Marketing Mix Analysis

Product

Product Type

A nappy/diaper is a type of underwear that allows the baby to defecate or urinate without the use of a toilet. The global baby nappy market covers different tangible types, each at different price points with different features, such as cloth nappies, disposable nappies, training nappies, swim pants, and biodegradable nappies. Baby nappies are manufactured according to different fits and sizes to prevent leakage.

The disposable nappy, in particular, should be marketed and considered as a consumer, convenience product i.

e. a staple product available at reasonable prices with little consumer involvement. The actual nappy product has different features, design, packaging, quality level and may come under different brand names and should also take into account after-sale service, etc. For the purpose of this assignment, we will refer to Pampers nappies as an example, with comparisons to the main competitor Kimberly Clark Huggies.

Product Line

Pampers nappies and pants product line includes: Pampers Swaddlers Sensitive Diapers, Cruisers, Baby Dry, Simply Dry, Easy Ups Training Underwear for Girls & Boys, UnderJams Absorbent Night Wear for Girls & Boys as well as Splashers Swim Pants.

To cater to each stage of development, Pampers offers a selection of nappies which include categories showcasing different features for newborns, babies and toddlers, all of which have unique needs and demands.

With such a long product line, it is essential to periodically assess the quality and performance of each item’s sales and profits to ensure it is contributing to overall performance and will not cause damage to the brand.

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In 2010, Pampers faced controversy when updating their Swaddlers and Cruisers line with Dry Max, a lighter and increased soakage technology, which P&G viewed as its biggest nappy innovation in 25 years. However, they must view this backlash as a lesson before introducing new products as the switch to thinner material nappies was not welcomed at all by customers. A case which was later dismissed, but at the time a small group of parents began reporting that their babies were experiencing severe diaper rash problems after wearing the new product. Pampers nappies since removed this product. (Mikkelson, D. 2013)

Pampers, have recently released new natural nappies to the market. Pure Collection, a nappy made of premium cotton and other carefully selected materials.

The chlorine-free fluff pulp is sustainably sourced and certified to Forest Stewardship Council® or the Programme for the Endorsement of Forest Certification forest management standards according to the website. Thousands of parents were interviewed and only 3 percent use natural nappies regularly. By appealing to a niche market, Pampers may have discovered the next trend, a risk which could carry great success. ( Barrett J. Brunsman, 2019).

Product Brand

It works in Pampers favour that they are included in the widely known Procter & Gamble brand, founded in 1837, it has gained consumer’s trust and loyalty over a long period of time. Pampers nappies hold an essential competitive advantage under this brand’s umbrella as the trademark provides legal protection in relation to unique product features which otherwise may be copied by competitors. Pampers, with their sustainability and catering to different age groups, hold the highest market share in nappies globally. Kimberly Clark Huggies would be the closest competitor, estimated to be 8.63 percent in the USA.

“P&G’s share of the baby diaper market is estimated to be 18.24 percent.” (Statista, March 2018)

This has been achieved by nappies sold in the USA and Europe having a reduced environmental footprint versus the previous versions and in comparison with competitors.

According to the brand, this is also the only nappy recommended by the British Skin Foundation. Another scientifically proven advantage Pampers have, as parents above all want a non-harmful product for their child.

Product Design

Pampers, recently, focusing on contemporary as well as existing product innovation intends to further develop their products by placing on offer an even wider range of nappy sizes e.g. Swaddlers now go up to size 5, thicker, more sustainable material for absorption and eco-friendly nappies. This is necessary for conformance within the market and to provide consistency with satisfying changing markets. By catering to current trends within the nappy market, this is systematic innovation however, still poses risks as new developments are an expense to the company who must source and produce a new and wider range materials in order to satisfy environmentally-conscious parents. When observing a product design as a concept, Pampers should think less of the technical product specifications and more in relation to how parents use and benefit from the product.

