Helped by both marketing missteps on the part of its rival and a new strategy to focus on claims beyond wetness protection, P&G now leads K-C in volume sales of diapers, according to Information Resources Inc. figures supplied by the company. But it still lags behind in dollar share.
The marketing giant aims to tip the balance with a faster-than-normal rollout of a revolutionary new product, Pampers Rash Guard, and the enlistment of some unusual marketing endorsements from doctors and pharmacists.
"Five years ago, Kimberly-Clark proved you could [overtake the category leader]," said Ken Harris, consultant with Cannondale Associates. "A relentless focus on product innovation can create significant increases in the diaper category. But the trick is to determine what meaningful innovation is."
Now being rolled out without the test marketing P&G normally gives major line extensions, Rash Guard is the first diaper allowed by the U.S. Food & Drug Administration to claim it can treat and prevent diaper rash.
"It was solving too big a need for us to put it in test market for a year," said Jeffrey Ansell, VP-baby care, North America, for P&G.
A RASH OF RASH
P&G research shows that two-thirds of infants get diaper rash some of the time and one-third regularly. Parents often don't bring the subject up with market researchers, Mr. Ansell said, because they feel they may be to blame.
But a P&G sales rep's experience last month in a pediatrician's office shows the depth of interest, he added.
The sales rep was there to drop off marketing kits with doctors, and heard a mother ask the receptionist about Pampers' rash-fighting diaper. A doctor passing by said he'd had two more inquiries. Soon, the rep was pitching Rash Guard to the whole office.
LOGICAL AVENUE OF PROMOTION
P&G may not get that lucky every time, but it's hyping Rash Guard to 23,000 of the country's 28,000 pediatricians, Mr. Ansell said.
Since infants taking antibiotics are frequent rash sufferers, pediatricians are logical conduits for Rash Guard marketing.
Moreover, an FDA-backed medical claim could give P&G ammunition in the diaper wars similar to the gingivitis-fighting claim that helped Colgate-Palmolive Co. overtake P&G's Crest in toothpastes last year. Colgate executives cite support from dentists among factors in the success of its Colgate Total brand.
Thanks to groundwork with its top 20 retail accounts months before the launch, P&G also has won over pharmacists.
"There are a number of [retailers] for the first time linking a product like this to their pharmacists," Mr. Ansell said, "so you'll see literature [from Pampers] on treating and preventing diaper rash at the pharmacy."
One chain, which Mr. Ansell wouldn't name, is running a 2-minute P&G-produced diaper-rash video loop in all of its pharmacies.
MARKETING BUDGET OF $50 MIL
The big question remains whether P&G can win category leadership with such tactics, combined with an estimated $50 million in conventional marketing support. That campaign includes TV and print advertising from D'Arcy Masius Benton & Bowles, New York, and a 6.5 million-piece sample and coupon direct-mail package in April.
Publicly and privately, rival K-C executives have downplayed Rash Guard as a narrow niche product that could be duplicated readily.
"We are always pleased to see competition based on product innovations, because we do very well in that area," said a K-C spokeswoman.
But Bill Steele, an independent consumer goods analyst, said Rash Guard "does address a real concern with parents."
P&G claims volume leadership in diapers, with a 40.1% share in 1998, compared to 34.8% for K-C, according to IRI figures supplied by P&G. But it's a different story in dollar share, where K-C has led since launching its Huggies Supreme in 1994.
P&G last year narrowed the dollar-share gap from 3.5 to 2.8 points, with the gap falling to 2.1 points in the fourth quarter, according to Salomon Smith Barney analyst Wendy Nicholson.
In a recent report, she blames lack of new products for K-C's decline.
The No. 3 marketer, Drypers Corp., and P&G both introduced diapers with aloe in 1997, ahead of K-C which, after initially dismissing aloe and P&G's move to unisex diapers, adopted both changes last year.
"Frankly, it's hard to understand what [Kimberly-Clark's] strategy is at this point," said a diaper buyer for one large retail chain.
K-C maintains it is gaining ground over P&G for the four weeks ended March 13, vs. the same period the prior year, citing ACNielsen Corp. measurements. The company didn't offer specific figures.
STRATEGY: CHANGE RULES
P&G's strategy, Mr. Ansell said, revolves around "the very important strategic choice made several years ago to change the rules of the game in the diaper category from leakage protection to genuinely making a difference to baby's skin inside the diaper."
P&G also has tried to derail K-C's thriving Pull-Ups training pants business by pushing larger size 6 Pampers.
Many kids are in training pants simply because they outgrow diapers before they're ready to toilet train, Mr. Ansell said.
Both strategies are working so far, he said, claiming size 6 Pampers have flattened growth of Pull-Ups-which went from an 8.2% dollar market share in 1995 to 10.7% last year.
Since P&G adopted its skincare positioning with a breatheable outer cover in 1996 and the Gentle Touch aloe liner in 1997, Pampers Premium has overtaken Huggies Supreme, with a 2 point dollar share edge to 58%, in the $475 million