Friday, August 10, 2001
P&G to change Luvs diapers
Revisions include product, marketing
By Cliff Peale
The Cincinnati Enquirer
Seeking to bolster the lagging diaper category, Procter & Gamble Co. will add new features and launch a new marketing campaign for the Luvs brand starting Sept. 1.
The Cincinnati company said Thursday that the prices and value of Luvs were out of line and that it wanted to expand the entire brand.
The changes will include improved anti-leakage performance, a softer cloth cover, a new package, new print and television ads, direct mail and coupons.
The program is one of a half-dozen product innovations and marketing campaigns set to launch this fall as P&G seeks to spark better revenue growth and increase profit margins.
P&G officials have made no secret about their frustration with the diaper business. In a conference call with analysts Tuesday, chief executive A.G. Lafley said changes would come soon.
I can't stand losing market share, so we're going to decide quickly, he said.
Mr. Lafley has called product innovation the key to reviving the Luvs brand, which has been losing share to generic competitors.
Price points have definitely been an issue for them in that business, said Kelly Capaldi, an analyst studying P&G at H&R Block Financial Services.
P&G would not comment on whether it was changing prices for Luvs.
For the month ended July 15, the dollar share for P&G's overall diaper business fell 3.1 percent, compared to the same period in 2000. The volume share fell 3.4 percent.
In contrast, private-label diapers increased their dollar share 3.8 percent and their volume share 6.2 percent, according to research from Credit Suisse First Boston.
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