Subsistence Marketplaces Initiative...Subsistence Marketplaces Initiative| Business Cases Page 1 Subsistence Marketplaces Initiative Business Cases June 2012 . * This case is based

Subsistence Marketplaces Initiative| Business Cases Page 1

Subsistence Marketplaces Initiative Business Cases June 2012

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* This case is based on a comprehensive business plan developed by a student group in the course entitled Sustainable Product and Market Development for Subsistence Marketplaces under the supervision of the instructor, Madhu Viswanathan. The case was prepared by Madhu Viswanathan, John Clarke and Srinivas Venugopal and copyedited by Tom Hanlon. We gratefully acknowledge the organizational sponsor of the project and the students who contributed to it.



Contents Contents ........................................................................................................................................................ 2

Executive Summary ...................................................................................................................................... 4

Situation Analysis ......................................................................................................................................... 4 Internal Strengths and Weaknesses............................................................................................................ 4 External Opportunities and Threats .......................................................................................................... 7

Immersion Experience and Field Research Findings ............................................................................ 7 Macro Environment .............................................................................................................................. 9 Market ................................................................................................................................................. 10

Major Challenges .................................................................................................................................... 11 Competition .............................................................................................................................................. 14

Objectives .................................................................................................................................................... 15 Mission ..................................................................................................................................................... 15 Impact of Malnutrition in India ............................................................................................................... 16 Attempts to Combat Malnutrition in India ............................................................................................... 16 Product Concept Generation ................................................................................................................... 18

Process and Outcomes ........................................................................................................................ 18 Descriptions of Concepts .................................................................................................................... 18

Evaluation of Concepts ............................................................................................................................ 19 Criteria and Rationale ......................................................................................................................... 19 Discussion of Ranking ........................................................................................................................ 20

Customer Needs with Corresponding Technical Specifications .............................................................. 21

Product Development ................................................................................................................................. 23

Marketing Strategy ..................................................................................................................................... 24 Target Market Selection ........................................................................................................................... 24 Product Positioning ................................................................................................................................. 27 Communication & Value Proposition ...................................................................................................... 27 Sustainable Distribution .......................................................................................................................... 28

Action Plans ................................................................................................................................................ 29 Manufacturing Plan and Launch Schedule .............................................................................................. 29 Financial Forecast ................................................................................................................................... 31

Dispenser Component Costs ............................................................................................................... 34 Ecological Impact Forecast ..................................................................................................................... 38 Social Impact Forecast ............................................................................................................................ 39

Product Perspective ............................................................................................................................. 39 Vita Jeevan Perspective....................................................................................................................... 40

Implementation, Controls, and Evaluation .............................................................................................. 41



Measures of Performance – Meeting Triple Bottom Lines ...................................................................... 41 Monitoring and Evaluating Performance on Multiple Dimensions ......................................................... 42

APPENDIX ………………………………………………………………………………………………………………………….44



Executive Summary

This report serves as a self-contained document capturing the learning and experiences of a yearlong course at the University of Illinois at Urbana-Champaign, Product Development in Subsistence Marketplaces. We, Vita Jeevan (Jeevan is Hindi for life), have planned a sustainable business venture targeted at low-income consumers in India. Vita Jeevan has several goals: (1) to provide a profitable investment opportunity to external financiers of this venture, (2) to combat childhood nutrition deficiencies in rural India through education and, (3) to promote economic activity in our target market while empowering our employees, and (4) to operate an environmentally sustainable business. Our central product is a nutritional candy, customized to meet the nutritional needs of children ages 5-8 in rural India. We will dispense these candies through two channels. First, we will install fun, interactive dispensers in primary school classrooms that educate children while providing a multivitamin candy. Second, we will retain commission-based entrepreneurs to sell the candies through local networks in their villages and surrounding communities. The following pages detail our rationale for selecting this business opportunity and provide suggested action items to embark on this venture.

Situation Analysis

Internal Strengths and Weaknesses

Before launching this venture, we found it worthwhile to openly assess our strengths and weaknesses as a business model. Additionally, we identified key opportunities to grow our business as well as threats, which could impede our growth. Figure 1 provides a summary of this SWOT analysis. Each is discussed in detail below.

Figure 1 Strengths

• Intimate knowledge of local market, problems, and target consumers

• Diverse background and expertise of team

• Product appeals to children in appearance, interaction, and taste

• Product targets a market without any direct competition

• Creates attachment with parents, authority figures, and community members through sound educational platform

• Address core problems directly: lack of education and

Weaknesses

• No established market base

• No brand equity

• More expensive than regular candy/health food

• Not a complete solution (no protein)

• Unfamiliar learning style to some users

• Requires competent supervision for best results



insufficient vitamin intake

• Familiar format for taking food and medicine orally

• Fosters friendly competition and encouragement among peers

• Durable, dependable design

• Controls dosage, an alternative not offered by competing products

• Bulk purchases (in the form of machine refills) lowers delivery costs and packaging, creating a more affordable and sustainable product

• Audio component designed to reach students of all levels of literacy

• Idea of preventative medicine is foreign to most consumers in target market

• Packaging required for candy (will generate some waste)

• Need for electrical power source. Not 100% portable

Opportunities

• Young children may transfer their knowledge and preference for our product to parents and older friends with greater purchasing power

• Partnerships with corporations, governments, and NGOs

• Can be easily configured for use in different languages

• Flexible, easily scalable business model

• Develops a market for reaching and educating middle-to-low income youth

• Great opportunities for expansion or follow-on projects

• Increased knowledge of nutrition breeds demand for healthy foods and supplements

• Game can be easily modified to create an updated version (and another selling opportunity)

Threats

• Product may not meet NIN/WHO standards

• Poor economic times could make product tough to sell to schools on a tight budget

• Competitors may offer “copycat” products

Strengths

The core strength of this business venture is our team’s intimate knowledge of rural India and the unique health challenges our consumers face. We have designed a solution that leverages some key findings from our research to meet a core need in people’s everyday life. Moreover, we position our product to



target an underserved market segment. No competitor has targeted low-income children. We believe our product addresses the right problem in the right way.

Our product is designed to address a systemic cause of malnutrition, lack of education, and additionally provide relief to children suffering from multivitamin deficiencies. Thus, our product is built specifically for children. We offer a delivery mechanism that children are comfortable with and enjoy using, yet durable enough to withstand roughhousing. Furthermore, we offer a healthy reward for using our product—tasty multivitamin candies. Our product fosters a competitive atmosphere that encourages children to learn. By appealing to children, we aim to gain the trust of parents and authority figures. Building trust with these parties is essential for the long-term viability of our plan. Finally, our product is built to be easily scalable. Because of the audio component, our product can be used in areas of low literacy and, with a quick modification, to communicate in different languages. By using a dispenser, we cut down on waste from packaging, simultaneously lowering our variable costs and creating a more ecologically friendly business model.

Weaknesses

However, this business model faces some weaknesses. We are building a network from scratch. The linchpin of our business plan is gaining access to schools. We plan to work with companies who already sell consumer products (e.g. paper, cleaning supplies, toilet paper, etc.) to schools and through governmental purchasing agents. However, if we cannot entice schools to purchase our product, our primary distribution channel becomes defunct. We believe offering the initial dispenser at cost will help to overcome this hurdle.

The finished concept is untested and has no preexisting market presence. To build our user base, we must communicate the benefits of taking a multivitamin to our intended users. This may be a challenge, as the concept of preventative treatment is alien to most subsistence consumers. In addition, our product does not contain a protein supplement. Accordingly, the benefits of our product are not as easily seen as competing products (e.g., children will not gain mass). Furthermore, our dispenser is dependent on an external power source, which limits its mobility or increases its ecological footprint (if chemical batteries are used as an alternate source of power). Finally, our product should be used under the supervision of a competent adult. If children consume too many vitamins, it may be detrimental to their health. Our dosage controls are only effective if an adult supervises use of the product.



External Opportunities and Threats

Immersion Experience and Field Research Findings

The impetus for developing our product began with an international immersion experience from January 7 to January 18, 2009. In a relatively short trip, our team gathered a great deal of information from a multitude of sources: personal interviews, discussions with volunteers from nongovernmental organizations, dialogue with long-time residents of India, observation of businesses, and general absorption of Indian culture. In our research, we had the pleasure of gathering input from people of different backgrounds—young and old, educated and illiterate, rural and urban, housewives and professionals—the list could continue for some time. Moreover, we were able to travel to several regions of the Indian subcontinent (Chennai, Delhi, Agra, and Hyderabad). Thus, our research contains flavor from users of varied backgrounds and cultures. The goal, generally, from our research was not to test a specific product, but rather to identify key consumer needs and behaviors. Several findings were common to each location we visited. In preview:

A. Malnutrition is rampant. B. A large percentage of households lack general knowledge about health and nutrition. C. Trust is essential to sell a product or service. D. Parents believe their children’s health is the highest priority. E. Lower income families aspire to the consumption behaviors of higher earning families. F. Communities may be losing some traditional knowledge. G. Children often play a major role in family purchasing decisions. H. Each village and community has unique marketing and distribution challenges.

The following paragraphs will provide support in our research for each of these statements.

A. Malnutrition is rampant. In section II of this report, we discuss data gathered by the World Bank, which quantifies the scope and impact of malnutrition in India. However, our team found plenty of evidence to support this statement throughout our trip. Every medical professional we interviewed—MDDS-licensed pharmacists, a surgeon, community doctors and nurses—identified the same three root health problems in their communities: malnutrition, lack of clean water, and poor hygienic practices. Poverty is the major cause of malnutrition, and rural community clinics treat patients for protein deficiency, iron deficiency (anemia), and multivitamin deficiency on a regular basis. In one half-hour interview in Hyderabad, we witnessed a 10-year old girl visit the clinic and receive iron supplements. The nurse on duty indicated this was a regular occurrence in the community. Parents are acutely aware that something may be affecting their child’s health, but often do not know why their child is underweight or sluggish. Schoolteachers and day-care professionals, too, witness malnutrition on a daily basis. From our general observation of a schoolyard filled with children and a day care, over one-third of the children seemed to be below a healthy weight. However, the burden for a malnourished family is not borne equally. We heard several times that if a family only had



resources to feed one child well, they would feed a young boy over a young girl. Similarly, staff at EMRI stated that pregnant mothers often had an iron count below 9.5 g/deciliter (12 is considered healthy), resulting many times in pregnancy complications and/or neurological damage in the newborn. Thus, malnutrition is prevalent for all ages, although the repercussions are most serious for young children.

