Business SL: Internal Assessment

To what extent the improvements regarding communication and

closeness that Yarecuador applies, creates a positive impact on the

customers?

Word Count: 1500

Session: November 2019
Code: hlp955
Table of Contents

Declaration of authenticity 3

Introduction 4

Findings and analysis 5-12

Tool 1: Fishbone Diagram 5-7

Tool 2: Force Field Analysis 8-11

Tool 3: Perception Map 12-13

Conclusion 14

References 15

Supporting Documents 16-21

Yarecuador Brand Market Survey 2018 16

Yarecuador Net Promoter Score, May 2018 17

Yarecuador Net Promoter Score, November 2018 18

Vistazo’s article, giving the Top businesses in 2018 19

Interview with the agricultural engineer/marketing manager 20-21

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 DECLARATION OF AUTHENCITITY

I declared that this written commentary is my original work, elaborated and

utilized especially to fulfill the purposes and objectives of this subject, and has

not been previously submitted to any other institution for other purposes. I also

declare that the publications cited in this work have been personally consulted.

Date: April 22, 2019

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Introduction:

Yara is a world’s leading fertilizer company and a provider of

environmental solutions, founded in 1905 in Norway. They also provide crop

nutrition programs and technological methods to elevate the yield of the crop.

Yara arrived to Ecuador, in Guayaquil on 2005, and was founded like

Yarecuador Cia. Ltda.

With the high demand in products, Yara Ecuador started to integrate the

existing portfolio to the Ecuadorian market. Since 2018, their main problem had

been failures in logistics, customer service, communication and closeness, due

to the single delivery point that they have in the country. Thus, in that same

year, the business started to applied solutions to improve their problems with

customers, as cellphones calls, mails and the introduction of apps for the

technical assistance of the customers. So the question in which this work would

focus is: To what extent the improvements communication and closeness that

Yara Ecuador have applied in the last years have created a positive impact on

the customers? To analyze this problem five supporting documents will be

evaluated: an interview with Xavier Hurtado, marketing manager, Net Promoter

Score of May and November of 2018, a Brand Market Survey 2018 and a

magazine article talking about the top businesses in Ecuador. The business

tools and theories to be used to analyze this problems are: a fishbone diagram,

force field analysis, perception map and one of marketing’s four P’s, promotion.

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Findings and analysis:

Tool #1: Fishbone Diagram

Image 1.1 – Yarecuador Cia. Ltda Fishbone Diagram for the year 2018,

analyzing the causes that lead to the failures in communication and closeness

with customers through time.

In both the Net Promoter Score of May and November of 2018, Yarecuador

have the same conclusions: the business need to work in marketing and human

resources area, as the main complain of the customers is the lack of connection

between seller-buyer.

Despite the fact that Yarecuador have documents such as the NPS and the

Brand Market Survey, to acknowledge their customers desires and concerns, a

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fishbone diagram was made to summarize and target the specific reasons why

the business have failures in logistics, customer service, communication and

closeness with their customers. It was divided in four categories, being them the

causes of the problem: Management, which according to Xavier Hurtado, is

drawback, as managers of Yarecuador have to consult with the leaders in

Norway, where is the headquarters of the CEO and the Board of Directors.

Also, managers in Ecuador have to follow a Yara International protocol,

reducing their power of control, making them unable to respond faster when the

business faced problems that need immediate assistance, as having problems

with the company’s service. Thus Manpower, give disadvantages to

Yarecuador, as they have few employees for them to divide into working in the

office and assisting farmers with the fertilizers, giving another difficulty to the

business, as the employees communicate only with the customers, no with the

farmers, making them complain about the communication of Yarecuador, as

they do not received the attention that they need or want. Also, the business’

Methods to turn over their products to their customers is one of the causes of

the failures in communication and closeness, as the they have just one delivery

point, making them have delayed deliveries, which make them be behind their

schedule, disturbing the farmers’ time, making them complain about

Yarecuador’s services. Moreover, Materials is the last category that cause the

problems in logistics, as the business have a lack of transportation, that

according to Hurtado, when there is a high demand in their products, it takes

time to arrive on time to its destiny. Plus, the apps that they use, as a solution to

improve their communication with the customers do not satisfied them, as the

farm’s owners and workers, demand for an assistance in person.

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 By analyzing the results of the fishbone diagram, it can be conclude that due

to the international condition, Yarecuador do not have the enough power to take

big decisions without the intervention of a third. And also according to the

interview made to Hurtado, one of the key sources of the problems is the lack of

employees, due to the difficulty to change their interaction with customers,

because they outnumber the few staff in the office, so what Yarecuador tried to

do, is give technical assistance through phone calls, mails and apps, but they

still received complains about the logistics of the business. Thus, a main issue

highlight in the interview, was the lack of delivery points: there is just one in

Guayaquil, and this creates a problem because there is a high demand in

products, but few ways to satisfied it.

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Tool #2 – Force Field Analysis

Image 1.2 – Force Field Analysis of Yarecuador, recommending a change with

its possible driving and restraining forces.

