Renova has established itself as a global organization in the disposable paper industry with about 600 workers and posting sales of 104 million euros in 2005 specially within Portuguese, Spanish, French and central European markets. As a global market, the tissue one is dominated by strong companies as Procter and Gamble and Kimberly-Clark, two giants big enough to destroy any intention to survive unless Renova is able to overcome with a differentiation strategy.
My analysis indicates that success lies in Renova’s ability to raise awareness and image of the Renova brand by successfully positioning its new black toilet paper as a unique personal care product for youth consumers from higher social classes. The major impediment to this goal is that toilet paper is a highly commoditized category where price is the most important attribute for the majority of the consumers (60% in the case of the Portuguese market). To overcome this impediment, Renova should leverage the launch of its new black toilet paper to strengthen its positioning as a product leader company selling unique products that go beyond the basic offering of toilet paper and communicate superior benefits in the minds of consumers of a specific targeted segment. This will allow Renova to create a distinctive brand positioning that will help them to attract new customers and not only retain its current customers but also getting them to increase the usage of its premium products.
As a firm which pursues a Product Leadership approach, the most important goal for Renova is to focus on affluent consumers who care less about price and more about brand and image and get these customers to purchase a premium toilet paper, Renova black. Concentrating on this segment ensures long-term growth and profitability, as this segment is less sensitive to price and to switch to private label toilet paper offered by retailers or to other brands offered by giant competitors...