5/16/2010

INSTITUTE OF
BUSINESS

MARKETING MANAGEMENT

ADMINISTRATION

Supplementary Feed For Cow | CowShar

Supplementary Feed For Cow - CowShar

Submitted by
Group-9 1.Omaer Ahmad, ZR-09 2.Kawsar Ahmad, ZR-50 3.Rafaat Wasik Ahmed, ZR-53 4.Nasim Ul Haque, ZR-54 5.Sadek Jake Alam, ZR-55 6.Rashed Al Ahmad Tarique, ZR-61

Contents
Executive Summary ................................................................................................................................. 5 Introduction ............................................................................................................................................ 6 Situation Analysis .................................................................................................................................... 7 Market Summary..................................................................................................................................... 7 Market Demographics ......................................................................................................................... 7 Geographic .......................................................................................................................................... 7 Demographic ....................................................................................................................................... 8 Behavioral ........................................................................................................................................... 8 Market Needs.......................................................................................................................................... 9 Market Trends ......................................................................................................................................... 9 Breed Management ............................................................................................................................. 9 Feed Management .............................................................................................................................. 9 Growth of Cattles .............................................................................................................................. 10 Market Growth .................................................................................................................................. 10 Product Offering .................................................................................................................................... 11 Value Chain ....................................................................................................................................... 11 Keys to Success .................................................................................................................................. 11 Critical Issues ..................................................................................................................................... 12 SWOT analysis ....................................................................................................................................... 12 Competition .......................................................................................................................................... 13 Marketing Strategy ................................................................................................................................ 13 Mission.............................................................................................................................................. 13 Marketing Objectives......................................................................................................................... 13 Financial Objectives ........................................................................................................................... 13 Segmenting, Targeting and Positioning .................................................................................................. 14 Segmenting ....................................................................................................................................... 14 Targeting ........................................................................................................................................... 14 Positioning ........................................................................................................................................ 14 Marketing Plan ...................................................................................................................................... 15

Marketing Mix ....................................................................................................................................... 15 Product ............................................................................................................................................. 16 Price .................................................................................................................................................. 16 Place.................................................................................................................................................. 16 Promotion ......................................................................................................................................... 16 Market Research ................................................................................................................................... 16 Competitive strategy: ............................................................................................................................ 17 Finance.................................................................................................................................................. 18 ANNEX Detailed demographics of dairy enterprises of Bangladesh ...................................................... 20 ANNEX - Extension Recommendations for Preparation of Urea-Molasses-Mineral Block (UMMB), and feeding to cattle as a supplement .......................................................................................................... 21

Executive Summary
Bangladesh is the 12th largest livestock rearing nation in the world with the highest density of cattle population in south and south-east Asia. This sub-sector is also the fastest growing part of GDP with an increase of 7.23% per year (as of 2004-05). Despite this tremendous growth the milk yield per cow is less than half compared to that of neighboring India and Pakistan. Also due to the low quality of cattle feed, cows here suffers from poor health condition which results in more infertility, less meat yield and decreased draft power. On the other hand, recent studies show that cows contribute to more 20% of the worlds methane gas emission. They do it mainly in the form of burping, belching and excreting. This percentage is higher than the contribution of the transportation sector, combined. Although antibiotics such as Monensin and Mootral provide a slow-release formula which reduces methane emission by cows, they prove to be too expensive for widespread use. Our product, CowShar, attempts to address these problems. CowShar is a Urea-Molasses Mineral Blocks composite which increases milk yield by 21%, increases weight gain by more than 1.5 times for heifer, increases fertility rate and decreases methane gas emission by 50%. Our market is divided into segments in two stages. First, we break the segments down geographically and then through the size and purpose of farmers. The most attractive segment is the medium and large scale cattle farmers who have ten or more cattle. Our promotion and awareness building campaign include feature in agriculture documentary programs, TVCs, banners and hosting events at the grassroots level. These help us to gain most attention from our target audience. Being the first player in this market, we will adopt the competitive strategies adopted by the market leader. After analyzing the market with Porters five forces our strategies are to expand the whole market and keep the most market share. In addition, as our product is targeted at the mass market, we are operating in a low margin market. The only way to take market share away from us would be by selling the product at a lower price than us. But this would lead to huge losses in the short-run and probably bankruptcy in the long run. So the room for multiple firms operating in this market is low. A 50 kg sack of CowShar will cost Tk. 600 to the farmer. This gives us a profit margin of Tk. 95.08 per sack. This gives us a breakeven volume of 22087 bags. This is achieved in the first year of output. At our targeted volume we make a profit of Tk. 166,592,362.

