Background of Kimberly Clark
Kimberly Clark is a giant in the consumer goods industry with sales of over $18.3 billion in 2007. Employing over 55,000 worldwide, this global corporation is found in over 150 countries. Kimberly Clark deals primarily with products to improve the lives of its consumers through the manufacture and distribution of a broad line of quality products. Well-known brands include Kleenex, Scott products, Kotex, Poise and Depends, and the diaper product which revolutionized the world of disposables, Huggies. The impressive 136 year history of the organization has adhered to three simple terms of its founders: quality, service and fair-dealing. Simplistic terms in today’s complex business environment, yet effective drivers in a competitive environment. Kimberly Clark demonstrates the highest level of ethical behavior. As a result, they are the leader in health and hygiene products used by professionals and families.
In 1872, Kimberly, Clark and Company was first formed by J.A. Kimberly, Charles Clark, Havilah Babcock and Frank Shattuck. As they adopted their principles of quality, service and fair-dealing they set in motion the basis for the beliefs held true today. Their internal motto, K-C At its Best, exemplifies the simple approach to quality product research, development, production and distribution. This philosophy is the basis for a goal of always exceeding the expectations of their customers, colleagues and shareholders. The teamwork and cooperation of the founding fathers is exemplified today in the strong commitment to its employees. By investing in the strength of its employees and fostering a positive environment of teamwork, Kimberly Clark reinforces its belief in teamwork to help all employees be empowered members of the organization. Kimberly Clark cares: they care about their employees, and they care about the products they bring to their loyal customer base.
While the values may appear to be old-fashioned, the innovations which Kimberly-Clark brings to the market are not. Kimberly-Clark has invented five of their eight major consumer product categories: facial tissue, paper towels, toilet paper on a roll, feminine pads and disposable training pants.
A strong marketing mix is at the heart of the sustained success of Kimberly-Clark including product, price, placement, promotion, and distribution.
“The term “product” refers to tangible, physical products as well as services.” (NetMBA)
The defining of “product” includes elements which must be understood from the customer point of view. Kimberly-Clark developed a product descriptor which states succinctly, what the product is, why the product is perfect for the consumer, and how (or what) task the product performs. The “product,” Huggies, could best be described as a uni-sex diaper with a breathable-cloth-like outer cover which lets air flow to baby’s skin in an improved, hour-glass, baby shape.
“Price is the amount of money charged for a product or service or the value exchanged for the product or service.” (NetMBA) The challenge of price is determining the price point between one or more product lines, how to price potential optional products associated with the main product, pricing products which must be used with the original product (if appropriate), and pricing bundles of a product. NetMBA offers additional challenge involving the pricing of new products. The first strategy challenge is achieved by setting prices high to skim a segment of the market. This works when:
Quality and image support the higher price
Enough buyers want the product at that price
Cost of producing a small volume cannot be high
Competitors should not be able to enter the market easily
A second pricing strategy involves market penetration. Considerations for appropriate pricing strategies are most appropriate when:
Market is highly price sensitive
Production and distribution costs fall as sales volume increases
Low price must help keep out the competition
Additional questions and considerations occur based upon market and market trends. Should discounts be offered? Location at times can affect how an item is to be priced. Are there conditions relevant to a particular location which necessitates a change in traditional pricing methodologies? Pricing involves an element of psychological effect: is an item perceived to be a greater value at $2.99 versus $3.00? Will temporary promotions benefit the product and enhance its longevity or market segment?
Place in the marketing mix is involved with the methods through which goods and/or services are moved from the manufacturer to the consumer. Neil H. Borden in his article, “The Concept of Marketing Mix,” discusses six channels for distribution or place. They are:
· Is a direct (to the consumer) or indirect (via a wholesaler) channel the most beneficial?
· Should the product be distributed through single or multiple channels?
· Is there a limitation to the number of retailers to be used?
How are channels for distribution to be decided upon? The knowledge of the distributors is an important consideration and whether that distributor will be a good fit with the policies and procedures of Kimberly-Clark.
Promotion keeps the product in the minds of the customer and helps stimulate demand for the product. Promotion involves ongoing advertising and publicity. The ongoing activities of advertising, sales and public relations are often considered aspects of promotion. Promotional decisions include: What will the promotional strategy include? What types and advertising modalities will be used to promote Huggies? What is the role of personal selling and sales forces? How much and what type of sales promotion will affect sales? How will public relations and publicity benefit the Huggies and Kimberly Clark name? Finally, what will be the allocated budget for marketing?
