar to this as there is clearly a market for it.
Take a look in your brochure to find the outcome of the forums that we had completed
Our results show that buildings are the least prioritised asset, we believe this is because they are have the least risk of being damage or need replacing.
Extreme weather conditions had the highest priority. This could be because weather conditions could affect all other aspects.
For example, bad weather can damage crops reducing the amount produce being made, so less can be sold. I can also have an effect of the livestock as some may live outside.
Value vs. Risk – unless it is legally required. Question as to whether it is worth insuring something
Making claims needs to be easy – process needs to be understandable and not stressful.
Small holdings needs to be considered as they require different things from their insurance compared to commercial farms.
This table shows that the highest age percentage is between 55-64 years old and 65+ years old. The lowest percentage is 35 years old.
http://www.ukagriculture.com/statistics/farming_statistics.cfm?strsection=Holder%27s%20Age
Tractor sales are rising (200-240hp sales in the UK increasing by 15% per year)
Do not want to restrict farmers who own expensive tractors and only want limited Insurance. This is the reason for the high max value of the Bronze Premium.
The trailer must be attached to the vehicle at time of claim for it to qualify. This is the same for both the Silver and Gold Packages.
Meaning of the colours and how it represents the company
Explain the difference on why we changed it, Colours and the additional to the slogan
Gotta explain why that’s the logo and the colours chosen for it.
Here we have 3 different colors of the same logo to represent the difference in the type of product they are buying.
Explain what each 3 offer
Packages i.e. forms and certificates
Bronze & Bronze Premium (No trailer, Cover from £25k - £35k)
Silver & Silver Premium (Trailer Incl. Cover from £35k - £45k)
Gold & Gold Premium (Trailer Incl. Cover from £50k - £75k)
Merchandising i.e. pens, keyrings, vouchers for family and friends
Researching websites
E-mailing farmers
http://news.bbc.co.uk/1/hi/uk/4178196.stm
The Campaign to Protect Rural England (CPRE)
Photographic ensures a bigger market as people are able to remember and pass on information if they hear someone needing what we provide
If doesn’t target a specific market there will be a longer process for us attracting customers, it’ll also mean customers will have to find us instead of us directly aiming to a group of people who immediately have interest
Vandalism will cost a lot of money to replace and we are unable to know when or if it’ll be vandalised, same with weather conditions, we are unable to protect our billboard in storms
over 10 million users
Powerful way of demonstrating that we are a price sensitive company
https://www.google.co.uk/search?q=graphs+on+audio+radio+for+advertisements+success&biw=1920&bih=960&tbm=isch&source=lnms&sa=X&ei=MEIQVcOdKc76aPGDgOgE&ved=0CAYQ_AUoAQ#imgdii=_&imgrc=3C553X8XTsSVIM%253A%3BmYpgGfC6wUHJaM%3Bhttp%253A%252F%252Fjustmedia.com%252Fblog%252Fwp-content%252Fuploads%252F2013%252F08%252Fgraph2.png%3Bhttp%253A%252F%252Fjustmedia.com%252Fblog%252F2013%252F08%252Fwhy-radio-is-still-relevant-in-a-digital-age%252F%3B524%3B281
More people using radio as the years go on, therefore attract more people who listen to the radio
The only people that would buy or subscribe to a farming magazine is those who are interested in farming.
OUR CHOSEN ADVERTISMENT
Farming magazine
Why?
Target market
Subscribe
Cost
Eye catching
Direct method of marketing
Appeals to both the young and old population
Cost effective form of targeting our market
Rural Trader Magazines send over 54,000 magazines to 5 rural county's monthly
We have a Facebook account; ties in with our aim of targeting the younger generation of farmers, growing trend of online users.
Direct marketing i.e. keep customer details- what do they like, buying patterns?
Opportunity to have personal relationship with customers
as our product is gerneric.
With tractors sales in the United States reaching 168,324 annually, this provides us with a big opportunity in the US alone
the product that we are selling allows our company to sell international with out moving human capital. We are able to do because of the nature of of how we provide a
for example john deere operates in over 30 countries around the globe. this may lead to explenttal growth.
Our tractor insurance products will allow us to obtain the customer base, which we will be able to sell further farm insurance products
http://www.nationmaster.com/country-info/stats/Agriculture/Tractors
