La Ferme Martinette – E-Business Case Study

Publication Date: June 2004

• Introduction
• Context and Favourable Conditions
• Development Phases
• Strategic Scope
• Key Success Factors
• Barriers to Adoption
• Creating Value
• Performance Measurements
• Future Prospects
• Implications for E-business Development
• Technical Notes on the Business

Introduction

La Ferme Martinette operates in the farm tourism sector and promotes itself using the Internet. The Internet project has been carried out over a period of five years. In the course of the site development process, a number of experiments were conducted.

This case is noteworthy because virtually all of the promotion has been carried out by means of the Web site and the Internet. La Presse has ranked La Ferme Martinette among Quebec's top 10 sugarhouses. It is the only sugarhouse to receive AAA accreditation from Agriculture Canada for traceability and salubrity in the agri-food sector. It has also obtained a food-packaging permit. Moreover, it is a member of the Club Agro-Export du Québec and has concluded a partnership with Estrie-International. Lise Nadeau and her husband own La Ferme Martinette.

La Ferme Martinette's operations centre on:

• activities in the sugarhouse;
• maple products; and
• accommodation.

La Ferme Martinette is typical in that it comprises 111 hectares and has extensive livestock, including dairy cattle, thoroughbred horses, sheep, goats, rabbits, and poultry, a source of delight for visitors.

Each year, it offers a wide range of high-end maple-based products in its own shop and on its Web site.

The farm has an attractive reception room that can accommodate 120 people for traditional sugarhouse meals and fine regional cuisine.

It offers Bed and Breakfast (B&B)-style accommodation in its four country inn units and an independent self-catering apartment.

Context and Favourable Conditions

1. For three generations, the new owners, the Martineau family, have been involved in maple growing rather than silviculture (forestry), a plus for the operation.
   
   
2. La Ferme Martinette has benefited from strong demand from city residents for short-stay excursions.
   
   

Development Phases

1. The first phase was the development of an information site.
   
   
2. The second phase was the development of a promotional site.
   
   
3. The third phase, now under way, consists of changing the site into a transactional site. Despite significant development of the information site, La Ferme Martinette notes that its volume of transactions is small. This may be attributable to several factors, including problems stemming from online buying. The possibility of making online purchases does not appear to be sufficiently obvious when a customer visits the site.
   
   

Strategic Scope

1. Scope of Functionalities and Services

One of the site's objectives is to promote the sugarhouse, activities related to the maple grove, accommodation and the sale of maple-based products. The site communicates tangibly the La Ferme Martinette experience. Photographs that can be easily downloaded are especially effective. The site seeks to offer an integrated approach in respect of La Ferme Martinette's three core operations.

From the standpoint of functionalities, it should be noted that La Ferme Martinette uses a toll-free 1-800 line for room reservations since it is unable to offer online reservations. The Internet cannot be used to make room reservations because the owners lack the time to update the room-availability database.

Among the other key functionalities, Ms. Nadeau insists on the importance of the site's bilingual nature, which is essential to generate export activities.

2. Market Scope

Its objective in terms of its market is to develop activities related to the sugarhouse, although the company is focusing, more specifically, on the high-end and very-high-end market in the realm of activities related to the maple grove. Its know-how enables it to offer natural, authentic products of very high quality.

Products are offered on the Web site at the same prices as in the shop and consumers must assume shipping costs, which can be considerable via Canada Post.

3. Geographic Scope

4. Scope of Skills

One problem that arose during the development of the Web site was the need to strike a balance between internal and external skills. La Ferme Martinette adopted an approach that allowed it to maintain control over the development and updating of its site by a supplier specializing in the development of technological solutions.

Ms. Nadeau believes that a number of outside suppliers offer limited technological solutions that are not economically viable. La Ferme Martinette adopted FrontPage software, which allowed it to maintain control over the development of its Web site and to avoid depending on a supplier specializing in the development of technological solutions.

Key Success Factors

One key success factor was the cross-referral of the portal, mainly with B&B Canada but also with other popular tourist sites devoted to accommodation. These portals offer La Ferme Martinette a significant volume of reservations traffic and a worthwhile price-quality ratio.

