Table of Contents

Executive Summary 2
Market Analysis 3
Product Concept 3
Features of Happy Nappy 4
Product Development Strategy 5
Competitive Landscape 6
Competition from existing players in Indian Market 6
Threats to entry in the market 6
Threat by Substitutes 6
Understanding customer power in the industry 7
Leveraging Suppliers 7
Segmentation and Targeting – Cloth Diaper Market 7
Need Gap Analysis 9
Target market and generic positioning 10
Generic positioning 11
Value proposition and positioning 12
Pros and Cons of existing products 12
Value Proposition 12
Value positioning 13
Pricing Strategy 14
Penetrative Pricing 14
Positioning w.r.t competitors 14
Introductory Discounting 15
Price Skimming Strategy 15
Volume VS Value Strategy 15
References 16
Executive Summary

Baby products are one of the well occupied markets in India with a few established players over
the years. There is intensive competition around the product category among the top brands which
offer similar products with comparable benefits. However, the recent past has exposed
dissatisfaction with the usage of disposable diapers with today’s new generation mothers being
extra conscious about the sensitivity of their babies towards the product. Moreover, the current
product comes along with a number of disadvantages which could potentially be filled by a new
product in the same category to address this need gap. This has led to the development of Health+
diapers that offers nappies made of cloth which are reusable and baby friendly. It is developed to
address the challenges faced by the usage of current disposable nappies. The primary target is to
educate the mothers who are the consumers of this product thereby inducing the benefits of this
new product and increasing the perceived benefit gained out of it. Health+ diapers are made out of
natural substances like bamboo thereby avoiding the use of extreme chemicals that could cause
harm to the baby’s sensitive skin. These diapers are also designed to be reusable which benefits
the environment as well. Priced at Rs. 500 per set, the longevity of the diaper is incomparable with
disposable diapers given their one-time use. The diapers life is dependent on the number of washes
and these are designed to last up to 2 to 3 months which explains the initial higher purchase cost.
Though the market that is targeted is an occupied market with strong players, the perceived benefits
that Health+ diapers offers would be the Unique Selling Point that would allure the potential
customers – Health conscious mothers. In fact, cloth diapers that are home-made are used in rural
areas but due to the lack of availability in cities, a need for such diapers is created. This strategy
would gradually shift the pattern of usage of diapers in India, and made the growth and profitability
of Health+ diapers to be sustainable. Currently, cloth diapers are lesser known, especially in urban
cities and entering the occupied market with a product that would bridge the gap created by the
existing disposable diapers would prove to be successful.
 Product Name – HappyNappy Diapers

Product Category – Baby Diapers

Market Analysis
The size baby diaper market in India is Rs 52.14 billion as of 2018 and is growing at the rate of
14% per annum. The healthy growth rate is driven by factors such as 25 million babies born per
year, higher disposable income among common people and the increased hygiene awareness of
Indian mothers. Although the industry is characterized by high growth rate, companies in the
diaper market still face a lot of challenges. The Indian diaper market is less than one-eighth the
size of China market. This is despite the fact that there are 25 million babies born per year in India
as compared to 15 million babies in China. In the same vein, Australia whose population is only a
fraction of India, sells more diapers than India. One of the reasons why the diaper market still
remains small is because parents prefer to wrap their baby’s skin in soft muslin cloth and use a
diaper only when going outdoors. In-order to increase our Indian market share in diapers, from the
house of Huggies we came up with a Product named “HappyNappy” which is a cloth diaper but
provides all the benefits of a disposable diaper and even more than that.

Product Concept
A cloth diaper reduces waste, saves money and gives you control over what touches your baby
skin, therefore keeping these requirements in view, a new product “HappyNappy” from the house
of Huggies is being launched. HappyNappy is an advanced biodegradable cloth diaper made with
chemical free substances. Our product can withstand at least a 100 washes and therefore reduces
the use of that many numbers of disposable diapers and thus acts as a super economical and pocket
friendly. Additional to all the qualities we promote GO GREEN through this product as it is a
biodegradable cloth diaper and not the diapers which are disposed-off after every use. You too
would be doing your part to give a cleaner environment to your kid.
Features of Happy Nappy
1. Outer Shell Features
● Fully elasticated on the waist and thigh area to give a snug fit to the baby
● Adjustable button system to reduce the chances of baby pulling & removing the diaper in
case of velcro fitted systems.
● The insert pads have velcro attached to both ends in the inner side to hold it in place during
use
● Life of the diaper shell is expected to be 100 washes
● Unique fabric which allows for easy washing of baby potty which do not remain stuck to
the fabric