B. A large percentage of households lack general knowledge about health and nutrition. Families we interviewed generally equated a full belly with a balanced diet. Families commonly could not afford to eat meat or some other source of protein more than once a week. Anecdotally, a middle-class family (income of 9000 Rs./month) spent more on snacks (e.g., 300Rs. per month on potato chips) than they were filling to spend on a powdered supplement such as Horlicks (Rs. 150-200). This family was relatively well off, and could serve eggs every two days and meat on Sundays. However, their diet tended to be very high in carbohydrates and lacking in vegetables, fruits, and other good sources of essential vitamins and minerals. The family acknowledged they felt they weren’t doing enough for their children’s health, but were unsure what to change. At one point, one of the girls in the family became severely anemic, and the parents had to go into debt to pay for her medication. The concept of preventative treatment was completely alien to this family, as it was to most families we interviewed. From interviewing a community doctor and a pharmacist, we learned that this was completely normal. Very few families understood that it was possible to prevent disease before showing symptoms. As a result, consumers only purchased multivitamins with a prescription; over-the-counter vitamins did not sell well. To compound matters, many families we interviewed misunderstood how to obtain essential nutrients through their diet. One interviewee believed that potatoes were high in protein.

C. Trust is essential to sell a product or service. Consumers simply would not purchase products from people they did not believe to be reputable, particularly when it came to the health industry. Again and again, we heard that they completely trusted their doctor, and would purchase whatever he recommended. Other trusted figures included teachers and friends or family who had purchased the product before, but not to the same extent. Consumers were willing to purchase health products from their local pharmacist. Generally, the people we interviewed would trust any product purchased in a major supermarket that was heavily advertised.

D. Parents believe their children’s health is the highest priority. Nearly every mother we interviewed would make a statement similar to, “If it will help the children, then I must buy it. I will do whatever is necessary. I have no choice.”

E. Lower income families aspire to the consumption behaviors of higher earning families. This statement is supported by our discussions with Jagat and some evidence in the communities. Building off of statements C and D, parents often believed that purchasing branded products (e.g. Complan, Horlicks, etc.) was necessary to have healthy children. These products featured slogans such as “Taller. Smarter. Stronger.” In the absence of fundamental knowledge about diet and nutrition, families couldn’t fathom achieving the same result through a more well-rounded diet. Furthermore, children of middle-income and high-income families would often use these products. Thus, low-income parents would aspire to buy these same alternatives for their children. Sometimes, this pressure would come from the children, who would see these products marketed on television.

F. Communities may be losing some generational knowledge. One daycare instructor regularly served ragi to the children in her care, at a cost of 15 Rs. per month, with other additives included. She believed it had nearly identical results to a branded power supplement. However, many of the mothers we met with, even if they were aware of ragi, were not serving it to their children. Some mothers would serve spinach and carrots (believed to be good for the eyes). We did not see the same type of awareness in many homes.



G. Children often play a major role in family purchasing decisions. Children would often accompany parents to the store and request specific products. Taste, mass advertising, and whether their peers used a product heavily influenced the children’s recommendation. We watched a two-year old boy run when asked to take a protein syrup that did not taste good. In contrast, a half-dozen children followed our group for several blocks since we were handing out some small fruit candies.

H. Each village and community has unique marketing and distribution challenges. Each village we visited was unique. One village we visited outside of Hyderabad used a drummer to announce messages the Panchayat believed were very important. The drummer would travel throughout the village, beating on a drum and shouting a few key points. In this manner, the entire village would know, for example, if a medical camp would be traveling through the next day. This same communication network was not available in other villages we visited.

Macro Environment

Cultural: From our interviews, we found that it is the norm in Indian culture to only obtain healthcare when needed. In other words, preventative healthcare is not a concern. Our biggest challenge is to convince the governing authorities in charge of the primary and upper primary schools (national, state, and municipal governments, panchayats, private trusts, and social enterprises) that preventative healthcare is a reasonable and necessary method to ensure school children will get an opportunity to learn and grow at their maximum potential.

Technical: The Tamil Nadu Department of Education website reports that 51.4 percent of all primary and upper primary schools in the state have connections to electricity (45.2 percent of rural schools, 72.7 percent of urban schools)1. This will literally cut our market size in half because our preliminary design depends on an external AC (alternating current) power source. We can develop a second model that either runs off batteries (purchased separately) or solar rechargeable battery packs (by placing the dispenser in sunlight to recharge the battery pack). The former solution will create more pollution in the purchasing and disposal of batteries while the latter would create a more expensive product, but be more ecologically sustainable.

Economical: The same aforementioned source reports that only 51.8 percent of sections (classes) in Tamil Nadu’s primary schools have either no or inadequate furniture and/or mats for schools (61.7 percent of rural schools, 32.7 percent of urban schools)*. Upper primary schools are a little better off with 37.2 percent of sections with no or inadequate furniture and/or mats (50.6 percent of rural schools, 26.2 percent of urban schools). In the same way, 21.6 percent of primary school teachers do not have adequate furniture (28.2 percent of rural schools, 9 percent of urban schools); 8.2 percent of upper primary school

1 Official Tamil Nadu Department of Education Website, http://www.schools.tn.nic.in/reports2002.asp?type=2, accessed 2009-04-11.

http://www.schools.tn.nic.in/reports2002.asp?type=2



teachers do not have adequate furniture (10.8 percent of rural schools, 6.1 percent of urban schools). It is our reasoning that if these schools cannot afford or get enough support to get basic necessities such as furniture for teachers and students, then it will not be likely that these schools could afford our dispenser, as it may seem like an unnecessary expense.

Market

The Tamil Nadu Department of Education states that there are a total number of 39,938 primary and upper primary schools in the state (33,366 primary, 6,572 upper primary). It also records that 77.4 percent of these schools are in rural settings, while the remaining 22.6 percent are in urban settings. The average number of instructional rooms per primary school is 3.6, while the average is 7.9 for upper primary schools*. Although it is our vision to have our dispenser in all 172,036 primary and upper primary classrooms, this does not seem reasonable, especially with the fact that many schools cannot afford furniture for their teachers and students (see above). The primary and upper primary schools are relatively small, with an average of 105 students and 288 students, respectively. The student-to-teacher ratio for primary schools is 32/1, while it is 36/1 for upper primary schools. This results in primary schools having approximately three teachers and upper primary schools with eight teachers2.

It is more reasonable and conservative to expect that our dispenser could be used by 100 children per day in the 48.2 percent of Tamil Nadu primary and upper primary schools that have adequate furniture (see Macro Environment section, above, for more details on these statistics). This would result in a market size of 18,556 schools that would need 26,320 dispenser units (both figures were calculated using a weighted average scheme among primary and upper primary schools in rural and urban areas; the latter was assuming one dispenser for every 100 children). The large size of our market gives us confidence that, once established, our dispenser would have the potential to grow rapidly and impact thousands of schools and millions of children across the state of Tamil Nadu. Once we have established our product in Tamil Nadu, we plan to market it in other Indian states.

Some 91.9 percent of primary and 92.8 percent of upper primary schools have a midday meal program for its students2. The program provides free lunch to students to combat hunger and malnutrition in children and to encourage school enrollment. In fact, Tamil Nadu pioneered the midday meals program in the 1960s that was expanded to all Indian states in 2001. This program has opened the door of opportunity for the entrance of our dispenser into the Tamil Nadu primary and upper primary school system in the following two ways: (1) The governing authorities (national, state, and municipal governments, panchayats, private trusts, and social enterprises) over the schools realize the importance of providing children with nutrition not only to benefit their health, but to encourage them to participate in school and to give them energy to have the opportunity to succeed in learning. (2) An infrastructure is already in place to fund schools in providing children with midday meals. This takes away much inertia that would be required for Vita Jeevan to convince the governing authorities to implement a scheme to fund schools 2 Tamil Nadu 2007 Statistical Handbook, http://www.tn.gov.in/deptst/Ecoindicator.htm, accessed 2009-04-12.

http://www.tn.gov.in/deptst/Ecoindicator.htm



to purchase our dispenser. In addition to the two above statements, we will also benefit by the fact that the children, being in school, are already in a learning environment. The educational aspect of our dispenser will fit seamlessly, supplement, and stimulate learning in classroom regimen.

Major Challenges

We foresee that the major challenges in the subsistence market are building consumer trust and dispelling entrenched misconceptions. Though this poses a major challenge, once consumer trust is built, it could act as an effective channel/medium to deliver alternative health-related products. Trust is in particular a major factor in the healthcare sector. Preliminary field research suggests that consumers trust only their primary healthcare provider, a registered M.B.B.S. doctor. Thus, a doctor’s endorsement is integral to the success of a health-related product or supplement in the subsistence context.

In general, we observed that the treatments patients receive for a variety of ailments are overwhelmingly allopathic in nature. In fact, over 80 percent of families interviewed from urban and rural settings did not consult ayurvedic physicians or acquire homeopathic or siddha-based treatments for ailments. This dispelled our general preconception that homeopathic treatments were the major form of healthcare administered in rural settings amongst the lower-middle class socioeconomic bracket.

There were, however, some glaring exceptions to the rule, cases where allopathic treatments were not administered due to traditional beliefs. Dr. Padmanabhan, a doctor interviewed in Chennai, reported cases of mumps in young children going untreated. Parents from lower socioeconomic brackets referred to this condition as god or ‘devi’ entering the child’s body and the child was generally only given buttermilk. Another common case was chickenpox, where the child was generally treated with neem and bathed in turmeric, rather than receiving conventional treatments. The preconceptions governing these illnesses and treatments are traditional in nature. The goddess Maari Amman is traditionally considered as a causative force for smallpox, chickenpox, mumps, and measles (Maari in Tamil means rain), and worshiping this goddess is perceived as a form of treatment.

This example demonstrates the cultural notions that exist in terms of healthcare within the subsistence market. Though there is a clear evolution towards allopathic medicine in the subsistence market, any new treatment regimens or medical supplements may still face major challenges in overcoming traditional and ideological beliefs. It is important to be aware of competing beliefs before entering the market.

