Agency: Saatchi & Saatchi South Africa Authors: Sangeeta Karumanchi

Pampers

The Crusade Against Wet Bottoms

Introduction

The hero in this case is Pampers, a brand that has succeeded in achieving a second dramatic paradigm shift in the diapering habits of a nation. We will show:

  1. How innovative strategic thinking in Pampers advertising has influenced the steady shift away from cloth to disposable diapers, against a backdrop of a negative economic environment and a non-conducive social and cultural climate.
  2. How advertising has helped Pampers maintain a fair share of the growing disposable market in spite of a huge price disadvantage.

But before discussing the change in the Pampers advertising strategy and what it has achieved so far, it is important to understand the evolution of the disposable diaper market in South Africa.

The Diapering Market In South Africa A Brief History

Pre-Pampers (before 1995)

Cloth was seen as the gold standard and was firmly entrenched in South African households. The climate, tradition and high incidence of domestic help dictated that cloth was the diapering system of choice. Disposable diapers as a category was declining (13% p.a. Nielsen) prior to the launch of Pampers. Huggies dominated the premium sector and cheap house brands and second grade products undermined the market. Disposable usage was restricted to LSM 6, 7 and 8.1

Enter Pampers: the first paradigm shift (March 1995February 1996)

Within 12 months, Pampers had managed to turn the disposable diaper category around to the extent that, at the end of ten months, the category showed a growth of 19% and was quoted by Nielsen as the fastest growing category in the grocery sector. In the same time frame, Pampers had achieved market leadership with a Nielsen share of 38.5% (Figure 1). It was conclusively proved in a 1996 Apex award-winning case study that advertising was the main contributor to awareness, information and stimulation of trial.

The dark ages (May 1996May 1997)

The disposable market became quite active in this period. Pampers strong position was compromised by an extremely rare perceived product quality issue which was corrected very quickly, but the damage was done. Huggies regained market leadership at 39.9% and Pampers fell to 26.3% in March/April 1996. Both Pampers and Huggies launched new product features and upgrades in this period. The market continued growing and saw an influx of cheap foreign imports. The growth in existing brands shares was coming from increased usage by converted disposable users.

Cloth, however, was still well-entrenched and Pampers started thinking about converting cloth users in May 1996. The company weighed up the risks of doing a generic category job and not getting fair share of the market expansion and decided not to launch a full-scale offensive until its market position was stable again.

Facing the Rubicon: June 1997

Pampers regained a degree of strength by June 1997 with a 32.3% share against a Huggies share of 37.7%. The market had seen some ups and downs in the previous year (Figure 2) but was showing a growing trend again.

However, Procter & Gamble (P&G) believed that there was value in exploding the market into increased disposable usage; for profit as well as to benefit babies and mothers in South Africa. The time was ripe for cloth conversion. The rest of this case will deal with the marketing and advertising decisions that were taken at this point and the effect those decisions had on diapering habits in South Africa.

The Barriers To Cloth Conversion For Pampers In 1997

At the beginning of 1997, there were many good reasons why Pampers should not have crossed the Rubicon.

Cloth as Gold Standard

Conventional wisdom is based on cloth in South Africa. Generations of men and women had grown up with cloth diapers and they saw no reason to change. Even disposable diaper users were changing babies from feed to feed a habit rooted in cloth usage and not favourable to realising the value of disposable diapers. Mums in our target market (women with children 03 years in LSM 6, 7 and 8) believed that they could out-change wetness with cloth nappies and, therefore, saw no need to use disposables. A habits and practices (H&P) study conducted by P&G in March 1997 showed that the usage of cloth diapers in South Africas metropolitan areas was still very high, at 74% of all changes. Cloth consumption was broadly spread across all LSMs and even mothers in LSM 7/8 were making 42% of changes in cloth (Table 1).

Table 1: Penetration of disposables in South Africa

LSM 6 (%)

LSM 7 and 8 (%)

Cloth used in past 7 days

94

62

Disposables used in past 7 days

27

64

Penetration of disposables

14

42

Source: P&G, Habits and Practices, March 1997

  The risk of category conversion

It is a well-established fact that when a category job is done, all the key players in the market benefit. Pampers ran a very serious risk of doing a sterling job for the disposable diaper category and not managing to get fair share of the market growth because:

It was the most premium priced diaper in the market.