Introduction
Indolent cows languidly chewing their cud while cattlemen are taking a nap under the tree. Now, however, Bangladesh's ubiquitous cows of which there are 23.4 million, are assuming a more menacing role as they become part of the climate-change debate. By burping, belching and excreting copious amounts of methane a greenhouse gas that traps 20 times more heat than carbon dioxide1 Bangladesh's livestock of roughly 210.03 million (including sheep, buffalo, chicken, ducks and goats) contributes more to global warming than the vehicles of the country. This is not a problem for Bangladesh alone. Last month, scientists at the Space Applications Centre in Ahmedabad in western India published a pan-India livestock methane-emission inventory, the first ever, which put the figure at 11.75 million metric tons per year higher than the 9 million metric tons estimated in 19942. Although there are no similar data present about Bangladeshi cattle, but there is a high probability that the same problem also exists here. The intensity of this problem is likely to increase as higher incomes and consumption rates put pressure on the country's dairy industry to become even more productive. Already in shortage of locally produced milk, Bangladesh will have to yank up production five times the current amount by 2021-22 to keep pace with growing population and expanding disposable incomes. Livestock such as cows, buffalo, goats and sheep are indispensable to Bangladesh's rural economy whether the animals are yoked to plow land, raised for milk and manure or harnessed to pull carts to move goods and people. The Ministry of Agriculture estimates that livestock contribute 3% to total GDP. But while livestock plays a crucial role in the economy, global warming is becoming a huge worry. For starters, most Bangladeshi livestock is underfed and undernourished, unlike its robust counterparts in richer countries. The typical Bangladeshi farmer is unable to buy expensive dietary supplements even for livestock of productive age, and dry milch cattle. Poor-quality feed equals poor animal health as well as higher methane production. Also, even when Western firms are willing to share technology or when Western products are available, these options are often unaffordable for the majority in Bangladesh. For instance, Monensin and Mootral, antibiotics whose slow-release formula reduces methane emission by cows, proved too expensive for widespread use. So the emphasis for scientists is on indigenous solutions. That is why we will produce urea-molasses-mineral blocks that are cheap, reduce methane emission by 20%, provide more nutrition and also increases milk production by almost 21 percent. So they will be easier to sell to illiterate farmers who don't know a thing about global warming but want higher milk yields. This dietary interventions work by checking methogens microbes that thrive in oxygen-free environments like cows' guts, where they convert the available hydrogen and carbon (by-products of digestion) into methane, a colorless, odorless gas. We will encourage well-to-do farmers to use oilseed cakes, which provide unsaturated fatty acids that get rid of the hydrogen.
1. 2. The Financial Times- Reducing cow flatulence; http://www.ft.com/cms/9d1713dc-13ae-11de-9e32-0000779fd2ac.html Time.com Cows with Gas: India's Global-Warming Problem; http://www.time.com/time/world/article/0,8599,1890646,00.html#ixzz0nzmEkNL5

Situation Analysis
It is an established fact that high quality animal protein in the form of milk, meat and eggs is extremely important for the proper physical and mental growth of human being. In Bangladesh, around 8% of total protein for human consumption comes from livestock. Hides and skin of cattle, buffaloes, goats and sheep are valuable export items, ranked third in earnings after RMG and shrimp. Surprisingly, Bangladesh has one of the highest cattle densities: 145 large ruminants/km2 compared with 90 for India, 30 for Ethiopia, and 20 for Brazil. 3 But most of them trace their origin to a poor genetic base. The average weight of local cattle ranges from 125 to 150 kg for cows and from 200 to 250 kg for bulls that falls 25-35% short of the average weight of all-purpose cattle in India. Milk yields are extremely low: 200-250 liter during a 10-month lactation period in contrast to 800 litre for Pakistan, 500 liter for India, and 700 liter for all Asia. Despite highest cattle densities in Bangladesh, the current production of milk, meat and eggs are inadequate to meet the current requirement and the deficits are 85.9, 77.4 and 73.1% respectively.4

