Case Study, 8 – 2 Easy to spread
Introduction
Using information provided in The Marketing Pathfinder textbook, research carried out via an internet search and a formal interview with Hatuma Lime marketing manager (see
Appendix 1 and 2) this assignment will analysis Case 8 – 2 Easy to spread, including answering the questions below.
The Purchasing Decision
1. What are factors that a farmer in Taranaki will take into account before purchasing
Hatuma Dicalcic Phosphate?
Marton Site Logistics
2. Outline the logistic decisions that Hatuma Lime needs to make to set up the Marton site? Building Brand Equity
3. What does management need to do to build the Hatuma Dicalcic Phosphate brand equity? 1

The Purchasing Decision
Price Point
The farm paddock can be likened to the engine room of the farm, opting not to fertilise for more than one or two years can cause significant damage to a paddock. In 2009 rising cost of fertiliser and decreasing farm income forced farmers to compare the benefit of fertilising paddocks or reducing stock numbers to maintain (Smith, 2009). Phosphate consumption has been steady in recent years at around 140,000 tonnes, indicating good sales for fertiliser companies (Fertiliser Matters, 2015).
Hatuma Dicalcic Phosphate marketing manager Aaron Topp feels that high analysis fertilisers have out priced themselves. Dicalcic phosphate (DP) uses 50% less phosphate and is therefor cheaper to produce and purchase (personal communication, October 8, 2015).
When comparing the cost of fertilising and the loss in production caused by not fertilising, the location of the farm will be a crucial consideration. For example, farmers in Taranaki will receive more annual rainfall when compared to farmers in hill country Hawkes Bay (Smith,
2009). This will result in a more healthy pasture on a Taranaki property should the farmer decide it is more cost effective not to fertilise.

Environmental Pressure
Farmers are coming under increasing environmental pressure (personal communication,
October 8, 2015). Fertiliser “application in new Zealand rocketed by 113% between 1986 and 2002 to 4.3 billion tonnes” (Greenpeace, 2009, p.5). “According to National Institute of
Water and Atmospheric Research figures, 90% of lowland rivers are polluted by farming, either with animal effluent or fertiliser runoff” (Greenpeace, 2009, p.5). When comparing
DP with other fertilisers, farmers would become aware that DP uses less phosphate and is non water soluble resulting in a much smaller environmental impact. Examples of the environmental benefits provided by using DP can be seen in Appendix 3.

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Marton Site Logistics
Gateway to Western Provinces
Choosing the site at Marton would have involved thoroughly examining business needs and objectives with the aim of selecting the best path to market. Hatuma Lime was attempting to gain market share in the Rangitikei, Manawatu and Taranaki regions. Marton is located in a position that allows it to be the gateway these regions (personal communication, October
8, 2015). Effective “distribution channels enable goods to be brought to consumers and not the other way around” (Stewart & Saren, 2014, p.175).

Railroad Access in the 1980’s
Whilst being interviewed Aaron Topp described how the Central Hawkes Bay and Marton sites are both located alongside the railway line. This allowed easy and cost effective transportation of bulk lime between Central Hawkes bay and Marton. In the 1980s this amounted to thousands of tonnes per week. (personal communication, October 8, 2015).

Reassessed Logistical Decisions
In recent years Kiwirail have made it ineffective for rail to be used as a goods transportation channel. This has forced Hatuma DP to look for alternatives to service areas outside of
Hawkes Bay. Owning the DP IP has allowed Hatuma to form partnerships with quarries around the north island. The partnered quarries mine the lime and produce DP, whilst
Hatuma have kept all sales. This has allowed easy access to customers outside Hawkes Bay without having to tackle the complicated logistical issues of transporting large amounts of fertiliser (personal communication, October 8, 2015).

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Building Brand Equity
To create strong brand equity, management needs to build the DP brand so it can connect with consumers and effectively communicate its unique product qualities in a way that will leave a positive impression on the consumer. According the Marketing Manager at Hatuma this is achieved by four main methods.

