Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Can P&G Redeem Itself?

What does a company do when its biggest brand falls prey to poor product development strategy? The only solution is to safeguard its market share and win back customers with improved products and better value.

This is exactly what mammoth Procter & Gamble (NYSE: PG  ) did for Pampers, its most important brand. Pampers' annual sales total around $9 billion, and it has contributed approximately 11% of P&G's sales from the last couple of years.

The goof-up
P&G introduced the new Pampers Dry Max diapers in March aiming to boost its market share in this category. The product was launched to compete with low-priced store-brand diapers and was touted to be one of the company's most significant innovations in the last 25 years. But it turned out to be a big marketing disaster, just like Coca Cola's New Coke, and P&G ended up losing 3% of the diaper market share to archrival Kimberly-Clark (NYSE: KMB  ) .

Not only did P&G lose market share, it got slapped with lawsuits. Parents complained that the diapers caused rashes to the tiny tots, and some were so dissatisfied with the new product that they sought legal action.

The fix-up
With the damage being done, it was time for some mending. P&G revised the marketing strategy for Pampers with a heightened advertising pitch. The company also worked on parents' suggestions for bettering the product and introduced the improved Pampers Cruisers with 3-Way Fit diapers, with a softer, quilted back-sheet, a 20% longer absorbent area, and new Sesame Street designs. The look is also a debut for Oscar the Grouch, featured for the first time on its diapers. The new product is expected to help P&G regain its lost market share.

Foe turns friend
P&G showed great marketing acumen by utilizing Facebook to address parents' concerns being vented on the social-networking site and to launch a promotion deal to create brand awareness and attract new customers for the new and improved Pampers. P&G introduced a "30 Days of Play & Giveaways" promotion campaign on Facebook, encouraging participation from parents with a chance to win prizes. This was a masterstroke to use the broad reach of social media and improve sales.

Foolish bottom line
I feel P&G will be able to redeem itself through its fresh marketing initiatives. It cannot afford to lose any ground as far as Pampers is concerned; after all, it is its biggest draw. The new look and feel of Pampers Cruisers should add to the company's top line.

To stay updated on Procter & Gamble, click here to add the stock to our watchlist service. It's free and it helps you stay updated on news and analysis on your favorite companies.

Fool contributor Amitabha Chakraborty does not own shares of any of the companies mentioned in this article. The Motley Fool owns shares of Coca-Cola. Motley Fool newsletter services have recommended buying shares of Kimberly-Clark, Procter & Gamble, and Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1590482, ~/Articles/ArticleHandler.aspx, 10/26/2016 5:49:16 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 4:00 PM
PG $87.40 Up +0.43 +0.49%
Procter and Gamble CAPS Rating: ****
KMB $113.66 Down -0.07 -0.06%
Kimberly-Clark CAPS Rating: ****