Feminine hygiene: P&G regains ground with Always, Tampax brands

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Feminine hygiene is a topic few people want to discuss, but Procter & Gamble Co. executives until recently had their own reasons to change the subject.

After a decade-long climb to leadership in U.S. sanitary pads for Always and the $1.85 billion acquisition of Tampax, P&G found itself losing share in both categories in the late `90s. The feminine protection business was shipped around the corporate suite like a foster child, with four different global bosses in as many years. It was among the last of P&G's major business units to improve under Chairman-CEO A.G. Lafley.

Now, following new product launches and advertising, the business is showing signs of turnaround, at least in the U.S. Always shares are on the rebound and Tampax is gaining ground for the first time since P&G acquired it in 1998. P&G's unit has a new home in the beauty-care sector and a new unified global agency in Publicis Groupe's Leo Burnett Co.

finding the way

"[P&G] certainly re-found their way in new [feminine] product launches," said Banc of America Securities analyst Bill Steele.

Monthly share data from Information Resources Inc. and Alliance Capital Management's Sanford C. Bernstein show Always' share has risen steadily since March. For the four weeks ended March 24, Always' share was 34.5%, rising to 36% in the four weeks ended Dec. 1, 2002. Tampax's share rose from 40.8% in September to 45% in the December period, its highest level in five years.

"The business is definitely back on track and everyone feels good about it," said Melanie Healey, VP-general manager of North American feminine care. P&G has indeed gone on the offense with Tampax Pearl, introduced in September.

Playtex CEO Michael Gallagher spent 45 minutes last week being grilled by analysts and investors regarding his assertion that a 10% decline in Playtex's fourth-quarter feminine product sales represented a successful defense against Tampax Pearl.

Ms. Healey attributes P&G's turnaround to focusing on fundamentals. "It's our job to understand [women's] needs ... and give them better products," she said.

new approach

Always Maximum Protection, launched last year, offers a 30% bigger pad for women who wear sizes 14 and up. Pads previously were designed for size 6 women, though 50% wear larger sizes. Ms. Healy says consumers compliment the non-condescending approach of the plus-size model in ads from Publicis' D'Arcy Masius Benton & Bowles, New York.

Always last year also improved absorbency, backed by D'Arcy ads touting them as "five times cleaner and drier" than the competition. The hard-benefit approach departs from prior ads featuring women trying to attract muscular bare-chested men.

Like Always, Tampax Pearl has looked to improve functionality, making the category's first new performance-related claims since allegations in the 1980s that super-absorbent tampons caused toxic shock syndrome.

But Tampax marketing isn't all back-to-basics. Burnett's "Pearl Girl" ads have a fashion look, and P&G has tried to apply eye-catching package design to a category where it never seemed relevant before, giving Pearl a box with windows showing off decorative plastic wrappers.

Playtex's Mr. Gallagher maintains P&G's comeback story is little more than packaging. He told analysts last week that P&G has spent $30 million on Pearl marketing to generate only $14.7 million in sales so far. Mr. Gallagher said Tampax's market share has flattened over the past eight weeks and failed to deliver on promises Pearl would boost category sales 8%, noting category sales fell 0.5% last quarter. (A P&G spokeswoman said sales numbers cited by Playtex don't include Wal-Mart or club stores, and added that retailers are pleased with Pearl's performance.)

playtex fights back

After defending its own tampons so far with price promotion, Playtex this spring introduces a new deodorant tampon and its own "pearlescent" plastic applicator, with increased ad support from Grey Global Group, New York, Mr. Gallagher said.

Playtex is suing P&G for patent infringement and false advertising, with a hearing in the ad case on Playtex's motion for preliminary injunction set for March 24 in U.S. District Court for the Southern District of New York.

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