Diaper Manufacturer Business Plan

The current drive and emphasis by the government on diversification of the industrial base away from the minerals sector presents an opportunity for Baby Nappies World to make a valuable contribution towards achieving this goal. Having undertaken a thorough and comprehensive research of the market we realized that there was a vast opportunity for a local manufacturer of diapers and pads, with less than a handful currently on the market. 

Aware of the fact that operating in such a market is largely dependent on good networking, we intend to establish networks and strategic relationships with various wholesalers, clinics and hospitals to ensure a steady stream of orders. In so doing we intend to ensure that the products we produce are of extremely high quality and fully serve their purpose. Our initial overall target market share shall be 10% of the market, mainly focusing on the wholesalers and organisations in Botswana.

We appreciate that entering such a market is not a ‘bed of roses’ and will require us establishing strong networks and links with several organisations and institutions as outlined previously. Hence we intend to implement an aggressive marketing strategy, well supported by the other business functions. The above prognosis influenced our decision to enter the diaper and sanitary pad manufacturing industry.

4.1 Market Segmentation

We will be focusing on wholesalers, academic institutions, hospitals and clinics that either sell or utilize our intended products. We also intend to focus on government tenders for our diapers and sanitary pads.

Our main target market is large enough to order from us and ensure that we are kept busy meeting their orders. Though we do not intend to fully depend on them, they shall constitute our ‘core’ market. One of our intentions will be to offer organisations an attractive alternative to South African companies mainly marketing our lower costs and shorter order fulfillment time.

4.2 Target Market Segment Strategy

Our marketing strategy will be based mainly on making our products available to the right target customer. We will ensure that our products’ prices take into consideration organisations order-makers’ budgets, and that these people appreciate the quality of our products, are aware our products exist,, and know where to order them. Our low production costs, which will naturally be reflected in lower prices for our products, will ensure that we have very good opportunities to win hospital, clinic, and institution tenders for our products, besides obtaining orders from all the other markets including wholesalers, chemists, informal traders and supermarkets we shall be targeting.

We realize the need to focus our marketing message and our product offerings. We need to develop our message, communicate it, and make good on it. This shall be undertaken in order to establish ourselves on the market and long-term relationships.

4.2.1 Market Needs

Baby Nappies World will set out to provide high quality disposable baby nappies, geriatric/adult diapers and sanitary pads that will facilitate the hygienic and easier changing of individuals, both adult and children. The quality of raw materials and assembly technology we shall utilize will be evident in our products, serving to enhance the appearance of our customers, in turn adding to their comfort. The large market is due to the fact that admissions are increasing at an enormous rate in hospitals and clinics resulting from increased diseases and infections, as well as the increase in the population growth rate.

We understand that our target markets need more than just something that absorbs. Our target customer wants something that absorbs as well as being hygienic, comfortable, easy to use and of good quality. Price also plays an important part in the purchase decision.

4.2.2 Market Trends

Botswana currently has one of the fastest population growth rates in the world, resulting in a population of over 1.6 million now compared to just 600,000 in 1971¹. By 2021 the workforce between 25-59 years old is expected to increase from around 500,000 to over 1 million. However, a drop in the fertility rate is anticipated because of increased opportunities and better education. In 1981 Botswana women had an average of 7.1 children, in 1991 they had 4.2 children and this is forecast to fall below there in the next 10 years. This is causing a shift in the demographic structure of the population, from a situation where over 50% of the population are under 19 years old, to one where more of the population is of working age. As a result the dependency ratio is likely to fall, resulting in increased household savings. The current population growth rate shows that there is a demand for diapers and nappies in households, particularly considering the increase in the workforce prompting mothers to stock diapers, especially disposables, as they are easier and faster to handle.

¹ Source: Central Statistics Office

4.3 Industry Analysis

Industry competition information appears in the following subtopics.

4.3.1 Competition and Buying Patterns

The key element in service utilization decisions made at the company’s client level is trust in the reputation and reliability of the firm. The most important factor in this market will be the quality of the product. Unlike our competitor’s nappies and pads, ours are going to have double the absorbent super gel making our absorbency superior to most top brands. This converts into fewer diapers and pads being used per day, encouraging customers to order our products.

4.3.2 Main Competitors

There are currently few local companies competing in our market niche. However upon closer research it was identified that South African products constitute approximately 70% of the market, dominating the market. Hence we intend to market ourselves as a local quality manufacturer of diapers and pads in such a way that with time customers will choose our products over competitors’ on the basis of our lower costs, faster order fulfillment times and high quality. The following were identified as our main local competitors:

1. X

   Located in Francistown, X, also known as N, specializes in the manufacture of baby napkins, bath and hand towels, face and wash cloths, beach towels, bath sheets and waffle gowns. With a large share of the northern market, mainly due to the large distance between Francistown and South Africa, N is an established player on the market and was rated as the best performer in the textile sector in 1999. It has had tremendous growth in a short time, with state of the art machinery currently in place.

   During 1999 the company pursued the European markets with employment rising to 340 people. It has a well-coordinated sales office, which ensures orders are met and delivered on time, as well as a professional sales staff that ensures customer inquiries are well handled. Its customer base is largely from South Africa with few local customers. Prices are extremely competitive with a pack of four black diamond napkins (70x70cm) selling for P27.08. Though the local orders are few they tend to be of large amounts. It obtains most of its raw materials, including yarn from Zimbabwe, with the actual weaving being done in the factory. Transport is normally provided for bulk orders of above P2,500.00 throughout Botswana taking four weeks at maximum to deliver the order. The actual delivery time often depends on whether the stock is available in-house. The company is an investment product of B, with a considerable degree of financial and technical backing.

2. Y

   Located in Gaborone West, Y specializes in the manufacture of baby napkins, towels, face cloths, tea towels and dish cloths. It has a large warehouse whose logistics/operations are well organised, coordinated and closely supervised. Prices are extremely competitive due to the above-mentioned factors with baby napkins selling at approximately P4.00 (70x70cm); Infant napkin approximately P3.00 (60x60cm) and a printed baby napkin selling at P6.00 (70x70cm). It targets both retailers and consumers ensuring a large customer base.

3. Z

   Located in Tlokweng Industrial, Z specializes in the manufacture of baby napkins, towels, face cloths, dishcloths, swabs and other textiles.

4. K

   Located in Tlokweng, K 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 South African market. It employs 145 people and is also an investment product of B.