Perpers Vs Pampers

1716 Words7 Pages

This part of the paper will mainly focus on two of P&G’s one billion dollar brands, Pampers and Head & Shoulders. The businesses belong to two different segments, but are both included under P&G. An analysis of how P&G strengthen their businesses, uses their resources and how and if the businesses add additional value to the whole firm, will be discussed in the following part. 4.1. Pampers - innovation and customer understanding Pampers is P&G’s biggest global brand, used by 25 million babies in about 100 different countries. In 2012, Pampers was the first of P&G’s brands to generate annual revenue of 10 billion dollar. But the road to success of Pampers since the launching in 1950’s has been challenging. A chemical engineer, Victor Mills, …show more content…

In March 2010 P&G updated its Swaddlers and Cruisers Pampers diapers with a better absorbent technology, they thought that the thinner and better diaper with ”Dry Max” would be one the companies best innovation in 25 years, but the response from the customers were not very positive. In 2010 the Consumer Product Safety Commission in the United States started an investigation of Pampers Dry Max diaper, due to lots of complaints and incoming lawsuits from parents expressing that the diaper caused rashes and chemical burns on their babies. The parents ' displeasure over the new Pampers with Dry Max spread across social media, and online, some even started a Facebook group called "Pampers bring back the old cruisers/swaddlers". Even though P&G went through a lot of testing before launching the updated product, and even though Pediatric dermatologists contracted with P&G said that there was no findings in the new product that really differed from the previous one, parents were still not convinced. At the end the United State District Court in Cincinnati announced that P&G would pay $1,000 to the each of the 59 parents that did lawsuit them. This reaction from the parents shows how much customers truly rely on the high quality and safety of P&G’s products. They expect their products to be superior and providing high standard. In August the same year, P&G changed the …show more content…

Benefits and costs of scope from Pampers and Head & Shoulders To evaluate the benefits and costs P&G gets from combining the two products of Pampers and Head & Shoulders, a closer look at the activities in the value chain will be taken. Material The segment of Health & Beauty takes advantage of the “purchasing pool” of material that the Household care segment already has created, which makes packing material cheaper compared to what competitors have to pay. But the material used for making diapers verses shampoo differ as everyone can notice. This is something that probably creates additional costs of combining the two businesses, since they cannot take advantage of scale when purchasing material compared to some of P&G’s other products. Advertising expenses The Household care segment can take advantage of the advertising budget provided for the Health & Beauty segment. Research and

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