P&G's New Year's resolution: Unleash new-product blitz

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Procter & Gamble Co. opens the millennium with a barrage of new brands, line extensions and expansions as the company's new-product program enters hyperdrive.

On P&G's drawing board for 2000 are U.S. test-market launches of Impress plastic wrap and Tempo paper handkerchiefs, along with national rollouts of Bounty Quilted napkins and ThermaCare heat wraps. All but Bounty are handled by D'Arcy Masius Benton & Bowles.

At the same time, the package-goods company will roll out the superpremium Physique haircare line backed by new ads; expand Iams specialty dog food into grocery and mass-merchandise channels; and introduce Vibrant laundry color protectant in the U.S. and Europe this fall.


"The evidence of accelerating sales growth is rising, and we think P&G's new-product flow is impressive," said Prudential Securities analyst Constance Maneaty, who raised her rating of the company last week.

She credited P&G's Organization 2005 reorganization for much of the new-product frenzy, and believes P&G could hit its ambitious target of 6% to 8% sales growth this year -- which would be more than double last year's growth rate and represent the company's best sales performance in a decade.

"I think P&G is going to improve its batting average," said Tom Vierhile, president of Marketing Intelligence Service. "They're doing a lot fewer me-too products."


Impress will roll into test market in Grand Junction, Colo., by the end of this month, P&G said. The sealable plastic wrap doesn't stick to itself when rolled out of the package, but can form a water-tight seal with itself or other materials when pressed.

After speaking with P&G executives last week and seeing a demonstration of the product, Ms. Maneaty feels Impress could make inroads in the $200 million plastic wrap category and even in the broader $1.6 billion food storage segment. It's so much of a competitive threat, she downgraded Clorox Co., marketer of the Glad brand.

Impress will be priced about 20% higher than other plastic wraps.

P&G also plans to bring its Tempo paper handkerchief brand, now sold in Europe and Asia, to the U.S. for a test, Ms. Maneaty said, though she did not have details on timing. P&G would not comment. P&G acquired Tempo in 1994 with its purchase of German tissue maker Schikedanz, and is expanding it to the U.K. this winter.

Paper handkerchiefs are almost non-existent in the U.S., where facial tissues are a $1.3 billion category. P&G's Puffs are a distant second to category leader Kimberly-Clark Corp.'s Kleenex in that segment. But in Germany, paper handkerchiefs are a $300 million category, and P&G has a 42% market share.


Because they're bigger and stronger than facial tissues, Tempo hankies are used for a variety of tasks, including cleaning shoes. European ads from D'Arcy, Frankfurt, play up its all-around usefulness.

After a test in Charleston, S.C., in 1998, P&G plans to roll its Bounty Quilted napkins nationally this summer. Fort James Corp. beat P&G to the punch, however, in rolling Quilted Northern napkins, a similarly styled premium-price napkin, nationally this month.

In test market, the product has been backed by TV, print and radio ads modeled on the Bounty paper towel brand's long running "Little Kids, Big Spills" campaign from Jordan McGrath Case & Partners/Euro RSCG, New York.

Already this year, P&G has rolled its ThermaCare disposable heat wraps into national consumer-direct channels, kicked off with a Jan. 4 segment on QVC. P&G will begin to sell the product to consumers and health professionals through its Web sites (pg.com and thermacare.com) and through toll-free phone ordering later this month. ThermaCare also hits German test markets Jan. 15.

P&G, meanwhile, breaks TV ads Jan. 24 and print in February magazines from Saatchi & Saatchi, New York, for Physique, which began shipping earlier this month. The ads feature the tagline: "Science gives you the style nature didn't."

Contributing: Mercedes M. Cardona

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