Behind the Brand: The Journey of Mama Mil Company

MamaMil Company is a startup company that will venture in production of infants’ formula.  According to the World Bank, the number of working mums has increased by 4%. This has led to a significant increase in demand of alternative foods for infants by working mothers for health and nutrition of the baby. The market is dominated by other competitors with Nestle having largest market share of 7%. After market research, it was observed that the consumers were not pleased with the prices offered by the market. It was also observed that the market did not meet the product requirements that the consumers wanted. MamaMil will solve the challenges facing the market. It will produce different varieties of infants’ formula that will meet all target market demand. The company plans to build a strong brand that will be recommended by all groups of mothers and health experts at very affordable prices.

MamaMil has a unique and well able partnership between an NGO that deals with health and nutrition of infants and a private maternity hospital which also has a pediatrics wing. The NGO is well known by the residents as it partners with the government in creating public awareness on importance of giving vaccines to children. The hospital has a good reputation. Dr. Hope who is a well-known pediatrician who is the most preferred in the region. He will be the director of MamaMil Company. Both will equally own and manage the company.

Market analysis identified a market gap in prices of infants’ formula in the market. The analysis also showed that the market did not cater for all the market demands. The infants’ formula available were differentiated in terms of age of which research indicated that they did not have much difference (Uhrakova, 2016). MamaMil Company will produce different segments of infants’ formula based on flavor, health requirement and different preferences of the care givers. This will ensure great satisfaction of customers.

The market analysis also indicated that caregivers used a certain brand of infants’ formula after recommendations by health experts. MamaMil will launch immediate promotions of the formula to new mothers and caregivers to create a large steady customer base. This will create a dominant target group for the company. MamaMil will also use renowned experts in the field of health and nutrition in infants.

Both partners will raise $300,000 of starting capital equally. This gives the total finance required to start the company. They anticipate sales of $350,000 in the first year, $450,000 in the following year and $550,000 in the third year. They hope to breakeven in third month of operation. They anticipates profits as follows: $20,000 first year, $50,000 the second year and $70,000 in the third year.

Company Overview

The company was formed by the partners after identifying the market gaps of pricing and market segments. Market research showed that most mothers could not afford the infants formula in the market. It was also indicated that those kids who reacted to the cow milk formula did not have another option to take. This provided the need to form the company to close the market gap by producing different segments of infants’ formula at lower prices than the ones given by the competitors. It will be formed from partners’ savings and be equally owned by the partners. The company will be established near the private hospital’s premises where they own a free space. The company’s mission is baby’s growth is essential to all mothers and should be affordable to all.

Situation Analysis

The strengths of the market is that the NGO is well-known by the residents since it occasionally offers free medical camps to the infants in the area. It also partners with the government in the health campaigns. The private hospital has a high reputation with the best health experts in the region. The pediatrician is believed to be the best in the region. The prices of the infants’ formula will be lower thereby being affordable to all. The company will have different varieties of the formula hence meeting the gap presented by the market.

The weaknesses of the market is that most mothers believe that the higher the prices of the infants’ formula the better the quality of the formula. This will highly affect MamaMil Company operation since the objective of the company is to reduce the prices of the infants’ formula than the ones in the market. It will also be hard to break the loyalty of consumers brand to MamaMil products.

The opportunities the company has is that NGO interacts with the residents thereby they have an opportunity to market the company’s products. The private hospital has an opportunity to recommend new mothers attending the prenatal clinics to use the company’s products. The hospital can also use posters to promote the products. The specialists in both partners can recommend the products upon enquiry.

The threats of the market is that there are medical experts who are arguing that giving baby formula risks the baby on getting obesity in future. This may affect the customers’ will to buy. The Government is also planning to create an entry barrier in production of babies’ products.

Marketing plan objectives/Goals

The objective of the company is to create a brand that is recommended by all. To create a brand loyalty that will ensure steady flow of income. To sell its products at affordable prices and still have a good profit margin. To have a strong team of management, marketing and sales team. To have different varieties of infants formula that will cater for all the needs required for proper growth of babies which are not available.

Segmentation and targeting analysis

Market segmentation

The formula will have different varieties based on types of formulas, ingredients used to make the formula and market. Different types of formulas are infants’ formulas, follow-up formulas and growing up formulas. Differentiated based on ingredients are colostrum based formulas, allergy free, presence of probiotics, milk free, supplementing formulas, dried foods and finger foods. They will be differentiated in terms of flavor, health requirement and nutrition. Markets will be supermarkets, chemists, hospitals and hypermarkets.

Target market

New mothers

Since most mothers work on recommendations, the company will focus to establish a large market base from new mothers. They will launch a good sales team in all maternity, prenatal clinics to provide information to new mothers and recommend MamaMil products. This will help to give first information that will enable to create a brand loyalty from the start of their motherhood. This will bring consistent income for stability of the company.

Mothers who cannot afford the formulas in the market

The company will also target mothers who cannot afford the infants’ formula due to high prices in the market. This will also create a large market for the company.

Mothers who are not satisfied with the products in the market

These are mothers who cannot find what they want in the market according to their preferences.

