Allison Strein

Econ 331

Business Proposal

2/25/2009

Name: Mast-Vac

Product Description:

Mast-Vac will provide dairy farmers with a new way to combat mastitis in lactating cattle. It will allow farmers to address the problem before it arises by vaccinating all cattle against the mammary gland inflammation. Mast-Vac will deliver a promise to stop the inflammatory infection before it starts.

Customers’ and Their Needs:

Do to the high costs incurred by the mastitis infection; a product such as Mast-Vac is a product that will be welcomed by dairy farmers. Not only is the infection costly to treat, it also strains the cow as well as limits milk production. Annually, mastitis can cost farmers up to $2 million; which is equal to about $200 per cow. By using a product such as the Mast-Vac vaccination, farmers can attempt to prevent the problem before it surfaces in the herd. This will not only lessen the amount farmers spend on antibiotics to treat the infection, but it will also reduce milk loss due to the infection. This will give farmers more profit in the long run; after the initial cost of the vaccination.

Product Value:

Not only does the Mast-Vac vaccination lessen expenses for dairy farmers, it also creates value in the health of their cattle. A special kind of bond is formed between farmer and cow in the dairy business, and the health of the herd is an important part of the business. A healthy herd has a longer productive life, which results in a more lucrative herd. Another benefit that this product has is the amount of time that will be made available to tend to other affairs. Treating cows for mastitis can be time consuming. Vaccinating them with this preventative will allow farmers more time to tend to other needs of their herd. Also, the mastitis infection causes SCC levels in the milk to rise. Milk with extremely high SCC levels is not suitable for human consumption, and therefore cannot be sold to creameries. Often times, creameries will pay a higher premium for milk with a low SCC count. If a farmer can keep the SCC of the herd low, extra profit will be made from the premium. How the Product Differentiates:

Currently, the mastitis treatments on the market have been created to treat case-by-case incidents. This is more costly to farmers and does not always work. Many times the SCC count remains high and the infection becomes a chronic problem. With the use of the Mast-Vac vaccination, farmers will be able to prevent the infection before it develops.

Market Size and Growth Opportunities:

Dairy farming is an industry that is not going to diminish. Milk is a product that is always going to be in high demand. Therefore, the future of Mast-Vac looks promising. As the chart on the right (USDA) shows, the number of cattle in the United States is not dwindling, in fact, it is beginning to climb upward again. This may be due to the increase in milk production per cow, as seen in the chart on the left (USDA). With average production on the rise and no apparent shortage of animals, Mast-Vac certainly seems to have a promising future.

Business Model:

In beginning this business, start-up costs will need to be funded through loans. Arrangements have been made with a local banker and the bank will help finance the initial costs. After the product is on the market and profit is being obtained, all costs will be funded through the business revenue.

Who I Am, and My Skills:

My name is Allison Strein and I was raised on a dairy farm. I believe that I have gained the knowledge necessary to run this business over several years of being involved on the family farm. I have a good understanding of the industry and have made valuable contacts over the years. I think that my education background will help me to run an efficient business and has given me the skills necessary to lead a group of individual to be successful.

Entrepreneurial Team Requirements:

The people that I am looking for in an entrepreneurial team need to be hard working independent individuals. They need to be flexible and be able to achieve their goals. I need people with good communication skills so that they can efficiently relay information to potential consumers. These individuals need to be able to work together but also get tasks done independently.