MARKETING BABYVITA IN INDIA

2

TABLE OF CONTENTS

Page No.

1. INDUSTRY OVERVIEW 3

2. ORGANIZATION AND PRODUCT DESCRIPTION 4

3. MARKET ANALYSIS 5

3.1. Customers 5

3.2. Market Size and Trends 5

3.3. Market Potential 5

4 .SWOT ANALYSIS 6

5. PESTLE 7

6. MAJOR COMPETITORS 8

7. MARKETING MIX 10

8. COSTING 11

9. STP PROCESS 12

10. MARKETING STRATEGY AND ACTION PLAN 13

10.1. Market Entry 13

10.2. Pricing 13

10.3. Guarantees and Quality assurance 13

10.4. Pharmacies and points of Sale 13

10.5. Advertising and Promotion 13

11. FINANCIAL STRATEGY AND BUDGET ALLOCATION 14

12. MARKETING SURVEY 16

DISCUSSION AND CONCLUSION 18

REFERENCES 19

3

1. INDUSTRY OVERVIEW

In the Western world until the mid-1900s, baby food was generally made at home. Recipes and

instructions for feeding babies were sometimes found in cookbooks. The first mass-produced baby

foods were invented by scientists/nutrition experts and manufactured in the mid-19th century by

innovative companies. These were infant formulas, substitutes for mother's milk

The industrial revolution saw the beginning of the baby food market which promoted commercial

baby foods as convenience items. In developed countries, babies are now often started with

commercially produced iron-fortified infant cereals, and then move on to mashed fruits and

vegetables. Commercial baby foods are widely available in dry, ready-to-feed and frozen forms,

often in small batches (e.g. small jars) for convenience of preparation.

Commercially prepared baby foods in the Netherlands were first prepared by Martinus van der

Hagen through his NV Nutricia company in 1901. In United States they were first prepared by

Harold Clapp who sold Clapp's Baby Food in the 1920's.The Fremont Canning Company, now

called the Gerber Products Company, started in 1927. The Beech-Nut company entered the U.S.

baby food market in 1931.The first precooked dried baby food was Pablum which was originally

made for sick children in the 1930s. Other commercial baby food manufacturers include H. J. Heinz

Company, Nestle, Nutricia and Organix. The demand from parents for organic food began to grow

in the 1960s; since then, many larger commercial manufacturers have introduced organic lines of

infant food.

At the beginning of the 20th century in America, most babies began eating baby food around the

age of seven months. During and shortly after World War II, the age at which solid food was first

introduced dropped to just six weeks. This age has since increased to four to six months.

In China and other East Asian countries, homemade baby food remains common, and babies are

started on rice porridge called Xifan, then move on to mashed fruits, soft vegetables, tofu and fish.

In Sweden, it is common to start with mashed fruit, such as bananas, as well as oatmeal and mashed

vegetables. In western Africa, maize porridge is often the first solid food given to young children.

4

2. ORGANIZATION AND PRODUCT DESCRIPTION

OLPAK started in the year 2014. Its headquarters are in Borivali. It was started by seven individuals

from SFIMAR college. Its primary products include baby food. Babyvita is the first product which

is launched by Olpak and our tagline is,” Healthy and Happy”.

Babyvita is a nutritional food that is given to infants from 6 months to 2 years of age. It is

characterized to be soft and easily digestible in the form of paste. This is more so because infants

lack any prior experience for eating and chewing the food. We focus on providing a balanced

nutrition in a pack, where in you can make homemade baby food in no time. All you would need to

know is the nutritional value of the food.

Baby vita is available in ready to eat and dry forms. It includes rice, wheat, cereals and oatmeal

which are rich source of fiber when they are mixed with lukewarm water and given to infants. Some

of the health benefits of Oatmeal for babies include high in energy, easy to digest, improves the

immune system, good supply of vitamins, minerals and antioxidants and not the least, of course,

acts as a natural laxative. It is considered to be good for babies. Babyvita is easy to digest and it

supplies good amount of energy to the baby. Apart from all these advantages, oatmeal has the least

allergic reactions in babies compared to other cereal and staples.

People across the world believe in providing fresh baby food to their infants. A balanced nutrition

is must while preparing baby food.