Farmer Testimonials
Hatuma lets farmers tell their story through testimonials. A farmer explaining how DP has changed his life in double page print, published in a national farming publication is a very powerful tool (personal communication, 8 October, 2015).

The Farmers’ Grapevine
Hatuma have established that farmers talk over the fence, and have nurtured this in their brand. Farmers often live and work in isolation. When they socialise they discuss and question why one farm is greener than another or why one particular farmer has farmed lambs with less dags. Hatuma have tried to produce a good quality product that results in the answer to these questions always being DP (personal communication, 8 October, 2015).

Considerate of Environment
Hatuma has fifty years of experience developing a fertiliser that leaves a small environmental footprint and believe that the utopia of fertiliser production is to provide a product that will cut back on nutrients whilst still maintaining productivity and stay within environmental compliance. Hatuma has spent ten years and over one million dollars proving that farmers can apply less than half the nutrients and maintain or better productivity
(personal communication, October 8, 2015). This is allowing Hatuma to be a first mover.

Strategic Partnerships
Forming strategic partnerships with much bigger fertiliser producers will allow Hatuma to grow the
Dicalcic Phosphate brand. According to Michael Hunter (2009) Ballance is New Zealand’s biggest fertiliser manufacturer and distributor. Hatuma DP have recently formed a pioneering partnership with Ballance. Brought on by the“growing demand for low-input fertiliser” (Hatuma, 2015), The partnership will allow “Ballance and Hatuma to begin nation-wide production of Hatuma DP”
(Hatuma,2015).

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SWOT Analysis
The SWOT analysis below summarises the points made above and looks at possible future opportunities. 5

INTERNAL

Strengths

Weaknesses

 Own Dicalcic Phosphate IP.
 Environmentally friendly product.
 Cheap in comparison to other

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fertilisers.
 First to market with product of this type.
 60 years of business experience.
 Farmers prepared to back the product and are happy to provide testimonials. 

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Opportunities
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Small scale compared to other produces. Limited ability to increase production. The size and structure of a small family owned business could make it hard to comply with new regulation. Threats
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Possibility of partnering with larger and well known fertiliser producers in New Zealand.
Possibility of partnering with foreign quarries to gain market share overseas.
Increasing agriculture production levels in New Zealand.
Risk of world food shortage could make fertilising a must.
Green movement worldwide creating demand for environmentally friendly products. Possibility of technological advances creating opportunities.

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External

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Partnerships with large companies could result in loss of business identity.
Tightening environmental laws
Could restrict fertiliser sales.
New technology coming to market. Possibility of difficulty importing
Phosphate due global influences.
Volumes sold are influenced by global economies.
Volumes sold are influenced by weather. Foreign businesses buying entire
New Zealand farming supply chain. Environmental Advertising, Appendix 3:

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Reference List
Greenpeace briefing. (2009). The Changing Face of NZ Farming Why Boom and Bust is not
Working. Retrieved from http://www.greenpeace.org/new-zealand/Global/new-zealand/report/2009/6/new-zealandfarming-and-climat.pdf Hunter, M (2011). Biggest fertiliser firm expands. Retrieved from http://www.nzherald.co.nz/bay-of-plentytimes/business/news/article.cfm?c_id=1503347&objectid=11028526 Hatuma Dicalcic Phosphate. (2015). Ballance and Hatuma Partnership a win-win for NZ farmers. Retrieved from http://www.hatumadp.co.nz/news/article/index.htm?id=8 Mladenov, P. (2015) History of phosphorus use in New Zealand a 150 year story. (67) 3-4.
Retrieved from http://www.fertiliser.org.nz/Site/resource_center/newsletter_fertiliser_matters/default.aspx Stewart, D. & Saren, M. (2014). The Marketing Pathfinder. Chichester, England: John Wiley
& Sons.
Smith, N. (2009). Will fertiliser scarcity harm farm economy. Retrieved from http://www.stuff.co.nz/business/blogs/nick-smith/2513708/Will-fertiliser-scarcity-harm-farmeconomy