The H.R and the Marketing Managers of Yarecuador analyzed the results

of the two Net Promoter Score make in 2018, and realized that at the beginning

of the year the most followed recommendation of distributers and farmers was

the business’ prices of products, but the managers of Yarecuador could do little

about these, as they do not have the power to change this factors, because the

prices are established in the headquarters in Norway. Months later, the

constrain change curse, as at May of 2018 there was a 18.18% of distributers

calling for improvements in the technical assistance and field accompaniment,

while there was a 4.55% of farmers calling for the same improvement, and the

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main problem being the prices of Yarecuador with a 50% of farmers, and

36.36% of distributers. Nonetheless, in the NPS of November of 2018, the

critics of the business’ price decrease to a 20% by distributers and 25% by

farmers, in the other hand, the main problem that the customers found was in

customer support, with 40% by distributers, and logistics with 40% by

distributers and 25% by farmers.

To improve their constrains of communication, closeness and logistics,

Yarecuador had try different ways to satisfied the customers, such as via apps

like TANK and CHECK IT, or via queries, mails and cellphone conversations.

But due to the continuity of suggestions by customers to improve their logistics

and technical support, stated in the NPS’ of 2018, the managers of the business

realized that this implementations are not feasible. So as an alternative of the

already innovations taken, in the above Force Field Analysis, is stated a

possible change that Yarecuador could make to improve their problems in

logistics, communication and closeness: to increase their delivery points in

Ecuador. There are four major driving forces that the business would have to

take in consideration when deciding if this change is feasible. The first one is

more places for farmers to meet Yarecuador’s employees for technical

assistance, as they only communicate with the owners, managers or distributor

of the farms, but no with the farmers, because there are too many of them in

comparison on the few employees in the office to help. This is categorized as a

5 in the force field analysis, because is the main advantage as is the most claim

issue that the distributors and farmers have when taking queries, also a change

like this was thinking of to give more close places for an easier communication

between seller and buyer. Then, there are two driving forces with a rank of 3, on

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time deliveries and increased output, because this are benefits that Yarecuador

know that they would gain, but the purpose of the innovation was not

considered for this causes, but to decreased the logistics and communication

problems. A plus, that came with the change if Yarecuador decide to take it, is

the improvement in the business competitiveness, rank as a 1, as was a

favorable coincidence, giving Agripac more competition as their major rival,

Yarecuador, have reached their number of delivery points, so Agripac would no

longer a the ace card of more dispatch places in Ecuador, than Yara. As a

result, the driving forces give a total of 13.

In the other hand, there are four restraining forces identify with this

innovation. The ones with most rank: 4, are construction costs, as a base

budget for one delivery point is $ 375000.00, and the total fees is $12550.00,

and if Yarecuador wants to improve their services, they would have to construct

approximately a 100 more, as Agripac have 160 delivery points around Ecuador

and if Yarecuador wants to be as big as its competitor they would have to

expend in a total fee of $12550.000.00; the other restraining force with rank of

4, is the new staff costs, because according to Xavier Hurtado, there have to be

minimum 5 employees for one delivery point, which makes 500 new employees,

and only with the minimum salary, the new staff cost per month would be

$187.500. The other two restraining forces have a rank of 1, which are: the new

transportation, because they are a consumer durable that their expenditure

would be nothing, compare to all the revenues that would give to Yarecuador;

and staff training costs would only generate profits, as one period of training

would give an efficient, productive and effective service, that would create a

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good environment for work, employees giving a good performance. Giving the

restraining forces a total

Considering the total scores of the force field analysis, it can be

conclude, that the change of increasing the delivery points in Ecuador would

give a positive impact in Yarecuador and would give more advantages than

drawbacks, that make the business capable of taking a big step to improve the

logistics, closeness and communication with the customers, giving them

another alternative for progress.

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Tool #3: Perception Map

Image 3.1- Perception Map, created based on the records of the Brand Market

Survey of 2018 (Yarecuador uses as a market strategy).

The main constrain that Yarecuador struggle with, is the lack of delivery

points. However, based in the Brand Market Survey, a perception map have

been made, where the growers and sellers of the products answer some

questions, in which they said that the only issue of Yarecuador is the lack of

communication with them, because talked with the owners and managers of

stores that buy their product, but they do not do it with the farmers, the ones

that actually use their fertilizers in the land.

Furthermore, according to Hurtado the main threat of Yarecuador is the

competitor, Agripac, which have a logistic advantage, because they have 160

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delivery points at national level, so the farmers could reach them very easily,

while Yarecuador only have one: Guayaquil. Furthermore, Agripac is one of the

top 500 businesses in Ecuador, according to the 2018 magazine’s article of

Vistazo, they are in the 44th place of all Ecuador’s industries, while Yarecuador

does not qualifies to that rank.

Nevertheless, Yarecuador is part of the 2018 magazine’s article of

Vistazo, that enlist the top 100 businesses that grew in revenues in that year; in

which the business, take the second place. Moreover, in the Brand Market

Survey, the growers of the crops, gave higher rates to Yara’s products than

those of Agripac.

