Drypers Corporation
Autor: ZhengHan Hsu • February 27, 2016 • Case Study • 1,012 Words (5 Pages) • 928 Views
Drypers Corporation
ChengHan, Hsu (Ken)
22/02/2016
- Introduction and problem
Dyrpers Corporation is a producer and market of disposable diapers and training pants. The product are sold under the Drypers and Comfees brand name in the United States and other brands names internationally. Dyrpers is the sixth largest producer of disposable producer in the world as well as the third largest marketer of brand-name disposable diapers in the America. In late 1997, Drypers Corporation discussed the advantages of spending upwards of $10 million on national television advertising in 1998 for its Drypers brand of disposable diapers. However, Drypers had not used television advertising in last 10 years ad spending $10 million expenditure represented a 33 present increase in company’s combined advertising and promotion budget. The advertising budget cost $30 million in 1997. In this case, the problem is Drypers want to send $10million for the national advertising campaign. More detail, the specific problem is how can the company promote brand recognition and increase short and long term sales with dramatic lower advertising and promotion expenditures. The issues discussed by the Drypers would like to expend their brand which is regarding with the communication strategy. Drypers also have to focus on sales and profits of short and long term, increase the sales. Moreover, Drypers have to use the lower budget for the advertising and promotion but it is a big challenge which has no any experience in launching the national advertising campaign before.
- Formulate and Alternative
- Launch national television campaign
- Advantages
- Improve brand awareness
- Be more competitive with Kimberly-Clark and Proctor & Gamble
- Increase demand
- Disadvantages
- Lack of experience and know-how on television advertising
- High cost, increase 33% cost of adverting and promotion
- Risky, Possibility of failure
- Do Nothing
- Advantages
- No additional cost for advertising and promotion
- Less risky
- Money would be spent on products innovation and research
- Disadvantages
- Missing out some potential consumers
- Decrease sales
- Remain or loss existing market share
- One alternative which is my choice
Decision Criteria | Launch national television campaign | Do Nothing |
1. Consistency with company goals | Yes, Drypers company has good sales in the U.S already. They can boost sales in international with national television campaign. | Yes, Drypers increased dramatically sales in international in 1997 so they can keep adopting the same strategy. |
| 10million on national television advertising Marketing research team to ensure that the television advertising campaign is smoothly run. Disposable diapers and training pants are distributed principally through grocery stores, drugstores and mass merchants. | |
3. Likelihood of competitor retaliation | Low to moderate. Drypers company try to create television advertising internationally, it will be effective for sales. | Moderate to high. Procter & Gamble and Kimberly Clark spent lots of money on the television advertising in 1997. If we do not invest on ads, it will decrease significantly sales. |
4. Compatibility with current products | Yes, Drypers Corporation provided premium-quality diapers and training pants for the babies and children and products will be innovation and differentiation. | Yes |
5. Effect on existing products | With the addition to doing innovative products, so that Drypers brand will always be differentiated from the rest in the market. | No |
6. New customer knowledge needed? | Yes, The customers look for disposable and training pants which are high in quality but good value for their money. Add up to the existing product lines that will include additional consumer products | No |
7. Company capabilities: competitive advantages & success requirements | Drypers is the third one company in diaper industry. They would like to make an international advertising to get more consumer awareness. Increase penetration of grocery retail stores | Still be #3 in disposable diaper market in the U.S No additional cost for advertising and promotion |
8. Size and growth potential of market | Huge internationally market in the world | Still at market of the USA |
9. Likelihood of rapid customer acceptance | Low, diaper has specific buyer Diapers is still high due to the product features that are handy have made mothers’ life easier as compared to the use of cloth diaper | Low to moderate, maybe consumers try to change others brand because the ads influence by them. |
10. Profitability | Continuing manufacturing and marketing brands of high quality Product innovation | Yes, they are profitable in their current operations. |
11. Overall risk | Moderate to high risk because the advertising cost is very high. | Low to none. Already #3 in the USA. |
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