Essay about P&G Case Study

916 WordsApr 10, 20124 Pages
In this case of Procter and Gamble (P&G) and Wal-Mart’s partnership, the main issue seemed to be caused by a third-part company’s collaboration with Wal-Mart which interfered the healthy partnership between P&G and Wal-Mart, also threatened P&G’s leading position in the diaper market. P&G’s diaper brand – Pampers has been the industrial leader in the relevant segment for years. P&G has been developing a long-established partnership with Wal-Mart based on a just-in-time ordering and delivery system for disposable diapers featured with the electronic-data-interchange system linking Wal-Mart vendors with P&G factories. The result of this collaboration created a win-win situation which let Wal-Mart reduced both…show more content…
It was clearly stated in the case that the products from those private-label brands can be 20 percent, or in some cases even 30 to 40 percent less than first-tier national brands. No matter what strategies P&G would use, it has to be related to a series of price adjustments to absorb the impact of the entering of low priced private-label product – in this case, Wal-Mart’s private-label diapers supplied by Kimberly Clark. Although the case didn’t provide any alternative solutions to the situation, in my opinion there were two main options to resolve the problem. The first option is to lower the price of P&G’s diaper product to better compete with Wal-Mart’s private-label. The second option is to mainly maintain or slightly raise the price to establish P&G’s diaper brand – Pampers as a premium brand in the segment. As I mentioned before, when the concern came down to the price, it seems that it’s inevitable for P&G to reduce the price of their diapers in order to stay in the leading position of the segment. Although P&G has all the rights and reasons to market Pampers as a premium brand with the high quality diapers and the intimate community service and relationships they’ve developed over years by marketing campaigns. However the research data from Huggies Every Little Bottom Study – Diaper need in U.S. and Canada* shows that one fifth of the North American mothers are struggling to provide diapers for their babies. It is obvious that affordability

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