Significant reductions in pollution are achieved by optimising the nappy design and the materials used in production which is a major factor with environmentally-conscious parents who thus, hold loyalty to this brand and type of nappy. It is necessary Pampers continue to use societal conscious practices in order to be viewed as an ethical brand. Weisbrod, A.V. & Van Hoof, (2012)

Product Features

Already Pampers Baby- Dry nappies have on offer soft and thick material nappies with a hypoallergenic scent to “add comfort for hours”. This nappy variety showcases three absorbent layers which aid in preventing leaks, a staple in optimising value but does not minimise costs in production. Their unique selling point appears to be the color-changing moistness indicator, which shows the nappy needs to be changed, a feature appreciated as shown by reviews online. This feature gives Pampers nappies a competitive edge versus other brands.

The nappies also promise a better fit with cushy sides which stretch catering to movement, whilst this is unanimous for a nappy, Pampers attracts with their scientific evidence relating to materials used located on their website, by using expert-approved proof of the nappies effectiveness, Pampers gain the upper hand. However, a seemingly popular nappy print, the usage of Sesame Street characters had to be pulled from production quietly over gender concerns of the product appearing too masculine. As a replacement, cameras and, paper airplane prints have been criticised by parents for being too generic looking. (Fickenscher, L. 2018).

On a plus note, Pampers convey the bright color yellow in their products, associated with happiness and comfort in consumer minds. The colorful package is essential for catching the consumer eye amongst a broad range of nappies on offer.

In 2011, the Pampers Cruisers nappy range with 3-Way Fit design incorporated improvements which consumers had given positive feedback on – featuring a smoother, quilted back-sheet similar to the Pampers Swaddlers nappies (available now in sizes 3-7) and “a 20 percent longer absorbent area”. Pampers’ boasts “the best care for sensitive skin” with their Swaddlers sensitive’ diaper range which promotes hypoallergenic’ ingredients for newborns/babies/toddlers. For children which skin allergies such as eczema or irritation this gives the Pampers nappies an advantage in the market. (P&G, 2011)

Since the increase of awareness of customer’s feelings towards the environment, Pampers plan to market green’ diapers, supposedly of a sustainable nature, where each product line is developed to the stage of a baby’s/toddler’s life accordingly. Pampers state on their website that they currently refrain from the use of harmful ingredients such as parabens, dioxins, and latex and provide a detailed video on how their nappies are made.

By not hiding any secret’ ingredients and being truthful towards their customers, Pampers nappies have long been a market leader, holding consumer loyalty passed down through generations.

Product Packaging

The power of packaging is now evident within the nappy market. It is important that nappy brands realise the packaging not only holds and protects but also works as a marketing tool. With increased competition and clutter on retail store shelves, the package must first attract, then communicate the brand position before sealing the deal. Pampers state on their website that throughout the course of the past 20 years, they have minimized the volume of materials which are used to design and package their nappies by about 50%.

In relation to their production plants between 2009 and 2014, they have reduced the manufacturing waste by approximately 78%. This is an important aspect as overpackaging not only creates a phenomenal amount of waste but also damages the environment. Pampers quote: “Every day we’re working toward new sustainability goals, e.g last year our site Targowek, Poland, became our first to run on 100% renewable energy.” Their efforts in aiding the environment have earned the brand the Green Good Housekeeping Seal in the U.S. Pampers Pure Protection collection boasts about being, rather impressively, 100% recyclable with boxes made from more than 33% recycled materials.

UK studies indicated that the potential environmental impacts are linked to the natural materials used in disposable nappies, as well as problems with their disposal in landfills, etc. Pampers could reduce the damage caused by disposable nappies by decreasing material use (i.e., product weight or the use frequency) and through the improvement in the manufacturing of materials such as polypropylene and polyester. (Weisbrod, A.V. & Van Hoof, 2012)

Product Positioning

Previously, Pampers’ early marketing focused on properties such as fluid intake, fit, and disposability. These features are similar to many nappy brands, so customers tend to focus more on the benefits than the attributes. Therefore, Pampers should go beyond the technical product features and focus on factors such as the health benefits of skin having a lack of moisture, dermatologically proven on their website. Pampers message to customers of its quality and product value is still crucial.

Basically, Pampers is positioned as a product to improve the lives of babies, toddlers, and mainly their parents, guardians, or health care providers, who tend to be a difficult market to target. Mainly, because they will be skeptical of any products used on very young children and babies. Pampers, to adjust to the current atmosphere and environment, must keep reinventing itself and changing up marketing strategies.

