The A2 milk company Limited is an ASX listed company that commercializes in Intellectual property that relates to A2 milk and other milk products for infant formula.
A2 platinum premium Infant Formula is based on a unique whey and casein protein blended from the milk of a cow. The Beta Casein protein is guaranteed to be only the naturally occurring A2 type and not A1 (Mencarini, 2013). The product is tailor made for babies and it is rich in key nutrients essential for growth and development (Messenger, 2014). This paper discusses the competitive environment in which the products operate while analyzing the internal and external environment of the product. Target market for the product and the market segmentation for A2 infant formula is also determined and a justification for the same is provided. Market position of the product is accompanied with a positioning map to explain how the product is positioned in the market.
Environment Analysis:
For many years, A2 Infant milk Limited has operated with little or no competition at all. This is mainly because the company specializes in A2 which involves carrying a lot of research and doing genetic tests to improve on the quality of milk suitable for children. However, in the recent past,the competition has gone a notch higher with many companies venturing into similar businesses. Some of the companies include Origin Milk in the US, Dean Milk, Lion, and Parmalat Company. Lion and Parmalat is the major competitor of A2 in Australia. A2 Milk Company still retains a significant first mover advantage and it enjoys good brand image which means that the company is miles ahead of others in the market.
Customers
A2 Milk Limited serves a wide range of domestic and International customers. The customers of the product are mainly in Australia and New Zealand with the customers basically being parents of infant children. The company also has licensed products in USA and UK. Products are also exported to the Chinese market which is very lucrative since demand is very high.
Macro environment
Political factors
Some of the political factors that affect A2 operations and activities include;
Political instability in some countries where its products are distributed, bureaucracy and interference by the government in the food and beverage industry, trade regulations and tariffs that are politically motivated, antitrust laws related to Food and beverages. Wage legislation may also affect the operations of the company as well as product labeling restrictions that are meant to block out some products.
Economic factors
There are a variety of economic factors impacting on A2 milk limited. The company depends on cow milk which comes from various contracted farmers. The productivity of cows depends on seasonality and hence there are seasons where the company fails to produce enough milk to meet the ever increasing demand in the market. The taxation laws in different countries may affect the planning of the company. Intellectual property rights are not well protected and enacted in some countries and therefore some other companies end up benefiting illegally from the companies` operations. Fluctuating interest rates and varying economic conditions affects A2 limited operations.
Social
The culture and beliefs of the society in which A2 Milk Company limited operates and sells its products affects the operations of the company. The culture of a society relating to consumption of milk influences greatly the performance of the company in these areas. The attitudes of people towards health and environment as well as leasure interests affect A2 infant formula. The education level of a society determines their level of understanding of the importance of A2 formula infant milk. The child care advice and culture of a society determines the probability of a mother offering their child the infant milk.
Technological factors
Technological factors are the factors related to use of technology in production, use, and distribution of a product. Technology is disrupting many industries and this has necessitated innovation for companies to remain relevant and afloat. A2 Milk Company limited depends significantly on gene technology to introduce the A2 protein gene into milk products. There has been a lot of research and advancement in technology in these field and its posed to affect A2 milk. Competition is setting in as some other companies try applying different technology to improve the A2 milk and this has increased competition in the industry. The changes in production technology are also posed to affect costs of production. The value chain structure of the food industry is also changing and this will impact on the operations and sales of A2 Milk Company.
Environmental factors
Environmental factors have a huge bearing on the A2 milk company and specifically A2 infant formula since the raw materials of the product is agricultural in nature. This means that environmental factors and changes in weather and climatic condition influences supply. During dry seasons, productivity of milk which the company depends upon to make A2 baby infant formula reduces. Decrease in supply means that demand will increase which in turn will increase prizes. These changes are not good for the company and the customers as well.
The laws regulating environmental pollution have a huge impact on the operations of A2 Company and also the supply of A2 baby infant faction. The regulations are too stringent in some countries to the point that they hinder the performance of the company (Tang & Allen, 2012). Air and water pollution regulations, waste management methods and attitudes towards ecological products also influences the product.