Market Summary
Market Demographics
Our market has been divided in three criteria which include geographic, demographic and behavioral aspects of the cattle farmers. Each of them is broadly described below:

Geographic
Baghabari area in present day Sirajganj district was a traditional milk producing area. A large community of Ghoshs collected the milk and supplied chaana, ghee, curds and sweets to sweet sellers across the country. In 1965, the then East Pakistan government created the Eastern Milk Producers Co-operative Union Limited (EMPCUL). This was renamed to Bangladesh Milk Producers Cooperative Union Limited (BMPCUL). BMPCUL is popularly known as Milk Vita, the brand name of its product. Milk Vita organized farmers in the Baghabari area into cooperatives and started collecting milk in the area. It set up a pasteurization plant. Among its other products are butter and ghee. Milk Vita achieved significant success in increasing the milk production in Baghabari area by providing training and extension services. However its impact and success outside the area has been limited. In other areas farmers still operate on an individual basis selling milk mostly to sweet manufacturers.

3. 4.

Beef Cattle Production in Bangladesh- A Review, M.A. Baset , M.M. Rahman , M.S. Islam , A. Ara and A.S.M. Kabir National Livestock development policy 2007- ministry of fisheries and livestock, government of Bangladesh

Demographic
Traditionally the industry has been dominated by the Ghosh community who collected milk from farms and processed them into Ghee, curds, sweets and other products. Liquid milk only had informal supply structure and in fact constituted a small portion of the total market. However with the development of the collective model of BMPCUL, the market for milk began to expand and surplus milk made its way to the cities as a processed package product. There are three types of production system which has been identified by IFCN in the cattle raising industry. In the following segments each type of farm is briefly described. More details, particularly about the dairy production system can be found in the next page: 2 Cow Farm (BD-02) Location: A family farm with .4 hector (ha) of irrigated land located in the rural upland. Activities: the farm keeps two indigenous cows. Its feeding system consists of three to four hours per day of grazing on communal land and stall feeding with some concentrates. About 63 percent of milk produced is sold to the local milkmen. The farm raises its own heifers as replacement. Off-farm income is minimal (6 percent of total household income). 10 Cow Farm (BD-10) Location: A farm with 1.5 hectors of irrigated land (no land rented). Activities: the farm keeps two indigenous and two cross-breed cows. It delivers 90 percent of the milk produced in the nearest collection point. The feed basis is provided by crop residues and fodder, both grown on farm. Lactating cows are supplemented with cotton seed cake, molasses and urea. The firm raises it own replacement heifers. No off-farm income is earned by any of the family members. 25Cow Farm (BD-25) Location: A farm in the rural area with 1.8 hectors of irrigated land. Activities: the farm 25 cross-bred cows. Over 97 percent of its milk is sold at the nearest milk collection point. The feed ration consists of cereal straw, green fodder, concentrated by-product such as oil seeds wheat bran, molasses and urea. The farm raises about 15 p0ercent of its own heifers and purchases cows early in their location or near calving.

Behavioral
The average Bangladeshi dairy farm has 3.5 heads of cattle. Dairy is still considered a secondary profession even for farmers with 5-10 heads of cattle. Part of the reason may be that most dairy farmers also have another source of income. Another reason for this may be that milking and tending the cows

has traditionally been the womens job and is therefore given less importance than farming the fields even in households whose major source of income is dairy.5

Market Needs
Although the milk production has been continuously increased, after a sudden jump in the early 90s, milk production has registered a very gradual growth. The double digit growth between 1991 and 1996 has tapered off to an average growth rate of 1.3% between 1996 and 2004. The reproduction and meat generating capacity has also lowered. Our product CowShar will help the farmers with the following benefits6:

Notable improvement of the body condition of the animals, Improved meat and milk production, Improved animal reproduction,
Decreased feed and water intake and Improved draft power.

