MARKETING TERM PROJECT

I. SITUATIONAL ANALYSIS

A. Executive Summary and Organization Mission:

Our mission is to provide a newly formulated product named “Neobest anti-

allergic baby food for babies with allergic intestines/stomachs”. The

mission of o our organization will be aligned with the mutual goals of the

organization so that the product “Neobest anti-allergic baby food for babies

with allergic intestines/stomachs” will resolve the allergic problems

which the infants and babies face from their childhood and/or birth, after being

tested positive to milk/dairy/wheat/soya-protein products. The targeted niche

market will be the global customers having children with the allergic

problems related and associated with milk/dairy/wheat/soya-protein

products. The newly developed product will cater to the baby food industry,

and will be lucrative for venture capitalists to invest in this newly developed

idea. This is because this product will be priced moderately so that the averagely

earning customers can afford to buy this product. The target will be to achieve a

larger market share by obtaining higher sales percentages in comparison with

the sales percentages of other baby food products like Neocate (which is

extremely high priced at $45.00 to $155.00) (Meyer & Allergy, 2016). Neocate

has already been recognized as the best anti- allergic product found in the United

Kingdom and in the United States of America because of the ingredients

of the baby food product (Meyer & Allergy, 2016).

B. Environmental Scanning

1. Social/Cultural Trends :

The global consumers of the baby food industry are more inclined

towards the ingredients of the baby food products as well as

towards the standardization of the ingredients of the baby food

products. For example, the global consumers of the United States

of America have faith on the FDA (Food & Drug

Administration) or USFDA (United States Food & Drug

Administration) more than any other organizations of food and

drug standardization (Tifft & Nicholson, 2016).

The global consumers of the baby food industry look for food

safety standards in the sense that any contamination with baby

food is an extremely serious issue. This is because the immunity

levels of the newborn children, or children between 1 month to12

months, is extremely low. Therefore, any contamination in baby

food can affect or harm the newborn children, or children between

1 month to12 months, in an extremely harmful manner. Therefore,

the global consumers want to get the best quality baby food

products so that they can be able to give their children the best

baby food products which are available in the global markets

(Meyer & Allergy, 2016).

The global consumers of the baby food industry ensure that they

read the reviews of the customers who have used any particular

brand of baby food products. This is the trend of the baby food

industry as well as for most of the adult food industry products.

This is because the global consumers do not want to take a chance

or a risk with their health or with the health and hygiene of their

children by trying out new brands of food products without getting

a fair idea about the outcomes or results of the new brands of food

products (Meyer & Allergy, 2016).

2. Political/Legal : According to the USDA requirements, organic products

must be directed by a USDA National Organic Program-approved

guaranteeing specialist, adhering to all USDA natural controls. Moreover,

according to the USDA requirements, organic products must be delivered

utilizing permitted substances. Besides, according to the USDA

requirements, organic products must be delivered without prohibited

strategies like sewage sludge, genetic engineering, and so on

(Lewandrowski, 2016).

3. Technology : Technology used in preparing baby food products is growing

gradually in the long run. The global engineers are constantly on the move

to prepare healthier and tastier food for newborn babies and for infants.

This is because the newborn babies and the infants will not like to eat food

which is not tasty or the same food again and again. It will become

extremely monotonous for them as it would become for the adults.

However, the safety of the preparation of the baby food products is

something which must be focused on. The main focus which is generally

kept by the engineers while making technological equipment for preparing

safe and high quality baby products, is cleanliness of the technological

equipment. The maintenance of hygiene is implemented by the use of

purifiers for purifying and checking the quality of the different types of

baby food products. Moreover, there are digitalized and computerized

setups wherein the baby food producers and manufacturers can get to

know about the percentage of fats, proteins, carbohydrates, impurities

present in the prepared baby food products (Petrarca et al. 2016).

