Diaper Manufacturer Business Plan

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Strategy and Implementation Summary

Baby Nappies World intends to win and maintain customers by providing products that add value in terms of price, quality, safety, availability and functionability, and are supported by a dedicated, well-trained team. This shall be important to the successful implementation of our overall strategy and hence the need to ensure we are focused and working harmoniously towards attainment of the goals and objectives. We initially intend to be focusing on satisfying the local market.

Our marketing strategy emphasises focus. We are a new company and hence must focus our efforts towards informing customers of our existence and the products we are able to supply. Initially Baby World Nappies will focus on the local market before contemplating entering the regional market. This is mainly due to our limited resources and the need to instill confidence in our products as well as business operations. The target customers will include key decision-makers and order-makers in hospitals, clinics, wholesalers and informal traders, who often order or recommend on behalf of the whole organisation, the aim being to obtain an initial order and fully satisfy the customer from then on. Hence:

  • We intend to focus on delivering quality products at affordable prices that in turn will produce good referrals, which can then generate revenue.
  • We intend to build image and awareness through consistency and distinctiveness in our order fulfillment.

Our strategy is to grow the business by nurturing clients and establishing good one to one relationships with them. All criteria from customer satisfaction, order fulfillment, price competitiveness to staff attitudes are to be looked at thoroughly in the initial stages so as to identify areas of improvement. To attain low lead times (the time it takes to meet orders) we need to ensure that all functions are communicating properly and formally, using valid and accurate data to derive achievable plans and schedules for all stages of procurement, manufacturing and delivery.

Baby Nappies World will develop new channels of distribution as the company grows. Its plan to become a nationally known brand may be pushed forward by entering into contracts with the numerous clinics and hospitals throughout the country, such that it gives Baby Nappies World exclusive access to the relatively remote areas in the country.

5.1 SWOT Analysis

We shall be in a highly lucrative market in a growing economy. We foresee our strengths as the ability to respond timeously to customer's orders and provide them with the correct quantity. Our key personnel will be well trained in the actual production of our products so as to ensure on time deliveries to the client. This will go a long way towards penetrating the market. Below are the summarized strengths, weaknesses, opportunities and threats.

5.1.1 Strengths

  • Relationship selling: We intend to get to know our customers, one on one. Our direct sales efforts will seek to maintain a relationship with our customers.
  • Diversified customer base: We intend to obtain orders for our products from a wide customer base. This will ensure lack of dependency on one customer.
  • Low production costs: The costs of our products will be approximately a third less than the famous brand names and end user prices.

5.1.2 Weaknesses

  • A limited financial base compared to our South African counterparts.
  • The introduction of new organisational practices and personnel who have not previously worked together presents a challenge to the organisation.
  • Our infancy dictates that wholesalers and other intermediaries might be skeptical about our products.

5.1.3 Opportunities

  • Service. As our intended target markets are in relatively accessible areas we intend to be able to meet their requirements in the shortest possible time.
  • Current drive by government towards encouraging the participation of indigenous entrepreneurs and diversification of the economy presents an opportunity that we may fully utilize.
  • Presently there is no reliable local manufacturer of diapers and sanitary pads, with less than a handful currently on the market.

5.1.4 Threats

  • The "Foreign is good, local is poor" belief may present a difficult hurdle to be overcome.
  • Existing competition, both local and foreign. Wholesalers and institutions may express satisfaction with their current diapers and sanitary pads.
  • The possibility of other start up diaper/sanitary pad manufacturing companies generated by healthy economic growth, establishing in the market.

5.2 Marketing Strategy

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 South African competitors and we need to be able to sustain that. Our marketing will strive to ensure that we establish long relationships with clients.

5.2.1 Pricing Strategy

Baby Nappies World's products will be competitively priced in relation to its South African 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 PX per nappy. However this will dictate that our costs are prudently kept so as to ensure our financial goals come to fruition.

5.2.2 Promotion Strategy

The promotion strategy shall initially revolve around informing customers of our existence, the products we produce, and how to order 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 lower order prices.
  • Quality products able to compete with the top brands.
  • Faster order fulfillment times.

We intend to be well known by all our stakeholders in particular wholesalers, hospitals 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 skeptical towards our products and their efficacy.

  2. Advertising. In view of the fact that we are new on the market we intend to undertake adequate advertising of our name and products we offer. This is to instill 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 products and business name.

  3. Direct Marketing. This will be used to a limited extent in the form of telemarketing and informing potential customers and obtaining referrals where possible. 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.

  4. 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. Trade shows that instantly come to mind include Botswana International Trade Fair (BITF) and BITEC, though the latter might not be as important as the former.

5.2.3 Distribution Strategy

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 whether they should refer their friends to order our products. To this end we intend to ensure we provide a quality product with superior absorbency and comfort. Hence we initially intend to use the following channels: (discussion omitted).

5.2.4 Positioning Statement

We intend to position ourselves as a desirable alternative source of high quality disposable baby nappies, geriatric/adult diapers and sanitary pads. 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. An important competitive edge will be our assembly strategy, which will be based on good quality, such that production and delivery are not only a pleasure, but also a feature that enhances the sense of quality and perception by clients. Our faster delivery, relative to our South African 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.

5.3 Sales Strategy

For the short term at least, the selling process will depend on personal selling/networking and advertising to inform potential customers about the products we offer and the benefits of utilizing our products. Our marketing does not intend to affect the perception of need as much as knowledge and awareness of the product category.

5.3.1 Sales Forecast

Sales forecast information is presented in the chart and table below.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Nappies, diaper, pads P748,800 P1,075,200 P1,142,400
Other P0 P0 P0
Total Sales P748,800 P1,075,200 P1,142,400
Direct Cost of Sales Year 1 Year 2 Year 3
Nappies, diaper, pads P361,920 P389,760 P389,760
Other P0 P0 P0
Subtotal Direct Cost of Sales P361,920 P389,760 P389,760