5

3. MARKET ANALYSIS

3.1. Customers

The primary market for implementing our strategy, chosen for Baby vita are urban cities like

Mumbai, Pune, Aurangabad, Nasik, Kolkata, Hyderabad, Chennai, and Bangalore. It’s our strategy

of targeting the urban and semi urban segment.

3.2. Market size and trends

OLPAK’s Babyvita comes up with a strategy that has been developed assuming that an average

family would purchase 500gms or 1 kg pack(two 500 gm packs) of Baby vita as per their

requirement.

3.3 Market Potential

The awareness to use baby food products made from oats and natural ingredients is increasing.

Baby food has been traditionally made by our ancestors and was widely used before the advent of

chemical / synthetics. Over a period of time, consumers have become aware of advantages of using

baby food made from oats and natural ingredients. There are absolutely no side effects from using

this product. Hence there is growing demand for such a baby food products in urban and in semi-

urban areas. If the product is attractively packed, given some publicity, distributed and priced

competitively the Baby vita will have a good and growing demand.

6

4. SWOT ANALYSIS

4.1.Strengths

Health product-Babyvita contains all the essential nutrients and vitamins which includes calcium for

strong bones, iron for healthy brain development and no added sugar which is very healthy, tasty

and easily digestible for the baby.

Natural Ingredients- Babyvita contains all natural and healthy ingredients like grains, oats and rice

and there are no artificial additives or preservatives added to it.

Cost-efficient-Babyvita is also very beneficial for the customers as it is very cost efficient.

4.2.Weakness

Less variety - Not a wide variety of flavours.

Lack of awareness - People aren’t much aware about the benefits of oat meal.

4.3.Opportunities

Penetrating into rural markets - OLPAK’s can produce smaller and cheaper packets of Babyvita to

tap into the Rural Market.

New Flavours - OLPAK can add new flavours to its product line.

Paediatricians - There is a possibility of tie ups with paediatricians as when OLPAK is referred to a

customer by them, it builds a sense of trust in the minds of the customers.

4.4.Threats

Competitors-The threats of Babyvita is that the market is already matured and there is a tough

competition for new market entrants, so it is difficult to enter in the market. Babyvita has targeted

only the metropolitan areas i.e. the urban and semi-urban areas. Babyvita has not yet targeted the

rural market.

Lack of Trust among the customers because of well established brands.

7

5.PESTLE

5.1. Political analysis:

OLPAK’s Babyvita can be affected by political change in several different ways. OLPAK has to

operate within the framework of laws set by Parliament, and that’s why it depends on political

considerations.

OLPAK is also very keen about stability of government stability in countries where they are trying

to get in (especially in underdeveloped countries where political stability is at risk).They are also

subject to state, local, foreign environmental laws and regulations

Government of India has initiated the “MAKE IN INDIA CAMPAIGN”.

5.2. Economic Analysis

OLPAK needs to have enough information about the country’s inflation rate, economic growth rate,

and national per person capital income, in which we are willing to start our business. Economic

condition varies from country to country.

5.3. Social Analysis

Social or cultural environment has a great impact on OLPAK. The main focus of social/cultural

includes the Social change involves changing attitudes and lifestyles. The social and cultural

environment is constantly changing. Different countries had different culture (language, religious

beliefs, food, family, clothing and their lifestyle). OLPAK has to developed strategies which are

according to belief and culture in multicultural country like India.

5.4. Technological Analysis

Technological change has the most rapid, persistent and profound effect. It creates opportunities for

new products and product improvements and of course new marketing techniques- the Internet, e-

commerce. Technology creates opportunities for new product or product improvements and new

techniques of marketing such as internet and e-commerce. Technology has great influence on

business operations and overall decisions. OLPAK uses technology by taking orders via telephone

and online by internet. Moreover, OLPAK uses technology in various business activities such as

record of their customers and employees.

5.5.Legal Analysis

OLPAK’s Babyvita is Legalized under Food Safety and Standard Authority of India under Ministry

of Health.

5.6.Environmental Analysis

OLPAK’s Babyvita doesn’t harm the environment as it uses recycled packaging material.

