HOW TO WIN A WAR BY

LOSING A BATTLE

INFANT BABY FOOD

COMPETITIVE STRATEGY
IN INDIAN CONTEXT

ABHISHEK PANIGRAHI
ROLL NO. 02
 PRESENTATION OUTLINE

 Why Milk Substitutes

 Competitive Strategy: Growth of Infant Baby Food through promotion of Breastfeeding

 Production of Breast Milk Substitutes: Quality and Legal Standards

 Social, Legal and Ethical Marketing

 Medical Chain – Harnessing relationships

 BREAST MILK
 Breast milk is the best nutrition for infant growth and development, and is also rich in
antibodies that provide the first source of adaptive immunity in a newborn’s intestinal tract.

 In preterm or low birth weight newborns, a mother’s own milk is the first choice for
preterm infants; when it is unavailable, donor breast milk is considered as the next best
choice.

 For healthy newborns whose mothers are unable to provide sufficient breast milk, the
current option of choice is infant formula.

37.7% Infants who are not breastfed: Market

 Market size and forecast

•Processed food production in the global market

is dominated by a handful of powerful
multinational corporations.

•Nestlé (US$19,370 m brand value) and Danone

(US$9098 m brand value) were ranked globally
by Brand Finance as the two most valuable food
brands in 2018

•Six multinational corporations controlled more

than half of the global baby food market (including
BMS), Nestlé followed by Danone holding the
biggest shares, and Kraft Heinz, Mead Johnson,
Abbott and Friessland Campina the remaining
four (Euromonitor International, 2015, as cited by
Save the Children.
 Types of infant food

Infant formulas are available in three forms:

(1) powder: The least expensive form of

infant formula that must be mixed with
water before feeding;

(2) liquid: Concentrated liquid that must be

mixed with an equal amount of water; and

(3) ready-to-feed: The most expensive form

of infant formula that requires no mixing.
 FORMULA MILK
There are three major classes of infant formulas:
 Cow-milk based formula,
 Soy-based formula and
 Specialized formula.

They vary in nutrition, calories, taste, digestion, and cost. Specific kinds of formulas are
available to meet a variety of needs.

Some cow’s milk substitutes are amino acid based or contain extensively hydrolyzed whey or
casein proteins. Some are rice-based formula.
 Cow Milk-Based Formula Hypoallergenic Formulas
Bovine milk is the basis for most infant formula. However, Protein hydrolysate formulas are meant for infants and
bovine milk contains higher levels of fat, minerals and protein babies who are unable to tolerate cow milk or soy-
compared to human breast milk. based formulas. They contain protein that has been
hydrolyzed—partially or extensively—into smaller
Therefore, cow milk must be skimmed and diluted to more
sizes than those found in cow or soy-based products.
closely resemble human breast milk composition. Cow-milk-
For infants who have a protein allergy, extensively
based infant formula contains added vegetable oils, vitamins,
hydrolyzed formulas are a satisfactory alternative.
minerals and iron for consumption by most healthy full term
infants.
Soy-Based Formulas
Formulas made from soy proteins are effective options for Amino Acid Formulas
infants with galactosemia or congenital lactase deficiency. They
help with colic and milk allergies, however, rarely, infants who Amino acid formulas are another option for infants
are allergic to cow’s milk may also be allergic to soymilk . who have severe cow milk allergy with reactions to
or refusal to ingest appropriate amounts of
Soy products should not be used in infants under six months of extensively hydrolyzed formula. They provide
age with food allergy. Because phytoestrogens are present in protein in the form of free amino acids with no
soy-based formula, the uses of soy-based formulas are limited peptides.
by the concern of potential harm for the infant, although this
remains controversial.
COMPETITIVE
STRATEGY
FOR
INFANT FOOD
FORMULA
 MARKETING OF FORMULA MILK
 Formula marketing, as for other fast-moving consumer goods, starts with a detailed understanding of the
customer; on this can be built long-term relationships which are strengthened with careful segmentation and
targeting.

 Campaigns need to work at both a brand and generic level. (Major Difference in marketing

 Maintaining stakeholder support is also important.

 The fiscal strength of the key players ensure that this marketing activity is guided by the best global
expertise.
Stakeholders:
One cannot advertise a brand,
- New Parents so generic promotions for category are must
- Doctors / Health Specialist
- Inoculators
- Para Medical Staff
- Government Agencies Who is the Customer?
- Medical Stores
Breast
vs.
Bottle
 Understanding the customer
Marketing is a complex and sophisticated art. In the formula industry, as in other consumer goods sectors, marketers seek to solve
their customers’ ‘problems’, and to do so effectively it is essential to gain a detailed understanding of “who are you talking to, what’s
in their head, how can you engage them, how do you sell yourself to that person” .