It did not have the range of distribution of Huggies, the next best competitor.

It did not have small pack counts or trial sizes like the competition.

The price factor

Cloth was perceived as a more cost-efficient diapering habit. This was a fair assumption on face value, but very few families had added up the cost of water, electricity, detergent and sterilising equipment, and arrived at the startling conclusion that cloth nappies were on a par with the disposables. Opinion was that disposables usage just meant that they were flushing money down the toilet (Insights research, Exploration Station, September 1996).

A second and more dangerous factor was that Pampers were perceived to be the most expensive diapers in the market. This would make it easy for cloth converts to see the benefits of changing their diapering system but it could also drive them to a cheaper alternative to Pampers.

Market still governed by mum factors

Unlike countries such as the UK and Germany, where good quality disposables have been around for 20 years or so, disposables were still very new to mums in the South African market. They therefore saw them very much from their point of view as good for preventing leaks I wont have a messy house and ease of changing I wont have to deal with messy pins and try and keep my wriggling baby under control (Insights research, Exploration Station, September 1996).

The baby benefits of disposable nappies were not a consideration at all hence disposables were branded as a convenient luxury for mum, and she felt guilty about buying them for reasons other than for travel, outings or bad weather.

Socio-economic influences

The South African economy was not at its most robust at this time, with real personal disposable income dropping by 1.3% and GDP per capita by 0.4% between 1996 and 1997 (Figure 3). In fact, personal disposable income in 1997 dropped for the first time since 1994. In 1997 it was slightly less than it had been in 1992 and luxuries such as disposables would be the first to go in straitened circumstances.

The incidence of domestic help is very high amongst the target market (approxi mately 650,000 domestic workers 1997 Race Relations Survey). That, combined with the excellent weather South Africa enjoys all year round, meant that mums in the upper LSMs could use cloth during the day (when it was the maids responsi bility) and only use disposables at night (when it was the mums responsibility). Convenience kicking in again! Most mums were very influenced by their mothers or mothers-in-law who preached the virtues of cloth it was cotton, natural and showed the world that mum was investing time and energy in looking after baby and not relying on convenient luxuries like disposables. A lot of mums also trusted the cloth nappy as a map an indicator of babys general health (e.g. deep yellow stains for dehydration) and were reluctant to give that up.

Crossing the Rubicon

In spite of these seemingly insurmountable challenges P&G decided that there was merit in tackling them. The benefits to the brand could be manifold:

  1. Demonstrate a leadership stance.
  2. Potential for Pampers to become the generic in disposables (à la Hoover).
  3. Opportunity to contribute significantly to the lives of mums and babies in South Africa, in line with the Pampers global vision.
  4. Increased profits from market growth.

Some significant decisions were taken at this point but the most important one was for the team (P&G and Saatchi & Saatchi) to accept the crusaders responsi bility and do everything in their power to convert cloth users to disposables, but more specifically to Pampers.

No brand can boost its sales, unless those people responsible for marketing it believe (or persuade themselves) that growth is possible, and then plan and invest accordingly. (John Phillip Jones)

We believed. And planned. And invested!

Preparing For The Crusade

Search and Re-apply

Since launch, Pampers had been using successful strategic and executional models from Europe as a tactic to save production costs which could then be reinvested in media. This had worked very successfully for us up to this point. However, an aggressive cloth conversion drive needed a different approach. To ensure that we were not trying to reinvent the wheel, the brand and agency team searched our respective international networks for similar situations in other countries (Search and Re-apply is a technique used by P&G and Saatchi & Saatchi to maximise learnings from their international networks). There are very few countries with the unique set of influences social, cultural and economic that South Africa faces. Most of the cloth countries in the world were third world countries, and South Africa did not share their consumer behaviour in the main. So we gathered a host of information that was very helpful but did not lend itself to direct application in South Africa.

Searching for the Holy Grail

Knowledge is power (Anon)

It was decided that we needed to get under the skin of the South African consumer to fully understand the barriers to cloth conversion and to find keys to unlock the main ones. The team concluded that pure quantitative data was certainly not enough and traditional research was not going to get us beyond scratching the surface.