Market Trends
The current market of cattle farmers now use three techniques to get the benefit that our product is offering singlehandedly:

Breed Management
Bangladesh has some of the least productive cows in the region producing on average 206kgs/head/year of milk compared to almost 800kgs for India and 7000 kgs for the USA. The most common local cow, Bos Indicus, has very low productivity. Attempts have been made to create various cross breeds to increase productivity. Common ones are Local and Bos Taurus cross, SahiwalPabna, Frissian-Pabna and Sahiwal-Frisian-Local cross. The results have improved productivity significantly. But to poor health condition of cows, the rate of failure in fertilization is very high.

Feed Management
Poor quality feed has been one of the major reasons for the low productivity of our cattle. The low productivity of our cattle heads in turn has also prevented our farmers from investing more in feed. Most cows are still fed with crop residues and cereal byproducts.

5. 6.

A review of milk production in Bangladesh with particular emphasis on small scale producers-international farm comparison network-T. Hemme, O.Garcia, A.R. Khan PRODUCTION AND UTILISATION OF UREA-MOLASSES MINERAL BLOCK IN THE PHILIPPINES- Hemando F. Avilla

Some cow farmers grow high yielding varieties of grass and supplement it with oilseed meals, broken rice and other by-products. However in most cases this is done in an unscientific manner.7

Growth of Cattles
A large number of farmers involved in bull fattening just before 3 or 4 months of Eid-Ul-Azha (Muslim festival), when they sell the animals with profitable prices. Cattle fattening for beef production have become an important business of the small farmers in Bangladesh. In few areas of Bangladesh a small scale commercial beef fattening program has already been started. Straw is the important crop residue; contribute the major portion of the fibrous part of the diet of the beef cattle. Rice straw is the basal feed for ruminants with low nutritive value and low digestibility. Farmers use rice straw of traditional varieties, green grass, sugarcane tops, wheat and rice bran, molasses, pulse bran and locally available resources such as pumpkin, carrot, banana, vegetable by products, rice gruel, boiled rice bran, oil cakes etc for beef fattening. The chemical treatment of straw is the most effective and economic method to improving the quality. Straw is mainly treated with urea and molasses and in some cases chemical treatment also done by the farmers. Urea molasses straw treatment in beef cattle resulted higher body weight, dressing percentage and also in better carcass quality than untreated straw. The acute shortage of feeds and fodder has long been identified as a serious constraint to optimum livestock production in Bangladesh. The nutritional factor is considered a major constraint to livestock productivity. Traditional grazing field is scarce except in some pokets in Pabna and Sylhet districts. Farmers used three years old cattle for beef fattening and maximum growth rate between 1.1 to 1.4 years of age. Cattle fattening period is 4.5 months in rural areas of Bangladesh.8

Market Growth
According to Bangladesh Economic Review, (2006), the growth rate in GDP in 2004-05 for livestock was the highest of any sub-sector at 7.23%, compared to 0.15% for crops, and 3.65% for fisheries sub-sector. These changes have been prompted by a rapid growth in demand for livestock products due to increase in income, rising population, and urban growth.9 The livestock industry of Bangladesh a rank 12th in the international market and is 3rd in the Asian market. Bangladesh has a higher cattle population than any countries in the European Union and more cattle density than any other country in south and south-east Asia.10

7. 8. 9.

REPORT ON THE DEVELOPMENT OF DAIRY INDUSTRY IN BANGLADESH- PRAN-RFL GROUP, December,2007 National Livestock development policy 2007- ministry of fisheries and livestock, government of Bangladesh Government of the People's Republic of Bangladesh Ministry of Fisheries and Livestock- NATIONAL LIVESTOCK DEVELOPMENT POLICY 2007 10. Beef cattle production in Bangladesh- a review-M.A. Baset, M.M. Islam, M.M. Rahman, G.B. Das and A. Ara

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Product Offering
CowShar is a urea-molasses-mineral blocks composite which make dairy firms more efficient. CowShar can: Improve weight gain of cows by 20.8 percent to 21.7 percent Increase milk yield of cows by 21%

The composite has been extensively tested in the Philippines and Bhutan and all of the benefits have been proved at the consumer level. Use of the composite has resulted in significantly higher Average Daily Gain in weight for growing cattle. Cattle receiving the composite supplement enjoyed better health and increased draft power.The benefits received from using CowShar will pay off well for the farmers a 21% greater milk yield per cow alone will more than pay off for the cost of CowShar.