The approach is indirect, very much “a soft sell” building faux-friendships rather than making an overt sales pitch: “we want to build a
relationship with you as a mother, we want to support you, we want you to see us as an ally and we want to subtly insinuate
ourselves as your friend and support in a healthy pregnancy and a happy baby” (FME).

Paradoxically, the only unmistakably factual material that is always included is the ‘breast is best’ declaration required by the WHO
Code, but this is also used to good marketing effect.

First, it aligns the company with WHO and the public health establishment. Second, it raises the topic of “first milk”, which is
supposed to be a no-go area for marketing: “they cannot legally communicate about the first milk, it’s legally forbidden in most of the
countries so they are always playing with the … [requirement to] mention that it is the best thing after the maternal milk”. For
example, one company’s ‘breast is best’ statement continues “unfortunately, not all mothers can breastfeed …”, and so into an overt
pitch for its products.
Building long-
term relationships
with baby clubs
and carelines
Segmentation and targeting

• This type of bespoke marketing

means that one size will not fit all.

• The personal data is to be used to

segment customers into smaller,
more homogenous target groups
which then receive suitably honed
approaches:
 Targeting the medical establishment

MEDICAL COLLEGES HOSPITALS

NURSING COLLEGES PRACTISING DOCTORS

INOCULATION / IMMUNISATION CENTRES PARA MEDICAL STAFF

INDIRECT MARKETING SCIENTIFIC MAGAZINES

 Profit margins and pricing strategies

An analysis of company reports from five of the biggest baby food companies gave an
indication of the profitability of the broader baby nutrition category.
A 23.3% weighted average of profits demonstrates why investors are interested in the
category.
Some business analyst described BMS products as “high-margin” categories, alongside pet
food and premium coffee (e.g. by Business Monitor International [42]).
Companies have taken the opportunity to premiumise their BMS products. In an investor
seminar presentation, Danone endorsed their brands and strategies for mid- to long-term
growth drivers in the Chinese market, including Aptamil Classic, Nutrition Classic and
Aptamil Platinum, as being “well suited to address untapped opportunity in ultra-premium
IMF [infant milk formula] segments”, divided into pricing segments described as “mainstream
… super premium … ultra-premium … [and] ultra-premium+”
 DISCLAIMER
• New parents are often extremely vulnerable; raising a baby is
immensely challenging, and almost all parents are primarily motivated
by doing the ‘best’ for their child in whatever circumstances they find
themselves.
•They badly need reassurance and support.
• They also need a convenient and dependable way of feeding their
child: a healthy diet compatible with hectic modern life, and the norm of
working mothers and fathers.
• Formula companies need to develop an intimate understanding of
these needs and are delivering to them with a combination of
‘sympathetic’ relationship building, non-judgemental support,
individually targeted communications, a readily available range of
reliable products and the construction of reassuringly familiar and
evocative brands.
• Digital marketing, where the social and commercial have melded, is
greatly enhancing their efforts, whilst making the breadth of industry
marketing strategies increasingly difficult to track and document.
• The reach and wealth of the multinational corporation has turned this
soft power into a very hard global force
 CONCLUSION
 The BMS market is worth about US$70bn per annum and is controlled by six of the most powerful food companies
in the world, with massive household and global reach. High profit margins offer attractive investment and business
opportunities. Marketing spend is extremely difficult to quantify accurately but certainly runs into billions of dollars
annually, which is used to target governments and stakeholders as well as consumers. This is corporate marketing
at its most powerful and disturbing.

 The concerns are twofold.

- First, in most cases, formula feeding is not the best option, from a health or ecological standpoint. As
noted above, its use is causing immense harm to babies, mothers and the environment.
- Second, the marketing is built on deception. Infant formula is in reality the definitive one-size-fits-all
product. By law all products must have the same formulation, as established by independent research.

 The only permitted variation from this is for unproven additives, which if they ever prove to be beneficial, would,
again by law, have to be added to all formula products.

 The product ranges, the segmentation and bespoke targeting, the carefully honed brands are simply subterfuge. In
the UK the two leading and supposedly very different brands which dominate the market are in fact made by the
same multinational.