The Search and Re-apply exercise had brought to light some innovative cloth conversion research that was being conducted at the time by P&G and the Research Practice (UK) in China and Turkey. We decided to adopt the methodology, which for reasons of confidentiality we cannot disclose. Suffice it to say that it was a guided qualitative technique based in clinical psychology. The Research Practice (UK) was commissioned in September 1997 to conduct an Insight Lab for us. After an intensive briefing session on South Africa and South African consumers, the agency and brand team spent a month with the research agency, adapting the methodology to our specific needs. The lab team (the researcher, the brand and agency team, the international Pampers product design team and some international brand and agency colleagues) cloistered themselves for ten days with various consumers. Unlike normal research, where the researchers involvement ends with the presentation of findings, this was an inclusive process with the full team being present throughout. The lab team (including the researcher) spent three days in strategy sessions after the completion of research, prioritising the findings and making strategic decisions.

The strategic research really helped us scratch under the surface to uncover the key barriers we faced. More importantly, it helped us identify the key insights to unlock these barriers. A solid foundation has been built! (Russell Mackie, Market Research Manager, P&G)

The Outcome

The Insight Lab proved to be valuable beyond measure as it really allowed us a privileged look into the hearts and minds of our consumers. It set the foundation for the brand and its findings are still being used today. We learnt that for economic reasons we were targeting the right segment LSM 68. It also proved that our approach of using real mothers and babies in our advertising, and focusing on the baby benefits, was touching a chord with consumers. It did point out, however, that our scientific approach thus far had done its job in establishing our credentials, but was getting tired. It gave us huge insight into how to talk to South African women, the importance of local nuance (all our advertising to date had featured European women in European settings) and emotional triggers that turned these mothers on.

Most importantly, it identified two massive, business-building, cloth conversion opportunities (Figure 4). We quantified the business opportunities (details confidential) in these two segments using LSM data and by factoring in lifestyles, income, and proportion of Pampers share. We decided to target the two segments with specific messages, detailed in the creative strategy.

The Marketing Objectives

1. Increase penetration of disposable diapers in LSM 6, 7 and 8 by at least 40% in the first year.

2. Ensure that Pampers gets more than fair share 2 of the increase in disposable penetration.

Executing The Crusade

The Product

Up to this point, Pampers could already claim superior dryness over any other nappy in the market. P&G, however, are constantly striving to improve the quality of their brands. At this point in time, we had the option of bringing in Pampers Baby Dry Extra an upgrade on Pampers Baby Dry Plus. Pampers Extra also had the advantage of being a unisex nappy and could replace the current boy/girl nappies. In line with the P&G philosophy of giving consumers the best available product, the team agreed that a superior product could help our crusade. It did, however, mean that we had to increase our price by approximately 8%. However, it was within a price limit that our target could afford and so we launched Pampers Baby Dry Extra at a higher price with a new pack.

The Importance of Advertising

We had a superior product, but we had to convince consumers (and lots of them!) of the value of the superior product. Having analysed the success of the Pampers launch in 1995 and the key role that advertising played (the subject of an award-winning Apex case study in 1996) the team decided that advertising held the key to delivering the marketing objectives.

The role for advertising was to:

Create a pattern of re-evaluation in the minds of our consumers and get them to see disposables in a new light.

Educate consumers on the baby benefits of disposables (Figure 5).

Make Pampers the brand of choice in disposables.

The advertising strategy

Make Pampers superior dryness valuable to both target markets by dimensionalising real tangible baby benefits.

Focus on the human truths that appeal to mothers.

Allow mums to justify the perceived price premium of disposables on the basis of doing the best for their baby.

Favour the kitchen logic approach over the scientific one.

Specifically, the two business-building strategies were:

Overnight:

You know that babies grow in their sleep and therefore uninterrupted sleep
is vital

Using cloth nappies, which need to be changed as often as 45 times a night could not possibly be good for your babys growth and development.

A good disposable like Pampers keeps your baby dry through the night and
gives him uninterrupted sleep. Are they really not worth it for your baby?

Pampers is the best choice you can make for your baby. Here is some proof
from a mother who has tried it and seen for herself.

Full-time:

You, more than anyone else, know that prevention is better than cure when it comes to your baby

Have you thought what is happening to your babys skin in the day when he is bouncing, shuffling and putting pressure on a wet cloth nappy?