A major misconception that we observed during the interview process was that many of the parents interviewed believed that their children were getting the required daily allowance of nutrients directly from their daily diet. Their daily nutritional intake on average involved two rice meals per day, one with vegetables, an egg in the morning with coffee, and perhaps a glass of milk at night with a supplement such as Complan. Meat was only consumed on average twice per week due to budgetary constraints. Parents also believed that rice had very high nutritional value. Some parents suggested that potatoes were a protein-rich food. In most cases, our research suggested that parents were not well educated in terms of child nutrition and dietary intake. Children generally consumed well below their required daily requirement of protein, vitamins, and iron.



Educating parents and teachers on this deficiency is vital in improving the general quality of child health in the subsistence context and also will impact the success of our product. A major challenge will be to educate parents to ‘cook and eat smarter,’ preparing more nutritious meals given their budgetary constraints. The educational component of our product will need to elucidate that the standard Indian diet does not necessarily incorporate the required nutritional requirements, and an additional nutrient-rich source may be needed. Our product should be positioned to meet this unmet need.

It was also brought to our attention during the interview process that the role of the medical store owner is very diverse. Low-income patients often directly approach chemists and medical store owners for treatments for common ailments. Preliminary field research suggests that the majority of patients/consumers are from lower-middle class socioeconomic brackets, with monthly incomes ranging from 3000Rs -7000Rs, and thus cannot afford to visit private hospitals for the majority of medical ailments they face. Patients complained that public hospitals, though cheaper, generally provided substandard healthcare and had very long waiting lists, thus making quality healthcare difficult to obtain. An alternative healthcare provider is needed, and often the medical store owner is forced to bridge this divide.

In addition, as pointed out during our visit to Byrraju Foundation, many of these patients/consumers from rural settings are illiterate (as high as 80 percent of ladies in villages served by Byrraju Foundation in Andhra Pradesh), and thus need help reading prescriptions and dosage instructions. Thus, patients often become reliant on their local chemist for a variety of services other than just the sale of prescription drugs. As a result, medical store owners and chemists are very influential in charting general treatment regimens for patients. Though chemists are not allowed to prescribe treatments for major illnesses, they often prescribe treatments for common colds and coughs and to help improve general patient health (supplements, protein drinks, etc.). Field research suggests that patients trust the opinion of their local medical store owners, with whom many of them have established very long standing relationships.

Thus, in successfully marketing a healthcare/supplement-based product, it is critical to leverage the influence of medical store owners and chemists within their local communities and to educate these pseudo-practitioners on the merits of our product and the benefits to the consumer. These benefits are very clear: greater physical stamina and improved mental capacity, or, as we like to call it, ‘stronger and smarter.’

The influence of women’s self-help groups is not as significant as first thought in the healthcare sector. Qualitative evidence suggests that though mothers would listen to opinions of fellow mothers before purchasing a new health-related product for their children, the ultimate authority influencing their decisions was the healthcare professional, the doctor. Thus, the impact of women’s self-help groups in product promotion is limited. In contrast, most parents expressed interest in participating in educational and promotional healthcare seminars run by trusted healthcare professionals.

The profiles of these campaigns can be boosted using well-established women’s networks. An educational campaign will need to incorporate medical professionals from surrounding villages, whether it be an



interactive health clinic run by organizations such as the Lions Club or Sankara Nethralaya, or an educational seminar run by a nurse at a local school. This is likely an effective communication tool with local consumers. Local media did not seem like an effective medium for communication. Local television, radio, and newspaper only had limited penetration into the market. State-based TV was most frequently watched and was the media employed by competitors in the nutritional supplement arena, e.g., Nestle, the producer of Complan. The majority of consumers interviewed were aware of these products and many provided their children with these products.

Field research also presented another major challenge in the development of nutritional supplements or multivitamin products. We observed that the majority of consumers interviewed preferred not to introduce synthetic products into their bodies. Their multi-nutrient intake was directly from natural sources – for example, iron from spinach, protein from eggs, and calcium from milk. Most consumers viewed multivitamins as an artificial medicinal tablet prescribed by their doctor rather than a healthy, natural, tasty preventative supplement. Thus, the supplement component of our product itself will likely have to be developed from natural products and plant extracts to allow for smooth integration into the Indian diet and to avoid the stigma associated with introducing artificial additives into the body. In addition, the large number of vegetarians in India coupled with cultural beliefs on vegetarianism, further reinforce the need for the development of a vegetable-based nutritional supplement.

In addressing problems with respect to child malnutrition, a holistic approach is needed. Simply providing nutritional supplements will not solve malnutrition in the subsistence context. Education, sanitation, healthcare and employment all need to be incorporated into the overall solution. The root cause of malnutrition in the communities we visited was poverty. Gandhi quoted “Poverty is the worst form of violence,” and the brutal impact of poverty was on display during our journeys throughout South India.

A specific example we encountered during our travels was the lack of sanitation in subsistence communities. Many children we met were anemic due to the presence of threadworm in their systems, resulting in fatigue, lack of appetite, and lack of activity. Lack of hygiene, consumption of contaminated drinking water, and a lack of sanitation during meal preparation caused this parasitic infection in many children, resulting in full-blown childhood anemia when not adequately treated. This impacted child health, growth and development greatly. Any treatment regimen for anemia in these children (prescription of iron tablets) had to be coupled with a de-worming course as well. To stop recurrence of the infection, families need to be educated on the importance of hygiene and cleanliness. In addition, nongovernmental organizations such as Byrraju Foundation have put in place infrastructure to provide clean drinking water to further reduce recurring infections. Thus, even in addressing a well-defined problem such as child anemia due to a specific multi-nutrient deficiency, in this case iron, a far broader approach than simply providing iron tablets is required to effectively combat the problem.

There are some unique opportunities in leveraging local talent and infrastructure in developing a nutritional supplement-based product in India. Tamil Nadu is a hotbed for activity in the pharmaceutical and nutraceutical sectors, with companies such as Pfizer and Baxter setting up local manufacturing plants. Also, during interviews with Vinod, a pharmaceutical consultant based in Chennai, we learnt that states such as Hiamchal Pradesh do not charge excise duty on the manufacture of pharmaceuticals. Thus, by employing existing infrastructure and talent in such regions, the cost of manufacturing the nutritional or consumable component of our product maybe greatly reduced.



Competition

Globally, the size of the nutraceutical and dietary supplements market is estimated to be $30 billion. In India, it is estimated to be anything between Rs 1,100 crore and Rs 1,500 crore with an annual growth rate of 40 percent. The nutraceutical market in India is around three to five years behind the European and US markets, where the industry is well established. Indian consumers are extremely apprehensive when they have to consume pills associated with wellness and not illness. The Indian market is more a curative than a preventive market. However, Indian consumers are increasingly becoming more health-conscious and are realizing the need for dietary supplements to reduce their risk to diabetes, cholesterol, heart ailments, and arthritis, along with other diseases. Multi-nutrients and multivitamins is an area that numerous companies are investigating.

Companies such as Amway are already very well established in the Indian nutraceutical industry. Currently, Amway has a reach in over 2,000 cities across the country, and the direct selling company had registered a turnover of Rs 738 crore during the year ended in December 2006. Nutrilite, the flagship health product from the Amway stable, is a vitamin, mineral, and dietary supplement. Besides Nutrilite, Amway has 16 healthcare products in the Indian market under the nutrition and wellness category. These products are basically fruit and vegetable derivatives, some of which provide competition to our product. Nutrilite Protein powder is the largest protein supplement brand in India, and Nutrilite Glucosamine is the largest-selling glucosamine preparation in India, according to the company. This apart, products for weight management and health drinks are also being marketed and promoted. Currently, Nutrilite contributes to as much as 50 percent of the company’s total income.

Companies such as Parry Nutraceuticals are also competitors in the nutraceutical market, with products such as Spirulina and Natural Beta Carotene. The direct advantage that we have is that the majority of products developed by Amway and its competitors are for the more affluent and are not targeted specifically at the subsistence market. They are over-priced and thus will be in a different category than our product. More conventional nutritional products such as Complan and Horlicks are available and affordable to consumers living in subsistence and thus pose more direct competition.

For now, the most immediate challenge lies on the regulatory front. Created in 2006, the Food Safety & Standards Act governs the Indian nutraceutical marketplace. The 2006 Food Safety & Standards Act in India borrows heavily from US and UK legislation, and as such, is pretty progressive. It stresses testing as well as regulating advertisements and health claims. Members from academia, industry, allied government ministries, and many other entities comprise the Food Safety Authority, and rigorous standards are being put in place. Many challenges lie ahead in the development of nutritional products for the Indian market.

Competition may also arise from the day meal program itself. In 2006, a scheme has been approved to ensure that midday meals would provide at least 450 calories and 12 grams of protein to children3. 3 Mid-Day Meal Scheme Catches on in India, http://www.bio-medicine.org/medicine-news/Mid-Day-Meal-Scheme-Catches-on-in-India-15899-1/, accessed on 2009-04-13.

http://www.bio-medicine.org/medicine-news/Mid-Day-Meal-Scheme-Catches-on-in-India-15899-1/

http://www.bio-medicine.org/medicine-news/Mid-Day-Meal-Scheme-Catches-on-in-India-15899-1/



Although this scheme has not been implemented totally nationally, the state of Tamil Nadu has the highest quality midday meal program and currently abides by these standards. In fact, many schools in Tamil Nadu also regularly provide health checkups and iron supplement tablets to combat anemia in children4. Since this scheme is a government regulation, it may be hard to convince those in authority that an additional nutritional supplement (multivitamin) is really necessary, even if in fact the midday meal does not supply the other necessary nutrients for a child to grow and learn to his or her greatest potential.

Objectives

Mission

Vita Jeevan’s mission is to serve India by addressing and informing, combating, and defeating the huge problem of the millions of malnourished children in India. We envision this mission in the development and marketing of a novel vitamin dispenser that intimately combines a much-needed daily multivitamin candy with an interactive education about nutrition and its importance for the child. It is our hope that the children will see the importance of preventative medicine through proper nutrition and carry this invaluable knowledge on to the next generations. In addition, we believe that this education process will not only be beneficial for the children. Their parents will also be learning indirectly through their children and will become aware of the importance of nutrition.

The dispenser will first be sold to primary schools in Tamil Nadu province to be placed in classrooms and/or lunchrooms. The product cannot usually be sold directly to a school, but through correspondence and building relationships with the national, state, and municipal governments, panchayats, private trusts, and social enterprises. It is our understanding that building a bond of trust between the seller (us) and the buyer (the aforementioned entities) is of utmost importance, and we believe our product will be sustainable not only because it is a first-mover in our marketing niche, but also because of the large size and purchasing power of our market (hundreds of government and private-run primary and upper primary schools alone in Tamil Nadu).

