REDEFINING AGRICULTURAL INPUT SUPPLY Online Auction Chemicals, Fertilizer, Seed, Machine Parts, Animal Health Supply Chain Management Tools/E-commerce Presence

MARKETING PLAN for Ram Marketing Consultants Colorado State University Megan Bruch, Alejandra Engler-Palma, and Jay Parsons August 2001

PROBLEM STATEMENT How do we market ? Revolutionizing Agricultural Input Supply

KEY ALTERNATIVES Focus on XSAg.com –Brokerage services Focus on Nterline Network –Supply Chain Management tools Focus on a fully integrated supply management system –Closely link the two platforms

MARKET IDENTIFICATION XSAg.com –Agricultural retailers Inventory management –Agricultural producers Sales of $100,000 to $500,000 Nterline –Agricultural retailers, distributors, and suppliers trading highly regulated products –Retail stores with greater than $3 million in annual sales

SWOT ANALYSIS XS,Inc. –Strengths –Weaknesses Market –Opportunities –Threats

STRENGTHS Strong, growing, and satisfied customer base >60,000 registered users 95% user satisfaction Partnerships/Alliances

Investment: Banking and Credit: Media/Content: Commodity Trade: Product Data:Logistics: Web Hosting: Technical: Privacy:Security: International: Alliances

WEAKNESSES Lack of service to producer Supply chain friction

EXTERNAL THREATS Significant competition Speed of adoption

OPPORTUNITIES Large growth in online agricultural sales forecasted By 2004, 15% of transactions online ( Forrester Research)

OPPORTUNITIES Slim farm margins Future input technology Supply chain management –~ $500 million in excess crop protection inventory each year ( –SCM systems shown to reduce inventory costs 30-50% (

DECISION Market a fully integrated supply chain management system closely linking the two platforms, XSAg.com and Nterline.

Online Auction Supply Chain Management & e-commerce Revenue & Customer Relations Management Chemicals, Fertilizer, Seed, Machine Parts, Animal Health PRODUCT POSITIONING

PRICING Transaction Fees Nterline Service –Storefront packages Subscription charges Maintenance fees –Advertising

PROMOTION Service Alliances –Agricultural Retailers Association –Vantagepoint Network Cross Promotion

KEY PLANNING ASSUMPTIONS Stable producer expenditures –$50 billion annually 2. Market concentration –75% among three competitors 3. Online sales growth – 12% of total sales

FINANCIAL ANALYSIS Transaction Fee Revenue $50 billion (market size) x 0.12 (online sales ratio) $ 6 billion (industry online sales) x 0.35 (XS,Inc. market share) $ 2.1 billion (XS,Inc. sales) x 0.02 (avg. transaction fee) $42 million (XS, Inc. revenue) x 0.3 (returns from operations) $12.6 million operating margin

MONITORING AND MEASUREMENT Transaction volumes and subscriptions Forecast accuracy Conduct random customer surveys

Online Auction Supply Chain Management & e-commerce Revenue & Customer Relations Management Chemicals, Fertilizer, Seed, Machine Parts, Animal Health