3. HERITAGE (1 of 2)
Pampers Diapers were invented by Victor Mills who was an American chemical engineer at
Procter & Gamble Co. In 1956 Vic Mills, disliked changing the cloth diapers of his new-born
grandchild.
• 1956 P&G started greatest mass marketing for disposable diapers in US.
• 1960 first product upgrade incorporated a one-piece plastic back sheet and hydrophobic top
sheet
• 1962 P&G engineers designed machinery to produce diapers efficiently and at high speed
• 1965 Pampers is a diaper industry leader
• 1969 Pampers finished national expansion in US
• 1971 adhesive tapes replace diaper pins
• 1971 Pampers began globalization with entry into Canada and Japan
• 1979 Pampers became a billion dollar brand
• 1982 leg gathers for better fit & less leak
• 1986 introduces Ultra Pampers which guards babies from moisture
• 1986 Pampers Ultra – the first diaper to feature as super thin shaper core with AGM. A
granule material that swells in contact with fluid and becomes a gel
4. HERITAGE (2 of 2)
• 1995 Pampers began globalization in Europe and CEEMEA
• 1996 launches Baby Wipes to clean baby’s skin
• 1996 creates a Parenting Institute to provide outreach on health, wellness, and nutrition for
mothers and babies, they’ve been listening.
• 1999 introduces super stretch diapers which crow and move with baby and Baby Care
becomes one of the seven P&G global business
• In 90s, P&G heavily invested in market research and focus group efforts around the world to
understand what moms wanted for their babies
• In the 90's we witnessed the introduction of specific gender diapers in Pampers and also the
return to unisex diapers at the end of the decade
• 2000 holistic innovation brought to life with the “koala” Baby dry initiative –“it hugs, it fits, it
works
• 2002 Vietnam manufacturing project was tested creating a low-cost solutions to bring
affordable diapers to developing markets
• 2003 Kandoo Wipes empower kids to master the bathroom on their own
• 2004 Project obelisk resulted in a better and cheaper manufacturing solution in Latin America
and Pampers reach to all consumer segments
• 2006 launches Splashers so babies can swim freely
• 2007 Pampers became P&G first 7 billion dollar brand
• 2008 Pampers partners with UNICEF creating the “one package=one vaccine” campaign
• 2011 Pampers celebrates its 50th birthday
5. PRODUCTS
1. Swaddlers
2. Cruiser Diapers
3. Easy ups Trainers for Boys and Girls
4. Underwear days. Under jam nights for Girls and Boys
5. Helps eliminate nighttime leaks
6. Free to make a splash!
7. Your little one's first toilet wipe
8. Good clean fun, just for kids!
9. Pampers Sensitive wipes
6. LATEST INNOVATION
Pampers Limited Edition Prints add a touch of fashion and fun to babies’
biggest wardrobe staple – their diaper! These new Pampers diapers are
designed to appeal to moms who look for style in everyday things, without
compromising performance
7. SWOT ANALYSIS
STRENGTH WEAKNESS
1. Highest market share among its 1. High cost
competitors 2. Aggressive competitors
2. Higher brand interest of consumers in
Pampers than others
3. Aggressive advertising
4. Strong distribution network
OPPORTUNITY THREAT
1. Regular innovations in the product to 1. Price wars with competitors
maintain customers’ high involvement 2. Sensitive product, any small mishap can
2.Good CSR activities to promote the hurt the image of the product and will lose
product the support of mothers
3.Innovative ways to connect with mothers 3. Easy substitute
12. MARKET
MARKET
International Market
Pampers products also fit the reseller market because after the export is done by different distribution channels
MARKET SEGMANTATION
Newborn
Extra Protect
Night
Fresh Comfort
Wipes
UNIQUE PRODUCT
MAIN COMPERITORS
Huggies - #1 in US Market
CONSUMER BEHAVIOR
Consistency
Objectivity
Provision
Utilitarianism
Purchase Process
13. MARKETING
Inbound logistics
• P&G obtained a portion of their diapers’ fluff pulp needs from a wholly owned subsidiary, cutting their costs
Operating activities
• Most efficient manufacturer of disposable diapers
• Highest sales per manufacturing machine
• Early capital investment in design of diapers (switch to adhesive tabs and fluff pulp) to maximize
manufacturing efficiency in the long run
• Pleated diapers conformed to babies’ bodies better
• No adhesive tabs to throw away
Marketing and sales
• Sampling Programs
• Relationship with Gift Pax to get their products to new mothers, including a coupon for the first
purchase
• Consumer Advertising – P&G and K-C were outspending everyone here by almost 500%, and P&G spent 35%
more than K-C
• Network television and Spot TV ads
• Local Newspaper Ads
• Couponing
• Used to improve sales in problem markets
• Promotional Allowances to the trade
• E.g. One free case for every three the retailer buys
• Test Marketing
• C2C Marketing
14. PORTER’s FIVE FORCE (1 of 2)
Bargaining Power of Suppliers
• Medium bargaining power
• Option to produce their own raw materials
• Few large manufacturing suppliers : complex machines
• Volume is very important to supplier
• Switching costs are high - machines are finely tuned ( takes years and lots of $ to change)
Threat from Substitutes
• High threat from substitutes
• Other products perform just as well
• Ease and convenience of disposal diapers keeps the use of cloth diapers down
• High price-performance trade-off (lower priced substitutes (cloth or diaper services) don’t have the same
performance)
Threat of New Entrants
• Low threat
• Brand identity is extremely important
• Millions of dollars spent on advertising
• Shelf space on stores is hard to get (would need to offer coupons and promotional allowances to stores)
• Huge setup costs = machines and crews can cost millions of dollars
• Economies of scale (takes a few years to get things up to speed)
• Access to distribution is extremely important (volume)
• Must roll out region by region - timely and costly
15. PORTER’s FIVE FORCE (2 of 2)
Bargaining Power of Consumers
• High bargaining power - they vote with their pockets
• Brand is extremely important
• Customers are very sensitive to price
• Substitutes are readily available
• High buyers’ incentive = coupons, hospital kits
• Buyers are very informed of products (starting at the hospital and continuing through heavy advertising)
Competitive Rivalry
• No exit barriers
• Industry is highly concentrated
• Large fixed costs
• Very little diversity of rivals
• Few product differences - all are beginning to offer similar products (adhesive tabs)
• Had to differentiate with things like coupons, samples, etc.
16. INCUMBANCY ADVANTAGES
Scale and Learning advantages
• Manufacturing – P&G was the largest manufacturer with over 80 machines spread across 4 manufacturing
plants
• 350 – 400 diapers per minute
• $5.5 - $6.0 million annual sales rate per machine
• Distribution
• regional plants and full truck-load (and train-load) shipments helped minimize transport, and transport
costs
Innovation advantage –
The leading manufacturers (P&G included) invested large amounts in R&D to improve the diapers and their
manufacturing process
Cost to match P&G: at least $10 million annually
Promotional advantage –
The Pampers brand was recognizable nation-wide, and required huge outlays in marketing
Cost to match P&G: at least $8.9 million annually
Consumer loyalty advantage
• The Pampers brand was not only the most recognized brand in the nation, but was also the highest-rated
diaper in consumer reports for 7 years running
• New entrants would need to outspend P&G in promotional efforts to gain shelf space by engaging in
promotional allowances to retailers – e.g. 1 free case for every 3 bought
17. RECOMENDATION
Promotion more vigorously
Promote Pampers as premium product
Concentrate on Niche Market
Look for spreading in more international market
Increase the distribution channel
Regular innovations in the product