4. US Economic Situation : The GDP of the United States of America, as of

2015, was $17.914 trillion (Shaefer et al. 2016). The GDP per capita of the

United States of America, as of 2015, was $51486 (Shaefer et al. 2016).

The unemployment rate of the United States of America, as of 2015, is 5%

(Shaefer et al. 2016).

5. Natural Environment : The preparation of baby food products requires the

scientific researchers to choose the purest form of raw materials and

process the raw materials carefully after purifying the raw materials in

order to prepare the final product. There is widespread global warming,

subtle and sudden weather changes, etc. which might drastically affect the

health conditions of the infants and newborn children in the upcoming

years in the future. Moreover, there are pesticides as well as fertilizers

used to grow fruits, vegetables and flowers quickly and in hybrid qualities

and hybrid sizes. Extracts from these fruits, vegetables and flowers can

harm the babies and infants if the baby food products are prepared from

these extracts. The babies and infants can also develop different kinds of

allergies towards certain fruits, vegetables, flowers, smell, or even

milk/soya-milk.

C. Sales Trends: Sales of organic baby food products in the United States of

America was about $22.5 billion in the year of 2015 (“Global Infant Formula

Market: Growing Demand for Organic Baby Food & Increasing E-commerce

Sales Key Trends”, 2016). There are online purchases of organic baby food

products as well as physical purchases of baby food products by the global

consumers. However, the online purchases of organic baby food products has

been on the rise in the past few years in America as well as in the other countries

of the global world (“Global Infant Formula Market: Growing Demand for

Organic Baby Food & Increasing E-commerce Sales Key Trends”, 2016).

D. Market Share: The percentage of baby food dollar sales in the United States of

America is $1,529.77 million (Facts, 2016). The percentage of baby food unit

sales in the United States of America is 1,199.52 million units (Facts, 2016). The

market share of organic weaning food in the United States of America is 21%

(Facts, 2016). The retail sales of organic baby food in the United States of

America is $553.9 million (Facts, 2016). The retail sales of organic milk formula

in the United States of America is $92.1 million (Facts, 2016).

E. Market Opportunity Analysis: It is evident from the recent sales trends and

market trends that the sales percentages of the baby food products in on the rise.

This is because of the aspect that there have been recent cases of babies and

infants acquiring allergic tendencies towards milk and dairy products. There have

also been reports of cases where babies and infants have developed excessive

developments of allergy like cow-milk protein allergy, soya-protein allergy, and

so on. “Neobest anti-allergic baby food for babies with allergic

intestines/stomachs” will be targeted towards developing immunity among the

babies and infants developing any kind of allergy towards milk, cow-milk, protein

diet, soya-proteins, etc. For this purpose, “Neobest anti-allergic baby food for

babies with allergic intestines/stomachs” will conduct tests on the babies and

infants (who use “Neobest anti-allergic baby food for babies with allergic

intestines/stomachs” for the first time). There will be tests conducted on the

babies and infants (who use “Neobest anti-allergic baby food for babies with

allergic intestines/stomachs” for the first time) like “Reducing substances” test,

“Toxic substances” test, etc. The tests will be conducted after the babies and

infants have consumed “Neobest anti-allergic baby food for babies with allergic

intestines/stomachs” for about a week after being diagnosed with allergy towards

milk, cow-milk, protein diet, soya-proteins, etc.

II. Marketing Objectives: The marketing objectives for launching the “Neobest anti-

allergic baby food for babies with allergic intestines/stomachs” will be as follows:

To provide the global consumers the opportunity to buy a substitute product to the

premium baby food products (like Neocate) with an affordable price.

To provide a substitute baby food product to milk for the babies and infants of the

global world having allergy towards the consumption of milk/dairy/wheat/soya-

protein products.

To achieve a market share of about 4% to 5% in the upcoming five to six years of

operations and running of the newly developed product.

