Marketing Strategy on Adult Diaper

Marketing Strategy Report On

Submitted to Prof. Beena Mathen

Complied by: Group 1

Calvin Pinto Fedora D’souza

76

Samir Vele

108

Table of Contents

Index

Page No.

About the project

01

Objective

02

Vision

03

Mission

03

Market Strategies

04

Positioning

05

4 P’s

07

Financial Analysis

13

BCG Matrix

15

Competitive Analysis

17

Future Scope

18

Reference

19

ABOUT THE PROJECT

It is known that in a country like India, hygiene is a factor given prime importance especially relating to ones bathroom habits. But as one grows older, relieving oneself becomes more tedious and difficult. This project thus deals with a business analysis relating to the manufacturing and marketing of adult diapers. We believe that it is an untapped market with a lot of small players that are scattered throughout the country. Also, besides foreign players, there are no branded national players in the market. So, it provides a lot of opportunity to new players like us to establish ourselves in the market. This project includes the vision, mission, objectives, marketing mix, financial analysis, BCG Matrix and Competitive Analysis for the product.

OBJECTIVE

Our primary goal will be to establish and strengthen our existence in the market, which will be bestowed by the business environment in which we function. We realize the fact that for us to prosper in this relatively untapped market there is need to be flexible and responsive, to delight our customers by providing them with what they want, when they want it and in the exact quantity. Our business strategy will revolve around the need to provide quality disposable adult diapers to the various institutions and wholesalers that need them, in the process of fully satisfying their requirements. This shall be undertaken through adequate training and recruitment of a professional team dedicated to providing and catering the customer's needs. We intend to ensure that our marketing campaign increases the knowledge of our products and services to the various market segments we shall be targeting. We also intend to have well laid out introductory promotional material that will enable clients to have an understanding of the product and advantages of utilizing the product hence this will undoubtedly generate increased sales of our products.

Vision: We intend to focus on delivering quality products at affordable prices that in turn will produce good referrals, which can subsequently generate good amount of revenue over a period of time.

Mission:

To create products which cater to the need of our esteemed customers and esteemed communities to live a healthy and comfortable life. Internally we intend to create and nurture a healthy, productive, satisfying and enjoyable environment, in which our employees are fairly compensated and encouraged to respect the customers' requests and the quality of the products we intend to produce. We seek fair and responsible profit, enough to keep the company financially healthy for the short and long term, and to fairly remunerate employees for the work and effort.

MARKET STRATEGIES

We intend to implement a progressive marketing strategy. In terms of marketing we intend that our name and products are marketed on an extensive basis to ensure that customers are aware of our existence. In price, we intend to offer reasonable and competitive prices in comparison to the local and foreign competitors and we need to sustain that. Our marketing will strive to ensure that we establish long relationships with clients.

Market Scope strategy: Single Market strategy -since we are catering to niche segment of market in India whose needs are different and compliant Market Geography strategy:

Local to Regional- Primary target is to target the state of Maharashtra. In our strategy we will initially target prime cities in the state (Mumbai, Pune, Nashik, Nagpur, Aurangabad, and Solapur) and spread to the rest of the state and (assuming that the product is well accepted) to the western region of the country. Market Entry strategy: We are to be Early Followers in this market since there are no markets leaders so far; however there are many local players in the market.

Market Commitment: Since we are new businessmen in the market we have a medium commitment towards the initial stage of production. We hope to establish a higher commitment as soon as we taste success in the industry especially our target region.

Positioning Basically we are positioning our product based on its Features and the basic needs of the Target Audience. We intend to position ourselves as a desirable alternative source of high quality disposable geriatric/adult diapers. This shall be undertaken through use of high quality raw materials and production processes so as to ensure the efficient delivery of quality products. The product strategy will also be based on quality, combined with making the product easily available to the customers. Our faster delivery, relative to our other counterparts, will also serve as an important competitive advantage on the market. Through our lower prices, made possible by reduced local delivery charges, we intend to attract a large portion of the market, both directly and indirectly through referrals.

Positioning in the market: Challenger: We hope to command a strong position in the local market and take up the share among the local players.

One -Price Strategy: The same price is set for all customers who purchase goods

Product Design Strategy: Standardized: - Common for everybody, only difference in size.

4P’s

Product:

Adult diapers is specially designed for physically challenged / old people aged from 45 & above. These diapers would be disposable. It would be available in different sizes i.e. Small, Medium and Large it has refasten able tapes and it locks on the wetness. These are mainly used in medical institutions such as hospitals and clinics where patients often require disposable pads to overcome the problem of dirty, smelly and wet bottoms. This is particularly so as these adult patients are incontinent and often do not have the ability to control their bladder. Pricing Strategy: Rapid penetration (high promotion, less price: We intend to offer reasonable and competitive prices in comparison to local competitors and we need to be able to sustain that. Adult diapers products will be competitively priced in relation to its competitor's products. Due to the introductory nature of our products we intend to implement a penetration pricing strategy which will ensure that potential customers are attracted by our lower prices, up until our products are fully appreciated on the market, especially in terms of their quality. We will initially charge Rs 200 for a pack of 5 and Rs 380 for a pack of 10. However this will dictate that our costs are prudently kept so as to ensure our financial goals come to fruition.

