Implementation | Shanghai_city

1. Market analysis
2. Proposed end users
3. Product
4. Analysis of product engineering principles
5. Product performance test and conclusion
6. Marketing Plan & Product Selling Points
7. Safety, Challenges and Plans

At present, ornamental fish encounter high infection rates due to existing bacteria such as Aeromonas hydrophila and Aeromonas sobria within the fish’s surroundings.

However, conditions of ornamental fish are often difficult to detect and cure, resulting in high death rates of both ornamental fish and food fish. The total purchase of ornamental fish grew from 4.22 trillion yuan to 20.98 trillion yuan, nearly fivefold in a decade. The number of registered ornamental fish-related enterprises has shown a steady upward trend, with an average annual growth rate of more than 10%. In 2019, the number of registered ornamental fish-related enterprises reached 8,675. The rising status of people owning ornamental fish makes the problem of infection rates vitally important.

The current optimal solution towards bacteria and substances within the fish’s environment is to change the water within tanks frequently. Average freshwater fish requires twice a change in water in a week. For people, this frequency of change can cause several inconveniences. Through our team’s survey, 73% of the users claim that changing water for their fish is troublesome and is their major challenge.

Existing solutions to this problem already exist, the majority involve using chemical products and antibiotics in fodder. Through interviews with experts, chemicals and antibiotics create dramatic side effects on fish and humans. Side effects include an acceleration of blood flow which is fatal for exothermic animals, a decrease in body surface mucosal secretion, and an increase in the fish’s breathing burden. Previously, antibiotic products occupied a large portion of the market in China. In 2013, 162,000 tons of antibiotics were used, of which veterinary antibiotics accounted for 52.0% (81,000 tons). However, the market for water cleaning products is not saturated.

According to the Ministry of Agriculture and Rural Affairs of the People’s Republic of China, PRC, feed manufacturers are prohibited from producing commercial feed containing antibiotics. As the people and the government’s awareness of antibiotics’ ability to create drug-resistant bacteria increases, the once filled market is now open for new, safer products.

Antimicrobial peptides, one of the major solutions for bacterial drug resistance, can be applied to several sectors such as agriculture, medical fields, and soon. As more research is done about antimicrobial peptides, their market size is growing. While antimicrobial peptides hold huge potential, only a few companies produce them on a large scale. In addition, antimicrobial peptide products are rarely created for ornamental fish.

Barriers to entering into producing our product include the truth that we are a new company in the market. We, compared to other firms in the market, have low popularity in society and there is a time limitation for us to develop our products. In addition, since we are a small-scale company, our working capital is also limited. To profit, we will have to spend a lot of money on buying land for factories, hiring labor, and advertising our product. Furthermore, since we set our price higher than our competitors, we might lose competitiveness despite the high efficacy and security can provide.

The overall market supports the research and development of antimicrobial peptides, which comes from several aspects. Primarily, the political aspect supports our team’s product. In 2020, faced with the impact of COVID-19 and the severe and complex external environment as well as downward pressure on the domestic economy, the CPC Central Committee proposed to step up efforts to stabilize the economy in six aspects. Various policies and measures have been introduced to give a strong boost to the development of ornamental fish. The rising of the ornamental fish industry by political decisions means a return of market capacity and revenue after the COVID-19 impact. New companies such as us are also allowed an opportunity to enter the market.

In addition, the number of fish owners has increased in recent years, accounting for 24.4% of the total pets owned, becoming the third-largest type of pet in China after cats and dogs. The increase in market size creates demand for products to protect fish from bacterial diseases, thus increasing our market capacity. Thirdly, the social aspect provides our team with a negative impact. Based on our survey conducted, 66.5% of the 600 people surveyed that they don’t know what antimicrobial peptides are. The lack of knowledge about our product can impact whether our product stands out or not, increasing the time needed to raise awareness. However, as a new company, the need for awareness is an indispensable part to conquer.