Each dispenser itself will be sustainable by the fact that it will be manufactured in India, using local parts and labor, which is much less expensive than exporting parts and labor from outside India. Also, we will sell multivitamin candies whose dispensers will need to be refilled on monthly. This will provide additional income that will help offset the expenses of materials and manufacturing costs of the dispenser itself. Our local manufacturing process will generate more jobs and create opportunities for local entrepreneurs, stimulating the economy and ultimately helping people get out of subsistence.

We are designing our dispenser with the world's environment in mind by aiming to be ecologically sustainable. We will use recycled plastics and other materials, when possible, to reduce the 4 The future of mid-day meals, http://www.hinduonnet.com/fline/fl2016/stories/20030815002208500.htm, accessed on 2009-04-13.

http://www.hinduonnet.com/fline/fl2016/stories/20030815002208500.htm



environmental footprint of product. We will be using lead-free electronics to ensure we are not contributing to lead poisoning. In addition, we are designing the dispenser to be energy efficient in both operation and manufacturing to reduce the already immense strain on the state's power grid. The multivitamin candies will be developed by an Indian company that also has the same high standards for the environment as Vita Jeevan: less pollution through wasted materials, less energy usage, and using more recycled materials.

Impact of Malnutrition in India

Malnutrition affects over 60 million children in India and contributes to more than half of child related deaths5. In India alone, child malnutrition is responsible for 22 percent of the country’s burden of disease and contributes to more than half of child deaths from major diseases such as malaria, diarrhea, pneumonia, and measles. The prevalence of child under-nutrition in India is amongst the highest in the world and is nearly double that of Sub-Saharan Africa. The problem is most dire in rural areas and in low-income socioeconomic groups, where an estimated 60 percent of children are severely affected.

The impact of malnutrition (protein-energy malnutrition and micronutrient deficiency) on early child development is devastating, retarding physical and cognitive growth while increasing susceptibility to infection and disease. In India alone, 57 percent of preschool children suffer from sub-clinical Vitamin A Deficiency (VAD), a condition that can lead to blindness, decreased immunity, exacerbate respiratory and gastrointestinal infections, and increase the risk of death. In addition, 75 percent of preschool children suffer from iron deficiency anemia (IDA), resulting in lowered physical activity, fatigue, and decreased capacity to learn and function. These health issues are trans-generational in nature, impacting both the child and the mother. For example, IDA results in low birth weight, premature delivery, and perinatal and neonatal mortality, and is responsible for almost a quarter of maternal deaths. Iodine deficiency is also highly prevalent in young children and pregnant women and is estimated to have so far caused the congenital mental impairment of over 6.6 million children in India. Decreased food intake is only one of the many root causes of these problems. Low incomes, a lack of education, inadequacies in providing basic sanitation and clean water, and a lack of infrastructure (hospitals, medical equipment, etc.) are other major factors.

Attempts to Combat Malnutrition in India

Government measures in India, such as the Integrated Child Development Services (ICDS) program targeting malnutrition, have met with mixed success. These top-down approaches have typically prioritized food supplementation rather than holistic approaches involving nutrition and health education, and have failed to cultivate a sense of local ownership in local communities. Government efforts such as 5 Gragnolati, Michele; Shekar, Meera; Gupta, Monica, Das. India's Undernourished Children: A Call for Reform and Action



this have resulted in a modest decline in under-nutrition in India during the 1990s; however, these reductions lagged well behind those achieved by other countries with similar economic growth rates.

Nutritional inequalities across different states in India remain large and, in general, are increasing. Private sector products addressing nutrition also exist, primarily Complan, Cerelac, Boost, etc., marketed through mass media channels. These products are typically centered on brand image and target the wealthier middle class, thereby making them unaffordable to those living in subsistence. Natural, more affordable substitutes such as Ragi flour, soy, etc., address the protein requirements of children but fail to address their multi-nutrient requirements. Prescription supplements are also available but are typically only prescribed by doctors after symptoms of malnutrition are detected, by which time the effects of malnutrition can be severe; thus this is a costly solution in terms of economics and health. A more integrated bottom-up solution focusing on education and prevention while encouraging strong participation and supervision by the community is needed.

Preliminary field research delineates an overwhelming need for a nutritional product and education program that seeks to meet the daily nutritional requirements of any child in rural or urban India to combat malnutrition, IDA, IDD, and multivitamin deficiency. The product will provide cost-effective measures (one product per school or per class basis) to meet the requirements of the subsistence market, integrate a strong, educational backbone, provide regulated doses, and focus on dispensing chewable multivitamins to provide the nutrients for strong bones, sharp vision, brain development, circulatory health, and a stronger immune system. The packaging is designed to not only safely and reliably provide the product to the customer, but also to appeal to the child. The product will incorporate a preventative medicine educational system that would help educate students, teachers, and parents on the importance of daily nutrition for their children. It will also provide information regarding certain ailments that the daily intake of particular vitamins or other nutrients would help prevent (e.g., a daily supply of iron would help prevent anemia; signs of anemia is weakness, lack of energy, and appetite).

The success of this product relies on its successful integration into the healthcare system in subsistence communities. Partnerships with the public sector (e.g., the Department of Health and Family Welfare through the Reproductive and Child Health program) are required to increase awareness and to utilize existing resources and distribution networks. Product promotion through education by partnering with private organizations such as the Lions Club, Sankara Nethralaya via medical camps, and Nutrition and Health Days, are also essential in increasing awareness. Educating teachers, mothers’ committees, and women’s self-help groups, and gaining the endorsement of local doctors, is necessary in developing a sustainable model. Another key activity is the appointment and training of change agents within rural communities. These are village volunteers who are elected by village members and endorsed by the panchayat (village leader) to provide health and nutrition information and promote positive health behaviors in the local community. Local media (newspapers and local television) also provide a relatively low-cost means of promotion. This pilot model will be floated, tested, and evaluated in a single village before scale up.



Product Concept Generation

Process and Outcomes

Numerous concepts were developed to address child malnutrition in India. Product development was centered on the identification of the major healthcare needs of families in the subsistence market. Preliminary field research in Chennai and Hyderabad indicated that preventative healthcare measures were almost nonexistent in the subsistence context. Patients and families generally did not visit the doctor or dentist unless faced with an ailment that significantly hindered their day-to-day activities. The prevalence of medical insurance in subsistence communities was also negligible, even given the nominal cost of certain insurance programs (75 Rs per annum). Furthermore, the majority of interviewees questioned the very need for health insurance and were not willing to pay for such programs given the current state of their health (healthy). The majority of subsistence families interviewed attended public hospitals and complained about long lines and inadequate treatment regimes. They did not realize that health insurance could subsidize their hospital visits and decrease their overall healthcare costs. The concepts of preventative healthcare, nutrition, and health education were foreign to the vast majority of people that were interviewed.

There was, however, one major exception to the above observations. An overwhelming majority of parents said that while they might not themselves participate in preventative healthcare programs, they would without doubt take preventative healthcare measures to ensure the welfare of their children. Field research suggested that these parents are willing to pay a premium to educate their children and to provide them with high quality healthcare. The welfare of the children is their number one priority. The general consensus amongst mothers was that they wanted their children to be stronger, healthier, smarter, and happier. They all agreed that they would support, endorse, and purchase a product that would help further the cognitive and physical development of their children. In addition, a vast majority of mothers wanted more information on how to better integrate the nutritional requirements of their child into their daily diet from locally available sources, given their daily budget and additional financial and cultural constraints (e.g., vegetarianism). Parents generally agreed they would support a cost effective multivitamin supplement that their child enjoyed and that was endorsed by their doctor.

Descriptions of Concepts

These outcomes were of fundamental importance in the concept development phase. Qualitative field research indicated that a preventative healthcare platform coupled with a strong educational component is required for the subsistence market. Design criteria focused heavily on functionality, affordability, and maximum market penetration. The goal was to develop a cost-effective system that could reach a large number of children in the rural/subsistence context. Of equal importance is the need to educate the public on the importance of preventative health and the long-term consequences of not taking such preventative measures. Such a program would have maximum impact if targeted at children from a young age onwards. As a result, government schools were selected as a target market segment, due to their ability to reach children from subsistence contexts. The major needs and product metrics will be discussed in



subsequent sections. Initial product design identified the following concepts that could potentially have an impact:

• Pacifier that slowly releases refillable nutrients to infants. This product would be sold directly to consumers and addresses malnutrition in the 0-3 years age bracket. The first three years of an infant’s life are critical to cognitive development. (sold directly to consumers)

• Three-point supplement that consists of three modules: (1) a chewy candy-like multivitamin; (2) a chocolate chew containing iron to address IDA; and (3) a flavored protein powder drink mix to address protein deficiency malnutrition. (sold directly to consumers)

• A weigh scale that has sensors for heart rate, blood pressure, and other vitals monitoring (sold to government or private hospitals). Could diagnose underweight and malnutrition in children immediately using a standardized chart.

• SMS (text messaging) service that regularly sends to consumers’ cell phones recipes, tips, and tricks to cooking healthy, well-balanced meals. (service sold directly to consumers)

• Java cell phone application that provides a database and pictures of recipes, tips, and tricks to cooking nutritious, well-balanced meals. Program could also evaluate the nutritional content of daily meals and provide a synopsis of what is missing and required. (either sold directly to consumers and uploaded to their phones or sold to cell phone service distributors)

• Water-soluble mix that provides a majority of a child’s daily vitamins and nutrients and can be easily dissolved into water, unlike current competitors’ products. (sold directly to consumers)

• Automated dispenser that rewards a child with a daily gummy vitamin after the child answers particular questions about nutrition; creates a fun and competitive environment that educates the child and parents on the importance of preventative medicine. In addition, vitamin dose is regulated by such a system.

Evaluation of Concepts

Criteria and Rationale

Our literature research and field research in India has shown there is an enormous need for a creative, effective, and inexpensive way to tackle the malnourishment problem among children in India. This includes (1) providing a way for children to voluntarily (hopefully enthusiastically) intake nutrients (e.g., vitamins and protein) and (2) to educate both child and parent on the importance of preventative medicine through eating a diet with healthy portions of necessary nutrients. The product or service needs to be creatively designed to appeal to both parent and child. Emphasis needs to be placed on making it attractive and providing an enjoyable experience for children (who can have a lot of influence on a parent’s purchases). The product should be easy to operate, reliable in delivering the nutrients to the child in a regulated manner (e.g., prevent overdosing), and effective in educating the child and parent intuitively. Importantly, our product or service rendered needs to be affordable for families living in subsistence; if it is too costly, then our goal to tackle the malnourishment problem will be in vain.