2. Diaper Insert Features

● The inner pad is made of multi layered fabric
● The fluid is absorbed faster compared to other products in the market.
● The inner layers of the pad absorb all the fluid and makes the outer surface completely dry
in no time. Therefore, the baby does not have the wet feeling.
● The insert pads are available in 2 different fabrics –
1) Bamboo Inserts Bamboo is highly absorbent natural fiber. Bamboo inserts remain
soft wash after wash. It is super soft and silky to the touch and Bamboo is four times
more absorbent than cotton. Bamboo is also breathable and thermal regulating
product. It dries quickly and keeps the baby comfortable and cool, even when wet.
 2) Charcoal Bamboo Inserts Charcoal bamboo is naturally antibacterial and antifungal.
Charcoal bamboo inserts for cloth diaper absorbs odor and toxin well, making it an
excellent baby caring option. Charcoal bamboo is highly porous, making it highly
effective for moisture removal and humidification. When the air is too dry, charcoal
bamboo releases its own moisture, thus adjusting the humidity in the air

Product Development Strategy

Competitive Landscape
Some of the major players/competitors in the global baby diapers market are

1. Unicharm (MamyPoko) 2. Procter & Gamble (Pampers)

3. Baby Bela (Happy Diapers) 4. Nobel Hygiene (Snuggy)

Competition from existing players in Indian Market

The two biggest players in the market incorporate Procter and Gamble (P&G), with the brand
Pampers, and Japanese organization Unicharm, which has the MamyPoko, the first to present pant
style diapers in the country.

Today, Pampers and MamyPoko are evaluated to have a 50 percent and 36 percent portion of the
Indian market, individually. While our brand Huggies, presently totally owned by American major
Kimberly-Clark, has an 8 percent market share and Nobel's in-house brand Teddy has 5 percent of
the market, according to information.

Threats to entry in the market

With tight item margins, small fabric diaper organizations come up short on the budgets to create
promotional campaigns and depends fundamentally on web-based networking media and informal
advertising, alongside a restricted retail nearness, to get the word out.This could serve as an
advantage as we already have an established presence in the market.

Threat by Substitutes

The possibility of other diaper companies (small scale and big players) to start catering the target
market that we are focusing on. This could lead us to compete with the big budget marketing
campaigns of global players as well. The top local and big players in the Indian market right now
are

1. Carewell Hygiene Products Ltd. 2. Diapers India Ltd. Godrej Hygiene Products Ltd.
3. Gufic Biosciences Ltd. 4. Hygiene & Health Care Ltd.
5. Regency Diaper Inds. Ltd. 6. Softouch Hygiene Products (Mkt) Ltd.
Understanding customer power in the industry

Over the most recent 20 years, the cost of infant diapers has fallen significantly — from Rs 15-18
each to Rs 7-9 presently, contingent upon the brand, say specialists. Customers look for better
alternatives for a lesser price due to high costs involved. Players must be forceful regarding
showcasing, thinking of pack estimates that are moderate to customers, since market penetration
stays under 5 percent in the nation.

Leveraging Suppliers

We are expecting the volume sales to up in a short span of time as we are using penetrative pricing.
This would generate a lot of pressure on our existing production lines There are lots of local
suppliers that can be leveraged to manufacture products for the company for large scale operations.
As most of the big players like Unicharm and P&G have their own factory setups, we can minimize
our costs by using local manufacturers while ensuring quality standards are put in place for the
cloth diapers.

Segmentation and Targeting – Cloth Diaper Market

Our target market segment needs quality diapers that does more than just absorbing. They want
additional features of hygiene, skin care, affordable costs, comfortability and easy usage.
The target segment is: Mothers and to be mothers (or parents who play the role of mothers) of low
and medium-income level families, mainly of the age group 25-40 in Urban and semi urban areas.
These mothers are the decision makers as well as the buyers of the product.

So, we have targeted those mothers who purchase nappies for their babies. While targeting, we
have geographically fragmented the market into urban & rural markets. Due to higher disposable
income, the focus should be more on the urban customers instead of their rural counterparts. The
market was fragmented on the basis of income levels. The family life cycle of people was also
considered taken into consideration while segmenting.

Competitive Advantage

Lower Cost Differentiation

Cost Leadership
Broad Target Strategy Differentiation Strategy
Competitive
Scope Differentiation based
Narrow Target Focus Strategy Focus

The marketing of the product will primarily focus on the hygiene and price, and stress on the
features like comfort, care and softness on the babies’ skin. The product is available in different
quantity ranges, from smaller mini packs to jumbo size packs. The product is as soft as a muslin
cloth and especially designed for mothers who resort to using cloth nappies for extra care. It’s also
easier to target parents who are more concerned about pollution, though their number is less.

