Huggies versus Pampers is a dilemma many mothers face standing in the aisles as they ponder what is most cost effective, the most leak protective or simply the better product. These are two of the most popular brands of disposable brands. They are comparable in concept, price and variety. Huggies is a brand of Kimberly-Clark, INC. Pampers is a brand of Proctor & Gamble, Company. They both share a significant percent of the global market. We must take a look at the companies themselves to understand the success if the products Huggies is the foundation of Kimberly-Clark 4. 7 billion diaper business. “Leading the world,” 2012).
The company launched the Huggies Brand in 1978. Since, the introduction of the brand it has made major improvements and changes to the product that continues to be the brand of choice for many parents. In 1978, they introduced Huggies. They continued to make improvements, until finally in 1985, they took the lead in competition and has remained in a leading position since 1995. Both Companies have access to a “growth market” with babies being born every day and people in constant need of household and hygiene products, the markets are ripe for the taking. 2003, America’s Greatest Brands) Kimberly-Clark’s company culture has a lot to do with the brands success. As highlighted in an article in NYSE magazine, President of Kimberly-Clark Joanne Bauer felt sustainability and growth could be improved by “by breaking barriers through open innovation. ” (McReynolds, 2012) This has proven to be true in many of the products that they have introduced. Huggies success can be also contributed to collaboration with a technology from Velcro USA, Inc which made it easier for parents to adjust and check diapers at will.
This was an improvement to existing tape technology that if reopen would tear and rip leaving the diaper no longer useful. (2003, America’s Greatest Brands) They have also made collaboration with CVS Caremark Corp and its ExtraCare Card. When a woman makes a purchase for neonatal vitamins or baby products they receive coupons for Huggies and other Kimberly-Clark products. (McReynolds, 2012) They also monitor and host many blogs taking in the concerns, complaints and needs of their consumers.
This is apparent by their new line Huggies Slip-Ons, similar to the Pull-up but due to the younger age of the intended market holds more. This came from parent concern that children as they grow older become less incline to lay down for a diaper change but yet are not old enough for potty training. Another philosophy conducive to Kimberly-Clark Company’s culture is “putting consumers and employees first. ” (McReynolds, 2012) This has been a constant philosophy over the past 130 plus years the company has been in business.
In 1875 when the four founders established the company they had four tenets: “to manufacture the best possible products; to serve customers well and deal fairly to gain their confidence and good will; to deal fairly with employees; and to expand capacity as demand for product justified, financing that expansion out of earnings. ” (McReynolds, 2012) This has lead to sustainability of the company by financing expansion out of revenue as oppose to debt, allowing the company to stay in business through many of the economic downturns throughout the years.
Marketing and innovation is another intricate part of the company’s culture. I do not mean your average commercial or billboard. CEO Thomas J. Falk felt part of continued success meant increasing marketing and innovation. He hired the Anthony J. Palmer to run the new department former managing director of Kellogg co (U. K. ) and made him senior vice president and chief marketing officer. That department is driven by this philosophy: “A brand is a promise, and a product is a delivery of that promise,” Palmer says. “Companies drive profitability when they deliver that promise better than their competition. With that as the underlying philosophy, Palmer divides the broader concept of innovation into three areas. “You can innovate the promise you are making, you can innovate the products you deliver, or you can innovate with different communication channels in how and where you have dialogue with your customers around that product,” (McReynolds, 2012) Procter & Gamble the makers of Pampers, introduced this product in 1961 and currently holds about 35% of the global market. They were the first to introduce the disposable diaper. Proctor and Gamble also have several other billion dollar brands such as Tide Laundry detergent and Crest toothpaste.
This variety of products that continue to meet consumer needs for over a hundred years stems from the pipeline of its organizational structure. A. G Lafley states in an article featured in Strategy +Business that they have “the ability to systematically convert ideas into new offerings that alter the very context of the business. (Lafley, 2008) Proctor &Gamble has a larger platform of brands to be innovated in than Kimberly-Clark. Kimberly- Clark focusing on meeting consumer needs thorough changes and ways of improving the product. Proctor & Gamble aims to continue to introduce new products to meet consumer needs.
I believe that this works well for both companies. Proctor and Gamble introduced Easy Ups shortly after Kimberly Clark introduced Pull Ups. Proctor and Gamble has more control of the global market than Kimberly Clark because of the introduction of other products. They have a highly capable and motivated workforce. They remain viable to offset global saturation by the introduction of new products, process and forms of community presence. (Lafley, 2008) I believe each company implements this same bottom line process but with different philosophies supporting them.
One major difference in company culture, became apparent in the 2000s, Lafley notes that people (consumers) were not oriented to any common strategic purpose. The employees worked on this notion of putting the consumer first but consumers around the world had not enrolled in the mission. (Lafley, 2008) So, recently they have incorporated “the consumer is boss” as a part of the corporate culture and have linked this directly with innovation. This is something that Kimberly-Clark had incorporated from the beginning, making consumers active in the introduction and improvements of their products.
Competition is what keeps these two companies innovative. Competition acts as a catalyst to help each company outperform the other. You can see how each company comes up with a new product to trump the product of the other. This has been continuing for years. You can readily see it by simply following the product line of thier disposable diapers and the introduction of each product, each company expounding on the ideas of others. Thinking of ways to improved and make or produce a better or new product and innovation has been the key. Proctor & Gamble has been under a lot of controversy recently.
This may pose a threat to the corporate culture. There has been pressure to terminate the CEO, concerns of underwhelming profit, decline in market share in many product categories and lack of innovative new products. (McGee, 2012) I speculate that they are going to have to go back to the basics, to the foundation that started the company investing in the consumers and employees in order to continue to thrive. Another, which I suggest for both companies, equally is determining new ways to make the same products using cost effective environmentally friendly products. These companies are generating profit almost equally well.
However, the revenue is not. (See Chart below, McGee, 2012) I suggest seeking ways to be innovative yet cost effect. Cost must be controlled in order to benefit from the profit that his being made. The market is ripe for both of these companies to thrive and they have solid foundations and proven longevity in the market. The competition among them acts as a catalyst to promote innovation and continually meeting consumer needs. A hindrance for companies is not being cost effective and socially responsible with the disposal and production so that they can enjoy their profits.