Value Chain
The following is a value-chain of Cow-Shar:

Inbound Logistics
Raw Materials Sacks

Operations
Mixing Packaging

Outbound Logistics
50 kg Sacks of Cow-Shar

Marketing and Sales

Advertisi ng Promotio nal Events

Service
Training to retailers

11. Effect of Monensin on the Performance of Cattle on Pasture or Fed Harvested Forages in Confinement: http://jas.fass.org/cgi/content/abstract/62/3/583

CowShar will be sold in 50 kg packs and will last 10 days for a 10 cow herd. The farmers will have to mix CowShar with regular cattle feed.12

Keys to Success
The key to success is ensure total customer satisfaction through improving efficiency of dairy farms. They need more milk production, better health of the cows, savings on feed and water intake, and improved fertility, and strive to meet those needs. Achieving these keys will make the venture profitable and sustainable over the long term.

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Critical Issues
KFL is a start-up business and the critical issues they would face are: Establishing a demand for CowShar in the market by educating the farmers about the long term benefits of CowShar. Establishing itself as the pioneer cattle feed supplement manufacturer.

SWOT analysis

Strength
Low Product Price Low transportation cost due to close proximity with target market. First movers advantage.

Weakness
Low profit margin.

Opportunity
Growing market Low raw material cost Availability of raw material Tax holiday due to agricultural investment Low bargaining power of supplier

Threat
Low barrier to entry Better technologic product

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Competition
This is a new-to-the-market product, so there are no existing competitors. However, Monensin could be a potential competition but the huge difference in price range (in CowShars favour) makes it unique in the market. Monensin is not possible to be produced locally and has a high price tag, making Monensin completely unfavorable for the local market.11 CowShar will be affordable for the farmers, and the price they would pay for CowShar will be paid off well in forms of increased milk production, reduced feed and water intake, improved fertility and better cattle health. And of course we get lower green house gas emission too.

Marketing Strategy
The market strategy focuses on the possibility of raising profitability and sustainability of dairy firms by making them subscribe to the idea of CowShar. We are specifically targeting dairy farms which produce milk, and have got 10 cows at the least. KFL does not cover the whole market, as being a startup company, CowShar needs to be focused and target the segment which is easier to access and communicate and accounts for the larger chunk of the whole industry.

Mission
CowShars mission is to provide its customers with means to make them more profitable and sustainable. We intend to attract customers by making them educated about the benefits of CowShar, and maintain them over the long run by making them realize the higher revenue and lower cost in dairy farming on using CowShar. We strictly believe that the profitability and sustainability of the dairy industry dictates our own potential, and thus we strive to keep exceeding expectations of our customers.

Marketing Objectives
Maintain a positive, strong growth each quarter. Achieve a steady increase in market awareness. Maintain a high rate of retention.

Financial Objectives
Increase the profit margin each year by 1-2% by increasing efficiency and economies of scale. Achieve a double to triple digit growth rate each year.

12.

Production and Utilisation of Urea-Molasses mineral blocks in the Phillipines (pdf)

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Segmenting, Targeting and Positioning

Segmenting
The markets have been segmented in multiple stages. First, it has been divided into geographical segments. In our case these segments are the districts. The geographical markets are then segmented into people who rear cattle for the different purposes. These purposes are: 1. 2. 3. 4. Micro producers who rear one or two cattle to supplement their incomes People who rear cattle for their own milk supplies Farmers who rear cattle for the meat market Farmers who own 10 or more cattle for production of milk for selling to dairy product makers