III. Marketing Strategy

a. Target Market:

● Children age 0-5 years

● Married men and women with children

● Upper and lower middle-income levels

● Healthcare institutions and healthcare franchisees

● NGOs and non-profit organizations

The healthcare institutions and healthcare franchisees will be where the “Neobest

anti-allergic baby food for babies with allergic intestines/stomachs” will

be supplied in large quantities so that the healthcare organizations can be

prepared to provide the global consumers with the newly developed “Neobest anti-

allergic baby food for babies with allergic intestines/stomachs” for

providing the babies and infants with similar levels of proteins and nutrients as

is provided by the consumption of milk products. “Neobest anti-allergic baby

food for babies with allergic intestines/stomachs” will be provided to NGOs and

non-profit organizations so that the newly developed product can

reach out to the underprivileged sections of the American societies

and the underprivileged societies of the other countries of the global world.

b. Analysis of Buyer Behavior:

Types of consumer buying decisions – There are impulse purchases which are

evident in the baby food products industry (Elg & Hultman, 2016). This is

because many consumers try new products when every other existing product

fails to nourish their children totally. There are also routine purchases which the

global consumers actualize in order to ensure that they keep stock and substitutes

of baby food products for their children so that the children do not starve in times

of hunger (Elg & Hultman, 2016). There are also global consumers who possess

characteristic traits of limited decision making and/or extensive decision making

in the baby food products industry (Elg & Hultman, 2016).

Cultural influences – There are cultural influences like having heavy meals by the

American citizens is considered mostly by the American citizens to be healthy

and nourishing, rather than taking light meals at regular intervals. Therefore, most

of the American citizens buy baby food products in bulk and in large quantities

for safety, security and health reasons.

Social influences – There are social influences like clichéd and stereotyped

mindsets about a particular brand name. There are American citizens who would

not want to try out new brands because of a particular family traditions of being

loyal to on particular brand name. There are also influences like counterculture

and subculture influences which influence the buying behavior of the global

customers in America. The American consumers are mostly impulsive buyers and

easily get influenced from advertisements and television commercials.

Life-style analysis – The life-style analysis of the American citizens can be

fathomed from the fact that there are different countercultures and subcultures

which influence the decision-making process of the American citizens. This is

because the food products which the people belonging to a particular subculture,

will want to buy will mostly be different from the choices of the people belonging

to another subculture. The same logic and rationale apply for different

countercultures.

IV. The 4 Ps

a. Product

● Description: Powdered milk substitute in the form of proteins, carbohydrates,

amino acids, essential vitamins, necessary fats, DHA combined together with a

flavor of ice-cream sandwich. The ingredients would be Rice Starch (25%), Fruit

extracts (10%), Refined Olive oil (2%), Powdered Chicken Supplements for

babies and infants (5%), Docosahexaenoic acid or DHA (3%), Protein

supplements for babies and infants (10%), Diet sugar (5%), Creatine (5%), Iron

(5%), Calcium (5%), Vitamin D (5%), Zinc (5%), Iodine (5%), Magnesium

Phosphate (5%) and Ice-cream sandwich flavor (5%).

● Packaging: Air-tight, Food-Grade and recyclable plastic container with

measurements of 1.5 lbs and 2.5 lbs of “Neobest anti-allergic baby food for babies

with allergic intestines/stomachs”.

● Classification: Specialty product. The global consumers of “Neobest anti-allergic

baby food for babies with allergic intestines/stomachs” would be desperate to buy

and feed this newly developed product because they would want to heal the

allergies (cow-milk protein/soya-protein allergy, etc.) within their children.

● Brand name: Neobest ™

● Warranty: Implied

● Positioning: “Neobest anti-allergic baby food for babies with allergic

intestines/stomachs” will be positioned as a natural substitute (with no milk

solids) to milk products for newborn babies and infants.