Distribution Strategy: Hospitals, Wholesalers, Super/hyper market, departmental/general stores and ashrams /old age home. Our products shall initially be mainly sold through personal selling and referral business, with relationships and customer experience being, by far, the most important factor. Relationships in this regard means establishment of links with the various wholesalers, hospitals and clinics which often order or require our products for their customers. Invariably the experience a customer has with our products will go a long way toward influencing the intermediary to continue to order our products, and they should refer their peers to order our

products. To this end we intend to ensure we provide a quality product with superior absorbency and comfort.

Distribution Channel: The distribution of the product would be done in the following pattern:-

Manufacture  Wholesaler  Retailer  Household Customers

This pattern of distribution would be chosen for efficiently & effectively distribute the product. By eliminating the Agents/Brokers we save a huge sum of resources which can be used for other promotional and advertising activities which can boost the sales and help us to grow

Distribution scope strategy: Intensive Distribution: The product will be available at all possible retail outlet. It will be available at almost all retail outlets in an area. The distribution of the product would be done in an effective way by this method.

Advantages: 1) The sales volume would be increased 2) The product will get wider customer recognition across the area 3) The product would be available at almost all stores

Disadvantages: 1) It is low priced and low margin product which requires a fast turnover 2) The degree of control on the retailers is minimal

Promotion Strategy: We intend to promote through medical shops, clinics, supermarkets, personal selling, and medical camps. The promotion strategy shall initially revolve around informing customers of our existence, the products we produce, and from where to buy them. The intention will be to highlight the following key benefits of ordering our products instead of competitors, including: •

Our lower production costs which will convert to getting product at competitive rate

•

Quality products able to compete with the top brands.

•

Faster order fulfilment times.

We intend to be well known by all our stakeholders in particular wholesalers, hospitals, old age homes and other such institutions that may utilize our products, as well as informal traders. Hence we shall leverage our presence using introductory letters, brochures and other sales literature. We intend to spread the word about our business through the following: 1. Personal Selling. Undoubtedly customer solicitation face-to-face will be our most

powerful form of promotion mainly due to the fact that our products are mainly ordered by individuals in organisations and institutions. Its flexibility will enable us to give our customers concise details of what we have to offer and the benefits of using our products. Another important determinant in utilizing personal selling is the fact that we are relatively new on the market. As such potential customers/clients will to a certain degree be sceptical towards our product.

2. Advertising. We intend to undertake adequate advertising of our name and product we

offer. This is to create awareness and knowledge of our existence in the market place, which hopefully shall convert into market share. A constant look out will be made of any special editions in the local newspapers, which may provide an opportunity for us to advertise our product and business name.

Our strategy will involve 4 stages in the initial first year:1) Phase I: It will include distribution of pamphlets in newspapers across the primary target

markets i.e. Mumbai, Pune, Nashik, Nagpur, Solapur and Aurangabad. This will be done for promotions for the first 3 months. 2) Phase II: The distribution of posters and promotional items to medicals shops for the next

couple of month. This will be used until the entire budget is used for this purpose .

3) Phase III: It will include the 1st part of the advertisement campaign in a popular lifestyle

and medical magazine for a period of 4 months. This is to target the upper middle class segment and the medical practitioners. 4) Phase IV: This is the final stage where we will promote through newspapers. The strategy

we followed is that we will advertise every week only on Saturdays for a period of 3-4 months. This will give us a better exposure as an advertisement on Sunday is most expensive and the weekdays; it can be assumed that not many people will pay attention to our advertisement due to their hectic schedule.

Events: We intend to attend trade shows and exhibitions to increase awareness of our products and services. These events will also enable us to interact with potential clients who may decide to order our products.

FINANCIAL ANALYSIS 2010-11

2011-12

2012-13

2013-14

Sales (units)

o

45,405

50,450

56,000

Sales Revenue

0

172,53,900

191,71,000

2,12,80,000

COGS

0

82,93,000

90,81,000

1,00,80,000

Gross Margin

0

8960,000

100,90,000

1,12,00,000

-90,00,000

0

0

0

0

50,00,000

55,00,000

60,00,000

Development Costs Marketing Costs

Administration Overheads

0

21,65,000

23,81,500

26,20,000

Gross contribution

-90,00,000

17,95,000

22,08,500

25,80,000

Interest paid @11%

0

5,00,000

5,00,000

5,00,000

-90,00,000

12,95,000

Net Contribution Tax @ 12% Profit after tax

0 -90,00,000

17,08,000

20,80,000

155,400

204,960

249,600

11,39,600

1503,040

1830.4

Advertising and Marketing Expenses:1) Advertising and promotion Phase I: 9 lakh pamphlets @Rs1

Rs 9, 00,000

Phase II: Posters, events and promotional items (for retailers)

Rs 5, 00,000

Phase III: Magazine ad. @Rs100, 000 per ad.

