After a two-week independent localized operation, Mead Johnson China Business Group held a National Partnership Conference on Sep. 26, 2021. It was the first time that Mead Johnson held such conference after it entered Chinese market 28 years ago, which could help its new operation strategies gain a consistent recognition among the companies in the whole supply chain.
Mead Johnson was sold to private equity firm Primavera Capital in this June (read CL news for more details). After the completion of the transaction, Mr. Zhu Dingping was appointed as the president of Mead Johnson Chinese Business Group and put forward three key market strategies, which are 1
Optimize the product portfolio based on local demands
Improve its digital platform focusing on Chinese consumers
Comprehensively develop its market in low-tier cities
In this conference, Mead Johnson introduced the detailed measures related to these strategies.
Mead Johnson will greatly promote its “1+1+N” product matrix mode, that is, “Enfinitas series + Enfamil series + other series, including Enfagrow and EnfaGentlease”. In addition, it aims to build a value chain ecology of “international famous brand + regional franchising products + considerable profits + service management system” under a flat and grid business model.
Consumer education is a significant method to develop new customers. As medical institutions such as maternity and childcare hospital and community healthcare center are where infant formula consumption frequently take place, Mead Johnson will invest more on medical channels and increase the product promotion there. In the future, Mead Johnson will make full use of a professional medical team with over 400 personnel and 5,000 professional promotions specialists with nutriology background. Besides, the whole sales team is requested to devote themselves to consumer education.
Lack of efficient response to the market changes is one of the obstacles for foreign-invested enterprises to develop their business in China (click here for more analysis about obstacles and opportunities for foreign brands). As Mead Johnson’s operation is totally localized, it will shorten the decision chain as much as possible. Mr. Zhu hoped his team can improve the decision-making ability and make quick response to the market dynamics. Front-line employees will enjoy higher priority when distributing resources and making decisions internally. 2
Market expansion to low-tier cities
With the enhanced per capita income and strengthened health awareness, people living in the third and fourth tier cities have increasing demand for high-end infant formula products. According to the partner list unveiled by Mead Johnson, maternal store is still a significant channel to develop its market in low-tier cities. On the whole, the new strategies increase the brand promotion both online and offline, and will penetrate into the third and fourth tier cities by diversified products and multiple business collaboration mode. Compared with the previous brand-oriented strategy, now it is more practical 3.