Great Scott! K-C Value Brand Reaches $1 Billion in Sales

Lessons From the Latest and Least Likely Member to Join the Club

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CINCINNATI ( -- In the panoply of billion-dollar package-goods brands, the newest may well be the lowliest. Kimberly-Clark Corp.'s Scott brand reached $1 billion in U.S. net sales for the first time in 2006, after leading the category since 2002 with a 7% annual growth rate.
Scott has joined the billion-dollar club.
Scott has joined the billion-dollar club.

Globally, Scott is a $2 billion brand. And while it may not be P&G's Tide or even K-C's Huggies in terms of size or profitability, it does appear to be the first value brand outside the airline or retail industry to reach such lofty status.

Kimberly-Clark VP-Brand Development Alan Loux and Arbor Strategy Group consultant Ralph Blessing, a veteran of Unilever's Suave, offer some lessons marketers can learn from Scott.

1. Size Matters:
The U.S. toilet-paper category alone totals $6.5 billion. Add in the paper-towel category, and the total space in which Scott competes totals well over $10 billion in the U.S. At $1 billion, Scott can afford marketing support other value brands can't, Mr. Loux said.

2. Make it Count
It's not how big your budget is; it's how you use it. In the first 11 months of 2006, Scott spent $14.8 million on measured media, according to TNS Media Intelligence, less than a 10th of the $115.3 billion spent by the category leaders, P&G's Charmin and Bounty.

3. Spend wisely
Charmin once made a Super Bowl appearance, but Scott's 2006 PR campaign featuring former Chicago Bears Coach Mike Ditka, from Omnicom Group's Ketchum, generated 200 million impressions, double the reach of a Super Bowl ad, Mr. Loux said.

4. New products
Even for a value brand, innovation matters. Scott Extra Soft bath tissue, a premium version of the original, thin-sliced, 1,000-sheet product, has helped the brand gain share each of the past two years, Mr. Loux said.

5. Be Original
It helps to be first. Value brand or not, Scott was the first national toilet-paper and paper-towel brand, first launched in 1879 and expanded nationwide by the 1930s.

6. On the web
You can get at least some people to engage with toilet paper online. The Scott Common Sense Community boasts 400,000 members who trade tips about ways to save money, Mr. Loux said.

7. No difference
Value brands thrive in categories -- including the tissue-towel space and many personal-care categories -- where more than 30% of consumers see no difference between premium and value brands, Mr. Blessing said.

8. Be Yourself
Premium brands don't necessarily translate to value. P&G halted its effort to slow Unilever's Suave by converting premium brands, and its Basic line of Charmin and Bounty -- aimed squarely at value players -- hasn't seemed to affect Scott's growth.

9. Keep 'em Close
It helps to have friends in high places. Former Wal-Mart Chief Marketing Officer Bob Connolly adopted the Scott eight-roll value pack as his "volume-producing item," helping make it a Wal-Mart juggernaut.

10. Wide appeal
Value is a state of mind, not wallet. Value brands cut across demographics and appeal to people who like to save money -- and often head big families -- making them valuable to retailers who promote the brands as a result, Mr. Blessing said.
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