M1 M2 M3 M4
P1 Single Segment Concentration
P2
P3
P4
Need Gap Analysis
The current disposable diapers are prone to causing severe body rashes in babies. A number of
parents have reported the difficulties existing in the disposable diapers.

1. Allergic reactions
Babies have sensitive skin and the usage of harmful ingredients used in making diapers
synthetic fibers, dyes or other harsh products – may cause allergies.
2. Toxicity
Harsh chemicals used in making the diapers may enter the baby’s urinary system if the
diapers are worn for long periods of time. In a day, around 7 or 8 diapers are used on an
average which means a baby wears diapers throughout the day. This continuous and direct
contact with the skin of the baby may adversely affect the baby’s health and lead to toxicity.
3. Causes Fungal infections
When the baby pees in the diaper, the substance causing the leakage to stop also prevents
air flow inside it. This makes the environment inside the diaper warm and moist making it
convenient for bacteria and fungi to thrive. The main reason for fungal infection is due to
the retention of moisture and lack of hygiene.
4. Diaper rash
Dyes and scents are used to neutralize the foul odor and to make the diaper look attractive.
Gels and artificial materials that are used to make spongy diapers can causes skin allergy.
Moreover, as babies grow, the content and frequency of baby’s poo can also grow leading
to more skin rashes and allergic reactions.
5. Expensive
Diapers are very expensive particularly when babies used 6000 disposable diapers over a
period of 2.5 years. Many parents completely rely on diapers and lot of money is being
spent in buying the same.
6. Not environment friendly
Disposable diapers are made of plastic and certain synthetic substances along with the urine
and stool, gets discarded in rivers and landfills every day and take 250-300 years to
decompose.
 7. Health issues
In 2000, BBC reported a German study which suggested that disposable diapers could be
linked to both male infertility and testicular cancer. This is due to the plastic lining that
impairs testicular cooling and increased the temperature inside the diaper by 1 degree. This
reduces sperm counts in adults thus affecting boy’s reproductive system.
8. Physical impairment
The premier British medical journal, The Lancet has reported hip problems are on a rise
over the past 20 years with the increasing use of disposable diapers as they do not provide
sufficient support to hold a baby’s legs in the current orientation for correct hip
development.
9. Respiratory Problems
In 1999, an American study related Asthma with disposable diapers. Six leading cotton and
disposable diapers were tested on lab mice. Cloth diapers did not cause any respiratory
problems but the disposable diapers caused eye, nose and throat irritation, including
bronchoconstriction similar to an asthma attack.
10. Environmental damage
Disposable diapers use 90 times the amount of renewable resources like wood pulp and
times the amount of non-renewable resources – One cup of crude oil is needed to make one
disposable nappy.

Hence there is a need to address the health issues surrounding the use of disposable diapers by
bringing in a product that would address these issues and as well as create a sustainable value to
the consumers as well as the firm.

Target market and generic positioning

The market segment we are trying to target is already occupied market by the existing disposable
diapers - which have several drawbacks - are aimed to be fulfilled by the new cloth diapers. Reports
from publications mention that firms do not want to enter the market which is completely occupied
by strong brands but in Health+ diapers, the differentiating factor that is filling the need gap would
help to cause a shift in people’s perceived benefits which could eventually help in capturing
significant market share.
 Price
Generic positioning High

Hygiene Hygiene
Low High

Price
Low
Value proposition and positioning
Pros and Cons of existing products
Traditional cloth nappies are good for baby’s skin and environment but not preferred by any class
of people, specially working professionals as it is inconvenient. Further, midnight leakage caused
because of these nappies is nightmare for the users.

Though disposable nappies address these concerns, they can cause skin rashes to babies and also,
are hazardous for the environment. Enough that, it is said ‘Had Napoleon used diaper, his diaper
would have still existed on the earth.’ Considering the growing population and thereby babies, and
impact on environment because of these nappies, the solution isn’t sustainable.

Value Proposition
In “Happy” nappies, we provide benefits of traditional cloth nappies and disposable nappies, for
happy child, happy parents and happy environment. Happy nappies ensure that we provide
sustainable solution for the parents who are not able to look after their baby and even if they can,
the time spent by them shouldn’t go on changing nappies. Also, at the same time, we make sure
that babies health and environment is taken care of.

