Jaclyn Feder, Christi Louis Jennifer Muckley, Seena Sherman, Jennifer Zupnick

The Problem Should Drypers Corporation invest an additional $10 million in advertising in order to increase their brand awareness, create value, and increase market share?

Market Characteristics $4.5 billion in 1997 Market Segments - value price - 5% - premium price % - private labels -16% $4.5 billion in 1997 Market Segments - value price - 5% - premium price % - private labels -16%

Value Priced Products Avoid high R & D costs Avoid national advertising campaigns Rely on in-store promotions, couponing, print advertising, and cooperative advertising. Consumers look for the best price and quality Avoid high R & D costs Avoid national advertising campaigns Rely on in-store promotions, couponing, print advertising, and cooperative advertising. Consumers look for the best price and quality

Private Labels Stress price over quality and product features Invest minimally in consumer advertising and marketing. Rely on retailers to promote their individual brand. Stress price over quality and product features Invest minimally in consumer advertising and marketing. Rely on retailers to promote their individual brand.

Premium Priced Products Heavily advertised High brand recognition Compete on a basis of product quality, features and benefits, and price. They are more expensive than value priced diapers yet much more successful. Spend a large portion of their budget on R&D and advertising. Heavily advertised High brand recognition Compete on a basis of product quality, features and benefits, and price. They are more expensive than value priced diapers yet much more successful. Spend a large portion of their budget on R&D and advertising.

Corporation Goals Goal: Large scale brand recognition. Build their product name into one that is sought out by the consumer. Drypers seeks to increase market share and stock price in 1998 Goal: Large scale brand recognition. Build their product name into one that is sought out by the consumer. Drypers seeks to increase market share and stock price in 1998

SWOT Analysis Strengths Product Innovation Product diversity 4th largest diaper producer 2nd largest seller of training pants in grocery stores Exclusive private label supplier for Wal-Mart in L.A. Acquisitions and joint ventures in foreign countries Strong cash flow and sales growth Licensed to use Sesame Street characters Strengths Product Innovation Product diversity 4th largest diaper producer 2nd largest seller of training pants in grocery stores Exclusive private label supplier for Wal-Mart in L.A. Acquisitions and joint ventures in foreign countries Strong cash flow and sales growth Licensed to use Sesame Street characters

SWOT Analysis Weaknesses Lack of national brand name recognition Less extensive national production distribution capabilities Comparatively less advertising budget No dedicated sales force in U.S. Not present in mass-merchant distribution areas Weaknesses Lack of national brand name recognition Less extensive national production distribution capabilities Comparatively less advertising budget No dedicated sales force in U.S. Not present in mass-merchant distribution areas

SWOT Analysis Opportunities Increase brand awareness through TV advertising Combine all labels to be under Drypers Increase market share by gaining a presence in mass-merchandisers Pursue international expansion opportunities Expand product lines to include additional consumer products Maximize license agreement with Sesame Street First mover advantage of germ-protection. Opportunities Increase brand awareness through TV advertising Combine all labels to be under Drypers Increase market share by gaining a presence in mass-merchandisers Pursue international expansion opportunities Expand product lines to include additional consumer products Maximize license agreement with Sesame Street First mover advantage of germ-protection.

SWOT Analysis Threats Continual growth of market share by P&G and Kimberly-Clarke Minimal response to television advertising Decline in grocery store sales on diapers and training pants Threats Continual growth of market share by P&G and Kimberly-Clarke Minimal response to television advertising Decline in grocery store sales on diapers and training pants

Alternative #1 No TV Advertising Advantages - Safe, no risk-taking Disadvantages - Solves nothing - Not pro-active Advantages - Safe, no risk-taking Disadvantages - Solves nothing - Not pro-active

Alternative #2 Television Advertising Advantages - Potential to reach a much wider audience - Increase brand awareness of consumers and mass merchandisers. - Continuous opportunity to capture new consumers - Brand loyalty to Drypers - Stress their innovative product line - Stress their differentiated products Advantages - Potential to reach a much wider audience - Increase brand awareness of consumers and mass merchandisers. - Continuous opportunity to capture new consumers - Brand loyalty to Drypers - Stress their innovative product line - Stress their differentiated products

Alternative #2 Television Advertising Disadvantages - High cost - Failure can be detrimental - Brand loyalty of consumers to other products Disadvantages - High cost - Failure can be detrimental - Brand loyalty of consumers to other products

Break-Even Market Share

Break-Even Sales ($)

Recommendation $10 Million in Television Advertising Stressing: Differentiated Product One National Brand Name Sesame Street $10 Million in Television Advertising Stressing: Differentiated Product One National Brand Name Sesame Street

Implementation Careful attention to design Research ad placement –Early morning cartoons, daytime TV Leverage negotiations with mass merchandisers Careful attention to design Research ad placement –Early morning cartoons, daytime TV Leverage negotiations with mass merchandisers

Any questions?