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The diaper and training pants market in the United States is a stable market so
that manufacturers of diaper brands and training pants can continue to thrive in this
market. Drypers Corporation is one of the manufacturers that offer good quality
products that are low in price compared to competitors. But one issue that exists is
the national branding that this manufacturer still lacks. National TV advertisement is
one of the promotional activities that the manufacturer seeks to evaluate in 1998.
disposable and training pants market since its inception in 1987 thereby thriving in
this market for a few decades already.1 The company has since heavily relied on
Drypers, in the United States. Towards the end of 1997, Drypers Corporation
management felt it inevitable to actually see how the consumers will respond to
national television advertising that would actually promote the brand. This is noting,
of course, that national television advertising is more costly than the existing
promotional activities done in the U.S. for Drypers and that it is the first time for the
corporation to embark on the said promotional strategy. In fact, the $10 million
expected spending for the TV advertising is already a big leap in terms of budget
1
The Gale Group, Inc. 2006. Drypers Corporation. Accessed 15 July 2009 from
http://www.fundinguniverse.com/company-histories/Drypers-Corporation-Company-History.html
2
because it is 33% higher than even the combined budget for advertising and
promotion.
and training pants market. This market can be characterized as being composed
of infants and children 4 years old and below and their mothers aged 18 to 49
years who are the main decision maker in purchasing diapers and training pants.
The primary channels of distribution of disposable diapers and training pants are
Table 1 show that majority of the retail sales come from grocery stores with
$2 billion sales in 2007 and $1.9 billion combined sales from drugstores and
mass merchants in the same year. Compared to 1994, however, the 1997
percentage share of grocery stores to total retail sales has declined by about 9%
while for drugstores; share has also slid down to 9.2%. Sales from mass
merchants, on the other hand, significantly increased by 9.4% in 2007 from the
With regards to the flagship brands in this market, Kimberly-Clark and Procter
& Gamble are generally considered to be the leading manufacturers of their own
The target markets for disposable diapers and training pants are still the
infants (babies below one year of age) and children aged 1 to 4 years old.
Moreover, since the babies and the infants are not the ones who purchase
diapers and training pants for themselves but their parents, another target market
are mothers with age ranging from 18 to 49 years old. With the planned national
television advertising by the Drypers Corporation, the more that the mothers
become an important niche in the market that the corporation should penetrate.
Not only are the mothers the main decision makers and purchasers of these
products, they are actually the ones who will be targeted by the advertisement
advertisement.
thereby using the knowledge to understand the market better and hence come
up with effective marketing strategies that will appeal to the target market.
Geographics
advertising campaign that will be shown is the entire United States. After some
time, the same strategy may be put into test to other countries where Drypers
Corporation is actively promoting Drypers or the brand name that is being used in
specific countries such as Mexico, Brazil, Mexico, Puerto Rico and Argentina.
The total targeted population however is the population of infants and babies who
are actually using disposable diapers and training pants which is approximately
Demographics
Of the 24 million estimated users of disposable diapers and training pants, 16%
are under 1 year of age, 33% are aged 1 to 2 years and 51% are 3 to 5 years
old. In terms of diaper usage, babies use five diapers in a day for two-and-a-half
years or basically 30 months, on the average. This totals to 5,475 diapers for the
30-month period.
Behavior Factors
With increased information in reproductive health and family planning, old and
new married couples have a choice with regards to birth-giving and children-
rearing. Hence, there is a tendency that the number of infants 30 months old and
2
Palo Alto Software, Inc. 2008. Medical Billing Service Marketing Plan. Accessed 15 July 2009 from
http://www.scribd.com/doc/4869611/Medical-billing-service-marketing-plan
3
U.S. Census Bureau. 2008. Current Population Reports: Marital Status and Living Arrangements (P20).
Accessed 15 July 2009 from http://www.census.gov/prod/99pubs/p20-514u.pdf
5
below seems to grow modestly. This therefore affects the demand for disposable
diapers and training pants in the market. Moreover, the innovations and
control also result to fewer demands for the use of disposable diapers and
training pants.
