CASE STUDY This baby needs to grow now... Lydia started her HealthyBana business with a range of baby products several years ago. The product range consists of baby food, baby clothing and accessories for babies, such as cots and toys. She launched the business in South Africa, but soon realized that there are opportunities knocking north of the Limpopo River. At this stage the product range is rather narrow and consists of food, including readymade jarred food, powdered food supplements and infant cereal porridge. Other products include baby clothing and prams and cots. A small range of baby and toddler toys are also part of the product range. While there certainly are opportunities to innovate, Lydia and her management team wants to focus on growing HealthyBana organically. They don't want to overextend their financial reserves on ideas that may cost money without certain returns. Ideas for innovations that have been brainstormed are more products and product lines than the existing ones - which admittingly is limited compared to a competitor like "babycity" (https://www.babycity.co.za/). HealthyBana's management team realizes that they will need to negotiate with more suppliers to enable them to stock a broader product range. More innovation possibilities are to supply food for other market segments, such as elderly people. Opportunities to innovate is broad and only limited by their imagination. Lydia and her management teamrealise that any innovation should be supported with resources. They focused so much on managing the business as it is now, that there is little opportunity to invest time on innovation. While there are HealthyBana outlets in most major cities in South Africa, Lydia has a feeling that they compete in areas where competition is already high. For instance, in malls like Centurion Mall (Pretoria), The Pavilion Shopping Centre (Durban), Tyger Valley Centre (Cape Town) and Greenacres Shopping Centre (Gqeberha) there are at least 3 to 4 outlets that focuses on the needs for babies and toddlers. HealthyBana targets young urban mothers aged between 23 and 34. Because they shop at the HealthyBana outlets in the malls mentioned above, they are in a middle to high income group. Lydia wondered if it is not time to explore opportunities that less represented market segments may provide. She thought about smaller shopping centres which are closer to neighborhoods - after all mothers with small children want to shop where it is most convenient. Lydia is a go-getter. She constantly thinks about expanding opportunities. She is the type of leader who allows her management team and people working for HealthyBana to come up with new ideas. She even introduced a reward system for innovations that comes to fruition. She realizes that it is important to measure the success of every new venture in a way that ensure it provides a balanced picture of performance. This would include financial, business process, market/customer and staff learning and growth perspectives.

Questions Assist Lydia with a strategy to help her and her management team to take HealthyBana into a next growth cycle. Your strategy should cover the following aspects.

Question 1 [30 Marks] Identify (brainstorm) possible new market segments on which Lydia and her management team could focus. HealthyBana already targets young urban mothers aged between 23 and 34. Because they shop at the HealthyBana outlets in the malls mentioned above, they are in a middle to high income group. Your answer should suggest new market segments outside this segment. Apply a layered approach, meaning that you should consider combining segmentation bases to identify segments. From all possible market segments that you identified, suggest the market segments that HealthyBana could target. Motivate why you recommend they should be targeted. Lastly, suggest a positioning statement for each recommended market segment.

Question 2 [20 Marks] List the target market segments that you recommended in question 1. Then suggest innovations that could be considered for each market segment. Your suggested innovations could include broad business model/process, product- and market-related innovations. You may, however, suggest any innovation that you consider appropriate to grow the business. Ensure that the suggested innovations make sense for the market segments that you recommended in your answer to question 1.