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Price wars in the disposable diaper business have moved to a new front-training pants. And that's creating pressure to cut marketing costs.

Price drops by Procter & Gamble Co. and Kimberly-Clark Corp. already have reduced category prices an average of 20%.

The move is significant because although training pants make up only about 10% of the diaper category, they make up a much bigger proportion of marketing budgets.


According to figures from Competitive Media Reporting, ads for training pants accounted for 23% of P&G's $50.8 million diaper spending and 44% of K-C's $56.9 million in advertising in the first 11 months of 1995.

Overall category spending, however, appeared to be stable. Figures for the first 11 months of 1995 showed K-C's diaper spending up 16.9% and P&G down 17.4% from year-ago levels. A P&G spokesman said media spending on diapers will be up slightly in the fiscal year ended Sept. 30.

D'Arcy Masius Benton & Bowles, New York, handles Pampers; Leo Burnett USA, Chicago, has Luvs. Ogilvy & Mather, New York, handles Huggies.


Responding to P&G's price cuts for Pampers Trainers and Luvs Training Pants in February, K-C increased the number of diapers per package in Huggies Pull-Ups and Goodnites 15% rather than increase prices.

P&G's move follows a share nosedive for Pampers Trainers and Luvs training pants in late 1995. Market share for P&G's training pants fell from 1.5% of the $3.6 billion diaper category in the second quarter to 0.1% by the fourth quarter, according to Dean Witter Reynolds analyst William Steele. The decline offset gains for the Pampers and Luvs brands last year, resulting in P&G's overall share falling 0.1 point to 37.2%, compared with a 2.1-point rise to 39.4% for K-C's Huggies.


"Trainers still have not performed up to our expectations, and we're certainly hoping that the latest pricing move and the continued upgrades we have in the pipeline will move things in the right direction," said a P&G spokesman.

Already, price slashing has cut the 40% unit cost difference between diapers and training pants to 20%. That should help the whole category, said the spokesman.

PaineWebber analyst Andrew Shore said a price decrease probably won't be enough to turn around P&G's training-pants business, which has never recovered from K-C's four-year head start in 1990.


"P&G's training pants will never be a threat of being anything more than a nuisance in the market," he said. "It's too [little] too late. It's almost a threat of being delisted in some stores if it doesn't start picking up some share."

Given P&G's poor prospects in the segment, he said the price cut looks like a scorched-earth policy. K-C, because it has 72% of the training-pants segment, stands to take a worse hit from the price decrease than P&G.

If so, it could be payback time for K-C torpedoing P&G's price hike on diapers earlier this year.

P&G Chairman-CEO John Pepper told analysts in November that improving profitability in diapers was a high priority for the marketer.

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