Marketing and Brand Management: Pampers - Case Study Example

This is a 6 page report on Pampers –the leading global brand of nappies. It discusses the market, consumers and the major players in the market. The next section explains the pricing strategies and the variables that are considered to make these strategies for Pampers. The last section describes the marketing strategies used for the brand. 1. Nappies are used to absorb and hold excreta of small children. Nappies globally are categorized into disposable and reusable nappies. The market for disposable nappies is dependent upon the birth rate- when the birth rate is high the usage increases. Broader categories of disposable nappies are ultra, which are extra absorbent and have become the standard nappies; training nappies/pants, discount and swimming nappies. Recently however, training nappies are eating away the market share of ultra nappies and marketers have to employ powerful marketing tactics to hold on to their share. Disposable nappies come in varying sizes and nappy functions and are targeted at specific age brackets. There is newborn (for up to 9lbs), mini (for approx 6-12lbs), midi (for approx. 10-24lbs), maxi (for 20-40lbs) and junior (for 35-55lbs) sizes. The market for nappies is increasing as mothers increasingly prefer disposable nappies over reusable cloth nappies. This transition is due to the changing lifestyles of mothers who work and can now afford the more expensive disposable nappies which are a more convenient alternative. More mothers have taken up fulltime work and with the convenience of daycare centers, they can have children and this affects the market for disposable nappies positively. However, there is a trend to have smaller families as living has become expensive and since both parents work, they cannot give more time to their children (Gelder). Nappies are used by infants and toddlers who are not potty trained. The usage of nappies begins from birth till the age of 2.5 years after which 90% of girls and 75% of boys become potty trained. As the child grows older, the consumption lowers; however, doctors today encourage parents not to force potty training on the children and let it come to them as a natural phenomenon which has increased the usage of disposable nappies (Troy 2005). Disposable nappies are mainly purchased by shoppers falling in the age bracket of 15 and above with children aged 0-4 in the household. Those in the age bracket of 15-24 are more brand aware and price conscious. Those between 35-44 are not brand aware but are price conscious while those over 35 are not price conscious. The major players in the market are Procter and Gamble’s Pampers and Kimberly Clark’s Huggies. Globally Pampers is the market leader with over 50% of the market share. Huggies however, is stronger in the US. Both the brands compete neck to neck in every category of disposable nappies. Pampers has ‘Active Fit’ while Huggies has ‘Super Fit’ and ‘Adventurers’ for active children as they facilitate more movement. Pampers has ‘Baby-dry’ while Huggies has ‘Dry Nites’ for night time (Troy 2005). Pampers also has sensitive nappies. Both the brands have nappies for older children and nappies for swimming with Pampers’ ‘Easy Up pants’ and ‘Swim Pants’ while that of Huggies ‘Pull-Up’ and ‘Little Swimmers’. Product improvement and new product development is essential to stay competitive in the market. Thus these market leaders compete with each other by exploring new product options using technology for continuous improvement and innovation. 2. The price of the product is a critical issue in the nappies industry. There is stiff competition in the market especially from the core competitor Huggies. If there is a visible price difference, the market share will be taken away. When entering a new market with Pampers, the market has to be thoroughly researched whether it is a developed or developing country, the presence of competition and then the product has to be priced (Janoff 2001). The geographical, demographic and purchasing habits have to be considered. If they are between15-24 of age, they will be price and brand conscious while those falling in the 33-45 category will be less sensitive to price. Thus they can even buy a product that is a little high in price but as along as the product features a good they will buy the nappies. The competition’s discount policies and price reductions also have to be closely monitored so that the price of Pampers may also be competitively adjusted. Every sub-brand of Pampers is marked at a different price depending on the demand and the consumer’s affordability so that Pampers can cater to a larger market. Once the target market is receptive to the product, they use premium pricing for the more sophisticated products which they later introduce in the market. Pampers Baby Dry for example are priced at $ .29 while Pampers Custom fit are priced at $.34.Once the customers become brand loyal, they will be willing to try new products of Pampers for more convenience by paying a little more price. According to Janoff (2001), P&G uses penetration pricing to enter developing countries. When Pampers was entering Brazil, P&G offered Pampers Uni which is a simpler and cheaper version of the more sophisticated varieties. This enabled them to capture the market keeping the purchasing power of the target market in mind. Recently P&G used predatory pricing to surge the Indian markets where they cut their prices to almost half so that they could get a hold on to the market keeping in mind the low purchasing power