Case3 Pampers

CASE-III: Procter & Gambles Pampers
In 2005, the volume of diapers sold world-wide was around 45 billion units. Traditionally, the industrys
top-selling brand was Procter & Gamble Pampers line of diapers. Procter & Gamble dominated the
market through the 1970s and into the 1980s with Pampers as its flagship offering. In late 1970s, Luvs
was added as a secondary offering to compete with Kimberly-Clarks Huggies brand. By 1985, Huggies
controlled 32.6 percent of the market and was a major threat to P&Gs industry leadership.
Beginning in 1994 and 1995, Huggies began to lead both Procter & Gamble brands in market share of
the then $3.6 billion diaper industry. In 1996, Pampers and Luvs gave P&G a combined 36.9 percent
share of the market while Huggies took 39.7 percent. While Huggies grabbed share in 1995, analysts
stated that this share came at the expense of Pampers market stake. Meanwhile, P&G undertook efforts
to regain the top spot by spending more promotional dollars and introducing new innovations. For 1996,
P&G spent $ 48 million on diaper promotions. The company spent $8 million to add breathable side
panels to its Pampers Premium brand. The panel strips allowed air to flow into the diaper without allowing
any leakage and were supposed to lower the humidity in the diaper, thus reducing diaper rash.
In 1997, Procter & Gamble preceded its rival in introducing a product that addressed a new concern
among consumers-skin care. P&G rolled out another innovation in diapers, Pampers Gentle Touch lining,
which was a diaper-lining that was actually good for the babys skin. The new product was backed by a
$25 million promotional campaign. The lining contained a special blend of three skin-smoothing
chemicals that transfer to the babys skin evenly. Pampers continued its focus on skin care with the
introduction of Pampers Rash Guard in late 1999. Tests have shown that the formulation of zinc oxide
and petrolatum used in the diaper lining reduces diaper rash without interfering with moving moisture
away from the babys skin. These innovations have proven very successful for P&G. Information
Resources Inc listed Pampers Rash Guard as number nine on its list of the top 10 best-selling new
products in the consumer packaged goods industry for 1999-2000. During the 52 weeks following the
introduction of the product, sales reached $97.2 million. Likewise, P&G made new introductions under
the Luvs brand. In 2000 Luvs Splashwear was introduced to provide consumers with a diaper, babies
could use in the pool. In 2001 Luvs Overnights was introduced for babies that needed improved leakage
performance overnight. In 2002 Sleepdrys from Luvs was introduced for children age 4 and up that wet
the bed.
In the beginning of 2002, both P&G and Kimberly-Clark had some unique product features that the
competing brand was not offering. For example, Kimberly-Clark was marketing a Pull-Ups brand diapers
that was targeting mothers with toddlers who were going through potty training. The disposable training
diaper could be pulled on and off like regular under-wear, but still had the absorbency features of a
diaper. Kimberly-Clark was also offering GoodNites brand disposable underpants for older children who
wet the bed. P&G had a unique hold on the skin care market with their Pampers Rash Guard Diaper and
had just introduced a Pampers Baby Dry brand with Quick Grip sides that could be fastened and
refastened to get a perfect fit. Both Kimberly-Clark and Procter & Gamble were offering swimming
diapers, overnight diapers with extra absorbency, diapers with added stretch for a better fit, and premium
top-of-the line diapers.
Under the leadership of Procter & Gamble Chairman A.G. Lafley, Pampers continued to gain market
share in 2003 and 2004 by relying on aggressive marketing programs based on extensive consumer
research. To remain on the cutting edge of consumer needs, Procter & Gamble needs to continue to seek
out and address exactly what consumer are searching for in a diaper before any rival does, as the firm
did by introducing the Pampers Gentle Touch lining. Thus, the use of marketing research may be the key
to enabling Procter & Gamble to regain leadership in the diaper market.
In this increasingly competitive diaper market, Procter & Gambles marketing department wanted to
formulate new approaches to the construction and marketing of Pampers to position them effectively
against Huggies without cannibalizing Luvs. They surveyed 300 mothers of infants. Each was given a
randomly selected brand of diaper (Pampers, Luvs, or Huggies) and asked to rate that diaper on nine
attributes and to give her overall preference for the brand. Preferences were obtained on a 7-point Likerttype scale (1= Not at All Preferred; 7= Greatly Preferred). Diaper ratings on nine attributes were also
obtained on 7-point Likert-type scale (1= Very Unfavorable; 7= Very Favorable). The study was designed
so that each of the three brands appeared 100 times. The goal of the study was to learn which attributes
of diapers were most important in influencing purchase preference (Y) and whether there are any
underlying dimensions inherent in the data. The nine attributes used in the study were:
Variable
Attribute
Marketing Options
X1
Count per box
Desire large counts per box?
X2
Price
Pay a premium price?
X3
Value
Promote high value.
X4
Unisex
Unisex vs. Separate Sex
X5
Style
Prints/colors vs. plain diapers.
X6
Absorbency
Regular vs. super absorbency.
X7
Leakage
Narrow/tapered vs. regular crotch
X8
Comfort/size
Extra padding and form-fitting gathers.
X9
Taping
Reasonable tape vs. regular tape.

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CASE-III: Procter & Gambles Pampers

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