A second key success factor was indexing by means of Add Me, which enabled the company to be referenced by search engines such as Google. The quality of indexing is essential, as it enables customers to directly find the address of La Ferme Martinette's Web site through the most popular key words that consumers use to conduct searches.

A third key success factor is accuracy, which is not always true of competing sites. The information is accurate and updated regularly.

A fourth key success factor is the direct sale of products. La Ferme Martinette recognizes the importance of management and control, which it deems to be key success factors. Its business, action and marketing plans are properly structured and clearly defined.

A fifth and final key success factor is the choice of an attractive but sober site that is free of extravagant technological touches.

Barriers to Adoption

One of the key barriers to adoption was the pinpointing of specialized suppliers.

Another barrier stems from logistics and physical distribution. The company does business with Clickshop, whose costs are high, according to Ms. Nadeau.

Canada Post distributes the company's products although it does not provide pick-up service nor does it perform administrative work such as filling out postal information. This is a significant barrier that makes exporting more laborious and less worthwhile. The company would like to find a more economical solution than that provided by Canada Post that includes pick-up.

Another barrier is the difficulty encountered in obtaining financing for its expansion projects, such as the penetration of international markets.

Creating Value

Complementarities and, to a lesser extent, lock-in, are mainly responsible for value creation in the realm of e-business.

Since 2000, La Ferme Martinette has invested $375 000 in immovable property, sugarbush equipment and accommodation. Its sales rose 30 percent between 2001 and 2002 and the company is expanding rapidly. In 2002, La Ferme Martinette produced and sold 7 000 pounds of syrup and 10 000 pounds of purchased syrup.

Forecasts for 2003 called for over 6 000 visitors, who account for 50 percent of sales, 4 500 meals served and nearly 2 000 preschool and elementary school children making guided educational visits to the farm.

1. Complementarity

Complementarities contribute to value creation. Farm tourism activities are driving the company's development and make it possible to sell derivative products and accommodation in conjunction with a stay at La Ferme Martinette.

The information provided on the Internet generates significant tourist spin-offs.

2. Retention

Lock-in plays a certain role by facilitating consumer loyalty, especially through the supplying of derivative products or the availability of information that allows consumers to plan tourist activities.

3. Value Chain

As for the value chain, the promotion, sales and management functions are the most important and the most prominent compared with other functions such as procurement.

Performance Measures

The Web site generates over 80 percent of the company's goodwill.

Another performance measurement is the seasonal adjustment of activities in La Ferme Martinette's maple grove, the cash flow from which is concentrated in the spring and is subject to the climatic uncertainty surrounding maple syrup production.

Future Prospects

The key challenges facing La Ferme Martinette are broadening the range of products it offers and shifting to a transactional site, which is important since Web-based sales of its products are one of the company's priorities.

The Ferme Martinette is also seeking to vigorously develop the market for maple products. It would like to use adapted, innovative marketing tools and bolster its sales in order to consolidate its investments.

Implications for E-business Development

Several factors play an important role.

1. It is important to maintain a coherent strategic vision of the company's operations overall.
   
   
2. The company is also striving to set itself apart from its competitors in order to draw the attention of consumers to its advantages and assets.
   
   
3. Another factor is the contractual relationship with the supplier for technological solutions, which demands a big commitment from the company.
   
   

Published in Partnership

This case study was prepared by CEFRIO as part of the project
"New E-business Models and SME Development", a project undertaken in cooperation with Industry Canada, the National Bank of Canada, TELUS, CANARIE and Canadian Heritage.

The research team included Mrs. Louise Côté, Professor from HEC Montréal, Mr. Vincent Sabourin, Professor from the Université du Québec à Montréal, and Mr. Michel Vézina, Professor from HEC Montréal. The research team completed this case study at the end of January 2004. The opinions expressed in this case study do not necessarily reflect those of Industry Canada and/or Canadian Heritage.

For more information, please go to the CEFRIO Web site — The Authority on Information Technology Appropriation — at:  www.cefrio.qc.ca/english/indexAccueil.cfm.