Fourthly, the technical aspect provides hinder to our product. Since we are a new company, the cost for research and development will be high, thus at the beginning, our price might be higher in return for the cost of research. In addition, innovative technologies by other companies might affect the final product sold in the market due to competition, which will decrease the amount our team can profit.

Legal aspects also provide our team with opportunities to enter the market. The Chinese government has prohibited the use of antibiotics for animals. The National Action Plan for Curbing Bacterial Drug Resistance aims to improve the scientific application and management of antibacterial drugs and curb the development and spread of bacterial drug resistance. At the same time, the Ministry of Agriculture and Rural Affairs of the People's Republic of China officially announced a comprehensive "ban on resistance" decision. Decisions on prohibiting antibiotics provide customers with safer products to increase survival rates. This provides our product with an expansion in potential market size and eliminated some of our competitors.

Lastly, the economic aspect of the market creates a negative influence. The current epidemic increases the cost of transportation, making it difficult for domestic transportation and the export of products. As the pandemic retards, the cost of transportation will decrease gradually. The high price of land and increased wages might also be a major hinder. During the decade from 1989 to 1999, China's nominal average wage rose by 330 percent, 1.7 times that of the previous decade. Land prices in China rose to 6,762 yuan per meter in 2020, an 18.7 percent increase compared with 2019. This is 9 times the price of land in the United States. Based on our thorough market research including the research on market size, capacitance, barriers to entry, and current problems faced by customers, we decided to focus on the pain point of single functions and lack of security awareness of chemical and antibiotic products.

Our company’s target customers include households that uses chemicals to clean their fish tanks in the past and various types of ocean museums. We target mainly users in their 30-40s due to their higher degree of acceptance of new technology than elderlies and high interest in ornamental fish. Our company aims to replace competitors who supply water purification agents by providing a safe way of cleaning that won’t cause side effects on fish as well as incorporating multiple functions such as sterilizing, decomposing waste, boosting survival rates, and eliminating fishiness. Our prices will be a little higher than those of our competitors due to research and development, but our product’s high efficacy and multiple functions can replace our competitors. In the future, after we gained our payback for pharmaceutical research, we will reduce our costs and decrease our price to enter the market of food fish. In the food fish market, we focus on farmers that raise comparatively expensive fish types since they are sensitive to high death rates, thus more likely to buy high-efficacy products like ours. After defining our end users, our group needs to position ourselves in the market and detect potential competitors that might affect our final revenue.

“Pepsick Tank-Cleaner” can efficiently kill bacteria, viruses, fungi, and other

microorganisms that affect the health of fish in the water, ensuring good water quality and healthy survival of fish. It has a strong effect and can maintain the effect for about a week. Users only need to soak a bag of powder to sterilize the fish tank, which is very convenient and fast.

"Pepsick tank cleaner" is a soluble powder. Every 5 grams of medicine is put into a plastic composite film packaging bag independently. There are 20 bags in each box. This is a small particle of wight color, which can be dissolved in water in 10 seconds. The ability of rapid dissolution can prevent fish from eating undissolved particles. Because the antibacterial peptide is a protein, fish can be digested without any side effects. Humans can also digest this protein. Therefore, our products are not harmful to fish and human beings.

Pepsick's final product, "pepsin tank cleaner", is stored in an independent packaging sealed plastic composite film packaging bag, which can ensure the tightness and avoid the risk of transportation. Antibacterial peptides will dissolve in water and selectively destroy harmful microorganisms to ensure the safety and cleanness of water. Our products can disinfect, purify water, decompose waste, increase the survival rate of aquarium fish, remove fishiness, and multiscene application. There are 20 independent bags in each box, which can be used by

customers for a long time without frequent purchases.

Users need to put different amounts of particles to adapt to different sizes of fish tanks. Volume<30L fish tanks need to be put into 1 package, while 30-60L fish tanks need to be put into 2 packages. Volume>60L fish tanks need 3 packages.

In this way, the packaging form of quantitative particles can be convenient for customers. When using, customers only need to pour a certain amount of particles into the water. Particles will quickly dissolve into water.