The target consumers are in a constant look for disposable and training
pants brands that are of high quality but still provide a good value for money.
which have also gained following because of the quality of the products that they
sell to the market. Drypers, on the other hand, retained its strategy of providing
consumers with disposable diapers and training pants with quality that is at par
with its direct competitors but with prices that are relatively low compared to
leading brands.
The trend in the U.S. disposable diaper and training pants market from 1994
Table 2. Trends in the U.S. Disposable Diaper and Training Pants Market
Management) of the book ________________. This table shows how the sales
in million units and million dollars sold have evolved from 1994 to 1997. Infant
birth is seen in a declining trend with at most 0.2 million decline from 1994.
Despite the decline in infant births, diaper sales in units and in dollars are still on
an increasing trend posting 17.5 billion units sold corresponding to $3.9 billion
in almost stable trend. There are really no significant changes for the period
indicated in Table 2. Children of this age range are the primary users of training
and youth pants, and as seen in Table 2, sales in units and in dollars show
increasing trend as well ending 2007 with 1.4 billion units sold and $595 million
retail sales.
To forecast the 1998 sales in units and dollars of the disposable diaper and
training pants market as well as the infant birth and the number of children 18
months to 8 years old, 1994 data was used as base. A compounded annual
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growth rate (CAGR) was computed first over a 3-year period. The compounded
investment over a specified period of time.4 Forecasting 1998 market sales using
CAGR meant considering not only the growth of the most recent year which is
1997 but also taking into account the growth trend that existed from 1994 to
sales. The 1998 forecast, on the other hand, is obtained by multiplying the
CAGR with the 1997 value and adding the 1997 value to the resulting product.
Table 3. 1998 Market Forecast of the Disposable Diaper and Training Pants
Market
Table 3 above shows the computed CAGR over a 3-year period with 1994
as the base. The forecasted value for 1998 show that infant birth will decline by
4
Investopedia. 2009. Compound Annual Growth Rate – CAGR. Accessed 15 July 2009 from
http://www.investopedia.com/terms/c/cagr.asp
8
0.1 million while children aged 18 months to 8 years will be stable, as in 1997.
The predicted diaper sales in 1998 will be 17.6 million units corresponding to
$3,946.8 million. This is still an increase from 1997 sales of $3,930. As for the
training and youth pants unit sales, CAGR is high at 13.28%. This impacted an
Correspondingly, retail dollar sales of training and youth pants will be at $637
million units and in million dollars of both diapers and training and youth pants
are forecasted to still increase in 1998 because of the positive growth that has
Table 4. Market Growth of the Disposable Diaper and Training Pants Market
%
% %
Growth
Growth Growth
1994 1995 1996 1997
(1994- (1995-
(1996-
1995) 1996)
1997)
Infants (millions): birth to 30
10.0 9.8 -2.00 9.7 -1.02 9.7 0.00
months
Diapers sold (billions of
17.2 17.2 0.00 17.3 0.58 17.5 1.16
units)
Diaper retail dollar sales
$3,880.0 $3,825.0 -1.42 $3,855.0 0.78 $3,930.0 1.95
(millions)
Children (millions): 18
26.1 26.3 0.77 26.3 0.00 26.2 -0.38
months to 8 years
Training and youth pants
970.0 1,070.0 10.31 1,250.0 16.82 1,410.0 12.80
sold (millions of units)
Training and youth pants
$485.0 $510.0 5.15 $540.0 5.88 $595.0 10.19
retail dollar sales (millions)
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Annual growth is computed from 1994 to 1997 and these are highlighted in
blue in Table 4 above. For diapers, market growth in units sold as well as dollars
sold is positive and the trend is increasing. Market growth in 1997 is 1.16% for
diapers sold in million units and 1.95% for diapers sold in million dollars.
Regarding the training and youth pants growth from 1994 to 1997, growth of units
sold in 1997 is 12.8% while for dollars sold, 10.19%. Growth of units sold
Table 5. 1998 Target Market Growth of the Disposable Diaper and Training Pants
Market
A seemingly logical target growth for the disposable diaper and training pants
above. The reason for this is that the computation of CAGR possesses that
characteristic of taking into account the year-on-year growth rates from 1994 to
1997, as if arriving considering all movements in unit and dollar sales that have
happened in the past 3 years. Hence, 1998 target growth for diapers will be
0.58% for units sold and 0.43% for dollars sold. As for the training and youth
pants, target market growth is set at 13.28% for units sold and 7.05% for dollars
sold. These targets seem to be realistic for 1998 considering the events the
sales trend of disposable diapers and training pants from 1994 to 1997.
