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DIAPER WARS HEAT UP AS KIMBERLY-CLARK, P&G READY FALL PLANS; $16 MILLION IN ACTIVITY INCLUDES ADS, COUPONING, PRICING PLANS

By Published on .

Procter & Gamble Co. and Kimberly-Clark Corp. are jockeying for leadership in the $3.6 billion disposable diaper market as they prepare fall ad campaigns totaling about $16 million.

P&G will spend an estimated $8 million to back its Pampers Premium with new breathable side panels, and a new unisex Pampers Baby-Dry Stretch with improved absorbency.

AUTUMN PUSH

The push starts in September with couponing, according to trade materials; a TV and print campaign from D'Arcy Masius Benton & Bowles, New York, begins Oct. 6.

P&G also is completing a rollout of Luvs Stretch, with newly added stretchy side panels.

Rival Kimberly-Clark has promised the trade it will match whatever P&G spends as it rolls out its improved Huggies Supreme, with breathable outer covers, and a new "mega" pack of a unisex version of its base Huggies Ultratrim line.

A K-C spokeswoman said the company will back its rollout with TV advertising from Oglivy & Mather, New York, plus direct mail and other promotion. She would not discuss budgets.

PRICE STRATEGIES

K-C said it would not, however, follow P&G's lead on category pricing.

P&G next month will increase per-diaper prices an average of 5.9% on its convenience packs, while lowering per unit prices on more cost-efficient jumbo and mega sizes. The K-C spokeswoman said it would neither raise nor lower prices on its diapers.

P&G abandoned a price increase on disposable diapers earlier this year when K-C failed to follow suit.

A P&G spokesman said the company had no immediate plans to change its pricing in response to K-C, although the company will "continue to evaluate the situation in the interest of remaining price competitive."

ANALYST REACTION

Analysts viewed these moves as tactics designed not only to create a competitive edge but to defend against rivals' innovations.

Salomon Bros. analyst Carol Warner said K-C appears to be "hedging its bets" by releasing a unisex version in response to P&G's unisex Pampers Baby-Dry Stretch, while maintaining the gender-specific diapers it says consumers prefer in other Huggies SKUs.

P&G and Kimberly appear evenly matched in the category now, said William Steele, an analyst with Dean Witter.

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