Calgene Inc.: Marketing

1. Do a traditional SWOT analysis (strengths, weaknesses, opportunities, and threats) of Calgene's situation in the spring of 1995.

Strengths

Ð'* R&D abilities in bioengineering technology

Ð'* Competitive advantages in bioengineered product licenses and regulatory agency approval to market tomato (and other bioengineered products)

Ð'* Competitive advantages in already test marketing "MacGregor's Tomatoes"

Ð'* Competitive advantage of being "closer" to mass marketing its tomato

Ð'* Success of industrial and edible oils and cotton seed divisions

Ð'* Bioengineering licensing agreements

Ð'* New "soft picking, packing, and shipping" methods

Ð'* Operating plants with new "soft" picking, packing, and shipping systems

Weaknesses

Ð'* High costs associated with operating "soft" p/p/s systems

Ð'* Management inexperience with "commercializing" products developed by R&D

Ð'* Bioengineering technology base may already be outdated

Ð'* Questionable knowledge base about acceptability of bioengineered products

Ð'* Question of whether "taste tests" of MacGregor's Tomato ever happened

Ð'* Still unproven ability to mass market a consumer product

Ð'* No established relationships with "resellers" in fresh tomato market

Threats

Ð'* Customer acceptance or lack of acceptance of bioengineered fresh consumable products

Ð'* High operating costs associated with "soft" p/p/s process may require "premium" pricing at point of sale

Ð'* Perceived advantages of "MacGregor's Tomato" does not occur at either reseller or consumer level

Ð'* Competitor tomato "Endless Summer" based on new technology may have superior product features

Ð'* Threatened boycott of bioengineered products like "Chefs" example

Opportunities

Ð'* First into new markets generally establish lion's share of market

Ð'* Size of market for fresh tomatoes is huge; even a small market share could mean large revenues for Calgene

Ð'* Loads of theoretical opportunities for additional bioengineered fresh produceÐ'--i.e., corn, etc.

Ð'* Two other divisions seem to be already successful or about to be and thus represent an opportunity for future growth

Ð'* Business-to-business product marketing represent fewer barriers to entry and Calgene has already established market presence via other two divisions in that market

2. What is your assessment of the product development procedures used Calgene to develop the MacGregor FlavrSavr tomato? Were they effective, or could they be improved?

Calgene's new product development process seems to have been less than adequate in that the "bruising" of MacGregor's tomatoes in the first large-scale attempt to market them should have been at least foreseen, if not known. The very late in the process discovery of bruising led to a crisis mode of developing a solution that turned out to be a very high cost processÐ'--so high in cost that it may require premium pricing for MacGregor's Tomatoes. There is also no specific evidence that "taste testing" by the consuming public of the FlavrSavr tomato ever actually occurred. Note that the instructor should at this point refer the students to the appropriate section of the textbook being used in the course for a discussion of the recognized appropriate new product development process.

3. What is your assessment of Calgene's knowledge about customer acceptance of bioengineered foods and specifically the FlavrSavr tomato? Do you think there has been an oversight, or do you agree that Calgene management has effectively considered market demand for the product?

There is little evidence to indicate that Calgene used any form of scientific research to ascertain the likelihood of consumers accepting either bioengineered foods in general or MacGregor's Tomatoes specifically. This would be an oversight of major consequence if Calgene did not perform any scientifically based and valid research into these two aspects. It would be especially evident that management was inept if valid "taste tests" were never performed.

4. Diagram the consumer purchasing process you believe is used by the average household when purchasing fresh tomatoes. List what you believe are the evaluative criteria applied when deciding which alternative fresh tomatoes to purchase.

The usual diagram that will be mentioned is as follows:

Recognition of need = Alternatives search = Evaluation of alternatives = Purchase act = Post-purchase evaluation

The evaluative criteria are likely to be as follows:

Ð'* Appearance (color, shape, etc.)

Ð'* Perceived