Disposable Diapers

5 Pages 1350 Words

Nature of Demand
The end users of TenderCare are those parenting a child. More specifically, women 18 – 49 with children below the age of three are the primary target market for TenderCare and their competitors.
Extent of Demand
It is estimated that there are 9 million households with 11 million children that consume diapers. The average use per household is estimated to be 5 per day. Foreign markets are creating more of a demand for disposable diapers. Canada for example is expected to have a 20 percent growth rate until the year 1990; the UK has doubled its market and is continuing to do so. Within the United States market, growth rates are slowing and this will mean stronger competition.
Nature of Competition
Competition is intense, “Procter and Gamble, and Kimberley Clark accounted for about 80 percent of the market from 1984 to 1985.” Procter and Gamble is the strongest competition for TenderCare with their two brands, Pampers and Loves. There are also followers in the market accounting for about 24 percent of market share.
Stage of Product Lifecycle
TenderCare diapers are in the growth to maturity stage, dollar sales in 1985 are expected to be about $3 billion and growth rates are expected to be about 14 percent. Although 14 percent is good, it is not great considering growth rates were higher in previous years.
Cost Structure of the Industry
Competition of TenderCare is not afraid to spend money. Pampers spent $500 million in 1982 to produce a new product. Procter and Gamble spent $40 million to advertise their two products in 1984, in the same year Kimberley Clark spent $19 million. Although these two companies have been spending money on production and marketing, TenderCare diapers are priced slightly higher than these three leading brands.
Skills of the Firm
TenderCare diapers keep moisture further away form the surface (baby’s skin) than other diapers. Also, TenderCare diapers are no...