Jaclyn Feder, Christi Louis Jennifer Muckley, Seena Sherman, Jennifer Zupnick

1. Jaclyn Feder, Christi Louis Jennifer Muckley, Seena Sherman, Jennifer Zupnick

2. The Problem Should Drypers Corporation invest an additional $10 million in advertising in order to increase their brand awareness, create value, and increase market share?

3. Market Characteristics • $4.5 billion in 1997 • Market Segments • - value price - 5% • - premium price - 78.9% • - private labels -16%

4. Value Priced Products • Avoid high R & D costs • Avoid national advertising campaigns • Rely on in-store promotions, couponing, print advertising, and cooperative advertising. • Consumers look for the best price and quality

5. Private Labels • Stress price over quality and product features • Invest minimally in consumer advertising and marketing. • Rely on retailers to promote their individual brand.

6. Premium Priced Products • Heavily advertised • High brand recognition • Compete on a basis of product quality, features and benefits, and price. • They are more expensive than value priced diapers yet much more successful. • Spend a large portion of their budget on R&D and advertising.

7. Corporation Goals • Goal: Large scale brand recognition. • Build their product name into one that is sought out by the consumer. • Drypers seeks to increase market share and stock price in 1998

8. SWOT Analysis • Strengths • Product Innovation • Product diversity • 4th largest diaper producer • 2nd largest seller of training pants in grocery stores • Exclusive private label supplier for Wal-Mart in L.A. • Acquisitions and joint ventures in foreign countries • Strong cash flow and sales growth • Licensed to use Sesame Street characters

9. SWOT Analysis • Weaknesses • Lack of national brand name recognition • Less extensive national production distribution capabilities • Comparatively less advertising budget • No dedicated sales force in U.S. • Not present in mass-merchant distribution areas

10. SWOT Analysis • Opportunities • Increase brand awareness through TV advertising • Combine all labels to be under Drypers • Increase market share by gaining a presence in mass-merchandisers • Pursue international expansion opportunities • Expand product lines to include additional consumer products • Maximize license agreement with Sesame Street • First mover advantage of germ-protection.

11. SWOT Analysis • Threats • Continual growth of market share by P&G and Kimberly-Clarke • Minimal response to television advertising • Decline in grocery store sales on diapers and training pants

12. Alternative #1 No TV Advertising Advantages - Safe, no risk-taking Disadvantages - Solves nothing - Not pro-active

13. Alternative #2 Television Advertising Advantages - Potential to reach a much wider audience - Increase brand awareness of consumers and mass merchandisers. - Continuous opportunity to capture new consumers - Brand loyalty to Drypers - Stress their innovative product line - Stress their differentiated products

14. Alternative #2 Television Advertising Disadvantages - High cost - Failure can be detrimental - Brand loyalty of consumers to other products

15. Break-Even Market Share

16. Break-Even Sales ($)

17. Recommendation • $10 Million in Television Advertising Stressing: Differentiated Product • One National Brand Name • Sesame Street

18. Implementation • Careful attention to design • Research ad placement • Early morning cartoons, daytime TV • Leverage negotiations with mass merchandisers

19. Any questions?