We contribute and appeal to the rising awareness of environmental protection by making a donation of 0.01 yuan for every bottle sold to the China Ocean Development Foundation.

First of all, our team will let people know about our products through various channels and establish awareness of our products. We mainly attract people's attention from different communication channels and perspectives by participating in the water research Expo, publishing articles in magazines and newspapers, letting online bloggers bring goods, aquarium interviews, send articles, posters, and short videos on social media. In this way, we can attract a group of customers with fish raising. Further, we will make appointments with our target customers. Then we will ask target customers and bloggers to try our products through online appointments or offline activities. After their trials, we will conduct further online and offline communication to understand users' evaluations of our products. We will further improve our products by understanding the difficulties encountered by users, the problems caused by use, and the product effects. After the improvement, the product can be purchased. Customers will see our products on aquatic products shelves or online stores and buy them. After purchase, more customers of high-end aquatic fish farming will provide feedback and user experience. Through the promotion of customers, we will collect a wider range of customer groups. After finding that the product has good bactericidal and water purification performance, customers will get used to using our products, establish brand loyalty, and continue to buy products.

AMPs kill cells by disrupting membrane integrity by targeting the lipopolysaccharide layer of the cell membrane. Inserting the hydrophobic end into the hydrophobic region of the plasma membrane, AMPs change the membrane structure and sometimes cause the coagulation and inactivation of membrane proteins. After AMPs enter the phospholipid bilayer, the hydrophilic end binds to the phospholipid tail region of the membrane. With the amphoteric properties, ion channels surrounded by AMPs form, resulting in the death of the cell due to leakage. In the case of our product, this mechanism acts both on bacteria and fungi, providing thorough cleaning in the fish tank.

In order to test the antibacterial effect of each antimicrobial peptide, we used two different dilution methods for each peptide, each with at least nine gradients, performed antibacterial tests for each concentration, and finally judged the antibacterial effect of each peptide by the difference in OD600 absorbance values. Then, we integrated all the antimicrobial peptide concentration gradients into micromolar concentrations and plotted the Comparison line graph as shown in Figure 7. The inhibition effect of Hydramacin-1 was much better than the other peptides at any concentration, and the high concentration of Hydramacin-1 had the best inhibition effect.

In the antibacterial test, we used the indicator bacteria from the fish tank water of Shanghai Haichang Ocean Park to simulate the antibacterial effect of our antimicrobial peptide on the water of the oceanarium. The experimental results showed that our Hydramacin-1 antimicrobial peptide was very effective in inhibiting the bacteria in the water of the oceanarium. As shown in Figure 7, in the positive control group, we added 100 diluted kanamycin to the bacterial solution; in the negative control group, the sterile bacterial solution was used as a control group for 12h of bacterial growth under normal conditions. When the concentration of Hydramacin-1 antimicrobial peptide reaches 8μM, it can sterilize and inhibit bacteria to an OD600 absorbance value of 0.5 and below. When the concentration of Hydramacin-1 antimicrobial peptide reaches 15μM, it can sterilize and inhibit bacteria to an OD600 absorbance value of 0.25 and below, and its antimicrobial effect is even better than that of kanamycin.

If Hydramacin-1 antimicrobial peptide is applied to the oceanarium, 15 mol of Hydramacin-1 antimicrobial peptide can remove one million liters of oceanarium water, which is 1000 tons of water. According to our interview with Mr. Ke, a Haichang breeding technician, the average water change in Haichang Ocean Park is about 1000 tons daily (including freshwater and saltwater tanks). Using our Hydramacin-1 antimicrobial peptide, the water change cycle can be extended to 2-3 days, saving at least 3000 tons of water in a week alone.

Introduction

To let more target customers learn about our product we decided to use an integrated market strategy combining above-the-line (ATL) and below-the-line (BTL). Possible methods include magazines, influencer promotion, flyer distribution, aquatic animal fairs, and aquariums. This promotional strategy is designed to expand our market size and educate consumers about the Pepsick factory and its impact.

