Ceres

Question #1: What have been the key factors in the company’s growth?

The growth of the Ceres Company has shown impressive growth, increasing revenues by over 70% in just five years, while growing profits by over 25%. (See exhibits 2,3&4). O’Connell & Wydown has proposed marketing initiatives for such as, expanding the GetCeresTM marketing program, adding new products to the organic seedlings line, and pursuing a pilot program with Menards, a major do-it-yourself home center.

Key Factors:

1. -Wydown sought to accelerate into the retail channel and recognized that his management team lacked the right experience. At the end of 2002, he hired Annette O’Connell as VP of Marketing.

2. - By early 2004 the company had added a new farm and distribution center in Lancaster County, Pennsylvania. The company expanded its sales force and added many independent sales representatives. The sales force concentrated mainly on training dealers on how to effectively sell Ceres organic seeds, seedlings, and live plants. This strategy led to revenue increases through 2004, with growth coming largely from new retail accounts.

3-. In 2005 Ceres started up the: GetCeresTM Program (see Exhibit 6). The company provided discounting and payment terms. New and existing dealers received a 15% discount for a minimum stock order. They as well received 120-day payment terms. The GetCeresTM program was based on market research and informal feedback gathered from the sales force. With this program the company had to become more aggressive to gain share and strengthen its competitive position.

4-. - GetCeresTM accounted for approximately 25% of total sales in 2005, and 35% in 2006. Ceres had a $4.5 million revolving credit facility with a commercial bank. December 2006, Ceres carried no balance on this revolver. The purpose of the revolver was to cover seasonal funding needs in the spring and summer months, and since 2001 the maximum credit line had been used at some point each year....