Positioning map

             Key   

Company SGM                                  Strong brand and a weak quality

Company Lactogen                          Weak quality and a weak brand

Company Bebelove                         Strong brand and a weak quality

Company Nutribaby                        Strong quality and a weak brand

Company Nestle                              Strong quality and a weak brand

Marketing strategy

The largest target market for MamaMil Company is the largest portion of new mothers. This is because the new mothers do not have any information concerning formulas and therefore their minds have not been brainwashed. The Kick-off using MamaMil products will create a strong brand loyalty to the new consumers.

. The prices will be much lower than the ones in the market so as to accommodate everyone. Promotion will be done in maternities, pre-natal and post-natal clinics. Promotion will also be done by the private hospital while attending to mothers in both pre-natal and post-natal. The NGO will promote the formula by encouraging its consumption while pursuing its programs to the residents. The infants’ formula will be available in chemists, nutrition shops, hypermarkets and supermarkets.

Branding strategy

MamaMil Company anticipates to create a strong brand and a large base of loyal customers. Market research analysis indicated that most mothers used a certain formula as they were advised by a health expert. MamaMil will use branding by user experience since largest target group is new mothers who will be introduced to MamaMil products. MamaMil will introduce its products to new caregivers so as to create a strong brand loyalty. The company will also use branding by thinking and imagery. This will be done where each brand within the diverse product portfolio will have its own management team, customer segment, supply chain and market share.

CSR strategy

MamaMil Company will ensure that all the stakeholders are fully aware of the company’s core business. Dr. Hope who is the most preferred pediatrician in the region will be the overall director so as to create a strong bond with the people. Also the seniors from different teams will be picked from the hospital and the NGO, this will ensure smooth running since they already had a business rapport. The company will also find employees from the residents. The company will also be looking for other partners who will be helpful in the growth of the company.

Ethics and corporate social responsibility

MAmaMil company will ensure to provide clean and formula which has the required nutrients for babys growth. It will educate all mothers on how to use the products and different specifications of different products. It will also educte its users not to pollute the environment by throwing the packaging materials anywhere.

Financial projections

Break Even Analysis

Monthly units break even

20, 233 Units

Monthly Revenue break even

$ 40, 466

Assumptions

Average per unit revenue

$2.00

Average per unit variable cost

$ 0.3

Estimated monthly fixed cost

$30,000

Proforma Profit and Loss

Year 1

Year 2

Year 3

Sales

$532,000

$581,000

673,000

Direct cost of sales

$83,750

$99,432

$115,239

Total cost of sales

$ 83,750

$99,432

$115,239

Gross margin

$448,250

$492,568

$557,761

Gross margin percentage

84.2%

84.7%

84.5%

Expenses

Payroll

$250,000

$283,000

$300,000

Sales and Marketing

$25,000

$32,600

$41,200

Utilities

$1,300

$1,340

$1,342

Total Expenses

$276,300

$316,940

$342,542

Profit before interest and taxes

$171,950

$175,628

$215,219

Interest expense

$12,000

$10,111

$8,350

Taxes incurred

$3,951

$12,432

$7,260

Net profit

$155,999

$153,196

$199,609

Net sales Percentage

2.92%

5.71%

8.21%

Conclusion

The company should provide good quality to the consumers so as to create a good customer loyalty and maintain good profit margins. The management must maintain good records. The company should also involve people so as to be the most preferred in the region. This also helps to note ant change in consumer behavior. The company has very good future prospects if it starts on a strong foundation.

References

JOURNAL OF PEDIATRIC GASTROENTEROLOGY AND NUTRITION (“Journal of Pediatric                                                                                                           gastroenterology and Nutrition”, 2018)

DONALDSON, J. K.

RELATIONSHIP OF MEDICAL SCHOOLS TO MEDICAL ETHICS AND MEDICAL ECONOMICS (Donaldson, 1938) Donaldson, J. (1938). RELATIONSHIP OF MEDICAL SCHOOLS TO MEDICAL ETHICS AND MEDICAL ECONOMICS. Southern Medical Journal, 31(3), 327-330. doi: 10.1097/00007611-193803000-00022

WORLD CONGRESS OF PEDIATRIC GASTROENTEROLOGY, HEPATOLOGY AND NUTRITION (”World Congress of Pediatric Gastroenterology, Hepatology and Nutrition”, 2016) World Congress of Pediatric Gastroenterology, Hepatology and Nutrition. (2016). Journal of Pediatric Gastroenterology and Nutrition, 63, S1-S415. doi: 10.1097/01.mpg.0000503536.79797.66

CLINICAL NUTRITION | SCIENCEDIRECT.COM (”Clinical Nutrition | ScienceDirect.com”, 2018) Clinical Nutrition | ScienceDirect.com. (2018). Retrieved from https://www.sciencedirect.com/journal/clinical-nutrition

DONALDSON, J. K.

RELATIONSHIP OF MEDICAL SCHOOLS TO MEDICAL ETHICS AND MEDICAL ECONOMICS (Donaldson, 1938) Donaldson, J. (1938). RELATIONSHIP OF MEDICAL SCHOOLS TO MEDICAL ETHICS AND MEDICAL ECONOMICS. Southern Medical Journal, 31(3)