We next turned to deciding which product idea (of those listed in section IV) to pursue. Bringing these children nutrients and education about nutrition is vital for combating malnourishment, but Vita Jeevan needs to be sustainable to be able to provide this product or service. We have developed ten criteria by which to gauge the sustainability of our product or service, with each weighed on a 1-to-10 scale:

1. Feasibility. In general, is it too far-fetched to be able to design, fabricate, and market (10 being strongly agreeable)?

2. Cost. How much capital do we think will be needed to spend to even get the product through design and to marketing (10 being lowest capital)?

3. Impact. How much will the product positively impact the malnourishment problem (10 being largest impact)?

4. Approval Process. How long will it take to get the product or service approved by an overseeing agency, e.g., National Institute of Nutrition (10 being the least amount of time)?

5. Competitive Advantage. Is our product or service novel or creative enough to even market it against our competitors in the context of the subsistence market in India (10 being most confident)?

6. Purchasing Power of Target Market. How likely will our target market segment be to purchase our product (10 being most likely)?

7. Penetration. How thoroughly and easily will our product penetrate into our marketing segment (10 being most thoroughly and easily)?

8. Size of Customer Segment. How large is our customer segment that a concept will be directed toward (10 being largest)?

9. Fit in Culture. Is our product or service sensitive to the idiosyncrasies and norms of the Indian culture (10 being most sensitive or least offending)?

10. Extensibility/Scalability. Does our product or service have the potential to be extended and scaled to other marketing segments (10 being most potential)?

The concepts are scored via weighted averaging of the ten aforementioned criteria. The results are shown in Table A.1 in the appendix at the end of this document.

Discussion of Ranking

It was found that the vitamin gummy dispenser had the highest score. Although the SMS service and three-point supplement were relatively close, the dispenser seems to have the advantage with a high competitive advantage. To our knowledge, no company has marketed a dispenser that both educates the child and parents on the importance of preventative medicine and provides a fun way for the child to take a daily multivitamin (the children or mothers we interviewed said that their children do not want to take something that looks like it came from a pharmacy).

The dispenser concept intimately combines the provision of nutrients and the education into a game-like atmosphere. In reality, with the current technologies available, our dispenser would be too expensive for



individual families to own. Instead, we would appeal to government schools (where most children in subsistence usually go) or villages to purchase our dispenser. It would be a community effort to purchase that would result in the benefit of the community.

It is easiest to describe the concept of our first prototype dispenser (Figures A.1 and A.2) via an example of a child’s interaction with it at school:

1. A child comes into class in the morning, comes over to the dispenser, and enters in her personal identification number (PIN) via buttons on the front panel to start the game.

2. The dispenser asks her a short series of questions regarding the importance of nutrition via a speaker and a visual display on a liquid crystal display. She answers the multiple choice or true-false questions with buttons on the front panel.

3. If she gets all questions correctly, the dispenser will reward her with a vitamin gummy. If she misses some of the questions, the dispenser will give a hint and allow her to choose another answer or ask her to look up the answer in a supplementary book until she gets all questions correctly.

4. It records her daily score and how many attempts she needed to answer each question correctly. It then calculates a weighted average daily score that it stores in its memory. Each month, the dispenser will announce the top scoring student(s) in the class, creating a fun and competitive environment.

Depending on the available technology and the time constraints of a teacher’s curriculum, the teacher could show a short DVD clip daily or weekly that educates the children on the importance of nutrition for preventative medicine (e.g., what benefits each vitamin gives a person, what foods have which vitamins, what food combinations help facilitate the best uptake of nutrients, etc.). If video technology is not available, the teacher could use the supplementary guidebook to teach a short daily or weekly lesson in which the children would be tested at the dispenser.

Customer Needs with Corresponding Technical Specifications

The following list identifies product features that are necessary from a customer’s perspective. Since this product is primarily for children in a school setting, we have tried to incorporate an element of fun and an incentive to learn so that a pull strategy works in creating demand for this product. Required specifications will be followed for manufacturing the multivitamin candy, and administrative privileges will be provided to school teachers or administrators so that the dispenser is used under their supervision; thus, overdose of the candy will not be an issue.



Customer Need Tech Specifications

Regulate dosage Must answer question to receive treat

Provide nutrition Tasty nutritional multivitamin

Educate children Audio and visual questions

Durable and long product life Few moving parts, solid state electronics

Can be cleaned easily (water resistant?) Molded plastic casing, rubber coated buttons

Fun! FUN!!

Competitive atmosphere Tracks individual scores over time (LCD display counter XX right of XX)

Provides incentive to learn Treats + competition + fun questions

Good audio quality Industrial full-range speaker

Easy to read Backlit LCD w/large characters

Intuitive (user-friendly) Familiar question format; large, clearly labeled buttons

Tracks progress over time LCD counter

Portable (not heavy) 10 lbs or less

Adjustable volume Variable speaker amplifier

Different language capabilities SD Card

Secure (kids can’t break in) Internal electronics, treats locked inside, sturdy casing

Saves data in nonvolatile memory SD card

Compatible with electric grid AC/DC converter, standard plug, 110/210 VAC to 3.3VDC

Multiple power sources (e.g., battery, solar) Backup battery system, solar panels, hand crank

Large question base 100+ questions

Can withstand high usage (lots of repetition)—doesn’t jam

Quality cast-aluminum mechanical parts and actuators



Can withstand wide temperature and humidity ranges

Solid state electronics and polyurethane casing

Administrative privileges (teacher login) Password/key access

Candy is visible Window showing candy

Allows children to select best answer among choice of several

Multiple buttons and LCD display/audio

Occupies minimum space and fits on a table top

Compact design

Should be light weight Light weight plastic outer shell

Product Development The main idea of a nutritional supplements dispenser is to control the daily doses of the supplements and to educate the users about the nutritional facts. The product will encourage people to think about what they should consume to be healthier. The products would consist of three main parts: supplement storage, question-and-answer system, and dispensing parts. The users will approach the product once a day and will enter their personal codes. Based on the personal information that they enter, the dispenser will provide the daily topics and questions about the nutritional facts either on its LCD displays or through the speakers. Once the users enter the correct answers for the multiple choices, the supplements would be dispensed. If the users enter incorrect answers, instead of the supplements, more detailed explanations would be provided to learn more and allow them to reenter the correct one. This whole system would attract the young children to learn about the nutritional facts. The power is necessary to operate the system. The main power source is electricity and energy generated from the solar panels. LCD with backlighting is for scoring and displaying progresses. For the sound system, MP3 decoder chips will be used.

The dispenser would be large enough to hold enough nutritional supplements for everyone in a classroom for one month (approximately 500 vitamins). The idea of a daily quiz is to motivate the students to learn nutritional facts. Once they learn about the importance of balanced meals, chances are that they will expose their parents to the importance of proper nutrition.

Most of the materials used to build the dispenser are available locally. Recycled plastics from the water bottles could be used for the outer shell. Using recycled plastics is more expensive than the buying regular plastics; however, there has been a global movement to reuse and recycle plastics for ecological issues.

Many parts would be manufactured and assembled locally to decrease the manufacturing costs. Once the system is set up to educate local people for the manufacturing processes, distribution costs would be also lowered by decreasing the shipping distances to markets. Setting up the manufacturing systems and warehouses locally will also help to increase the number of jobs for people in subsistence areas in India.



Marketing Strategy Primary and secondary market research clearly indicates that vitamin deficiency in children is rampant in India. To make matters worse, consumer behavior studies show that there is a negative perception towards food supplements and in general towards popping a pill in one’s mouth without an actual illness or disease, wherein symptoms are evident to make a consumer believe that something is wrong and medication is required. These barriers do not stand for the candy dispenser if it is marketed as a candy with an educational and fun side to it, rather than a vitamin supplement, even though both serve the same purpose. So the overall approach would be to emphasize the fun as well as educational element of the candy dispenser and run promotional campaigns to create awareness about the product, which in turn will generate demand. The other major aspect will be to generate interest in smaller business owner/entrepreneur groups for getting involved in the supply side of the business.

Target Market Selection

Conventional mass marketing approaches employed over the last 25 years by companies such as Nestle have met with limited success in the Indian subsistence market. It has taken the best part of three decades and copious amounts of investment for this top-down approach to establish brand recognition in these subsistence communities. Clearly, a more integrated and efficient, bottom-up marketing strategy is required.

The subsistence market is one that is governed by trust and loyalty among consumers and retailers. Very strong and complex relationships often exist between retailers and consumers in these markets, extending well beyond a simple exchange of goods and services. Retailers in these subsistence markets often operate as small independent entities that rely heavily on their customers to support their livelihood. They themselves often live in subsistence and understand the implications of doing so. As a result, retailers are forced to be innovative and creative to extend their market share. For example, retailers often serve as local lenders and provide additional financial services to consumers that are not eligible for bank loans. In addition, local retailers often subsidize long-term consumers in times of economic strain to help their customers while maintaining their market share and consumer base. Their reputation within the community is paramount, and they primarily rely on word of mouth for promotion. This symbiotic relationship between consumers and retailers fosters loyalty, understanding, and mutual respect as a result. This highly effective, holistic bottom-up marketing strategy adds value to every transaction in these markets and is vital for the survival of both the consumer and the retailer.

We will need to adopt a similar trust-based marketing strategy in entering the subsistence market in Tamil Nadu. A bottom-up strategy will be employed that leverages strong community relationships to gain the trust of the consumer. To achieve this, strong partnerships with highly established organizations are required. Lions Club International, Sankara Nethralaya, and the Rotary Club are very highly reputed nongovernment organizations (NGOs) that have been servicing the subsistence communities of Tamil Nadu for decades through medical camps, health days, and the provision of subsidized or free medical care. Medical camps run by these NGOs traditionally have very high penetration and turnout even in rural areas of Tamil Nadu.



