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HI6008 Penetrating Market As New Entrant In Online Baby Care Product Industry Assessment Answer

Assessment Details and Submission Guidelines
T1 2020
Unit Code
Unit Title
Business Research Project
Assessment Type
2. Group* Report on Literature Review (including statement of ‘who wrote
which sections)
Assessment Title
Literature Review
Purpose of the assessment (with ULO Mapping)
This assessment item seeks to ensure that all students enrolled in the Capstone Unit – Business Research Project – are adept at sourcing relevant and current literature using academic search portals, such as Pro-Quest, and other places where high quality secondary data resides.
Furthermore, this assessment requires students to not only read and summarise what other authors have already established, but also to become skilful at weaving together complementary or contrasting arguments relevant to their approved topic, research problem, and research question(s).
Relates to Unit Learning Outcomes 1, 2, 3 and 5
30 % of the total assessments
Total Marks
Word limit
At least 2500 words for the Literature Review


Assignment 2 Specifications

This unit aims to give you an opportunity to combine many facets of your acquired MBA skills into the production of a high-quality research project.

Assignment 2 - the Literature Review - is designed to ensure that each team member masters the skills of searching, locating, reading, summarising, and using relevant academic literature and secondary data to create a compelling discussion and/or argument, thereby creating the context for their further research in pursuit of the answer to their research question(s).

Assignment Structure should be the following:

  1. An opening statement of the Research Problem and research Question(s) – these should now be more detailed than what you had in your Topic Approval.
  2. Discussion of major theories, models or streams of influence around this topic. This provides your lecturer with evidence that you have gone deeper than your initial search now to find literature that leads you toward answering your research question
  3. Draw the reader’s attention to any contrasting views expressed in prior research in this area and give your view of how differing opinions can be brought together to help answer the research question and ultimately resolve the research problem. [the more comprehensive your literature review, the better. Whatever you do NOT find out in this literature review will leave you with more work to do when you move to the next part of the project, i.e. methodology]
  4. Report how it has brought you closer to an answer to your research question(s).
  5. Ensure all in text citations are correctly referenced.
  6. Add a comprehensive List of References, in Harvard referencing style. [Students please be warned that errors in referencing attract suspicion of plagiarism/academic misconduct and may require detailed investigation, prompting a request for further information from you regarding your sources. It is always essential that academic integrity is upheld and any breach thereof may lead to a mark of ZERO and a report of academic misconduct. Don’t take a chance!]

  7. Append a statement indicating ‘who wrote which sections of this report’


“Online Baby Care Product Industry”


In this 21st century, the rise in technical innovations has surged “Online shopping”. As it focuses on variety in selection, convenience, efficiency, personalized services, price comparison (Chaffey, 2017). While entering the online marketing a strong e-business strategy must be built. Babies should be cared through physiology and in specific environment. Products such as, diapers and accessories, baby formula etc. is the most sensitive part which must be taken more seriously. According to baby product industry research put out by TABS Analytics, there is increment in e-commerce as compared to a shopping center (TABS Analytics, 2017).  However, the trend of ecommerce is here to stay for long and has made itself fit into the buyer’s lifestyle in a very convenient manner. As ecommerce has fit into the buyers’ lifestyle, the trend of ecommerce will never fade away. 


The exponential growth in online business can be witnessed in the global market evidently (Marca, 2009). It is estimated that there was 3.53 trillion US dollars’ worth sale through online portals which has also been estimated to double by the end of 2022 (Middleton, 2011). A lot of importance as well as scope of potential growth has been seen in terms of ecommerce. One of the greatest challenges for the existing firm is the process of change. The organization needs to look over aspects such as company structure, culture as well as customer orientation.  Another key factor while entering the online marketing seems to be resistance which must be ensured by building up a strong e-business strategy (Coltman et al., 2000).

The growth in the market has been seen due to the firms choosing the digital platform to exploit the potentials of the business. One of the few businesses which have been seen growing slowly is the childcare products. The majority of managers have come to the agreement that internet is the next big thing for the business and childcare products are not an exception (Jackson & Harris, 2003). With the electronics business sky rocketing, this business has equal opportunity and protentional. The dynamic nature of the business doesn’t allow the business organization to have an exact depiction(Bo & Zhang, 2010) However, the trend of ecommerce is here to stay for long and has made itself fit into the buyer’s lifestyle in a very convenient manner.


In today’s world, there are already a number of well settled baby care online stores which have a great trust of customers. In this situation, our major concern is about the feasibility and sustainability of new entrant to penetrate the established and competitive market in this industry. In baby product industry research performed by TABS Analytics, which was undertaken with the baby care products including baby seat ad safety products, baby feeding products, diapers and accessories, baby formula and other needs, found that there is double digit declination in market penetration but slightly increased e-Commerce growth share (TABS Analytics, 2017), but remain silent regarding feasibility of new online business in this industry. So, the main research problem for our project is:

“The viability of new online entrepreneur to penetrate the baby care industry” 


  1. How can a new online business compete with the well-established baby care businesses?
  2. What are the challenges for a new entrant in baby care product industry?
  3. What are the best products to sell online for baby care?
  4. How to attract the perfect customer and win their trust? 
  5. Which particular online platforms are best for marketing?
  6. How to retain customer and achieve profitable long term growth?  
    With the strategic management company structure, culture as well as customer orientation is responsible for sustaining competitive advantage of the business.  This research will describe the Strength, Weakness, Opportunities, Threat, and competitive advantage for online shopping of “Child Care” products while penetrating the market as a new entrant. Consumer’s satisfaction towards the product is the determinant that impacts the business. Thus, this research will clear about the challenges new entrant faces while competing to sustain, relation with customer.



