Thursday, March 20, 2014

Pampers, the $10 Billion Brand

Procter & Gamble has 25 billion-dollar brands, but Pampers--the disposable diaper brand--is the single largest in the company's portfolio. Last year, Forbes ranked Pampers #51 in its list of global brands.

Of P&G's total sales, Pampers accounts for about 12%. And, just as important, Pampers is an absolutely key brand for P&G's main target market of mothers. Pampers has nearly 13 million Facebook likes.

A recent Bloomberg Businessweek article looked at P&G's research and development for improving Pampers products. Pampers researchers measure babies' "output" and diapers' absorbency from every angle, striving to prevent leaks and keep tender skin as dry as possible for as long as possible.

Researchers interview thousands of parents every year, and observe hundreds of babies for hundreds of hours, watching diaper performance as the children move. The head of P&G's diaper research lab says that "fitting a diaper is like trying to fit a snowflake" because no two babies are alike.

Pampers' marketers learned an important lesson when confronted with aggressive competition from Huggies, which in 1978 offered a shaped diaper to fit babies' bottoms. Many mothers preferred Huggies to the Pampers design of that time--and so Pampers shifted to shaped diapers and cranked up its innovation in a bid to recapture market share it had lost to Huggies.

The Swedish firm Svendka Cellulosa Aktiebolaget (SCA) is a big competitor in Europe and is also looking to Asia for future growth. Pampers is in China, but global rivals such as Mamy Poko (from Unicharm) are also in China. In short, there's no end in sight for the international diaper wars.

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