Rs 4, 00,000

Phase IV: Newspaper ad. @Rs 100,000 per ad

Rs16, 00,000

2) Distribution and warehousing

Total

Rs16,00,000 Rs.50, 00,000

Assumptions: 1) Taken a loan of Rs. 1 cr. And an individual investment of Rs. 20 Lac 2) COGS include Machinery – Rs. 90 Lac for first year, Variable Cost – Rs. 180 per pack,

Rent – Rs. 10,000 per month. Second year consists of only rent and variable cost

3) Advertisement are distributed as follows: I Phase: Pamphlets Rs 3, 00,000 II Phase: Posters, events and promotional material worth Rs 5, 00,000 III Phase: Monthly magazine ad, =Rs1, 00,000 per ad IV Phase: Newspaper ad. = Rs 1, 00,000 per ad 4) Administrative overhead increase at 10% per annum 5) EMI from bank loan is Rs 5, 00,000 per year

BCG Matrix

After reaping the initial success and if we diversify in the near future the BCG matrix would be as follows: The areas of diversifying would be: 1) Relive adult walker (support to walk) 2) Relive toilet aids/ commode chairs 3) Relive diabetes/BP kits (for diabetic and BP patients) 4) Relive wheelchairs (for those who can’t get up on their own and need wheelchair

to travel)

Ranki ng

Company

Relative Market share

Growt h rate

Sales 2015

1

Relive toilet aids/ commode chairs

1.35

30.75

17138.00

2

Competitor

8 1

Relive adult walker Competitor

0.50

34.64

985.41 1970.82

10 1

Relive diabetes/BP kits Competitor

0.35

14.93

422.17 1206.20

1 2

Relive adult diapers Competitor

1.15

10.14

2308.02 2006.97

12 1

Relive wheelchairs Competitor

0.12

6.48

334.87 2790.58

12694.8 1

COMPETETIVE ANALYSIS

There are currently few local companies competing in our market niche. However upon closer research it was identified that Indian products constitute approximately 60% of the market, dominating the market. Hence we intend to market ourselves as a local quality manufacturer of adult diapers in such a way that with time customers will choose our products over competitors' on the basis of our lower costs, faster order fulfilment times and high quality. The following were identified as our main local competitors: (The competitors information are purely based on assumptions) Suraksha: Located in Pune, it specializes in the manufacture of baby napkins, bath and hand towels, diapers, baby diapers with a large share of the western market, mainly due to the less distance between all major cities; it is an established player on the market and was rated as the best performer in the sector in 2005. It has had tremendous growth in a short time, with state of the art machinery currently in place

Suvidha: Located in Nashik, it specializes in the manufacture of baby napkins, towels, face cloths, Adult diapers and sanitary pads. It has a large warehouse whose logistics/operations are well organised, coordinated and closely supervised. Prices are extremely competitive .It targets both retailers and consumers ensuring a large customer base.

Atmay: Located in Solapur, it intends to go into manufacturing of baby napkins in bulk in the near future. It currently has the capacity to do so and manufactures face cloths and dish towels, all for the western region of Indian market.

FUTURE SCOPE

The following can be implemented after reaping initial success in our venture:Direct Marketing:- We can also provide diapers via direct marketing through our website at a less cost following a Loyalty program .

Also , if we get successful initial response in the market, we can hire call center services to take order from customers(if it is possible)(details will be provided in the brochure/pamphlet) In the case of telemarketing, it will involve our targeting potential customers of our products and informing them of our existence. We may then arrange for an appointment with the respective decision-maker/order-maker, with the intention being to encourage them to order our products (assuming we develop a huge product line in personal care segment)

Diversification:-We hope to diversify towards other markets like baby diapers and sanitary pads. We also can hope to provide services of collection and recycling of used diapers from various sources. (1st priority will be our customers and hospitals) There has been a recent technology in Japan for recycling of used diapers (click the link below for the article) for making fuel. We assume that if we can have a tie up to export batches of used diapers to them at a price if at all they go on a full scale commercialization. Maybe a tie up with the government may be possible. (All these are based on assumptions)

References 1) http://news.cnet.com/8301-17938_105-20004020-1.html

2) Theory: Marketing planning & strategy: Subhash Jain