“Online Baby Care Product Industry”

Literature Review


There is a wide number of organisations that offer ‘baby care’ products and services through e-commerce and that have gained considerable consumer loyalty. The study concerns itself with identifying the viability of new businesses to penetrate the baby care industry over e-commerce. With the presence of large-scale competitors, it is challenging for new entrants to penetrate the market along with generating sufficient amounts of consumer trust and loyalty to achieve success. Furthermore, there is an extensive range of elements that influence the capabilities of the companies in terms of attracting and retaining consumers. 

Growth of Online Baby Care Businesses in Australia

As per the market value report generated by Statista, the online baby care market in Australia, as of 2020, is worth 345 million USD indicating a CAGR growth rate of almost 2.8% over the next 5 years (Statista, 2020). The baby care products that are most sold by the online businesses in this segment include baby formulas, skin and hair care items, as well as, disposable baby care items including diapers and wipes. The major competitors that sale baby care products online include Target Australia, Amazon Australia, Bonds, Myer and The Iconic. Over the past 5 years, the crude birth rate of Australia has declined from 13.4 to 12.9 (Statista. 2020). However, it is expected that the online baby care market would experience further growth in the coming years. As evident from TABS Analytics research, almost 20% of all baby product sales are performed online (TABS Analytics, 2016).

Challenges for New Entrants

Despite the exponentially growing size and structure of the online baby care market, there are several challenges associated with the market entry that new entrants have to face while operating in the e-commerce segment. There is a wide number of sellers offering similar baby care products at premium prices to consumers. Furthermore, as opined by Tyagi (2018), from a psychological perspective of parents, it is likely for parents to select baby care items that are pricey due to the perceived high quality and the desire of the parents in terms of taking the ‘best possible care’ of children. As postulated by Wang (2018), for new entrants, the inter relativity among premium pricing and perceived high quality may pose threats as the likelihood of consumers choosing the offerings of the new businesses rather than already established ones is significantly low. As argued by Hånell et al. (2019), in an industry that has intense competition, new entrants must offer a unique value proposition to engage and attract consumers which need to be backed with the identification of the right products and services based on consumer demand.

Generating Consumer Attraction

As defined by Kracklauer et al. (2004), customer attraction refers to the practices used by a company in terms of inspiring consumer interest in the offerings and services of the organisation. In the context of retail businesses, customer attraction relates to generating more potential leads and sales. A wide range of strategies are employed by e-retailers to attract potential consumers including personalisation of product and service offerings based on the needs and wants of the clientele, establishing company-consumer interaction to keep potential clients informed of the offerings, word of marketing where existing consumers who are satisfied with the offerings promote the brand to their peers, friends and families and many more. Online baby care providers carry out their operations in a specific niche. As postulated by Toften and Hammervoll (2013), in the context of niche markets, the growth of companies may be significantly slower due to the lack of customer demand. Furthermore, with the presence of large companies in the industry, generating consumer interest becomes prone to disruption for new businesses owing to the limited capabilities of innovation.

Consumer Retention and Loyalty in E-Commerce

As defined by Singh (2006), customer loyalty refers to the likeliness of consumers in terms of repurchasing the offerings of a company or reengaging with a brand. Consumer retention, on the other hand, is defined as the ability of a company in terms of keeping their consumers over a specified period (Sarwar et al. 2012). Both consumer loyalty and retention are perceived as vital in the context of e-commerce as the rate of e-commerce innovation and progress is very high due to which, if a company does not constantly upgrade its offerings to meet the best interests of the consumers, it may soon become obsolete and the business may be disrupted. In the context of the baby care product market, upgrades refer to the product improvements such as the use of more soft and absorbing materials in diapers to prevent soiling or outer clothing marks. As per the findings of Alnawas and Altarifi (2016), generating consumer loyalty entails the development of a transparent business framework while meeting the consumer value perceptions and expectations at the same time. A critical challenge for a new entrant, therefore, is the analysis of the consumer behaviour and purchase patterns to develop sufficient comprehension regarding the manners in which to meet consumer expectations (Alnawas and Altarifi, 2016). In this context, the Howard-Sheth Model of consumer behaviour indicates four variable sets that allow companies to determine consumer behaviour including stimulus, internal variables, exogenous variables and response-output variables. As per this model, a company must be able to identify the motives and attitudes of the buyers and use relevant stimuli including the characteristics or attributes of the offerings, the perception of the individuals of the characteristics of a product and social stimuli provided from social groups, families, and friends.   

Howard-Sheth Model of Consumer Behaviour

Figure 1: Howard-Sheth Model of Consumer Behaviour

(Source: Prachi, 2019) 

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