Case Study: Tendercare Disposible Diapers

Market Analysis:

The TenderCare is marketing TenderCare products throughout the United States and Canada and also other parts of the world to natural and health products stores, upscale pharmacies, baby product stores and specialty supermarkets. TenderCare Diapers have drawn response from two diverse market segments. The first and largest segment of the market consists of those consumers who use disposable diapers with artificial chemical absorbents. The second market segment consists of those consumers who use cloth diapers, but for the past years the sales rise very quickly for the disposable diapers, total dollar sales of disposable diapers at retail in 1985 were expected to be about $3.0 billion, or about 8 percent for units, and in Canada currently consumed about $ 0.25 billion at retail, with an expected growth rate of 20 percent per year until 1990. And UK is about twice this size and growing at the same rate.

The Company plans to develop other TenderCare products while retaining the focus on quality natural products. The Company is positioning itself to share in the large and growing markets of disposable diapers and natural products. In March 1998, RMM introduced TenderCare GEL-FREE Baby Disposable Diapers at a suggested retail price that is competitive in price to the leading disposable diapers.

Industrial Analysis:

In the multibillion dollar market for disposable diapers and wipes, the battle for brand dominance and share increase is waged among the leading brands through national media advertising, trade promotions, pricing, and product innovation. Procter & Gamble was clearly the dominant competitor with its Pampers and Luvs brands. However, Procter & Gamble’s market share had been declining from 70 percent in 1981 to 50 percent currently. TenderCare recently introduced its new thicker Blue Ribbon Pampers to stop the decline in the market share. To achieve this TenderCare spent $ 500 million to purchase the new equipment for this new product, meanwhile P &G spent $ 40 million to advertise their two existing brands and Kimberly Clark spent $ 19 million to advertise huggies in 1984.

Johnson & Johnson Industrial strategy in 1981 effect the disposable diaper’s industry for short time the new premium features in the product increase the share of Johnson & Johnson from 8 percent to 12 percent but Huggies and Luvs with these premium features stop this increase. Two well-managed giants Procter & Gamble and Kimberly Clark accounted for about 80 percent of the market in 1984 and 1985. The latest estimation market shares are shown in the figure.

Strategy of Promotion:

The strategy choice will directly dictate the size of the target market. Additional facts that should be considered relevant include that disposable diaper use is on the rise, however, the growth will not continue indefinitely. Growth rates for disposable diapers would eventually approach growth rates for births, and unit sales of disposable diapers would become directly proportional to the number of infants using diapers. The slowing growth rate would result in increased competition. If the Diaper Rash strategy were chosen, RMM’s diapers would not compete directly with standard disposable diapers. Both the Special Occasions and Head-On strategies have TenderCare directly competing and selling directly against Pampers, Huggies, Luvs, etc. The competition in this market is considered intense. The disposable diaper industry is in its mature stage and competition is fierce. As of 1985, Pampers and Huggies each occupied 28% of the market, Luvs occupied 20%, and all other brands made up the remaining 24%. The market segment is measurable, substantial, accessible, differentiable, and actionable. RMM has a differentiated product. They need to use their existing services and contact personnel to make the TenderCare product a success. The introduction of new thick Blue Ribbon Pamper diapers offers the Company significant merchandising, promotion, and shelf space opportunities. The marketing effort devoted to building the Blue Ribbon Pamper diaper brand results in cross-over support for the TenderCare product. As an added benefit, RMM is able to build its reputation in the trade as a diversified natural products company.

Market Analysis:

The TenderCare is marketing TenderCare products throughout the United States and Canada and also other parts of the world to natural and health products stores, upscale pharmacies, baby product stores and specialty supermarkets. TenderCare Diapers have drawn response from two diverse market segments. The first and largest segment of the market consists of those consumers who use disposable diapers with artificial chemical absorbents. The second market