8

6. MAJOR COMPETITORS

1. Nestlé (manufacturers of Cerelac & Nestum)

2. Nusobee

3. Farex

4. Heinz Baby Food Cereal.

5. Cow and Gate

Nestlé Cerelac and Nestum

The undisputed leader in the baby food market in India is Nestlé. Most of the infant foods

dominating the Indian baby food industry are produced by Nestlé. Available in a wide range of

flavours of different quantities & sizes which are meant for babies. Apart from Lactogen Nestlé

India Ltd. also produces a host of other baby food brands like Cerelac and Nestum. Market

Leadership with 85% share (as on 2012) of the 300 Cr baby cereal market trusted brand name in

Indian households. Nestlé Cerelac is in the range of Rs. 140-210 and Nestlé Nestum is in the

range of Rs.100-160.

Nusobee

Nusobee was manufactured by Wockhardt Limited is one of the most popular baby food brands

available in the market today. Nusobee Soya and nusobee casein powder are available. However, as

of 2011 it has been acquired by Danone as Nutricia International Pvt. Ltd. Nusobee Casein powder

is available in 200g refill pack worth Rs. 71 and 400g pack Rs. 159. Nusobee Soya powder 400gms

is available at Rs. 350.

Farex

Farex cereals are enriched with iron, which help supports proper growth and development in babies.

In the 1980’s it was the best brand and had 65% share however in 2010 its share was just 1%. The

brand is currently acquired by Danone as Nutricia International Pvt. Ltd. Farex is available at Rs.

349/- In medical stores and marts.

Heinz Baby Food Cereal

Creamy Oat Porridge, Banana & Apple Muesli and Very Berry Porridge. However this brand is

available online and not at any retail outlets. The price of Heinz Breakfast Creamy Oat Porridge

Cereal is Rs 368 – Rs 370 for 125g.

Cow and Gate Cereal

This product is available online at a price of INR 575, and not available in any retail stores.

9

Indirect Competition

Cow And Gate Infant Milk

A popular UK brand available abroad and online. The price in India is around INR 2500.

AmulSpray

AmulSpray is an Infant Milk food, it is an Infant Milk substitute. AmulSpray is available in every

retail store and pharmacy at the rate of Rs. 220.50 for 500gms.

Lactogen

Nestle’s Lactogen is among the top baby food brands India. It is available in stage 1 formula tin

(upto 6 months), stage 2 formula tin(after 6 months) and stage 3 formula tin(after 10 upto 24

months). The price of Nestle Lactogen Infant Formula is Rs 239 for 400g.

10

7. MARKETING MIX

Product

Ingredients – Organic Oat flour, Vitamins (A, B6, B12, C, D, E), Calcium, Iron, Protein, Ribofalvin,

Thiamin, Niacin, Folate, Milk Powder, Tocopherol.

Sizes : Currently available in a 500gm pack.

Shape & Colour: The shape and colour are very attractive for the customers.

Labelling and packaging: The labelling and packaging includes Olpak brand and logo. The

packaging includes an expiry date and time along with manufacturing date. Second part of labelling

includes the quantity of product in grams along with ingredients and contents.

Competitive Advantage: Its unique stay fresh seal and a long lasting shelf life gives the brand a

formidable competitive advantage. Not only it is easy to make but also it is completely made

considering the digest system and requirement for infants on different stages of age. The factors that

make Babyvita successful is its quality and superior nutritional value.

Price

Rs 220 for a 500 gram box.

Promotion

In Campus - Promotion for Babyvita was done in a unique way by displaying Baby Bibs promoting

our product along with Banners at the SFIMAR Campus. OLPAK founders went about promoting

Babyvita by giving Test Samples to various Students and Teachers. It was highly appreciated and

liked by all. Promotion was also done through Whatapp and Text messages.

The product will be endorsed by a Mascot rather than Celebrities making the cost of promotion less.

During the first year, promotions will be done by advertisements on television and radio, use of

print outdoor media, test marketing and distribution of free samples.

Above the line promotions

• Television commercials.

• Radio commercials.

• Hoardings.

• YouTube commercials.

Below the line promotions

• Samples

• More samples can be made available at medical stores, Marts and general stores.

• Social media sites

• Discount vouchers through SMS and Email.

• Make it available at all general stores and Marts.

Place

Headquarters are loacted in Borivali.

Warehousing Facilities: Olpak has its own warehouses for the storage of its products as well as it

also has hired some more warehouses.

Our products are available at general stores, medical stores, retail stores and most importantly in

baby care marts and shops.