Online
Magazines

The opportunity to utilize photo-quality color visuals to draw the reader's attention is one benefit of advertising in a magazine. Magazine ads can be referred to in the future, and they have a longer shelf life than newspaper ads. Additionally, because our goods are about aquatic plants or animals, we chose to place them in periodicals concerning scientific education or biology to effectively attract people who require our products.

The static nature of magazine promotions is one drawback. As a result, companies frequently run a lot of advertising in the same publication. Additionally, readers are inundated with advertisements (often referred to as ad clutter), making it possible for them to purposefully ignore or accidentally overlook our ads. The third drawback is that there may be a considerable delay between submitting the advertisement and it appearing in the publication, which might result in missed sales if additional promotional strategies aren't employed.

Influencer promotion

We-media is becoming more and more popular these days, and many people are more likely to be influenced by well-known people or peers who provide authentic material than traditional marketing ads. As a result, word-of-mouth marketing experts now see social influencer marketing as a value-enhancing strategy. We have decided to partner with well-known fish bloggers on the internet today and have them advertise our products. So, we searched for well-known fish farming bloggers on the Tiktok app and Xiaohongshu app, as shown in Figure 1:

For example, the blogger in the first picture has more than 9 million followers on Tiktok, and the average number of “Likes” per video is about 100,000 to 200,000. If the conversion rate is 1% to 3%, our sales volume can reach 1,000 to 2,000 product sales. According to the research, the Tiktok platform will take 10% of the commission for Tiktok and 6% for Taobao which is reasonable.

However, developing an effective influencer marketing strategy takes time and work. Finding the ideal influencer for a product, creating partner terms and conditions, approving influencer-created content, and evaluating the success of a campaign are all necessary steps, and it's a slower process.

Offline
Flyer distribution

We distribute flyers to broaden our audience, and one of the main benefits of doing so is that it helps us avoid spending a lot of money on product advertisements. A conventional flyer is far less expensive than any internet marketing while doing research online. You may get rid of the subscription plan and get a lot of goods in bulk for extremely reasonable prices. It is now easier than ever to create flyers. Additionally, because we purchase them in quantity, they last longer. It will often take you several months to purchase a new batch of fliers.

However, sending flyers also has some drawbacks: a deluge of flyers will bore customers, decreasing the effectiveness of publicity; the distribution of flyers will produce a lot of urban waste because many people will toss them away without even giving them a second thought, which is very harmful to the urban environment. friendly.

Aquatic Animal Fair

We will regularly participate in aquatic animal and plant expositions and promote our products well to the public. In addition, customers can be precisely positioned at the Aquatic Fauna and Flora Expo, and it is easier to find customers who need a lot of this product, such as aquarium managers, fishermen in fish farms, and so on.

Similarly, it also has some disadvantages. The requirements for entering the expo are relatively high, and many competitors also want to participate in this kind of expo, so the competitiveness is relatively strong, and our products need to perform well.

Aquarium

We will cooperate with the aquarium to promote the product offline and negotiate to sell our product in the aquarium store. We will also popularize the knowledge and benefits of antimicrobial peptides in the aquarium to people who come and go so that more people know about antimicrobial peptides.

Conclusion

Due to the COVID-19 pandemic, many offline venues have received a lot of restrictions. We decided to combine online and offline promotions and conduct them together, which will greatly increase the sales and awareness of our products. Above the line, through the promotion of magazines, more people know about our products, improve their popularity, and then through the promotion of self-media to greatly increase sales. Below the line, entering the fair, we can let more wholesalers and more fish farms know about our products and greatly increase sales.

Profit Analysis and Calculation

The main cost of our antibacterial peptide products is research and development fees, which require a large amount of investment in the early stage. The production cost is relatively low. At the same time, we need to rent factories and machinery, which will also be a considerable expense. Our preliminary estimate of the net profit of our products is 10%.

Product Pricing

Given the low cost of the product, we can use pricing that is well below the industry average. At present, the price of a degradable bone nail in the market is about RMB, while our product is estimated to be priced at 30-50 RMB. It is a product worthy of investment and development with high quality and low price and large profit.

