Place your order now for a similar assignment and have exceptional work written by our team of experts, At affordable rates
Case 3.3 Kimberly Clark page 748
answer questions for chapters 21 and 23 on page 750 only
do a one page summary of the case with added research and sources and then answer the above questions by typing the questions and then the answers.
Case 3.3Kimberly-Clark: Competing Through Innovation
The diaper industry has always been in a stage of flux. Right from the beginning of the industry in the early 1960s, this industry has gone through periods of rapid growth and fierce competition. A brief outline of the diaper industry will be helpful in understanding its competitive nature. A new idea, the disposable diaper, revolutionized this industry in the late 1950s. This was the Procter & Gamble (P&G) brand, Pampers. Pampers was advertised to parents as a convenient method of keeping their children clean when they were traveling. However, P&G managed to create a completely new market with Pampers, which eventually led to the creation of a new section in grocery stores. P&G’s Pampers had a meteoric growth in popularity and in revenues. Typically, a growing industry attracts new players, and one of the companies to give P&G an early fight for market share was Kimberly-Clark (KC). With its Huggies brand that it introduced in the late 1970s, KC was able to successfully gain a share in this market. By the mid-nineties, KC had roughly a third of the disposable diapers market.
Not many other players (other than P&G and KC) have been able to penetrate the disposable diaper market. One of the important reasons for this barrier to entry is technology and innovation. P&G and KC have continuously made innovations and improved technology to make Pampers and Huggies, respectively, extra absorbent and extra convenient. Innovations ranged from creating new absorbent material to avoiding leakages to designing new delicate outer layers for diapers to reduce or avoid the occurrence of diaper rash in infants. In fact, P&G and KC have made so many innovations and have tried so hard to keep each other at bay that there was virtually a diaper-patents race between them for a few years. However, since the mid-eighties, P&G has been dominating the patents that have been filed in this industry.
Other big consumer–packaged goods companies (CPG) did eventually enter this market, such as Johnson & Johnson and Colgate-Palmolive in the mid-seventies. Despite their initial strengths, Colgate-Palmolive and Johnson & Johnson have now all but disappeared from the disposable diaper industry. One of the reasons for this might be attributed to the fact that both of these late entrants had to play catch-up with P&G and KC, who were both innovating rapidly. Perhaps because of the patents that P&G and KC had obtained, it became more difficult for Colgate-Palmolive and Johnson & Johnson to make comparatively superior products.
Because of its inherent nature, the disposable diaper is considered very wasteful and especially harmful to our environment. During the mid-eighties, the disposable industry became a target of the environmental lobby. To counter this problem, P&G increased its own lobbying efforts in Congress and other appropriate forums. P&G and KC, through their advertising, tried to soften this issue and to portray an image of a conscious corporate citizen. P&G eventually made further innovations to make its Pampers product more environmentally friendly.
KC became the dominant player in the disposable diaper market, overtaking P&G in revenues. In 2001, KC had roughly 46 percent of the market share, whereas P&G had 34 percent, mainly through its two product lines, Pampers and Luvs. P&G then, through some shrewd pricing strategies and promotions, seemed to have outmaneuvered KC. By 2003, KC’s market share had decreased to around 44 percent and P&G’s had increased to 38.5 percent.
In 2006, according to an online KC survey of mothers, 98 percent rated keeping their baby comfortable as an extremely or very important factor when choosing baby care products. In addition, 85 percent of moms said that their children’s comfort needs change as they grow. Responding to these needs, KC introduced two new super premium diapers—Huggies Supreme Gentle Care and Huggies Supreme Natural Fit diapers. In North America, net sales increased nearly 5 percent, driven by a more than 6 percent sales volume increase reflecting higher sales of Huggies diapers. KC’s earnings through the diapers sector went up from $3.6 billion in 2006 to $4.2 billion in 2007. Total revenues in 2008 amounted to $19.42 billion.
After a long and fierce battle, Procter & Gamble regained share leadership over rival Kimberly-Clark in the U.S. diaper market in late 2013 and has been growing it ever since. However, it is a different story in developing markets, particularly in China and Eastern Europe, where KC’s Huggies brand has grown rapidly and taken share from P&G’s Pampers in recent years.
As of 2017, the global market of the disposable diaper industry was growing but the slow-growth environment seemed to have intensified the competition between P&G and KC to capture/increase market share. In an effort to increase market share and customer satisfaction, KC initiated a customer survey. KC wanted to get specific information from potential customers to understand better the market segments and related demographics. Since the focus of a new campaign will be on direct mail, the survey concerns the evaluation of a mailer. The survey questionnaire follows and the data file is provided. Based on the results of this survey, KC management will devise further strategies.
1.Construct 16 full profiles using the following attribute levels: style (print/colors, plain white), absorbency (regular, super absorbent), taping (regular tape, resealable tape), and leakage (regular, leak-proof). Rank the 16 full profiles in terms of preference. Calculate the part-worth functions and the importance of each attribute.
Write a report for Kimberly-Clark based on all the analyses that you have conducted. What would you recommend that Kimberly-Clark do in order to increase market share?
If the survey conducted by Kimberly-Clark were to be conducted in Australia, how should the marketing research be conducted?