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VIEW FROM THE TOP
BASF REALIGNS WITH CHANNEL
Editor's Note: Andy Lee, director of business operations for BASF, Research Triangle Park, N.C., oversees all sales and marketing functions in the U.S. crop protection market. Lee has been with BASF and predecessor organizations for more than 20 years, serving in a variety of managerial positions in Europe and the United States.

AM: What factors have led BASF to realign itself with the channel? How have you incorporated this into BASF's structure?

AL: In late 2002, BASF made the strategic decision to more closely align with the channel. This realignment came after a review of our business, as well as conversations with key customers. We built a strategy around four core elements we share with our channel partners: to focus on core competencies; to deliver a differentiated offer; to set reasonable business expectations; and to responsibly manage costs. Our flat organizational structure ensures that we retain a focus on our customers as opposed to internal processes. Each of our core competencies - research and development; manufacturing and production; product registration; marketing; and life cycle management - begins with our strength as the technology leader in crop protection.

AM: How is the company communicating its commitment to channel partners?

AL: Building trust, transparency and a long-term business plan are critical elements of communicating our commitment. As the market consolidates, BASF is demonstrating a clear path forward, based on a long-term vision of the U.S. crop market. We see partnership with the channel as a core part of our future success. We believe this is the best and most efficient way of delivering new technology to the marketplace - including to the ultimate user, the grower.

AM: How is the realignment being incorporated into marketing and communications initiatives? How does the grower also fit into this?

AL: We remain committed to meeting the technology needs of the grower, the ultimate purchaser and user of our products. For example, we offer our channel partners the Retailer Support Tool (RST), a program that provides sales incentives from retailers to their growers based on growers' past purchase behavior and BASF brands stocked by the retailer. The RST supports our channel partners while also offering tangible financial incentives to growers.

AM: What programs or services have been initiated due to BASF's new position?

AL: We have launched two new programs to support our retail partners. The first is the Retailer Support Tool mentioned previously. The second is the B2B Support Tool, a program that rewards retailers for reaching specific sales goals. Unlike traditional, one-size-fits-all programs, the B2B Support Tool rewards good business practices. These two tools effectively took the place of dozens of other programs BASF had in the marketplace prior to 2003. In this way, these tools - even while offering retailers highly customized solutions - have greatly simplified our channel offering. And that has been a welcome development indeed for our customers.

AM: Has your mix of advertising and PR dollars changed as you have begun focusing more on the retailer/distributor and less on the grower?

AL: As in the past, we carefully analyze the needs of the marketplace, especially the channel, and approach our advertising and public relations efforts accordingly. While shifts occur from year to year as needs dictate, we are consistent in choosing communications executions that support our channel partners and reinforce the value of the technology we deliver to the market.

AM: What benefits do you expect from the channel-focused, business-to-business approach?

AL: The biggest beneficiaries of our channel-focused strategy are the growers who use our products. Our strategy allows us to deliver technology in the most efficient way possible, while providing valuable support to the retailers who serve as a grower's most trusted adviser.

AM: After several years of consolidation in the ag chem industry, how has BASF managed to pull through and keep growing in challenging times?

AL: Technology is the linchpin to our current and future success. In the past year alone, BASF has launched seven new products in the U.S. crop market. In 2003, more than half of our sales were derived from products introduced in the past five years. This year, we've already introduced Prowl H2O herbicide, and we're anticipating a soybean rust registration in 2004 for Headline fungicide. And, as our acquisition of Regent insecticide in 2003 demonstrates, we are committed to strategic acquisitions that enhance our product offering to the channel. Our position as a technology leader strengthens our channel partners and ultimately benefits the U.S. grower. AM


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