We will seek partnerships with such highly reputed and trusted NGOs to help generate awareness of our product. Free promotional stands at such events could provide all visitors and patients with a multivitamin. Promotion at medical camps will also help gain the attention of doctors and nurses, vital to the endorsement of our product. Also, partnerships with other high profile NGOs with well-established marketing and distribution networks, such as the Bill and Melinda Gates Foundation, are also desirable. Partnerships within the local community are also necessary. Women’s self-help groups will be employed to inform and educate mothers on the importance of adequate nutrition for their children and for basic product promotion. The endorsement of local village panchayats (leaders) will be sought as the panchayat, a locally-elected leader, represents the voice of the people and serves as an authoritative figure and advisor in villages.

Local and state government support is fundamental to the success and penetration of our product. Partnerships with the Department of School Education and the government of Tamil Nadu could provide entry into numerous government schools across Tamil Nadu. The Department of School Education at present runs various programs that include the Supply of Nutritious Noon Meal for Standards 1 to 10, Supply of Free Slates for I Standard, Supply of Free Text Books for all students from Standards 1 to 5, Teaching Learning Materials through Operation Blackboard Scheme in elementary and middle schools, and so on. Vita Jeevan is ideal for integration into the school system, as it could supplement the government-run Nutritious Noon Meal program through the provision of a vitamin candy to each child after his or her meal. In addition, it would supplement the education curriculum by educating teachers, children, and parents on the merits of nutrition. Via a pilot program, the dispenser would be provided at cost to the Department of School Education to equip government schools across Tamil Nadu. Revenue generation would be through the ongoing purchase of the multivitamin refill packs.

As seen in the market research takeaways, deficiency of essential vitamins is a huge problem in developing countries, especially in the subsistence context. In India alone, 57 percent of preschool children suffer from sub-clinical Vitamin A Deficiency (VAD). And since the nutraceutical market is expected to grow at an enormous rate of 40 percent, we decided to bring these two together and create a vitamin supplement for school children. After initial number crunching, we saw that the state of Tamil Nadu alone offers a market for about 26,320 candy dispensers in its schools, and therefore we came to the conclusion that primary and upper primary schools would be the best target segment for our product. In addition to this, a continuous line of supply will be required for the candy itself. Therefore, we decided to break our product concept into two possible business opportunities.

1. The Candy Dispenser – It has an educational takeaway associated with its use, and we have designed it such that children are attracted to playing the game. Since this is requires some monitoring and is a high-tech device that may not be affordable for a lower income family in the subsistence context, we decided to target government schools in India to make this investment and bring in the candy dispenser for better health, education, and fun. This product can also be made a part of the midday meal program run by the government of India. The Midday Meal Scheme is the popular name for the school meal



program in India. It involves provision of lunch free of cost to school children on all working days. The key objectives of the program are: protecting children from classroom hunger, increasing school enrollment and attendance, improving socialization among children belonging to all castes, addressing malnutrition, and facilitating social empowerment through provision of employment to women. The scheme has a long history, especially in Tamil Nadu and Gujarat, and has been expanded to all parts of India after a landmark direction by the Supreme Court of India on November 28, 2001. Our product covers most of the objectives of this program and therefore, we believe that it will be a good fit with government-run schools.

2. The Candy – Since a line of supply will be required to replenish candy stock in schools, it can be an opportunity for small, local entrepreneurs. The multivitamin candy can also be sold like any other candy to conventional retailers in the market, such as the local grocery shop or the neighborhood kiosk. The multivitamin candy could also be the cash cow in this business, and hence appeal to small scale entrepreneurs.

Since the Vita Jeevan dispenser will primarily be sold to schools, we plan to set up corporate partnerships with companies that already sell consumer products to schools and that have CSR projects targeted towards children. The former will help Vita Jeevan establish its footing by virtue of existing business links, and the latter will help in getting the required resources in terms of sponsorship and other business-related help. For instance, Amul is a highly successful dairy cooperative in India that provides milk-based products to the entire country as well as overseas markets in Southeast Asia. Vita Jeevan could partner with Amul to utilize its existing distribution channel and excellent penetration in the Indian market to piggyback its new product on Amul’s existing offerings. Amul is also actively involved in children’s educational programs. It sponsors awards and sponsorships like Vidya Shree and Vidya Bhushan every year to meritorious students.

The idea and value proposition of Vita Jeevan falls in line with the midday meal scheme that is run by the Government of India. We plan to partner with programs like these and take the concept of nutrition a step further by proposing a preventive rather than a curative approach. This proposal will be further strengthened by getting endorsements for Vita Jeevan from doctors, pharmacists, and educators. These people are indispensable when it comes to changing or shaping habits that are culturally ingrained. In this case, taking any kind of pills is considered unnecessary in the Indian culture unless one is diagnosed with an ailment. Our product, however, is a candy with multivitamins in it. So if a doctor, who is trusted by everyone in the community, endorses this candy, it will eliminate the taboo that could be a potential problem for our product.



Product Positioning

The Vita Jeevan candy dispenser will be positioned as a fun product that brings along a learning experience for schoolkids in the classroom (and outside, after we achieve a critical mass for its popularity). The unique selling proposition of our product includes:

• Health benefits will be provided to a large number of children in a non-intrusive manner • It will create awareness about general health and hygiene • The product will be fun for the children and is designed to promote healthy competition among

these children • The dispenser will monitor daily dosage for each kid, besides the fact that it will be operated

under the supervision of a teacher or administrator, and thus over-consumption will not be an issue

Since this product is designed for subsistence markets in semi-urban and rural areas in India, the motivation to keep the price low is immense. A preliminary cost analysis was done (in the midpoint report) for the design that was created, keeping in mind the bare essentials for making this product fully functional. We have followed a minimalistic approach in designing this product and have consciously chosen to keep the price low. As of now, the selling price for a dispenser will be $100 and $0.05 for each candy (please see financials for details). Since the price is still substantial for a lower income household, we decided that the target market should be a place where this product can be put to mass usage to make it cost effective; hence the schools. The target market can be expanded to hospitals, malls, and other such entities after the initial phase of product launch.

Communication & Value Proposition

Objective - Since the candy dispenser serves a hidden need, our first objective is to create awareness about the health problems that take place in children due to multivitamin deficiency. The next step would be to make a “product promise” and educate people about how this product works and what it offers. These promotional efforts will also be geared to the government to sell the candy dispenser and to local entrepreneurs who would want to sell the candy to retailers or to end users. We plan to make this product for the people and by the people (in the target segment).

This promotion/communication campaign will help in forming positive impressions about improving children’s health, their awareness about nutrition, and creation of business and income for local entrepreneurs. This segment of local entrepreneurs will have to come up with their own strategy to create a customer base of schools or retailers and make an initial investment to start this business. We will,



however, provide informational support so that they can market the product and create a customer base for themselves further down the supply chain.

Promotional Tools – We plan to start with two methods to spread the knowledge of Vita Jeevan:

• Free samples. To promote the candy, we will launch an awareness campaign to educate people about the benefits of eating this candy, specifically the health problems that can be avoided by a regular intake of multivitamins. We also recommend giving out free samples so that consumers do not perceive it as a bitter medicine. Second, the candy itself will act as a self-promoter. The wrapper will be brightly colored and designed to get noticed by kids. There will be a health-related question and answer in the inside of each candy. This is aimed at putting a fun element into the product.

• Guest lectures by doctors and other experts in schools and communities on the importance of nutrition. These lectures will focus on the importance of daily multivitamin intake and the consequences of not meeting these daily requirements. It will also be a good platform to actually tell people what this candy contains. This will alleviate any preconceived notions or fear of popping a foreign element in one’s mouth. These lectures will break the mental barrier that people (especially kids) have against pills in the Indian culture.

Sustainable Distribution

It is essential that we use a unique approach to attain sustainability in distributing our Vita Jeevan dispensers. Contrary to most nationwide distributions found in the West and other developed countries that usually use a single central distributor, we take a bottom-up approach by producing dispensers locally through entrepreneurs with as many locally available materials as possible. This eliminates much wasteful spending from transportation costs from other states or even other countries. Specifically, we will order all electrical components (microcontrollers, motors, displays, speakers, batteries, cables, PCB boards, etc.) from the lowest bidder within India, if not within the state of Tamil Nadu. Metal mechanical support bars (to keep the dispenser rigid and mechanically sound) are readily available in larger cities such as Chennai. We are planning on using recycled and recyclable plastics for the outer shell of the dispenser, which will be created locally with a plastic vacuum molder apparatus. Individual entrepreneurs will order and pick up all necessary parts and materials from a centralized local storehouse for fabrication. The only fabrication not performed by the entrepreneur is creating the plastic outer shell, which will be created at this central location using the relatively expensive vacuum molder. After fabrication, the entrepreneur then performs a thorough and stringent quality check for each dispenser to ensure flawless and reliable operation. The entrepreneur delivers the dispensers to his set of schools (see Action Plans, below) along with the vitamin candies, which are obtained at the local storehouse.



Action Plans

Manufacturing Plan and Launch Schedule

Our dispensers and candies will be produced locally in India, creating jobs in the same communities where we sell our product. Our candy ingredients are natural and can be found throughout India. Likewise, our dispensers rely on readily available components. This flexibility allows us to source from local facilities, cutting down on transportation expenses.

We plan to invite entrepreneurs to become part of the distribution channel and hence explore a business opportunity for themselves. The idea is that these entrepreneurs will take responsibility for refilling Vita Jeevan dispensers once a month. Each entrepreneur will be responsible for 10 schools, and he or she will get a fixed monthly commission for this. Any additional sales will fetch them a 25 percent commission on that sale. Here we are trying to follow the direct marketing and sales method used by Avon, Tupperware, and other companies to expand their sales. This also leaves a lot of room for business expansion through people who will be actually working in the field with this product.

We will begin a pilot project in Tamil Nadu with a goal of placing 100 dispensers in schools by the end of Year 2 (see product launch schedule, below). We intend to use the knowledge gained from this initial pilot to tailor our design and delivery approach in the following years. We have conservatively projected reaching 12,000 schools within our first seven years of production. India, as of 2000, has 641,095 primary schools. Tamil Nadu has 31,052 by itself. We plan to grow profitably and at a reasonable rate to properly support sales with marketing and education. However, our product has potential to reach an enormous market. If we sold to every primary school in India, we could generate upwards of $2 trillion in annual revenue. For a detailed description of our start-up activities, please consult the launch schedule on the next page.