● Unique benefits: “Neobest anti-allergic baby food for babies with allergic

intestines/stomachs” offers newborn babies and infants with guaranteed relief

from allergies (cow-milk protein/soya-protein allergy, etc.) with zero side effects.

b. Price

The method of pricing will be based on focusing in increasing the sales

percentages through the enhancement of the distribution channels.

Moreover, the pricing will be aligned with the mutual goals, the mission and the

vision of Neobest ™ so that a 4% to 5% of the target market share can be

achieved in the near future.

c. Place (Channel of Distribution)

● Direct distribution – For NGOs and non-profit organizations, there would be the

method of direct distribution adopted.

● Indirect distribution – For health care institutions and healthcare franchisees, there

would be the method of indirect distribution applied because intermediaries are

important to promote and market newly developed baby food products.

d. Promotion/IMC

● Newspapers, Magazines, Social Networking websites.

● Television advertisements, wireless media advertisements.

● Focus on low and moderate price of the new product in comparison with premium

products like Neocate – There will be press conferences organized and media

attention entertained for the purpose of globalizing and publicly promoting the

distinctive features of the new product.

e. Response of the Target Market

The sales percentages of the new product and the target market share, will be

measured for understanding the response of the target market.

V. Competitive and Industrial Analysis

a. Direct Competition:

Neocate is the direct competitor of the new product. Neocate is an already

established brand in the target markets of the baby food industry. Neocate has

been proven to possess an immaculate formula and is considered to be one of the

best formulas ever developed for children possessing allergies (cow-milk

protein/soya-protein allergy, etc.). However, the price of the Neocate products is

extremely high priced and basically caters to premium customers. This

disadvantage of Neocate will be exploited by the newly developed product’s

product differentiation and pricing strategies (Meyer & Allergy, 2016).

b. Indirect Competition:

Gerber Products Company is an indirect competitor of the newly developed

product. Gerber baby foods and Gerber purees are products of Gerber

Products Company which consist of ingredients like fruit flavors of bananas,

applesauce, prunes, pears, peaches, etc. Also, vegetables like sweet potatoes,

peas, green beans and carrots, are ingredients in the Gerber baby foods and

Gerber purees. Gerber, being a subsidiary of the Nestle is a close

competitor of the newly developed product (Schlegelmilch, 2016).

This is because Nestle also manufactures and prepares baby food

products and protein supplements for babies and infants.

References

Elg, U., & Hultman, J. (2016). CSR: retailer activities vs consumer buying

decisions. International Journal of Retail & Distribution Management, 44(6), 640-657.

Facts, U. (2016). Topic: Baby Food Market. www.statista.com. Retrieved 29 November 2016,

from https://www.statista.com/topics/1218/baby-food-market/

Global Infant Formula Market: Growing Demand for Organic Baby Food & Increasing E-

commerce Sales Key Trends. (2016). Parent Herald. Retrieved 29 November 2016, from

http://www.parentherald.com/articles/63286/20160824/global-infant-formula-market-

growing-demand-for-organic-baby-food-increasing-e-commerce-sales-key-trends.htm

Lewandrowski, J. (2016). Climate Change and Agriculture: How is USDA Helping Agriculture

Respond.

Meyer, R., & Allergy, F. (2016). Neocate LCP-The No. 1 Amino Acid-Based Formula in the

UK. NETWORK, 6.

Petrarca, M. H., Fernandes, J. O., Godoy, H. T., & Cunha, S. C. (2016). Multiclass pesticide

analysis in fruit-based baby food: A comparative study of sample preparation techniques

previous to gas chromatography–mass spectrometry. Food Chemistry.

Schlegelmilch, B. B. (2016). The Future of Global Marketing Strategy. In Global Marketing

Strategy (pp. 221-249). Springer International Publishing.

Shaefer, H. L., Wu, P., & Edin, K. (2016). Can Poverty In America Be Compared to Conditions

in the World’s Poorest Countries?

Tifft, D., & Nicholson, J. (2016). The Process of Local Commercial Food Production.