Mastering Value Pricing: A Quick Real-World Value Pricing Exercise in Crop Protection in the US Market - Fungicides in Corn

Perceived value matrix

Introduction

As I began outlining my next article on technical product positioning, I found myself immersed in the rich details of an illustrative story—something that my regular readers will recognize as a hallmark of my process. This attention to detail takes time and deliberate focus. In the course of my research, I revisited "The Crop Protection Network" (CPN), a valuable resource for anyone interested in agricultural science and global crop protection. As always, I found their content to be exceptional and widely accessible—a treasure trove of knowledge for professionals and enthusiasts alike.

While drafting a new, hypothetical product concept for the article, I began diving into one of the most significant challenges faced by row crop growers: estimated yield losses by bushel. This exploration led me to focus on a crucial, real-world topic—value pricing—which forms the foundation of this brief but powerful piece.

But before we proceed, I recommend you first check out my previous article on pricing products in the chemical industry (link to the article). It covers the essential principles that will serve as the backbone for what follows.

The Task at Hand: Building a Value Pricing Model

For this article, I will walk you through the process of building a value pricing calculation. Using open-source data from CPN, coupled with insights from phone conversations with key industry contacts, we’ll estimate current farm gate prices and uncover valuable insights for growers.

Methodology Overview - Key Steps

1. Identify the Crop and Market Segment: I’ve chosen to focus on corn and its prevalent foliar diseases.

2. Understand the Growers’ Pain Points: I made the assumption that estimated annual yield losses are a strong indicator of the key challenges (or pain points) for growers in the U.S. within this market segment.

3. Select the Products for Analysis: My research zeroed in on products targeting diseases such as Anthracnose Leaf Blight, Common Rust, Eyespot, Gray Leaf Spot, Northern Corn Leaf Blight, Southern Rust, and Tar Spot. (You can find more detailed descriptions of these diseases here).

4. Standardize the Data: I compiled the relevant data into a table, creating a clear framework for developing a value map.

5. Gather Pricing Information: Through conversations with trusted industry contacts, including distributors, I obtained current farm gate prices. If you’ve worked in this industry, you know that these insights are accessible to anyone familiar with the U.S. market.

6. Construct the Value Map: With the data in hand, I plotted the information to create a value map, helping visualize how different products compare in terms of perceived value (cost per acre) and perceived benefits (the sum of Key Buying Factors or True Selling Points).

7. Analyze the Value Map and Draw Recommendations: The final step was to analyze the map and derive actionable recommendations based on the insights uncovered.

Step 1: Defining the Market

This exercise was straightforward, as I’m writing an article on technical product positioning with a focus on corn and foliar diseases. I kept the setup simple, allowing us to explore how value pricing can be effectively applied in a real-world scenario.

Step 2: Identifying Key Buying Factors

To determine what matters most to farmers, I turned to several insightful articles published by the Crop Protection Network (CPN) (article link). Based on this research, I established that the Key Buying Factors—those factors that influence purchase decisions—are closely aligned with the most significant pain points for farmers dealing with foliar diseases. I then calculated the relative importance of these factors.

Key Buying Factors (KBF) Table

Step 3: Product Selection for Analysis

Next, I selected a range of products that would serve as the basis for this analysis. The chosen products are widely used in the market and offer various levels of efficacy against common foliar diseases.

Product Table

Step 4: Data Standardization

Here’s where the tedious work comes in: standardizing the data. While this may seem monotonous, it is crucial to have clean and consistent data for an accurate value map. If you have access to a skilled data analyst, I highly recommend collaborating with them at this stage.

Perceived Value Matrix

Step 5: Pricing Assumptions and Insights

In this step, I reached out to a few industry contacts and made some educated assumptions to estimate the current farm gate prices. These include accounting for annual price increase requirements by R&D companies, especially for fungicides containing patented molecules like SDHIs. Such assumptions are vital in constructing a realistic pricing model.

Pricing and Market Assumptions

Step 6: Building and Analyzing the Value Map

Now comes the exciting part—building the value map. The key buying factors we've identified, which correspond to farmers' pain points, are critical in determining the value positioning of each product. This is not just a pricing tool but also a powerful asset in communicating value during a marketing campaign.

Value Map

Step 7: Product Analysis and Recommendations

Let’s dive into the analysis of specific products based on the value map:

• Headline AMP: This product ranks sixth in perceived benefits among its competitors but is priced relatively low (third-lowest). It falls within the fair-price line, meaning it's currently undervalued and is likely giving away more value than it captures.

• Revytek and Veltyma: While both products offer average perceived benefits compared to their competitors, they are among the most expensive options on the market. Positioned outside the fair-price line, they face a critical challenge: either the commercial team will need to lower prices to remain competitive, or the products risk losing market share over time. However, based on insights from the Crop Protection Network (CPN), these products are currently the top choices for combating Tar Spot, a major concern for corn growers. This unique effectiveness allows them to command a premium price, extracting maximum value despite their higher costs. In fact, their superior performance against Tar Spot could position them as the market standard for managing this key pain point in fungicide treatments.

• Delaro Complete: This product stands out with the highest perceived benefits and value among its competitors. Falling within the fair-price line, its price is perfectly aligned with the value it delivers—an excellent example of a well-executed pricing strategy.

• Miravis Neo, Trivapro, and Headline AMP: These products offer moderate perceived benefits but fall into the "worse value" quadrant. The analysis is somewhat biased toward Tar Spot, but the perceived value will vary depending on the specific disease pressures in different geographic locations across the U.S.

• Approach: This product ranks the lowest in perceived benefits, with the second-lowest price among competitors. Positioned within the fair-price line, its pricing is acceptable, but it may not deliver significant value differentiation.

• Approach Prima: Offering the second-lowest perceived benefits, this product is priced the lowest in terms of cost per acre. It falls outside the fair-price line, indicating that it is likely underpriced—potentially part of an aggressive market penetration strategy aimed at increasing share.

Conclusion

The key takeaway from this analysis is that pricing must be aligned with the perceived value your product delivers to the market. Underpriced products may be giving away value, while those overpriced ones risk losing competitiveness. By understanding the value that your product provides and where it stands in the competitive landscape, you can make smarter pricing decisions that drive both sales and profitability.