Proposition Traditional Cloth Health+ Disposable Diapers

Diapers Diapers
No Leaks 🗶 🗶 🗶
Fit 🗶 🗶 🗶
Convenience 🗶 🗶 🗶
Expensive 🗶 🗶 🗶
Complexity 🗶 🗶 🗶
Convenient during 🗶 🗶 🗶
travel
Chemical free 🗶 🗶 🗶
Rashes to babies 🗶 🗶 🗶
Environmental cost 🗶 🗶 🗶
Smell 🗶 🗶 🗶
🗶 🗶 🗶
Registered in CPSFA
Value positioning
Our positioning w.r.t. Cloth Nappies

Benefits/Price More Same Less

More More for More More for same More for less
Same X X Same for less
Less X X Less for Less

Our positioning w.r.t. Disposable Nappies

Benefits/Price More Same Less

More More for More More for same More for less
Same X X Same for less
Less X X Less for Less
Pricing Strategy
Penetrative Pricing
The cloth baby diapers ask for a change in consumer behavior in terms putting extra efforts for
cleaning of the cloth piece used, which will discourage people from purchasing it initially. While
the health benefits and long-term cost of the product outweighs that of the currently prevalent
disposable diapers, the awareness may not be there among customers regarding the same. Hence
to get people to try out this product we will position it as a relatively low-cost product for one
diaper set compared to disposable diapers. The feedback from customers will generate a positive
word of mouth thus creating awareness about the benefits among others. Once it establishes a name
for itself, we can leverage that to increase our prices.

Positioning w.r.t competitors

Disposable diaper usage
Age of The Diaper Usage Per Diaper Usage in One Cloth Diaper Use
Baby Day Month

3 set (1 cloth + 5 insert

0 to 1 months 10 to 12 diapers 320 diapers
pads)

3 set (1 cloth + 5 insert

1 to 5 months 8 to 10 diapers 270 diapers
pads)

3 set (1 cloth + 5 insert

5 to 9 months 8 diapers 240 diapers
pads)

3 set (1 cloth + 5 insert

9 to 12 months 8 diapers 240 diapers
pads)

Cost to customers
Brand Pampers MamyPoko Happy Nappy
Price ₹800/60 diapers ₹700/60 diapers ₹500/set
#diapers/6 months 1800 1800 5 set
Total cost for 6 months ₹24000 ₹21000 ₹2500
Introductory Discounting
Since the introductory price in itself is lower compared to disposable diapers while allowing usage
for an extended period of time, allowing customers to extract much more value, discounted pricing
is unnecessary and hence will not be required.

Price Skimming Strategy

Price skimming strategy is used when the product to be launched has exclusive additional features
which gives the company a competitive advantage in the market to leverage upon. Since baby
diaper market is a highly concentrated market and the cloth diaper require additional effort on
consumer’s part, setting up a higher price initially may prevent from gaining expected market share
targeted by the company. Hence price skimming strategy is not beneficial to use here.

Volume VS Value Strategy

One of the key features from which product derives its value is from its longevity of use. Hence a
volume strategy is not suitable for our product. The long-lasting nature and the health connotation
associated with the product differentiates it from any existing disposable diaper in the market,
allowing us to charge a price at much higher margin while still providing customers with much
higher value. The initial low-price set is to gain the attention of customers. However, once they
begin understanding and acknowledging the value of our product and are willing to invest, we will
increase our prices to derive more value from each unit sold.
References

1. https://www.entrepreneur.com/article/20962
2. https://www.conzumr.com/br/DIAPERS/compare?prodList=5073,4807,4829,5002,5064
3. https://parenting.firstcry.com/articles/7-side-effects-of-diapers-on-babies/
4. https://www.diaperjunction.com/Cloth-Diapers-and-the-new-CPSIA_b_184.html
5. https://parenting.firstcry.com/articles/diapers-usage-how-many-will-your-baby
need/#targetText=Newborn%20babies%20soil%20more%20diapers,and%20pee%20after
%20every%20feed.
6. https://www.firstcry.com/paw-paw/paw-paw-reusable-diaper-with-insert-walrus-print-
small-size-blue/2581496/product-detail?ref=GoogleShopping_1_Cloth-Diapers-
Nappies!!Search_Smart_Shopping_All_Products!!&gclid=CjwKCAjwqZPrBRBnEiwA
mNJsNsuy8I_9w4bdvYzCxlcCFbz-
EmmSiqthd10q__yBMibHvjMCNCJUZhoCovgQAvD_BwE
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@~27@@@1@0@20@@@@@@@@@@@@@@@@&rating=&sort=HighestDisco
unt&ref=SEM_GSN_PB_Huggies_HUGAUG_Diapers&gclid=CjwKCAjwqZPrBRBnEi
wAmNJsNtIxNQIz4rNGb49Pc5WtJk7uqZch-
NVGZIBTU2Twj3eQFrhqFXfmfxoCEMkQAvD_BwE