11

8. COSTING

Bibs for promotion 200

Banner 50

Sample tins 150

Powder 150

Watsapp and text messages 5

TOTAL 555

BREAK-EVEN POINT ANALYSIS:

Product Selling price TFC VC (per unit) BEP(quantity)

Babyvita

(500 gms)

220 10,00,000 60 6250

12

9. STP PROCESS

The STP process for marketing stands for market segmentation, target markets and product positioning.

Segmentation: OLPAK’s Babyvita covers all the people in metropolitan areas i.e. urban and semi-urban areas.

Targeting A target market is a group of customers towards which a business has decided to aim its marketing efforts

and ultimately its merchandise. Family Life Cycle: Parents with babies.

Social Stratification: Upper upper class, lower upper class, upper middle class.

Age Segments: All the infants between 6months to 2years and all the mothers between 18 to

45 years of age are targeted.

Income level: All the parents having average income and above average income.

Positioning

Baby Vita is a name of quality and best food for babies and the positioning statement of Baby Vita

is, “best start to a happy and healthy future”.

Differentiation

Baby Vita brings you a nutrient rich easily digestible baby food which contains natural

grains, oatmeal and other vital nutrients and minerals.

Each serving contains 100% of your baby’s daily value of iron.

Easy to digest.

Convenient as only water needs to be added.

No added salt, preservatives, artificial colours or flavours.

Additional nutrients like calcium for strong bones and vitamins like B6 and B12, thiamine,

zinc to help support your babies growth and development.

Contains no added sugar in baby cereals for babies under 12months.

13

10. MARKETING STRATEGY AND ACTION PLAN

10.1 Market Entry

Our market

There are many people who are looking out for combination with value. OLPAK’s Babyvita fulfils

this criteria. The market is huge as people want to give the best nutrition for their children and with

the goodness of oats, rice, wheat and other vital nutrients Babyvita serves the purpose. We will use

Penetrating pricing since nestle is still the leader in the market and provides Rs.147/- for 300gms.

The point of sales would be pharmacies, General Stores and major retail outlets. The marketing

strategy will be centred on reaching out to the families with infants between the age group of

6months to 2years through reliable and quality sources to gain customer confidence by guarantee

and quality assurances.

10.2 Pricing

The price of the product would be INR Rs.220 per box. This would be reasonable while maintaining

the quality of the product at high standards and the brand as a whole, as the product is new in the

market. The price is set so, since the average competitor pricing is INR Rs.400 for a baby food

powder in India.

10.3. Guarantees and Quality assurance

Food Safety and Standard Authority of India under Ministry of Health will form the basis for

assuring consumers of OLPAK Babyvita’s quality and standards.

10.4. Pharmacies, General stores and major retail outlets as points of sale

Points of sale for OLPAK’s Babyvita would be pharmacies as consumers perceive this approach as

a high quality guarantee. Also major retail outlets and General stores are being targeted for the sale

of Babyvita.

10.5. Advertising and Promotion

The product will be endorsed by a Mascot rather than Celebrities as this would incur large cost of

advertisement. Instead funds will be allocated more on the frequency of advertisements on

television and radio, Use of print outdoor media, test marketing and distribution of free samples.

These would be undertaken in the first year. Various Above the line and Below the line activities

will be used for promotion.

14

11. FINANCIAL STRATEGY AND BUDGET ALLOCATION

OLPAK’s Babyvita startup capital would be a bank loan of INR Rs.25,00,000. Every 500gms box

of Babyvita would be priced at INR Rs.220, market price. The financial tables given below in a

detailed manner of the financial aspects related to business. The budget allotted towards marketing

expenses is estimated to be at INR Rs.8,50,000 for the first year as its in its introductory stage so

advertising expenses will be on rise so as to create brand awareness. However, the following years

would see a subsequent reduction in allocation for the same.

P & L Statement

2014 2015 2016 2017 2018

Revenue

Sales 25,00,000 59,40,000 60,27,000 63,88,620 67,71,937

Cost of Goods Sold 30,00,000 47,50,000 47,10,000 51,34,000 54,80,500

Gross profit/(loss) (500000) 11,90,000 13,17,000 12,54,620 12,91,437

Operating expenses

incl.Advertising

expenses

10,50,000 8,32,000 7,41,000 6,94,500 6,73,250

Depreciation expense 50000 50,000 50,000 50,000 50,000

Total Income/(loss)

(A) (16,00,000) 3,08,000 5,26,000 5,10,120 5,68,187

Interest Expense 2,00,000 2,00,000 1,80,500 1,67,000 1,38,345

Earning before

Interest and Tax (14,00,000)

1,08,000 3,45,500 3,43,120 4,29,842

Taxes 20000 42,000 44,100 56,500 78,200

Net Income (13,80,000) 66,000 3,01,400 2,86,620 3,51,042

15

Projected Balance Sheet over the next five 5 years.