The SWOT analysis for Drypers Corporation will showcase the strengths and
weakness of the company as well as the opportunities and threats that it may
Strengths
• Manufactures diapers and training pants with quality that is at par with
competitors
• Good quality diapers and training pants are not premium-priced unlike its
competitors.
merchandising arrangements that have been done in the past as part of its
promotions.
Weaknesses
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• There is no national brand that has been established in the United States
Opportunities
national brand.
competitors.
Threats
• The lack of extensive research and development will in the long-run affect
2.5 Competition
manufacturers invest heavily in research and development and have spent large
12
40.4 41.2
39.6
37.6 37.4 37.3 37.7
36.6
25
23.8
22.3
21.1
Figure 1 shows that Kimberly-Clark consistently leads the market from 1994
to 1997 with increasing market share from 1994 to 1997 and ending 1997 with
involved in both manufacturing and marketing Drypers in the United States and other
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brand names outside U.S. Drypers Corporation boasts of diaper and training pants
that are premium in quality but low in price relative to its competitors. Drypers
terms of ranking, Drypers diapers are 4th in the market while for training pants, it
ranks 2nd in the market in 1997 among grocery stores in the U.S.
quality but are sold at lower price is one key to overcome the fierce competition of
the diaper and training pants market. Product innovation is also another key to the
corporation’s success. It may not able to compete with leading brands in terms of
pricing but the innovations that are being done on its flagship brand has proven to be
also one of the ways by which the Drypers brand will be established nationwide and
advertisement that it plans to do for 1998. The stakes may be high for the company
as expenditure for promotions in the United States is up at $10 million, the most that
the company might be spending for promotions. If this will work successfully, then
the company will be able to establish one brand in the U.S., hence increasing
demand for the product and therefore increasing sales and revenue. Extensive
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aspects as it faces a new and challenging event in the promotion of its flagship
3.1 Mission
known for premium-quality brands but which have value for money. It is the
corporation’s mission to be able to establish one brand for the diaper market that will
be known nationally and worldwide and to rise up in the ranks and challenge leading
competitors.
The following are the objectives of the corporation in terms of its marketing
aspects:
worldwide.
babies aged 4 years and below because they are the main consumers of diapers
3.5 Positioning
training pants at lower prices at the same continuing to be the first in the market in
3.6 Strategies
The corporation will work on the following strategies to attain its objectives:
“Everyday Value”
• Add up to the existing products lines that will include additional consumer
products
market.
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• Pricing of Drypers will provide value for money since the corporation will
continue to effect prices that are at most 40% lower than the competitors.
One of the qualitative research methodologies that can be done initially is the
FGDs will provide the company insights regarding the perception of viewers of the
number of people.
4.0 Financials
allotted spending of $49 million and sales that will be generated in 1998 is $38
million.
The CAGR over a two-year period of 1995 to 1997 is 32.3%. Using this to
compute for the sales forecast, 1998 sales forecast is $38 million.
The company’s working capital in 1997 stood at about $49 million and may
5.0 Controls
5.1 Implementation
To implement the strategies that have been outlined by the corporation, there
1998, the only diaper in the market that has an antibacterial treatment. Expansion
will also be done in countries where there is still low consumer penetration such as
Latin America, the Pacific Rim and Eastern Europe. National TV advertising will
push through to establish brand name for the corporation. Additional product lines
There must be other plans that will serve as a fall back if the TV
continued building of relationships to retailers as they were one of the reasons of the
REFERENCES
The Gale Group, Inc. 2006. Drypers Corporation. Accessed 15 July 2009 from
http://www.fundinguniverse.com/company-histories/Drypers-Corporation-
Company-History.html
Palo Alto Software, Inc. 2008. Medical Billing Service Marketing Plan. Accessed
marketing-plan
U.S. Census Bureau. 2008. Current Population Reports: Marital Status and
http://www.census.gov/prod/99pubs/p20-514u.pdf