Citing

Net Story

A lady in a faded gingham dress and her husband, dressed in a threadbare suit, stepped off the train in Boston and walked timidly into the outer office of the President of Harvard University.

The secretary knew immediately that such country hicks had no business at Harvard. She frowned. ‘We want to see the president,” the man said softly. “He’ll be busy all day,” the secretary replied. But the couple decided to wait.

For hours, the secretary ignored them, hoping they would finally get discouraged and go away. They didn’t. And the secretary finally decided to disturb the president. “Maybe if they see you for a few minutes, they’ll leave,” she told him. He signed in exasperation and nodded. He detested the thought of gingham dresses and homespun suits cluttering his outer office.

So the president, stern and dignified, waved the couple in. The lady told him, ”Our son attended Harvard for one year. He really loved it and was happy here . But about a year ago, he was accidentally killed. My husband and I would like to erect a memorial to him on campus”.

The president wasn’t touched, he was shocked. “Madam,” he said gruffly. “We can’t put up a statue for every person who attended Harvard and died. If we did, this place would look like a cemetery”.

“Oh, no,” the lady explained quickly, “We don’t want to erect a statue. We thought we would like to give a building to Harvard. The president rolled his eyes. He glanced at the gingham dress and homespun suit, then exclaimed. “A building! Do you have any earthly idea how much a building costs? We have over $7.5 million in the physical plant at Harvard”.

For a moment the lady was silent. The president was pleased. He could got rid of them now. But then the lady turned to her husband and said, “Is that all it costs to start a university? Why don’t we just start our own?”

Her husband nodded. The president gaped in confusion. And Mr and Mrs Leland Standford walked away, travelling to Palo Alto, California, where they established the university that bears their name, a memorial to a son that Harvard no longer cared about.

Of Databases and Diapers

Is the Indian baby market ready for diapers? Or, to put it in better perspective: is the Indian baby’s mother ready to invest in diapers -- the disposable variety?

The disposable diaper is a cunningly-designed consumer product of convenience which could have only become phenomenally successful in the greatest consumer market in the world, the United States. Anything that can be used once and discarded easily is manna for consumer marketing and its devotees.

Before looking at the possibility of transplanting this phenomenon into the Indian context, it would be insightful to study a case of diaper product, introduction and marketing in the US. In this aggressive, competitive battlefield, the pursuit of a consumer (and his wallet) is becoming a hi-tech exercise, involving the building of sophisticated databases to be accessed by computers. The widely-acknowledged bestseller Maxi Marketing ( with focus on “the new direction in advertising, promotion, and marketing strategy”) described how the concept of a “selective database” was used be Kimberly-Clark’s consumer products group to enable the Huggies brand of disposable diapers to capture whopping 33% of the $2.7 billion disposable diapers market. It gained 10 share points in a single year from Proctor & Gamble’s Luvs and Pampers diapers (names which are as closely associated with diapers as Lux is with soaps ) which dominated the market till then.

Revolutionary Departure
Reflecting the new thrust in marketing. Kimberly-Clark is reported to have achieved this phenomenal rise in market share by a revolutionary departure from traditional marketing strategy: on a total advertising budget of $ 35 million, the company spent $ 10 million on database direct-mail marketing to new mothers and the rest on awareness advertising in broadcast and publication media.

The company fashioned a database program that can identify by name 75% of the 3.5 million mothers in the US each year. The process starts by getting the name of the expectant mother from a hospital or doctor. The mother receives very personal letters (made possible by computerized word processing and mail merge programs)—a communication which sets up a relationship with the mother. When the mother returns home with the newborn and needs diapers, huggies discount coupons arrive to take advantage of the goodwill created earlier by the mailings.

A spin-off for Kimberly-Clark is the valuable database of information about parents and children by name and address: this can now be used as base for many other products.

The important thing is that Kimberly-Clark based its strategy on the fact that a typical family that uses premiums quality disposable diapers spends $ 1,300 (Rs 19, 00) on them in the first two years of the child’s life. By focusing on the lifetime value of a customer (total sales) rather than the value of a unit sale, the company discovered that if the whole loyalty-seeding exercise increased the number of regular Huggies diaper users by just 1%, it would pay for itself. The strategy is presently reported to be doing much better than this projection.

What is the relevance of this case history in the Indian context? Looking at the two new entrants in the field – Diapers India and Regency Diaper Industries – there seems to be a sufficient case to assume that the disposable diaper has at last been given the status of a viable business by serious entrepreneurs. An earlier brand of diapers called Wraps has been in the market for about a year, but has not made much headway.

Diapers India is already in the market with the brand Snuggy (advertised with the slogan, “Baby’s Snuggy. Mummy’s Happy.” Presumably, it is positioned against the many foreign Huggies, Luvs and Pampers that find their way in on every other flight that comes in from the US.

These “imported cartons of Pampers or Luvs or Huggies are often used Sparingly – particularly since the traditional streak in the Indian housewife puts a greater value on economy and the art of recycling than the comfort and convenience of disposable goods. With Snuggy locally available, however, and at Rs.6 per diaper, the resistance of decades may give way: the crucial element, as seen in the Kimberly-Clark case, is that of appropriate marketing.

What is the size of the market? The public issue advertisement of Regency Diaper Industries estimated that, “Twenty five million babies born every year is good news for our bottom-line.” Very optimistic, but what is needed is the well-researched database marketing strategy spelled out in the Kimberly-Clark example.

Whether disposable diapers succeed or not in the burgeoning Indian consumer market, it is apparent that there is now a vast new opportunity for computer-based, highly personalized, response-oriented marketing. Whether the target is expectant mothers or some other clearly defined group, the means are now at hand for a revolutionary new approach to open up the potential of marketing.