We used to think that you had to be a number one or two brand to prosper into today's competitive markets. Well, it seems that in diapers even being the challenger brand aint enough. Kimberly Clark are killing the Huggies diaper brand in Europe, throwing in the towel after many years of trying to compete with P&G's Pampers brand.
Here are a few take-outs from this story.
1. Leaders need to renovate to stay ahead
Back in 2002 Huggies had a UK share of 40%, only 5pts behind Pampers on 45%. However, Pampers stepped up their investment and innovation on the core, such as Active Fit nappies for babies on the move, and lower-cost Simply Dry nappies. Fast forward to 2012 and the chart below shows that Pampers now has a c. 60% share, with Huggies only on 20%, not much bigger than own label.
2. Beware of sub-brands
Kimberly Clark will retain its premium nappy sub-brands, Pull-Ups, DryNites and Huggies Little Swimmers. The company's UK MD, Tristram Wilkinson, said that research showed "consumers have a separate relationship with Pull-Ups, DryNites versus Huggies nappies, and ultimately see them as different brands." I wonder why?
Now, a quick look at the packs shows why this may be. Pull Ups, Dry Nites and Little Swimmers in fact look like stand-alone brands, not sub-brands. Its hard to even spot the Huggies brand. This means that the marketing and talent invested has been fragmented over four different brands. Who knows, if the focus had been on one strong Huggies brand, with descriptors being used for the products, perhaps the core diaper business would have survived.
3. Ruthless focus
Kimberly Clark has said it will be re-focusing its resources and investments in Europe on leadership brands such as Andrex. This goes to show how ruthless companies have to be today to drive profitable growth.
In conclusion, the demise of Huggies shows how important it is to gain and retain brand leadership. It might be fun to be a challenger brand, but its also a dangerous and even deadly position to be in.