Kimberly Clark has developed a multi-level, multi-product line around the Huggies brand. The packages for each are designed with a specific target audience and to fulfill a particular need within the market segment. According to Package Design Magazine, Kimberly Clark listens to the needs of their customers: a continuation of the initial goals first developed at the beginning of the organizations philosophy. Packaging decisions are coordinated and decided upon by a team of global packaging professionals. “The important information on each package is different depending on the customer—buyer, manager, stocker, or clinician. Plus, the FDA has a say on the type and size of specific information, the marketing department wants to emphasize advanced or new features, and the brand manager needs to present the global brand consistently.” (Package Design Magazine, 2008)
Packaging designs for the Huggies brand of diapers and wipes are first and foremost, colorful, rugged, and convenient to use. The introduction of new packaging designs for the established Huggies brand “Dri-fit” included “ a visual hook in the form of a large cloud and a smiling sun on the pack to depict the DRY proposition of the brand. The packs looked refreshing and got an enhanced shelf throw and branding. Images of babies engaged in some kind of activity and smiling were used to bring out the brand essence” (DMA Branding) The Dri-Fit joins the other styles of Huggies available in the American market. The diapers are divided into two main categories: Snug and Dry, Gentle Care, and Natural Fit. Sizes are from Newborn (under 10 pounds) to Size 6, (35+ pounds.) Standard “diapers” (includes all styles) are in the easily recognizable darker red packaging while other Huggies products in the diaper line are packaged differently for easy of recognition. Photos on each variety, even though in the standard red package, vary. Other packages including Huggies Little Swimmers, Pull-Up Training Pants and Overnites diapers are packaged in plastic packs of different colors and patterns for easy differentiation. All Huggies show attractive babies or toddlers on the front of disposable plastic packages. The photos are representations of the appropriate age or group the individual product has targeted. For example, toddler size diapers show active toddlers pushing toys, while infant sizes show smaller babies in comfortable sleeping positions, the comfort obviously a result of the use of a dry Huggies diaper. When discussing the packaging for Huggies Tight Seal Baby Wipes package, Food and Drug Packaging stated, “Kimberly-Clark knows that when changing a diaper on a squirming baby, it’s frustrating to finally grab that baby wipe only to find it dry and useless.” As a result, the package is an easy-to-use one handed pop-up design which eliminates the annoying “dried out” tissues of some packages. “The Slide-Rite product features a plastic, clip-like closure that slides across a zipper track at the top of the pouch.” (Food and Drug Packaging) In addition to the more “traditional” brands associated with the Kimberly Clark Huggies brand is the introduction of 20 auxiliary items which includes baby lotions and body products.
A target audience is comprised of the individuals, groups, communities and bodies of decision makers who can influence your target. Targets are identified as the individual or individuals who have a direct decision-making power over an issue. The traditional target audience for the Huggies group of products has been young mothers who may have had parents who used Huggies for them. Kimberly Clark has opened a new target audience however, with the development of their new website, “Huggies Baby Network.” The site is aimed to mothers from the time they first become pregnant and has been developed in an effort to retain their loyalty during the newborn, infant and toddler phases. (Kimberly Clark) An addition to the marketing mix is the Hispanic population. Reported in PR Week, “Kimberly-Clark’s Huggies and Pull-Ups recently launched “Tren de Vida” (Train of Life) a campaign intended to connect its diapers with Hispanic mothers in a culturally relevant way.”
Competition and Product Differences
The disposable diaper market is flooded now with brand and off-brand products. Primary brand products led by the Proctor and Gamble entry, Pampers. Like Huggies, Proctor and Gamble has extended their product line into various size diapers and has also moved into the ancillary product range with wipes and their newest twist, the Kandoo product line. The Kandoo line is in direct competition to the Huggies Pull-Up line of potty training aids. Proctor and Gamble however, hasn’t developed an entire line of lotions, creams, disposable wash cloths etc. The webpage for Proctor and Gamble provides information on the product but has taken a different tactic for attracting their target audience. Rather than attempting to capture the mother-to-be, their efforts concentrate on activities for the child which has already been born. Games, activities, promotional offers are accessible through the website.
A primary difference between Huggies and the closest competitor, Pampers would be the shape of the diaper itself. Pampers has adopted a traditional rectangle shape, touted in advertisements to fit babies who are “shaped like a brick.” Huggies developed the innovative
signature hour-glass “shape” technology, which included a die-cut inner absorbing padding that contours to the baby.
While blogs aren’t credible sources, one recent blog brought forth some interesting thoughts and insights. “In an interesting blog article entitled “Being first is Secondary” from Stealing Share – A Brand Development Firm, it talks about the Disposable Diaper Industry and how Pampers, who built the category in 1968, were all of a sudden threatened by Huggies. According to Stealing Share, “Huggies now dominates the disposable diaper market outselling both Pampers and Luvs combined. P&G confused brand with efficacy and continued to tout product innovation and features, leaving “caring Mother” to Huggies. “
So what caused this shift in the Diaper Market? According to Stealing Shift:
Pampers sold the best diaper money could buy.
Huggies sold the concept of a “Good Mother”.
Huggies built a brand and Pampers built a great category.
Kimberly, Clark, Babcock and Shattuck based their early goals on quality, service and fair-dealing. The success of the Huggies brand within the Kimberly Clark family of products has maintained those goals and taken brand development and marketing to high levels. Marketing, while concerned with quality products, has evolved into the new triad of quality, brand identity and market share as the determinants of success. Kimberly Clark has met these goals with Huggies.
Borden, Neil H. “The Concept of MarketingMix.” Science in Marketing 1964.
“Huggies Baby Network.” Huggies Baby Network. Kimberly Clark. 24 Oct. 2008 <http://www.huggiesbabynetwork.com/>.
“Huggies tight-seal pouch keeps baby wipes moist.” Food and Drug Packaging Feb. 2002.
“Kimberly-Clark: Huggies 2005 ReBrand 100: notable.” ReBrand. DMA Branding. 25 Oct. 2008 <http://www.rebrand.com/page.php/id/278>.
“The Marketing Mix.” Net MBA. 24 Oct. 2008 <http://www.netmba.com/marketing/mix/>.
Romanik, Ron. “Different Strokes for Different Folks: Kimberly-Clark Listens Carefully to its many customers.” Package Design Magazine. 2008. 25 Oct. 2008 <http://www.packagedesignmag.com/issues/2008.03/coverstory.shtml>.
Zirillo, Nicole. “Huggies, Pull-Ups connect diapers with Hispanic moms.” PR Week 22 Sept. 2008.