One analyst said P&G insiders have promised to boost Tampax ad spending as a percent of sales and give the brand consistent marketing support, which it hasn't always had in the past.
FCB WILL TRY TO KEEP ACCOUNT
Incumbent Foote, Cone & Belding, Chicago, taken by surprise with the announcement last week, "absolutely" will try to keep the Tampax business, an agency executive said, citing ties with Tambrands management and a strong reception for its recent $60 million global ad campaign.
But account conflicts with P&G competitors, including S.C. Johnson & Son's household cleaning products and Kimberly-Clark Corp.'s Kleenex facial tissues, could prove fatal to FCB's chances.
Kimberly-Clark in particular appears likely to run afoul of P&G's strict conflict policy. The marketer is among primary corporate rivals cited by name in the policy, and a conflict with a leading brand within the paper sector "would be a difficult one to swallow," said Jim VanCleave, retired VP-media and programming at P&G and now an independent media consultant.
But he said FCB might be able to keep the Tambrands business if it's willing to part with Kleenex.
"No decision has been made," a P&G spokeswoman said, either on an agency for Tambrands or whether FCB's account conflicts take it out of the running.
If FCB loses Tampax, New York-based D'Arcy Masius Benton & Bowles would appear to be the front-runner to get the business. An agency insider said DMB&B plans to make a pitch for the business during an annual meeting scheduled with P&G April 15.
DMB&B handles P&G's Always feminine protection brand, plus such other paper-sector brands as Pampers and Attends. When P&G purchased the Baby Fresh and Wash-A-Bye Baby wipes business from K-C last year, it made DMB&B agency for the brands the same day.
WORKING TO ALIGN AGENCIES
P&G has been working to align agencies more along product or sector lines, such as with the recent switch of Ivory soap to Grey Advertising, New York, from Saatchi & Saatchi Advertising after the brand was repositioned as a beauty care product.
DMB&B also has history in the tampon business on its side; it was the agency for P&G's Rely tampon brand, which was discontinued in 1980 amid controversy over links between the new superabsorbent tampons and toxic shock syndrome.
But insiders at P&G roster agencies said DMB&B may not automatically inherit Tampax. Some cited the relative strength of Leo Burnett Co.'s global business, particularly in Asia and Latin America, identified by P&G and analysts as key territories in the push to make Tampax more of a global brand.
BURNETT PLANS TO PITCH
Burnett, which also plans to make a pitch for the account, according to insiders, handles P&G's Luvs diapers and, outside the U.S., Bounty paper towels (see related story on Page 16).
The agency also has experience in feminine protection as former agency for K-C's New Freedom brand.
A Burnett executive said conventional wisdom hasn't always been followed lately at P&G, such as when the company named Burnett agency of record for print buying over Saatchi & Saatchi, widely favored to get the assignment.
Other agency sources said DMB&B has fallen somewhat out of favor because of problems with the lagging Crest toothpaste and Scope mouthwash brands it handles. DMB&B insiders, while acknowledging problems with Crest and Scope, said P&G is happy with the agency's work on Always and it could conceivably gain Tampax while losing Crest and Scope.
SOME CUTS EXPECTED
Badly burned by the Rely experience, P&G has been reluctant to re-enter the tampon category. Even recently, company insiders were telling analysts P&G had no interest in Tambrands, which has been considered "on the block" since as long ago as 1993. Among the cuts analysts expect P&G to make will be in top management, marketing and sales personnel, retaining Tambrands' manufacturing plants.
Feminine protection has become one of P&G's fastest-growing global categories even without a tampon brand. Sales of Always and Whisper sanitary pads were up 17% in the fiscal year ended June 30 and have continued rising at a double-digit pace this year, said Jay Freedman, portfolio manager for Lincoln Capital.
Tampax commands about half the $630 million U.S. category for tampons, and would provide P&G with a perfect launching pad for its brand globalization strategy.
Even in Europe, where Tambrands is relatively strong, the brand "is basically not represented at all in the German market, and Procter & Gamble is very strong there," said Michael Grant, analyst with J.P. Morgan Securities.
A wild card in the deal could be an aggressive antitrust stance by the Federal Trade Commission or U.S. Justice Department.
P&G argued last week that regulators should treat tampons as a separate category, though the company expects the deal to take three to six months to close.