Drypers Corporation Essay

1021 Words Oct 5th, 2008 5 Pages
Drypers Corporation
National Television Advertising Campaign

1. Problem definition
What are the questions to be decided?
Drypers Corporation’s senior executives were discussing about spending 10 million dollars which will increase 33% in the company’s combined advertising and promotion budget on national television advertising in 1998.

What are the objectives/goals?
1) Increase penetration of grocery outlets
2) Increase grocery penetration will help increase mass merchants see us in a new light and help us break into this all-important retail channel.
3) Move from promotion-driven sales to brand-driven sales.

Is there any secondary concerns?
10 million dollars is huge amount expenditure, so short- and long- term sales
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Demand analysis
From 1994 to 1997, the number of infants born in US is around 10 million (birth to 30months). A baby, on average, uses five diapers per day for 30 months, for a total of 4500 diapers. At an average retail price in the range of 18 to 27 cents per diapers, each baby represents about 1012.5 dollars in retail sales. The retail dollar value of the US disposable diapers market was estimated to be 3.39 billion dollars in 1997. The retail dollar value of the training pants and young pants market was estimated to be 595 million dollars in 1997.

Distribution channels
Disposable diapers and training pants are distributed principally through grocery stores, drugstores and mass merchants. Grocery stores accounted for approximately 2 billion dollars in diapers and training pants retail sale in 1997. Grocery store distribution of diapers and training pants has been decreasing as a percentage of total retail sales since 1994. Grocery Stores accounted for 51.2% of retail sales in 1997, compared with 60% in 1994.
Mass merchants and drugstores recorded diaper and training pants retail sales of about 1.9 billion dollars in 1997. Mass merchants have increased their share of total diaper and training pants retail sales from 30% in 1994 to 39.4% in 1997. The drugstore share of diaper and training pants retail sales has declined from 10% in 1994 to 9.2% in 1997.

Competitors
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