Kimberly-Clark looses 'Bounty killer'

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Kimberly-Clark Corp. is launching an improved version of its value-priced Scott Towels dubbed internally "the Bounty killer" because it scores the same as Procter & Gamble Co.'s category-leading premium-price brand in consumer satisfaction tests.

The improved version of Scott Towels roll nationally in late May or early June, according to Sanford Bernstein analyst Jim Gingrich, arriving just as P&G makes its paper business a primary target of turnaround efforts. A Kimberly-Clark spokesman had no comment.

Scott Towel advertising plans weren't available, but TV and print from WPP Group's J. Walter Thompson USA is likely to break in late summer, said one retailer. Kimberly-Clark spent about $7 million on media behind a 1999 restage of the Scott Towels brand, primarily east of

the Mississippi, according to Taylor Nelson Sofres' CMR. It was Scott's first major media push in more than a decade.

The new Scott product poses a bigger threat than the last product improvement, Mr. Gingrich said. The last upgrade in 1999 was focused primarily on the eastern U.S., where the brand was already strongest. As a result, Scott's market share grew to 14.4% east of the Mississippi in the 12 weeks ended Feb. 1, according to Sanford Bernstein, up 3.6 share points since the restaged Scott product launched in June 1999. But the new Scott product, stronger and more absorbent than even the best version now available in the east, will roll nationwide this time, Mr. Gingrich said.

Moreover, it may have one competitive advantage: a value price vs. premium-price Bounty. That's significant considering Kimberly-Clark tests that show consumers "indifferent" between the new Scott and category-leader Bounty, according to Mr. Gingrich. Single rolls of Scott Towels retail for as much as 30% less than Bounty.

Bounty consumers have already proven sensitive to price. The brand's market share fell after its last price increase, forcing P&G to roll back half of the 9% price hike taken in mid-2000, although the market share has since rebounded. Bounty's market share was 40.2% for the 12 weeks ended Feb. 25, according to Prudential Securities, below the peak share of 41.7% Bounty had in the fall of 1999, but up from around 39% late last year.

P&G last week also began rolling Bounty in a box dispenser, aimed at moving the brand beyond the kitchen, to be backed by TV and print ads from Havas Advertising's Jordan McGrath Case & Partners/Euro RSCG, New York, to break this summer.

Reversing weakness in P&G's tissue and towel business is a top priority of P&G President-CEO A.G. Lafley, Mr. Gingrich said. But in a business where major product improvements take two to three years because of the high cost and complexity of equipment, P&G will be hard-

pressed to gain ground fast.

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