Operation Capability

Our products are mainly designed to inhibit fungi and bacteria in Water and treat fish diseases to save water resources Through market research, we found that there are a variety of drugs for fish diseases on the market, and the price is generally not high( such as 12RMB/100ml), but there are no products that can contain all the functions. Our products are more functional and therefore more competitive in the market.

Our company will invest a lot of money in scientific research in the initial stage, while the fixed costs such as hiring plant and machinery also need to be taken into account.

As the years go by, our fixed costs will be relatively stable, which will also mean that our production costs will be lower, leading to higher net profits in the coming years. According to various data, we believe that our product is sustainable. Although it is not profitable in the early stage, with the economic scale, our cost will be reduced, to achieve profitability. However, our sales profit will increase or decrease depending on the fluctuations of the epidemic. Thus reaching the minimum or maximum value.

As a project involving fish farming, the inventory turnover and total asset turnover of the project will be relatively high. At the initial stage of project industrialization, there will be an overall upward trend and then fluctuate at a stable value. Compared with the inventory turnover rate and total assets turnover rate in the second year, the production capacity will be further expanded due to the improvement and adjustment in consideration of the reduction of product entry into the market and the occupation of a certain market share. These two indicators have declined, but the overall level is still healthy and positive. In general, antimicrobial peptides are not expected to have good operational capacity and asset liquidity, and cannot provide good short-term solvency for the project. To some extent, it affects us because we don't reach profitability until the second year of production, which is the main problem with our product.

Growth Ability

Given the product innovation and the impact of the epidemic, this project will take time to adapt to the market and continue to improve the product. At the same time in the same type of product, this project has its unique shape with the latest technology. In addition, most water purification products are related to penicillin, and people are becoming more aware of the side effects of penicillin, which means that the market for antimicrobial peptide water purification products is expanding. All in all, antimicrobial peptide water purification products have good growth potential.

Sales Mode

Our products are roughly divided into online sales and offline sales. Offline sales are mainly aimed at some fish-raising stalls in flower and bird markets, while online sales are mainly aimed at some fish-raising enthusiasts. Our products are mainly sold online, accounting for 60%-70% of the total sales, and offline sales account for 30%-40% of the total sales. Due to the particularity of our products, we expect better performance offline, and generally higher sales in places like fish stores, because people can observe the effect of antimicrobial peptides on fish.

Financial Plan

We'll use our first investment fund to invest in concession plants, machinery, and employees. The remaining funds will be used for advertising and company registration. We expect our product r&d and testing costs to be about 22 percent, our production costs to be about 45 percent, and our investment in the market to be about 33 percent

During the project, we strictly comply with iGEM on the safety regulation. In the laboratory, each member followed all safety measures and all of our experiments have been done under the supervision of our instructor. Our experiments are done in a super clean laboratory to avoid contamination and the microorganisms we mainly used were E. coli DH5α and E. coli BL21(DE3) which are quite safe for general experimental use.

There are now two main challenges to the production and usage of our antimicrobial peptide to be used in the aquaculture industry and a fish tank.

Firstly, we do not have a conclusion about our antimicrobial peptide's poisonousness for the fish because we are not allowed to test upon animals. So, although we did get a satisfying result in our experiment that the antimicrobial peptide did function in the water collected from the fish tank, we can not guarantee that the antimicrobial peptide will not be harmful to the fish. Furthermore, we can not guarantee whether the water in the fish tank will be harmful to the environment when we discharge the water. Therefore, there will be more tests to be conducted before we implement our products in the real world, like the toxicity testing et al.

Secondly, we can not guarantee the activity and the survival rate of our antimicrobial peptide during transportation, because the temperature requirement for peptides is quite rigorous, so, we cannot guarantee how much peptides will be successfully functioned if it leaves the lab environment. Although the Freeze-drying technology shall be useful for the reserve of our antimicrobial peptide, we have not applied it yet, so we don't know how the actual functioning will be. Thus in the future, we probably will study the Freeze-drying technology and try to make our products freeze-dried, then further improve the capability of reserving.