of the target market . To price Pampers, psychological pricing is also used like Pampers Swaddlers economy pack is priced at $18.99 to give an image of being low priced. This affects the more price conscious-consumers (Janoff 2001). . According to Troy (2005), when P&G was introducing Pampers for the first time, the market was not ready to buy such an expensive product which was 8.6 cents higher than reusable nappies. P&G realized that they need to reduce the costs which they did by mass production and reaping economies of scale. Using market orientation pricing, they managed to set the price at 6 cents per nappy and captured 1/3rd of the market. The pricing of Pampers is very competitive as it has a global strategy of being amongst the cheapest brands. Pampers has an overall image of an economically priced product offering value for money. Their pricing strategies enable them to give a tough competition to competitors and allows them to be the market leader. 3. Previously Pampers had one marketing strategy for all regions it catered to. However, after Pampers went global, P&G realized that marketing promotions have to be modified according to the market in which the product is being sold (Gelder). The living style and work habits of the purchasers vary in different regions and so does the income. Some purchasers are housewives while some have full time jobs. Culture also plays a vital role in promotions and punch lines have to be modified according to the respective regional market. The needs of the consumers have to be assessed and the promotion is designed accordingly. In the climatically hot regions for example, rashes are developed more often and thus nappies with rash cream linings are promoted more than the other sub brands. There are niche markets and the promotion has to be tailored accordingly. For example nappies for swimming have a small market and their promotion is concentrated on mothers who want their children to swim at an early age. Also, the promotional strategy depends upon the sub brand and the age it caters to. Pull up pants are designed for older children however they are not called nappies as the consumers are older and would be embarrassed if they use nappies. The product is cleverly named keeping the consumers’ feelings into consideration (Facenda July 2007). . For the promotion of Pampers, several factors related to the life patterns of the purchasers are considered. The promotional mix strategies depend upon the customers and how they want to interact with the brand. The kind of exposure of media they get is taken into account and the marketing campaigns are formulated around those patterns. Advertising is the primary mode of promotion. The typical purchasers watch soap operas a lot so advertisements are placed between famous TV serials that women follow. Also, P&G focuses on promoting their product via product placement. The company paid $50,000 to be featured in the movie Three men and a baby. Since their customers also like reading magazines, their advertisements are also seen in the print media especially parental guidance books (Gelder). These strategies worked well for years till Huggies entered the market and built an instant relation with mothers and in the process took away 30% of the market share. According to Facenda (2007), P&G realized that building brand experiences and interacting with customers increases brand loyalty and trust and therefore sales. It is steadily transforming its promotional strategies into more interactive communication and personal selling strategies. To have a more personalized relationship with customers, Pampers has to consider where it can interact with the customers. These are mainly information channels including the internet. 40% mothers are online therefore Pampers now has an interactive website for parents which has boosted trust and loyalty in purchasers (Facenda July 2007). Also, to reinforce the brand and gain market share, Pampers has used sales promotions like The Pampers Sleep Like a Baby Tour which was a highly interactive and innovative educational program across a competitive market like the UK which increased sales by 3% and built an instant connect with parents. Pampers also uses interactive TV channels to build the relationship with consumers. Targeted mailing and direct mail, giving out coupons and discounts are also used along side with other promotions to build a relationship with consumers. Such innovative communication has revived Pampers which was a declining brand. It is evident by their promotional strategies that they are well informed about their target market. Their strategies are perfectly timed and their use of technology like internet and interactive TV along with the traditional modes of promotions has geared them for the future escalating their market share. Work Cited Facenda, Vanessa L. Why P&G Is Getting Behind Pampers in Aggressive Brand Push. 9 July, 2007. Accessed 28 September 2007. Available: http://www.brandweek.com/bw/news/recent_display.jsp?vnu_content_id=1003608700 Gelder, Sicco.General strategies for global brands. Accessed: 30 September 2007. Available:http://www.brandchannel.com/images/papers/GLOBALBRANDSTRATEGIES.pdfYou are viewing page 1 Janoff, Barry. P&G Changing Diapers Strategy.10 August 2001. Accessed 29September 2007. Availbale: http://www.allbusiness.com/marketing-advertising/4115098-1.html Troy, Mike. How leading brands maintain their top-shelf status.24 October 2005. Accessed: 28 September 2007.Available: http://findarticles.com/p/articles/mi_m0FNP/is_20_44/ai_n15789798 Read More