Free case study on drypers corporation
Free Case Study On Drypers Corporation
Business—Drypers Case Study Paper
Introduction
Diapers in the past couple of decades have slowly but surely become a
necessity. Thanks to the considerable increase in population of infants
and toddlers, which comprise more than 3 quarters of the entire diaper
manufacturing and retailing industry, this has become a reality. Because
of all of these factors, there has been a continuously growing need to
focus other interventions that would convert to better brand and product
awareness, which, if things go as planned, would lead to a significant
increase in product mobilization and therefore, sales and profits.
Fortunately, there are many ways that the diaperindustry key players
have figured out to achieve that. Research shows that the two biggest
premium brand diaper manufacturers in the U.S. and probably
internationally, relied on TV marketing and advertising campaigns to
sharpen their edges and obtain a larger share of the market.
Evidently, their values increased a few months after their brand and
product awareness campaigns were carried out. This is the reason why
other diaper manufacturers like Drypers Corporation, be they be a value
or private label diaper manufacturer, should also consider investing a
portion of their budget in TV marketing and advertising. This paper will
focus on the different key players, particularly the diaper manufacturer
and private labelers in the United States diaper industry. Comparisons
between the major key players, the largest diaper manufacturers and
advertisers—Kimberly Clark and Procter & Gamble, against Drypers
Corporation will be made.
Executive Summary
There is a large market for diapers, training pants, and other
related products in the U.S. This is due to the fact that the population
of infants, toddlers and basically all other people who could benefit
from such products have slowly but continuously increased in the
continent. A statistical value suggesting that the entire U.S.
disposable diaper market was worth approximately 4 billion USD—this is
assuming a baby uses a total of 4,500 disposable diapers until 4 years
of age which is equivalent to a whopping $1,100 worth of disposable
diaper retail sales for every baby in the U.S. . Drypers diapers,
manufactured by Drypers Corporation, are a value-priced branded product.
For the sake of comparison, the type of disposable diapers being
manufactured by Procter & Gamble and Kimberly Clark are premium
priced branded diapers.
Drypers Corporation is one of the most prominent companies in the market
sector for diapers in the United States. It has been competing with
other major key players in the industry, especially Procter & Gamble
and Kimberly Clark Corporations which hold the first and second places
as top diaper manufacturers in terms of market and even dollar share.
Also, these two big companies, a few years before the start of the 21st
century, seemed to have dominated smaller diaper manufacturers such as
Drypers Corporation in terms of the two criteria we have mentioned. This
was thanks to their overly large budget for marketing and advertising,
especially for TV advertising, which at that time was like the most
premium and grandest medium of advertising. As a result, brand awareness
and the mobilization of products manufactured by these two large-scale
diaper corporations rose quickly to the point that other manufacturers
were left out with only a small portion of the entire diaper market
share. This is so far the main problem that Drypers Corporation had to
face.
Unfortunately, this problem leads to another problem. The management
would have to walk in a practically undiscovered terrain because Drypers
Corporation is a value priced branded disposable diaper manufacturer and
manufacturers of this type do not usually manufacture their products via
television broadcasts but rather via various direct means of
advertisement such as prints and coupons. Procter & Gamble and
Kimberly Clark, premium-priced disposable diaper manufacturers and
significantly larger and have considerably deeper pockets than Drypers
Corporation, are already experienced in TV advertising. They actually do
not have the need to advertise in TV because of their already strong
product and brand awareness. The second problem is the risk that Drypers
Corporation faces. It has been announced that they are to invest 10
million USD for television advertising.
After reviewing Drypers Corporation’s situation, we have decided to
recommend the cutting of the planned budget for TV advertising because
of the following reasons: firstly, they do not have the necessary
experience in dealing with TV networks for advertisement purposes;
secondly, because it would be too risky for the company to shed out such
an amount of funds to fuel a maiden advertising campaign. We also
recommend that the management do a small scale pilot testing first and
then based on the results of the test, create a TV advertising strategy
that they could use in the future to ensure that they can significantly
improve their brand awareness even without having to expend some 10
million USD in funds.
Analysis and Evaluation
Product Strategy
Branding Items
Promotion Strategy
Since the only real problem why Drypers is not selling as many units of diapers and training shorts as they were expecting is their overreliance to direct forms of advertising, it would really make sense to try out something new. Apparently, they found a promising answer in TV advertising. While it is quite obvious that TV advertising would really be a great boost to the consumers’ awareness of their products, the real issue lies on the amount of funds they are going to invest for their debut partnership with TV advertisers. They have two options here. They can either start full blast just like what they are planning to do now or they can start out small and slow until they finally have a complete grasp of how advertising in TV works.
Pricing Strategy
There is actually no pricing issue present if we talk from a pro-Drypers Corporation point of view. In fact, their current pricing strategy is one of their key advantages over their competitors. They develop high quality products and sell them for significantly lower prices—qualities that economy class and even some middle class customers love the most. One of the options they actually have is to slightly increase the prices of their products up to a reasonable level. They can do this because after their latest product innovations, customers may still find a price hike to be fairly reasonable. The management can also keep the prices low so that more consumers would be lured in. Either way, the pricing advantage belongs to Drypers Corporation.
