Huggies - the Threat of Private Label

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  • Topic: Private label, Marketing, Diaper
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  • Published : April 5, 2013
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HUGGIES: COMPETITIVE ANALYSIS

Overview: Private Label
Due to the somewhat ogolipolistic nature of the Canadian diaper market, 74% of which is dominated by two key brands, the market share of the remaining competitors is highly diluted with most brands capturing merely 1-4%. Grouping many of these competitors together, it is clear that private-label brands hold the third position in the nappies/diapers/pants market in Canada, with a value share of 22% - 8 share points behind Huggies (see Appendix 1.0). This reflects a small growth from previous years, which can be attributed to competitive pricing, as well as continuing trends in product innovation (i.e diapers for specialized needs, eco-friendly products etc.) Despite this recent growth however, private label brands still face heavy competition from Huggies and Pampers’ premium branded products, as mothers continue to remain brand loyal to big names. 1 Of the leading private label brands, Kirkland, marketed and sold exclusively by Costco, offers simplistic product designs and packaging. With minimal marketing initiatives towards the brand, Kirkland Diapers captured the majority of its 3.7% market share by relying on its competitive pricing in bulk sizes. Wal-Mart’s Parent’s Choice, and Loblaws Company’s President Choice brands (PC) are also both large players in the private label diaper market, with product distribution spanning across the largest grocery banners/mass merchandisers in Canada. Product innovation in the form of hypoallergenic 1

Diapers, Nappies, Canada." Global Market Research and Analysis for Industries, Countries, and Consumers. N.p., n.d. Web. 11 Feb. 2013. .

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and leak-proof technology, coupled with competitive pricing options has been the leading driver for sales in the past few years. Unlike Kirkland however, both Wal-Mart and Loblaws have actively marketed their brands similarly to their nationally branded competitors by: 1) targeting mothers and the experience of parenthood, and 2) active social media campaigning. These brands account for 3.7% and 4.5% of the market, respectively2.

Brand Positioning & Strategy
With Pampers and Huggies established as premium brands in the market, private label products such as PC and Parent’s Choice are positioned as cost-leaders, offering quality products and features at competitively low prices. Unlike other industries however, this cost-leadership positioning is much harder to maintain as the sensitive nature of baby care has raised industry expectations for all brands to deliver high quality products. As a result “in the baby diaper market, private labelers are continuing to produce ever more sophisticated products and are becoming more of a threat to the big brands like Pampers and Huggies.” This is reflected in private label product lines, such as PC’s newly designed Supreme© Stretchy Fit, which was developed to prevent leaks with overly active babies and rival Huggies’ Little Movers product line. Brands like PC and Parent’s choice are therefore positioned to target value-conscious mothers on a budget, offering consumers a better value, with great quality and significant savings over national brands. 3 In order to supplement its functional cost-leadership positioning, some private labels have also successfully established emotional connections with consumers by becoming a part of 2 3

Diapers, Nappies, Canada." Global Market Research and Analysis for Industries, Countries, and Consumers. N.p., n.d. Web. 11 Feb. 2013. .

http://www.nonwovens-industry.com/issues/2013-01/view_features/the-baby-diaper-market/

the parental experience. For example, PC diaper brands currently have multiple initiatives to build/share the parental experience, rather than educate parents like its nationally branded competitors. This involves creating various platforms, online and in person, that allow parents to share, gain knowledge, help each other in their path to...
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