Additionally, according to the NPS of May and November of 2018, the

only problem that the farmers witness is the lack of support by the offices when

they ask for technical assistance, which, according to Hurtado, is a very difficult

thing to do, because the recommendations change according to the place, floor,

texture and location and these demands a lot of staff. As well, Hurtado said that

the business would have a better liquidity, if they could have other alternatives

to dispatch their fertilizers and communicate to the farmers, growers and

sellers.

Yarecuador had already talked about all this constrains, with the NPS,

the Brand Market Survey, and all the documents and strategies that they use,

managers had already target the communication issues and the lack of

technical advice, that’s why they have tried different things such as, via apps

like TANK and CHECK IT, or via queries, mails and cellphone conversations.

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 Therefore, the business need to work in the promotion of their products,

making one of their marketing objectives, to have a stronger relationship with

their customers and consumers, to satisfied all their desires, thus, the brand

loyalty will increase.

Conclusion:

In conclusion, the improvements that Yarecuador have applied in the last

years, such as using apps like TANK and CHECK IT, cellphones conversations

and mails, have not created a positive impact on the customers, because in the

queries and interviews, the customer and consumer complaint about the

logistics of the business, saying that they do not communicate as fluent as they

would want and that they do not receive the needed technical assistance when

buying Yara’s products. Prove of the unsatisfied farmers are the NPS and the

Brand Market Survey, because more than the customers make the same

statement through the year 2018: the communication and closeness is a key

factor to give a good service, and the business is missing this part of the job.

Yarecuador managers need to strengthen the logistic area of the business by

creating new forms to talk to customers and having more delivery points in

which the fertilizers could be dispatch and the farmers could come and ask

questions about the products.

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References Bibliography:

Agripac se expande e inaugura nuevo local en tumbes. (17, February, 2019). In

Ecuador221.com.ec. Retrieved on May 20th, 2019, from

http://ecuador221.com.ec/agripac-se-expande-e-inaugura-nuevo-local-

en-tumbes/

Cevallos, Y. (November, 2017). In Dspace.espoch.edu.ec. Retrieved on April

23th, 2019, from

http://dspace.espoch.edu.ec/bitstream/123456789/7827/1/20T00941.PD

500 mayores empresas del ecuador. (21, September, 2018). In Vistazo.com.

Retrieved on January 12th, 2019, from

https://www.vistazo.com/proyectos-especiales/500-empresas-2018

100 empresas que más crecieron en ingresos. (30, November, 2018). In

Vistazo.com. Retrieved on January 16th, 2019, from

https://www.vistazo.com/seccion/edicion-impresa/100-empresas-que-

mas-crecieron-en-ingresos-0

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 Yara en Ecuador. (n.d). In Yara.com.ec. Retrieved on April 15th, 2019, from

https://www.yara.com.ec/acerca-de-yara/yara-ecuador/

Yara international asa. (24, April, 2019). In Msn.com. Retrieved on April 23th,

2019, from https://www.msn.com/es-pe/dinero/stockdetails/finanzas/otc-

yariy/fi-a32kbh

Tabla de Aranceles. (n.d.). In Cae.org.ec. Retrieved on May 20th, 2019, from

Appendices:

Supporting document #1: Yarecuador’s Brand Market Survey 2018

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Supporting document #2: NPS May 2018

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Supporting document #3: NPS November 2018

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Supporting Document #4: Magazine Vistazo article, of the top business of

Ecuador, 2018

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Supporting document #5: Interview with Xavier Hurtado

To: Xavier Hurtado, marketing manager of Yarecuador.

Date: January 16th, 2019

How much influence does Yarecuador have, to change their interaction

with the customers?

First of all, it’s very difficult, because there are a lot of customers in comparison

to the employees at the office. We have tried to make a change of our

communication with customers, through social networks, emails, apps such as

TANK and CHECK IT, and queries. However, all of our decisions have to enter

in the international protocol.

How is the interaction with customers, or with how much frequency does

the staff communicate with them?

With direct customers (120), that are the managers or owners of a farm, almost

every week. However with the farmers, not at all. We do not sell directly to the

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farmers (consumers), the customers have to go to our delivery place in

Guayaquil and pick up their purchase.

For you, as marketing manager, what is the main problem that Yarecuador

have?

One of our limitation is the logistics: There is only one delivery point in Ecuador,

one in Guayaquil, so when there is high demand in their products it is very

difficult for us to deliver all of it at time. So the delivery is very slow, and we wish

to have more points.

Also, the technical assistance: sometimes the farmers want a Yara employee

24/7, supporting and helping them, but it is difficult due to the time and costs

like transportation or the gap in the work at the office that the employee is living

by going to a farm.

Does this problem affect Yarecuador revenues?

It does not affect in a quantitative way, but if we talk about qualitative terms, the

staff is affect because, as much of personnel that the business have, they are

not sufficient, and at the end of the day they are exhausted.

Does the business have any competitor threat?

Yes, Agripac has a logistic advantage, because they have 160 delivery points at

national level, so the farmers could reach them very easily, and they also have

a minimum of 5 employees in each delivery point so the customers would not

make them wait for assistance.

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