Sustainable Marketplaces Laboratory| Brief Cases Page 31

Subsistence Marketplaces Initiative Brief Cases June 2012

Financial Forecast

Our business model provides incredible flexibility to scale for the Indian market. Initially, we will seek grant funding and support from governmental and nongovernmental organizations to donate dispensers to economically-challenged schools at cost. Much like a razor-and-blade model, we make our real profits from candy sales, which have a 60 percent gross margin. Best of all, we incur almost no fixed costs. Our dispensers will be custom manufactured at the time of sale by local suppliers, and our candy orders can be tailored to meet demand. Our largest expense is our sales force. Here, we assumed that we will hire one entrepreneur for each 10 schools we service. This entrepreneur will be fully trained and will be compensated at 25 percent commission for any sales made outside the schools, plus a flat fee for refilling the dispensers in the schools once per month. By hiring local entrepreneurs, we will leverage the existing relationships in the community (e.g., self-help groups, family ties, etc.) to build trust and distribute our product.

The following exhibits detail our financial projections. Please note that all costs in these statements are based on estimated price quotes from India vendors at much lower order quantities (i.e. 100 vs. 1,000,000). As a result, the components’ costs should be lower than projected here. Labor, transportation, and miscellaneous expenses will vary by region of production. Nevertheless, our model has great potential in this market, even with conservative cost estimates.



Assumptions

Revenue

Primary Schools in India1 641,095

Primary Schools in Tamil Nadu 31,052

Penetration Rate 5%

Classrooms per school 5

Students per classroom 40

Weeks students are in school 36

Selling price per dispenser $100.00

Percent of dispensers sold at cost 35%

Selling price per vitamin candy $0.05

Candies sold through other channels (% of school sales) 50%

Cost of Good Sold

Total component costs $48.20

Labor costs per dispenser $10.00

Total cost per unit $58.20

Miles traveled to refill dispenser at school 5

Miles per gallon 20

Fuel cost per gallon $2.00



Fuel cost per delivery $0.50

Deliveries per dispenser per year 12

Annual delivery costs per dispenser $6.00

Shipping & handling per dispenser $20.00

Training expense per entrepreneur $100

Commission percentage 25%

Multivitamin unit cost $0.02



Dispenser Component Costs

Description Price Order Condition for

Listed Price Link

Microcontroller

PIC18F45J10 $2.21 100+ link

Subtotal $2.21

Motor System for Dispenser link

RE-260RA 1.5 - 4.5 V DC Motor $0.45 500+ link

74HCT04 Hex Inverter $0.14 500+ link

ST L293D DC Motor Driver Chip $1.60 100 - 249 link

Subtotal $2.19

Sound System link

STA013 mp3 Decoder Chip $5.50 100+ link

PCM 1748E Digital-to-Analog Converter $1.45 100+ link

MAX9744 2x20 W Power Amplifier $1.70 1000+ link

Speaker $3.00 link

Subtotal $11.65

External Memory for Voice and Score Storage

SD/MMC Socket $3.16 100+ link

512 MB SD/MMC Memory Card $6.95 link

Subtotal $10.11

LCD for Score/Progress Visual

MAX232ID RS232 Serial Controller $0.75 link

RKI-1213 16x2 Serial LCD with Backlight $6.40 100+ link

Subtotal $7.15

Power Converters

http://www.microchip.com/wwwproducts/Devices.aspx?dDocName=en024619

http://www.seattlerobotics.org/encoder/200001/simplemotor.htm

http://www.allelectronics.com/make-a-store/item/DCM-296/SMALL-DC-MOTOR-MABUCHI/1.html

http://www.jameco.com/webapp/wcs/stores/servlet/ProductDisplay?jameco_page=46&langId=-1&productId=44898&drill_parents=category_root%24%2410%24%241042&drill_children=10%24%241042%24%24104250&catalogId=10001&storeId=10001&search_type=all&drill_displays=ICs+

http://www.alliedelec.com/Search/ProductDetail.aspx?SKU=2482024&MPN=L293D&R=2482024&SEARCH=2482024&DESC=L293D

http://www.teuthis.com/daisy/index.html

http://www.futurlec.com/cgi-bin/search/qty_price.cgi?part_no=STA013

http://focus.ti.com/docs/prod/folders/print/pcm1748.html#pricingpackaging

http://para.maxim-ic.com/en/search.mvp?fam=spkr_amp&175=D&hs=1

http://www.amaoto.com.tw/p2.htm

http://www.sparkfun.com/commerce/product_info.php?products_id=136

http://www.flash-memory-store.com/secure-digital.html?gclid=CP-0qIa-kZkCFSAeDQodJwtjbA

http://app.arrownac.com/aws/pg_webc?s=P

http://robokits.co.in/shop/index.php?main_page=product_info&cPath=6_64&products_id=191&zenid=qirij81gc78q820l2gnkd7gj71



Astec DA4-050EU AC to DC (5V) Power Adapter $6.93 100+ link

TI TPS62056DGS 3.3V DC Power Converter Chip $2.30 100+ link

Subtotal $9.23

Miscellaneous

Buttons, wires, connectors, etc. $5.00

Subtotal $5.00

GRAND TOTAL $47.54

Apart from the major component costs, a host of other costs will have to be accounted for depending on the following:

1. Manufacturing Cost – This will depend on where the product is manufactured 2. Distribution Cost - It will be much higher if the product is manufactured in the US and

then shipped to markets like India. 3. Warehousing Cost – It will be higher in the US. 4. Marketing Cost – Since the target market is government schools in India, marketing

efforts will have to be directed towards government agencies that are responsible for making spending as well as health-related product decisions for schools. This will include the Directorate of Education, the Ministry of Education, and the Ministry of Health, among others.

http://www.newark.com/astec/da4-050eu/external-power-supply/dp/70K1037?_requestid=210484

http://focus.ti.com/docs/prod/folders/print/tps62056.html



Pro forma Income Statements

Year Ended December 31,

2009 2010 2011 2012 2013 2014 2015 2016

No. of Dispensers Sold 0 100 1443 1553 2000 3000 4000

No. of Candies Sold in Schools 0

3,600,000

77,150,000

154,800,000

254,800,000

404,800,000

604,800,000

No. of Candies Sold through Entrepreneurs 0 0 1,800,000 38,575,000 77,400,000 127,400,000 202,400,000 302,400,000

Revenues from Dispenser Sales - - 8,537 123,189 132,580 170,740 256,110 341,480

Revenues from Candies 0 0 270,000 5,786,250 11,610,000 19,110,000 30,360,000 45,360,000

Total Revenues - - 278,537 5,909,439 11,742,580 19,280,740 30,616,110 45,701,480

Less:

COGS, Dispenser - - 5,820 83,983 90,385 116,400 174,600 232,800

COGS, Candies - - 108,000 2,314,500 4,644,000 7,644,000 12,144,000 18,144,000

Gross Margin Total COGS - - 113,820 2,398,483 4,734,385 7,760,400 12,318,600 18,376,800

Gross Margin - - 164,717 3,510,956 7,008,195 11,520,340 18,297,510 27,324,680

Other expenses:



Commissions - - 22,500 482,188 967,500 1,592,500 2,530,000 3,780,000

Training - - 1,000 14,430 15,530 20,000 30,000 40,000

Salaries 60,000 60,000 90,000 90,000 150,000 180,000 210,000 270,000

Fuel Costs to Refill Dispensers - - 600 9,258 18,576 30,576 48,576 72,576

Shipping - - 2,000 28,860 31,060 40,000 60,000 80,000

Marketing 100,000 100,000 100,000 100,000 100,000 110,000 121,000 133,100

Total Other Expenses 160,000 160,000 216,100 724,736 1,282,666 1,973,076 2,999,576 4,375,676

Interest Expense

Earnings Before Taxes

(160,000)

(160,000) (51,383) 2,786,221 5,725,529 9,547,264 15,297,934 22,949,004

Taxes - - - 975,177 2,003,935 3,341,542 5,354,277 8,032,151

Net Income

(160,000)

(160,000) (51,383) 1,811,044 3,721,594 6,205,722 9,943,657 14,916,853



Ecological Impact Forecast

Although our main focus is attacking the problem of child malnutrition in India, we feel it would be irresponsible of Vita Jeevan if we do not make the extra effort to do it in an ecologically sustainable way. It is our responsibility to ensure that the manufacturing and marketing process creates the least amount of material waste and pollution and uses as much renewable energy and resources as possible. The following are some ecological problems in India and how our plans impact the ecology, keeping in mind the well-being of India’s environment and its future generations.

E-waste (electronic waste) is a huge problem in India. E-waste is usually comprised of obsolete or broken computers, DVD and CD players, stereos, TVs, computer monitors, and other items, and consists of various components and possibly hazardous chemicals that make it difficult to recycle. It is estimated that India generates over 146,000 tons per year6. Hewlitt-Packard India has been successfully recycling their old computers and printers since 1987, and in 2007 they exceeded their goal of recycling 1 billion pounds of electronic products7. We plan to set up a recycling program like that of HP’s to take in our old dispensers and either reuse the parts or recycle them.

In the past few decades, plastic waste has been a problem in India8. Despite India’s efforts to recycle used plastics, these efforts are not enough to tackle the sheer volume of plastic products created and used by its inhabitants. Plastic bottles and bags litter streets, clog up rivers, storm water, and sewage systems. Many animals, such as fish, birds, and larger animals such as cows, die because they either ingest plastic waste or get tangled into plastic waste products, which take years to biodegrade. We plan to use as much recycled and recyclable plastics, metals, paper, cardboard, and other materials as possible to reduce our footprint on India’s and the world’s ecology.

For example, we plan to directly attack the plastic waste problem by collecting and/or buying recyclable plastic waste bottles and bags in the local area, have them recycled, and use the recycled material to create the outer housing of our dispenser. This will help reduce waste in the local area and create more opportunities for people to get involved in recycling and awareness of the need for recycling. Currently, “rag-pickers”—usually child scavengers—collect plastic waste and sell it for whatever they can get3. It is our hope that Vita Jeevan’s initiative in recycling will help get all people involved in recycling at a larger scale. Also, we plan to use resources such as http://www.recycleindia.org/ and junkyard.recycleinme.com/ to connect with other companies to buy, trade, and sell waste plastics and metals for recycling and reuse. 6 Managing E-Waste, http://www.expresscomputeronline.com/20071231/management01.shtml, accessed 2009-04-16. 7 Recycling Catches on in India, http://dqchannels.ciol.com/content/features/108081902.asp, accessed 2009-04-16. 8 Bags of Rubbish – Discarded plastic a nightmare in India, http://findarticles.com/p/articles/mi_m2465/is_8_30/ai_67448416/?tag=content;col1, accessed 2009-04-16.

http://www.expresscomputeronline.com/20071231/management01.shtml

http://dqchannels.ciol.com/content/features/108081902.asp

http://findarticles.com/p/articles/mi_m2465/is_8_30/ai_67448416/?tag=content;col1



We plan to use local suppliers and workers to eliminate waste of precious and dwindling fossil fuels. This waste occurs through unnecessary transportation of materials and finished products that are transported throughout India, and especially exported from outside of India. In addition, this will result in less air pollution, which is a problem for many of India’s largest cities.