Targeting
Among the 6.7 million cattle farmers in our country 10% own ten or more cows. We target to capture 30% of this market. The micro producers generally procure their feed mainly from their own fields. Therefore, since they do not come into contact with the cattle feed market frequently, it would be difficult to change their habits and make them purchase feed. The second segment consists of customers who rear cattle at their own home for their milk consumption. Since their utility of increasing milk production diminishes, they would probably not be very interested in our product. The third segment of customers is highly seasonal. They rear a large number of cattle for the Korbani cattle market. The majority of these cattle producers raise cattle for a short period of time. Since this market is short-lived, we will not target this market at the start. Our principal target market is the final segment. This group is the principal buyers of cattle feed in the country. These farms are located mainly in the northern part of Bangladesh. If we target this market, we can start out with a smaller and concentrated distribution system in the most profitable market segment.

Positioning
We want to position ourselves as the pioneer in the cattle feed additives market as a source for reducing cattle feed costs, increasing milk production and improving the health of cattle. We are trying to position our product as a part of everyday cattle feed market.

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Marketing Plan
The main objective of our marketing campaign is to create a market in Bangladesh for cattle feed additives. As such an industry does not exist in Bangladesh, we want to become the pioneer and use the first mover advantage to become the market leader. To sum up, we want our product to become synonymous with cattle food additives which produce healthy, lively cattle that produce more milk while cutting down on food consumption. The message we want to give to buyers is that we will reduce their feed costs by 20 per cent and increase their milk production by up to 20%. To pursue our objective, we will follow a multistage awareness program. As our product is to appeal to a mass market, we must create campaigns that reach this mass audience. In the first stage, we would feature our product in agricultural television shows on national television. These shows include Mati o Manush on Bangladesh Television and Hridoy e Mati o Manush. These programs would be specifically selected because they feature innovations and innovative products that are a part of rural Bangladesh. They have a large regular audience in rural Bangladesh, especially in the agricultural sectors. This medium will help us spread the message to our target audience effectively and efficiently. The second stage in our awareness campaign is television advertising during airings of Bengali movies in the various television channels. As audience for these movies are based mainly in villages, this would also be quite well targeted. Another way of creating awareness is through retailers of cattle feed. These retailers are generally located at the central market in each village community. We can make banners which portray the availability of our product. As we will give the retailers an attractive commission, they would be able to provide information to customers about the benefits of our product to prospective customers. There are some traditional events such as stick fighting, horse races, etc. that are very popular. As the prizes in these events are very cheap, we can gain cost effective awareness building among potential customers. This would be helpful in creating word-of-mouth generation.

Marketing Mix
As our product is a good, we use four Ps framework to produce the desired effect in our customers.

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Product
Our core product is a food supplement that reduces the feeding cost for cattle farmers. It does this by reducing the action of bacteria in the cattles digestive system which result in lesser emission of gases through flatulence and belching. As a result, more of the food is converted to milk production and keeps the cows healthy too. The farmer adds the mix to the hay or grass. About 500gm per day per cow is required. The product would be available in 50kg sacks.

Price
Since our selling point is to reduce food costs, we have to keep the price at a level which should be less than the cost savings it provides. As most of our inputs come from byproducts of other industries, our cost of raw materials would be quite low. This helps us to sell the product at Tk. 600tk per 50kg bag.

Place
Customers can avail our product at cattle feed outlets. These are located within proximity of farms and hence the carriage costs to customers would be low and carriage convenient.

Promotion
The promotional strategies are outlined above in the marketing strategies section.

Market Research
Extensive studies on the dairy cattle industry in Bangladesh has been carried out by the Bangladesh Agricultural University and the statistics available from Bangladesh Bureau of Statistics provides us information about the location of our target markets. This significantly cuts down our research costs. We choose a handful of areas to test market our product. We would use information from this source to find the shortcomings, if any, of the product and distribution network. Findings from this research would be used to iron out the problems in the product. Further market research would be conducted about the viability of international markets for our products and the modifications necessary to meet the local legislation requirements. In addition, a firm in the UK is planning on selling carbon credits to industries in developed countries. The carbon emissions reduced by our products could therefore act as a second source of revenue for our firm. The viability and marketing resource requirements for such a venture would also be evaluated from our market research findings.

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The funding needs for our market research are shown in the pro-forma financial statements attached.

