Monsanto—The Launch of Roundup Ready Soybeans

20 Pages Posted: 21 Oct 2008

See all articles by Mark E. Parry

Mark E. Parry

University of Missouri at Kansas City - Department of Organizational Leadership/Marketing

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Abstract

As Monsanto launches Roundup Ready Soybeans in 1995, its executives must choose a target segment and decide how to position the new product and how to support that position through appropriate tactical decisions regarding price, distribution, and communication. The genetically altered soybeans will not die when sprayed with Monsanto's Roundup®, the world's leading herbicide. A multimedia version of this case is also available (UVA-M-0619M).

Excerpt

UVA-M-0619

MONSANTO—THE LAUNCH OF ROUNDUP READY SOYBEANS

On May 25, 1995, Monsanto received regulatory approval to begin selling a soybean seed that was genetically altered to resist the effects of Roundupâ, Monsanto's best-selling herbicide. Two seed companies, Asgrow and Jacob Hartz, were selected to manufacture and distribute these new Roundup Readyâ soybean seeds for the 1996 planting season, but the specific details of Monsanto's own launch plan needed to be finalized. First, how many manufacturers should Monsanto license for production of the new seeds, and what should Monsanto require of those licensees? Second, what premium should farmers pay for the new seeds? Third, what kind of sales force effort should Monsanto exert to support the efforts of Asgrow and Jacob Hartz? Fourth, what kind of communication program was needed to assure widespread adoption of the new seed?

Soybean Farming Practices

According to the most recent Census of Agriculture, in 1992 almost 400,000 farms devoted some acreage to soybeans. Exhibit 1 presents the geographic dispersion and size distribution of soybean farms. Exhibit 2 contains per-acre costs in four different soybean-growing regions: the Northern Plains, the North Central Region, the Southeast, and the Delta.

As Exhibit 3 reveals, in 1994 about half of domestic soybean acreage was cultivated using some form of conservation tillage—farming practices that embraced a variety of techniques designed to limit soil damage caused by wind and rain erosion. Early examples included contour plowing and terracing techniques. More recently, the development of effective herbicides spurred the popularity of no-till techniques, which were “based on the premise that last year's crop residue will retain the precious topsoil that could be washed or blown away due to repeated plowing.” An additional benefit of no-till techniques was the retardation of new weeds in the spring planting season.

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Keywords: new product introduction, segmentation, positioning, launch strategy, channel strategy, genetically-altered food, bioengineering, pricing strategy

Suggested Citation

Parry, Mark E., Monsanto—The Launch of Roundup Ready Soybeans. Darden Case No. UVA-M-0619, Available at SSRN: https://ssrn.com/abstract=910079 or http://dx.doi.org/10.2139/ssrn.910079

Mark E. Parry (Contact Author)

University of Missouri at Kansas City - Department of Organizational Leadership/Marketing ( email )

5110 Cherry St.
Kansas City, MO 64110
United States

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