Price

Pricing Strategy

Pampers focuses on a “Non-Price Competition” pricing strategy, instead, they are keen to zone in on the quality, packaging and delivery of its nappies in order to differentiate itself from its competitors, a customer-driven good value-based pricing strategy.

With this strategy, Pampers does not resort to reducing prices in order to increase the demand for its nappy products. Due to its proven excellent quality, and overall good reputation, consumers are not reluctant to pay a higher price when buying its products, its nappies are on average a higher price than competing supermarket own brands. Demand is mainly inelastic for nappies, as they are a staple consumer good, however new everyday low priced nappies may be stealing the spotlight.

Low Prices Supermarket Competitor

UK Statistics show that Aldi won the overall best nappy award as voted from website reviews and surveys taken from a large sample group consisting of 79% parents. Pampers must note this when adjusting their prices in line with new lower-priced supermarket competitors. In the past, they have learned that by initiating price cuts, led to a diaper war with KC Huggies brand.

Aldi Mamia Newborn Size 2 Nappies, ?2.09 (approx. 2.45) for 44 pack (4p per nappy), MadeForMums Awards Gold Winner

Pampers Premium Protection New Baby, ?5 (approx. 5.85) for a 31 pack (16p per nappy), MadeForMums Awards Silver Winner Taylor, A. (2018).

Pampers Pricing Advantage

One can see that this is why the brand must use non-price metrics such as loyalty to maintain its revenue or expand its market growth.

In this strategy, it is clear that Pampers relies mainly on the purchasing capability of its loyal consumers in order to maintain revenue in the oligopolistic market. The reason being Pampers does not hold status as a premium brand, therefore, Pampers should be quite flexible in its pricing as such there are other brands such as Huggies that maintains the market traction and reputation. Affordability is currently the main concern and it is inevitable that Pampers reduce the price of their nappies to maintain a leading position in this segment.

Pampers Product Line Pricing

Pampers occasionally place on offer discounts and allowances located on their website to maintain sales, a special benefit to customers who enjoy getting their products at a reduced price than usual. In the USA, the official Pampers store prices show Pampers cruisers cost $10.99 (approx. 9.71) for one pack of 31 diapers. The Swaddlers nappy range also cost $10.99 for a single pack of 36, slightly higher, nappies for sensitive skin cost $11.69 (approx. 10.34) for a pack of 33. By focusing on product line pricing(Usd.currency rate.today. 2019) ( Diffen LLC, n.d. Web. 22 Mar 2019)

Competitor Prices Continued

Competitor prices are also referred to as a part of Pampers nappies marketing mix, so as to not overprice their products. Pampers currently face large competition from other nappy brands such as Huggies etc. meaning that their price point has to be in line with other competitors, i.e. if the price is set too high by consumer standards and perceptions, Pampers will lose out as consumers will not be willing to pay more for the same product.

When bringing new nappy brands to the market companies must be aware of how much consumers are willing to pay compared with older methods. A historical example, when P&G introduced a new brand of disposable nappies, Pampers, in Peoria, Illinois. The product test failed because the price ten cents a nappywas too costly. In December 1961, mothers typically paid 3 cents for a nappy service, whilst mothers who cleaned their own cloth nappies paid about 1? cents per nappy change. In order to make Pampers price-competitive, production engineers had to develop a block-long machine which enabled P&G to profitably sell Pampers for 5? cents each. For a while, P&G Luv brand catered downstream with a budget nappy to further push Huggies back. (Parry, Mark E. and Martin, M. L. 2009)

Recent Price Increases

In 2008, Pampers released an announcement stating that it would increase its prices for nappies between 6-8% due to the increasing prices of raw materials. P&G is currently facing turmoil recently from once again a price hike, due to increasing competition and rising costs in the USA.

The cost of Pampers is going up by an average of 4 percent, the company said when it reported quarterly earnings Tuesday, raising the price of a 128-count pack of Swaddlers for newborns from $34.99 at Target to about $36.39. (Hirsch, L 2018.)

2018 followed in a similar pattern. The company stated that with increasing costs of the raw material pulp, as well as transport and freight charges, Pampers showed a price increase of 4% average. (Malito, A. 2018)