Competitive strategy:
Competitive forces: We identify the competitive forces according to the Porters Five Force model: 1. Threat of intense segment rivalry: a segments attractiveness decreases with the increase of the number of competitors in that segment. There is no other company that offers the same product as ours. So there is practically no threat of rivalry in our target market segment. Thus the attractiveness of our target market is very high regarding this particular aspect. 2. Threat of new entrants: The production process of CowShar is quite simple. That offers a low entry barrier for other companies to enter the market. The exit barrier for the market is also low since there is no need for a large investment in machinery and other such manufacturing units. So the attractiveness of the market is low considering this particular force. 3. Threat of substitute products: As of now there is no perfect substitute for CowShar. The only product currently existing in the market that can be considered as a substitute is urea. But urea only stimulates growth of cows and thus only benefits farmers rearing cows for the meat market. Our main target is farmers rearing cows for milk. Considering this force the attractiveness of the market is quite high. 4. Bargaining power of buyers: Bargaining power of buyers increase as they become more concentrated or organized. Our target market is not much concentrated since we are supplying to individual customers. So bargaining power of buyers is low and the attractiveness is high. 5. Bargaining power of suppliers: Our raw material involves different types of unrelated products. So we will not be dependent upon any particular group of suppliers. Moreover our suppliers are not concentrated or organized for that matter. So their bargaing power is likely to be low, therefore increasing the market attractiveness. Our product is going to be the first of its kind in the Bangladesh market. That makes us the pioneer in this product category. As the first mover we are going to adopt the following competitive strategies: Capturing the largest potential market: After launching the product we are going to exert extensive promotional efforts to create maximum awareness in our target market and capture as much market share as possible.

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Expanding the total market: After the initial launching of CowShar we will put in continuous effort to expand our market. Our first area of operation will be the North Bengal but we will gradually expand the market to cover the whole country. We will also be able to export our product to countries such as India and Pakistan. There are no similar products in these countries as of yet. Position defense: Our positioning is going to be based on a strong value that is to substantially increase the milk production of cows for an affordable price. Preemptive defense: Our market has a low entry barrier. So it will attract a large number of competitors. Our low price will act as a preemptive defense strategy against this host of competitors. This low price wont allow them to make significant price cuts. If they want to offer their product at a significantly lower price than us they will suffer heavy losses.

Finance
There are about 23.7 million cattle reared in Bangladesh. Of these cattle about 10% are kept in firms which are considered to be in medium size farms (more than 10 cattle). We aim to capture about 30% of this market. This gives us about 711,000 in our target market. As each cow requires about 500gm per day, we would sell about 2,595,150 bags of 50 kg per year. The following table shows the cost per kg of producing 1 kg of CowShar Input Molasses Rice bran Urea Cement Salt Dicalcium Phosphate Trace minerals Water Labor Total Cost Per Kg (Tk.) 6.65 6.3 28.84 5.6 12.6 29.75 630 0.35 0.50 10.0984 Amount Needed(Kg) 0.36 0.38 0.1 0.08 0.019 0.02 0.001 0.04 Total Cost(Tk.) 6.65 6.3 28.84 5.6 12.6 29.75 630 0.35

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The price of the CowShar is set at TK. 600 for 50 kg sacks. The cost of the sack is Tk. 504.92. This gives us a margin of Tk. 95.08 per sack. At this margin, breakeven quantity is 22087 bags. The following page shows a summarized pro-forma financial statement of our firm for the first year. Tk. 1,557,090,000 1,310,343,138 246,746,862

Revenue Cost of Goods Sold Gross Profit Selling and Administration Expenses Commissions Administrative Expenses Depreciation Advertising Promotion Profit

77,854,500 600,000 200,000 1,000,000 500,000 166,592,362

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ANNEX Detailed demographics of dairy enterprises of Bangladesh

Source - a review of milk production in Bangladesh with particular emphasis on small scale producersinternational farm comparison network-T. Hemme, O.Garcia, A.R. Khan

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ANNEX - Extension Recommendations for Preparation of Urea-MolassesMineral Block (UMMB), and feeding to cattle as a supplement

21