P&G claims share lead over rival Colgate

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Procter & Gamble Co. claims it has regained market-share leadership in one fiercely competitive category, oral care, and is close to re-taking the lead in another, diapers. But its rivals in those crucial categories aren't likely to back down.

Colgate-Palmolive Co. disputes P&G's oral-care claim. And with that company and diaper-rival Kimberly-Clark rolling out new or improved products in 2003, maintaining momentum will be difficult for P&G. But recent share progress indicates that its strategies in both categories are working better than anything else P&G has tried in the past decade.

P&G claims Crest has attained share leadership over the Colgate brand in oral care and regained leadership in toothpaste as measured in all channels in the U.S. in calendar 2002. Information Resources Inc. data still show a 2% to 3% gap in Colgate's favor in recent months, but P&G claims to make that up in unmeasured channels.

P&G's leadership claims are plausible, given that Wal-Mart Stores, whose sales aren't included in IRI data, are weakest in Northeast and West Coast markets where Colgate is strongest. IRI also doesn't cover club stores, where Colgate has battled with major-player Costco over its refusal to sell its Hill's Science Diet pet food. The feud resulted at one point in the mid-1990s in all its products being de-listed for less than a year. Jim Gingrich, analyst with Alliance Capital Management's Sanford C. Bernstein, believes Crest has achieved leadership in both oral care and toothpaste.

But Colgate disputes the claim. "By all the independent data available through ACNielsen, Colgate is the clear toothpaste market leader," a Colgate spokeswoman said. "For the month of October, ACNielsen data shows that Colgate also took overall oral-care category brand leadership." ACNielsen includes Wal-Mart data compiled from a consumer panel.


In diapers and training pants, P&G's Pampers trails K-C's Huggies and Pull-Ups brands by substantial margins. But, primarily on the strength of the February launch of Pampers Baby Stages of Development, P&G's total diaper and training-pants business, including value-priced Luvs, has climbed in recent months. In the four weeks ended Nov. 3, P&G's dollar share of the $2.8 billion category reached 39% to K-C's 41%, the closest P&G has been since early 1998, according to IRI. K-C's lead was as high as nine points in early 2001.

In a recent conference call with analysts, P&G Chairman-CEO A.G. Lafley said P&G's third-quarter U.S. market share in diapers and training pants was up 4.5 points from last year. "For the first time in three years, P&G is contending for market volume share leadership in our home market," he said.

Kimberly-Clark said P&G relied heavily on promotion spending for its surge. President-CEO Thomas Falk noted on a recent conference call that P&G has offered $5 coupons to buyers of Pull-Ups. Rich Palesh, president of trade deal-tracking firm Promodata, has seen some particularly steep deals from P&G in the third and fourth quarters, including ones for 32% to 41% off the case cost of Pampers Easy Ups training pants and 20% off diapers.

A P&G baby-care spokeswoman said promotional support is in line with a launch of the magnitude of Baby Stages of Development. K-C is "outcouponing and outpromoting" P&G, she said.

Category leadership can be fleeting when shares are as close and competition as fierce as in toothpaste and diapers. Spokespeople for both P&G businesses carefully avoided providing quotes that will furnish locker-room-style inspiration for opponents.

But Mr. Lafley couldn't resist a little verbal fist pumping during a P&G internal awards ceremony last month. "In North America, P&G currently holds [total oral care] share leadership for the first time in nearly a decade," he said, departing from the teleprompter script to add, "Reuben [Mark, Colgate Chairman-CEO] isn't very happy about that."

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