An excess of lead in the environment is especially harmful to humans and animals because it can leach into the groundwater and manmade water systems and cause many health problems and even death. We also plan to use lead-free electronic components to prevent lead pollution and contamination of ground water in the case our product is not recycled and is thrown into landfills.

Social Impact Forecast

Product Perspective

The burgeoning Indian nutraceutical industry poses numerous challenges and raises a variety of social and ethical concerns at both the business and product levels. These include concerns over adequate disclosure of information on the characteristics of nutraceuticals and proper regulation of t he market. In India alone, government regulation, through initiatives such as the Food Safety & Standards Act established in 2006, is expected to tighten protocols in the functional foods and nutraceuticals sectors over the coming years.

The pharmaceutical and nutraceutical industries are well aware of cases such as the Tylenol crisis and the Perrier Benzene contamination, cases in which numerous consumers lost their lives and worldwide product recalls were initiated. The social and commercial impact in both cases was absolutely devastating, highlighting the importance of regulation and vigilance in this highly sensitive healthcare market.

These lessons also apply to the subsistence market, and immense care needs to be taken on our part in the development, manufacture, or purchase of nutraceutical products and supplements for dispensing through our educational platform. The potential hazards and social ramifications of such supplements need to be clearly labeled on the packaging and also need to be presented to the consumer in a means that they can comprehend: for example, the impact of over-consumption of iron supplements can result in nausea, vomiting, diarrhea, and is bad for health. The adoption of codes of ethics for Vita Jeevan may be the first step in this self-regulatory process, and this may make the prospect of government regulation less intimidating. The precise content of the code of ethics must respond to our organization, industry, and market, and must extend well beyond purely conflicts of interest or compliance with the legal and regulatory environment. We are seeking to operate in the subsistence market, one governed purely by trust, and thus the safety of our products and the honesty of our marketing is paramount. A functional code of ethics will create a positive image in the eyes of regulators and should provide reassurance for our customers.

It is true that some herbal medicines are marketed as nutraceuticals to avoid the controls necessary for traditional pharmaceuticals. The developed world has already caught wind of this and in the US, the regulation of nutraceuticals is already well established through, for example, the Dietary Supplement



Health and Education Act of 1994. This Act provides for the definition of dietary supplements and provides for the details that can appear on the labels of dietary supplements. The act also prohibits claims of preventing, mitigating, treatment, or cure of specific diseases without the approval of the US Food and Drug Administration. Similarly, in developing nutritional products for the Indian subsistence market, great care needs to be taken to avoid claims that are not scientifically valid. More importantly, consumer education must seek to prevent consumer misunderstanding; for example, these supplements will not improve their overall health if they suffer from chronic diseases.

On the other hand, the Dietary Supplement Health and Education Act allows for statements on classic deficiency diseases, the effect of nutrients, and the general utility of dietary ingredients. This is very much in line with the nutraceutical products that we are developing. These products will target multivitamin deficiency and iron deficiency anemia, and the treatment of these classical deficiency diseases is a claim that we can safely make. The direct social impact of our product is enormous, helping to combat rampant health problems such as blindness due to vitamin A deficiency, fatigue due to iron deficiency anemia (which also impacts a child’s physical and cognitive ability), and potentially helping to combat child malnutrition. The educational platform will also serve as a medium for dispensing future product lines such as iodine supplements and protein supplements, specifically targeting child health and wellness. The indirect social impact is less stress on an already overstrained public healthcare system, by reducing the load on public hospitals. By gradually improving child health, we hope to reduce the frequency of child visits to the doctor for preventable secondary illnesses due to decreased immunity, primarily arising from a lack of nutrition.

The educational component of our product, the dispenser, could also have tremendous impact on rural/subsistence communities. It provides a medium to educate subsistence consumers on the importance of nutrition and its impact on general health and well-being. This is a positive step towards preventative medicine and should help reduce the strain on the overloaded public healthcare sector while reducing the economic burden of illness.

Vita Jeevan Perspective

From a company perspective, we hope to add value to local communities and support regional entrepreneurship. We hope to source local materials and train a regional labor force consisting of intelligent, capable individuals from the subsistence market itself for localized marketing and distribution. This labor force would be proficient in the local language and local customs, and should command sufficient respect from their respective regional communities. As discussed, the manufacture and packaging of the nutritional supplement product will need to be conducted through partnerships with local pharmaceutical and nutraceutical companies in the Tamil Nadu or Himachal Pradesh regions. This will help create local job opportunities and induce localized wealth creation, thereby providing a holistic approach for sectors of the community to overcome subsistence.

It is very important to establish ourselves as part of the community that we seek to serve. For Vita Jeevan, our name and reputation should be synonymous with trust and honesty in the subsistence market. By developing localized relationships and interactions with consumers through community outreach activities (e.g., medical clinics, health education talks and lectures at local schools), by providing children and



families with free sample supplements, and by contacting consumers through their local doctors, we hope to become firmly entrenched in the community. Trust and acceptance are pivotal factors that will determine the social impact of our venture.

Implementation, Controls, and Evaluation

Measures of Performance – Meeting Triple Bottom Lines Although our financial performance is quite important, our social and ecological performances are equally important in measuring whether we are following the goals of our mission statement. The following are ways in which we will measure our effectiveness in being socially, ecologically, and financially sustainable.

People: We will measure the positive impact of our dispenser’s ability to both educate children on the importance of proper nutrition for preventative healthcare and help directly fight malnutrition via a vitamin supplement by answering the following questions:

• Has there been an increase in child enrollment and participation in primary and upper primary schools?

• Has there been a decrease in the number of child patients (5 to 12 years of age) in clinics for problems caused by malnutrition (e.g., anemia because of iron deficiency)?

• How well do the children score on basic tests about nutrition (to test whether the dispenser is effectively educating them)?

• What is the average score of a child, classroom, or school on the questions given by the dispenser, and is the average score increasing over time?

• Do parents know more about nutrition through their child’s interaction with the dispenser? • Are the parents choosing more nutritional meals to cook for their family?

In addition, we need to evaluate the impact our business practice makes on society. Some variables of interest are:

• How many jobs are created in the community by our establishment? • Do members of the community see Vita Jeevan as non-intrusive, amiable, and playing a positive

role in society? • Do our employees feel they are treated equally, paid fairly, that they are an integral part of our

business, and that they are a part of a family instead of simply a company?

Planet: We will measure the ecological impact of our business by evaluating the following:

• the amount of new versus recyclable and renewable materials ordered; • the volume of non-recyclable and recyclable waste created; • the volume of recyclables we collected or paid to collect around the community; • how much energy, on average, is needed to create a dispenser; and • whether our supply chain uses the most eco-friendly products and methods.



Profit: Internally, we will measure our financial sustainability by observing our income and return of investment in research and development, manufacturing, and marketing of our dispenser to the surrounding communities. We realize that it is paramount that our financial sustainability harmonize with the other two principles of ecology and society; to think otherwise, such as making profit at any cost to society and environment, is to defeat the whole purpose of Vita Jeevan. Therefore, we need to evaluate our external financial impact by answering the following questions:

• Are we creating more jobs in the local community? • Is the average income of the community increasing because of our business? • Is our business creating more entrepreneurs and small businesses? • Are average health costs and insurance premiums lessening because less children and adults are

visiting clinics and hospitals?

Monitoring and Evaluating Performance on Multiple Dimensions

People: Performance will be evaluated by gauging consumer satisfaction through a variety of market surveys and qualitative interviews. Local labor will be employed to orally survey and interview parents and children on the perceived impact of our program. For example, parents will be asked whether they are learning to cook more nutritious meals with the knowledge they gained from our community outreach activities. How often do they cook these meals and do their children enjoy eating them?

Children will be asked whether they look forward to their daily candy at school. Are the nutritional questions they are asked by the candy machine too hard? What is one thing that they learnt/remember from the candy machine?

This will give us an indication of whether we are connecting with our audience, the child. This will also serve as a form of market research, helping us to improve our product to better educate the children while providing them with a tastier supplement. Teachers will also be interviewed on child interaction with the educational unit.

Doctors and nurses will be surveyed to assess whether the supplement portion of our product is helping to promote child health and wellness. For example, the school nurse would keep track of the number of students exhibiting symptoms of anemia (fatigue, tiredness) on a monthly basis and correlate trends to supplement treatments that are being offered to children through our program. Qualitative research and data acquisition could be further enhanced by, for example, providing a placebo (regular chewable candy) to one class while our nutritional supplement is provided to another class, and monitoring the number of patient visits from each class. Also, on a more quantitative note, a small set of students that are willing could undergo a monthly blood test to chart their iron levels as a function of time to determine their response to our nutritional program.

Planet: We will monitor our ecological impact by determining the percentage of recyclable materials that were used to create each product and the waste (in kgs) that was created for the production of a single unit. These are tangible quantities that can be gauged during the manufacturing process itself. We will



also collaborate with local retailers to recycle old/used products that could potentially form components of the dispensing system.

Profit: The onus is on developing a system that is sustainable socially, economically and financially. Profit will be gauged in terms of return on investment (ROI), as conventionally done. Initial return is expected to be very low due to high capital costs in the development and distribution of the dispenser. It is hoped that the dispenser will be provided free of charge to government schools. ROI is expected to increase as we gain acceptance in local communities and consumption of the nutritional candy increases. ROI, however is not a complete indicator of the economic impact of our product. Families and local entrepreneurs will be interviewed to determine the amount of local job creation and wealth generation in the community. Families will be questioned on the general health of their children and whether their average number of hospital visits per child per month have decreased. Thus it is hoped that this holistic approach, coupling preventative medicine, health awareness, education, and local wealth generation, can help combat subsistence in at least a few communities.



Appendix



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