Legal factors
These are regulations regarding trade that affect the operations of a company in a particular country. They include tax laws, copyrights and patent laws, employment laws as well as health and safety laws (Skinner, 2011).
Identification of a Target Market
From the analysis of the market and the features and design of our product which is A2 baby infant formula milk, the target market for the can be identified as “A2 infant formula milk for children.”
Description of Target Market
In order to describe the target market of A2 infant milk for children, it is important to segment this market so as to identify how the product is sold and distributed to the target population. The market is segmented geographically, demographically and psychographically (Ramaswamy & Namakumari, 2009). The geographic market of A2M is divided into the Australia and New Zealand segment, UK segment, US market segment and then the China and rest of Asia market. The market segmentation on geographic basis is based on the demand level in the market and how strategic the market is.
Demographic segmentation is based on the age of the children. There is A2 infant milk for children below 6 months (Woodford, 2007). There is also a product for children below 12 months. The company also produces infant milk for children below the age of 3 years. The company also has different types of patents across many countries such as Animal Genotyping patent in Australia, Canada, India, and North Korea (Morstein, 2017).
Positioning
The product position of A2 infant baby milk product is based on the advantage of the product. The unique advantage of the A2 milk is that it contains the A2 protein which is easily digested especially by the reproductive system of infants. Research published in the journal of Clinical Nutrition and it showed people who consumed A2 protein were less susceptible to bloating and other stomach aches than people who consumed the A1 protein (Pride, Ferrell, Lukas, Niininen & Schembri, 2015). The product is positioned to focus on the market of infant who do not have a fully developed reproductive system.
Marketers prepare market positioning maps that show how consumers perceive a particular brand of product in the market. The product positioning map below compares the products positions of different products in the market.
The product positioning maps compares the prices of the products with the perceived nutritional content of the milk which is an important factor in quality.A2 platinum which is a product of A2 milk limited is at the top of the map. At this point, the price of the product is highest and the level of nutrition in the product is also high. Aptamil is at the position where the price is high but it is not perceived to be of very high quality (Conto?, Del,Faccia & Zambrini, 2017). The bottom right corner of the map contains Kericare and parent choice and the products in this position are low price and high nutrition content. The bottom left corner is where the prices are low and the product is of high quality.
Conclusion
A2 baby formula is a milk product processed by A2 Milk Company limited which is headquartered in New Zealand. The product is made by isolating the A1 protein from milk and leaves only the A2 protein which is more nutritious and easy to digest. Ease of digestion makes a2 milk a product that is recommended for infants since their digestion system is not fully developed and adopted to digesting some food. The product targets children below the age of 1 year. The paper begins with a micro-environment analysis where the competitive environment is evaluated. An analysis of the external environment is also done using the PESTEL analysis. The target market for the product chosen is infant children and its positioned as ‘premium quality infant a2 milk’.
Reference List
Conto?, F., Del, N. M. A., Faccia, M., & Zambrini, A. V. (2017). Advances in dairy products. Hoboken, NJ: John Wiley & Sons.
Morstein, M. (2017). Mastering diabetes: A comprehensive, integrative approach for successfully treating both type 1 and 2 diabetics. Chelsea Green Publishing Co.
Mencarini, I. (2013). A simulation model of dairy herd conversion to produce A2 milk: A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Agricultural Science at Lincoln University.
Messenger, Joanne. (2014). How to Balance Your Hormones. Balboa Pr.
Pride, W. M., & Ferrell, O. C. (2010). Marketing. Australia: South Western Cengage Learning.
Pride, W. M., Ferrell, O. C., Lukas, B. A., Niininen, O., & Schembri, S. (2015). Marketing principles.
Ramaswamy, V. S., & Namakumari, S. (2009). Marketing management: Global perspective, Indian context. Delhi: Macmillan.
Skinner, E. R. (2011). Brain lipids and disorders in biological psychiatry. Amsterdam: Elsevier Science.
Tang, M., & Allen, K. (2012). Kids’ food allergies for dummies. Richmond, Vic: John Wiley & Sons, Australia.
Woodford, K. B. (2007). Devil in the milk: Illness, health and politics : A1 and A2 milk. Nelson, N.Z: Craig Potton.
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