Balance sheet

Current Assets 2014 2015 2016 2017 2018

Cash 55,000 95,000 1,15,000 1,15,000 1,15,000

Gross accounts

receivable 5,50,000 5,60,000 7,68,000 7,94,000 7,94,000

Inventories 6,00,000 6,50,000 6,78,000 6,30,000 6,30,000

Total current

Assetst(A) 12,05,000 13,05,000 15,61,000 15,39,000 15,39,000

Plant and equipments 10,00,000 9,50,000 9,00,000 8,50,000 8,00,000

Accumulated

depreciation (50,000)

(50,000)

(50,000) (50,000) (50,000)

Net fixed assets(B) 9,50,000 9,00,000 8,50,000 8,00,000 7,50,000

Total Assets (A+B) 21,55,000 22,05,000 24,11,000 23,39,000 22,89,000

Notes Payable 2,00,000 1,00,000 1,09,000 1,90,620 1,00,000

Accounts payable 2,35,000 90,000 1,60,000 1,09,380 87,958

Accrued expenses 3,00,000 1,00,000 90,600 1,17,380 1,00,000

Other current liabilities 3,00,000 49,000 50,000 1,00,000 2,00,000

Total current

liabilities 10,35,000 3,39,000 4,09,600 5,17,380 4,87,958

Long term debts 25,00,000 18,00,000 17,00,000 15,35,000 14,50,000

Total Liabilities 35,35,000 21,39,000 21,09,600 20,52,380 19,37,958

Equity - - - - -

Reserves and surplus (13,80,000) 2,86,620 3,51,042 66,000 3,01,400

Total Liabilities 21,55,000 22,05,000 24,11,000 23,39,000 22,89,000

16

12. MARKETING SURVEY – SAMPLE SIZE-20

1.What are the baby breakfast nutrition products you currently use?

2.what are the factors that drew you to this product?

3.How did you come to know of the product?

60%

10%

5%

10%

15% CERELAC

HEINZ

BOURNVITA

1ST BITES

FAREX

20%

30%

10%

25%

10% 5%

HEALTHY

NUTRIENTS

VITAMINS

EASY TO DIGEST

BRAND

QUALITY

20%

40%

30%

10%

FRIENDS

DOCTOR

FAMILY

ADVERTISEMENTS

17

4.Are you brand conscious?

The person will now be briefed about our new product and idea

5.Are you willing to try Babyvita if it is launched in the market?

90%

10%

YES NO

90%

5% 5%

YES

MAYBE IN THE NEAR FUTURE

NO

18

DISCUSSION AND CONCLUSION

Studies show that babies who are fed nutritious, healthy diets grow in to stronger kids and better

adjusted eaters than those who are fed poor diets.

It is essential that the baby should be fed a healthy and nutritious food in order to maximise the

babies growth and development process. It provides protein, calcium and iron which are very

necessary for their development. Baby food in a variety of flavours and colours can also help in

encouraging the baby to get used to lots of flavours. The food given to a growing child is essential

for his all round growth, both of mind and body.

A Healthy breakfast is important to keep the baby active throughout the day. Babyvita gives the

baby the energy and nutrients he/she requires.

Babyvita is a new product with the uniqueness of all the important nutrients that are present in

other baby foods and also additionally gives your baby the benefit of oatmeal.

With Babyvita your child wil always remain “Healthy and Happy”.

19

REFERENCES

www.euromonitor.com/baby-food-in-india/report.

business.mapsofindia.com> Top-brands-India

www.livemint.com/.../Farex8217s-new-owner-faces-tough-task-of-reviving-brand.html

BabyFirstYear.org

http://www.babyfirstyear.org/baby-food-overview.html#ixzz3K5tEumhf

http://www.businessdictionary.com/definition/behavioral-segmentation.html#ixzz3K5tqzSqp

http://www.weareopen.in/Baby-Care?Baby-Food

www.babyoye.com

www.indiastudychannel.com

20