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When your competitors are Kimberly-Clark Corp. and Procter & Gamble Co., life sometimes treats you like babies treat Drypers' products.

Such was 1995 for Drypers Corp. P&G and K-C both cut prices, boosted promotion and rolled out new products even as material costs soared. Drypers, which was consolidating its four brands into one, saw its sales plummet 19% and raised the possibility of bankruptcy.

But by 1996, with new financing in hand, the company boosted marketing support and added baking soda to its diapers. As P&G consolidated its Pampers line mid-year, Drypers began filling the suddenly open space on some store shelves.

By early 1997, Drypers' market share rebounded from a 1995 low of 2.5% to 3.1% of the $3.6 billion category. Drypers sales were up 17.2% in the 52 weeks ending April 27, according to Information Resources Inc., more than any other brand.

In May, Drypers launched a revamped diaper and, to get consumers' attention, a category-exclusive deal with Children's Television Workshop to use "Sesame Street" characters on diapers and packages.

"We're now offering the the most differentiated benefits in the category," says Drypers VP-Marketing David Olsen.

"We've got all the absorbency and standard features that Pampers and Huggies have," he says, plus baking soda, aloe vera, Elmo and Big Bird.

Mr. Olsen, 39, credits Drypers' recent success in part to a consumer promotion program that includes newspaper inserts, direct mail and in-store couponing. Besides a current print campaign by Moffat Rosenthal, Portland, Ore., Drypers also has advertised on radio through Country Music Association tie-ins with retailers and on TV through retailer co-op programs. And the company is expanding event marketing through nationwide sponsorship of "Sesame Street Live" shows.

"I think there's a combination of fundamentals that we do pretty well," Mr. Olsen says.

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