A good disposable like Pampers keeps your baby dry throughout the day and can help prevent nappy rash. Are they really not worth it for your baby?

Pampers is the best choice you can make for your baby. Here is some proof from a mother who has tried it and seen for herself.

The creative solution

A teaser announcing the arrival of the new unisex pack in green led the launch in May for two reasons: one to make the announcement, and two to hold the fort until we had finished the main commercials.

Working to our strategy of showing real life mothers telling an honest story that other mums could identify with, two television commercials (Melanie & Elizabeth and Siza & Simpiwe) featured real mothers who had been given the product to try for a month. These real life stories were totally unscripted and edited from real statements made by mothers in the course of a real life shoot where we spent two days in each of their homes, sharing their lives and witnessing the special moments that happen between mum and baby.  

In keeping with the Pampers brand character, we went out of our way to make sure that we did not imply that women using cloth were bad mums. The baby was very much the hero of the communication with mums feeling that Pampers were merely helping them do the best for their babies.

In print, we focused on using thought-provoking headlines such as Shhh! Baby growing to grab the readers attention and then proceeded to educate mothers on the benefits of Pampers. Both TV and print ads carried the end line Pampers. For the driest, happiest babies.

Maximising Delivery of the Message

It was decided that the two target markets were reasonably distinct in terms of messages, but the media targeting had to consider that the overnight target market would graduate into the full time target market once we had accomplished our goal of making them use at least one nappy a night. (See Figures 6) Hence, the messages were to be aimed at both targets with a skew to LSM 6 in the overnight message and a skew to LSM 7 and 8 in the fulltime message. 

Past experience in the market, specifically at the time of launch when we achieved the first paradigm shift, dictated our choice of media. Television was the lead medium due to its ability to reach the largest proportion of the target market cost efficiently. It was also judged to be the most effective medium to inspire a mindset change and educate at the same time.

Print was focused on supporting the TV message as well as providing the product detail that this target market is hungry for. Specific niche baby publications were chosen to focus our message at the target market. We also inserted a sample into the key baby publications encouraging mums to test the new nappy for themselves.  (See Figure 7 for the advertising schedule.)

Continuity has always been the focus of the Pampers media strategy and we carried on using this successful principle (Figure 8). The decision to invest carried through into the media plan, and adspend was approximately doubled over the previous year.

Was The Crusade Successful?

Did it achieve the marketing objectives?

Increase penetration of disposable diapers in LSM 6, 7 and 8 by at least 40% in the first year

Another H&P study was conducted in April 1999 to verify whether our changed strategy was having any impact on the market. The results were remarkable as shown in Table 2 and Figure 9.

Table 2: Comparison of disposable penetration in South Africa (19971999)

LSM 6 (%)

 LSM 7&8 (%)

 

1997

1999

1997

1999

Cloth used in past 7 days

94

76 (20%)  

62

28 (55%)

Disposables used in past 7 days 

27

(+30%) 

64 

88 (+38%)

Penetration of disposables

14

21 (+50%)* 

42

42 73 (+74%)

*This result is significant only at a 90% level of confidence and thus we are not confident that the strategy was as successful in this segment. Further investigations are underway which will lead to refining the strategy in the year ahead.
Source: P&G, Habits and Practices, March 1999

We surpassed our first marketing objective in both segments. However, our strategy worked much better in LSM 7 and 8 than in LSM 6, as expected, given the economic constraints of LSM 6.

Ensure that Pampers gets more than fair share of the increase in disposable penetration

We wanted to ensure more than share maintenance in a growing market. The market share analysis shows that the market grew by 25% in volume and 35% in value over the period (March/April 1998 to March/April 1999). In March/April 1998 Pampers had a 31.4% volume share of the market and a 33.5% value share. If we had achieved fair share, we should have maintained the same shares in the new market. However, our objective was to gain more than fair share and we did. The Pampers volume share grew to 35.1% and our value share to 37.4% (Figures 10 and 11).

Did we achieve the advertising objectives?

The best way to illustrate the achievement of these objectives is to let consumers speak for themselves (all quotes from Project Damper, Research Surveys, May 1998).

Create a pattern of re-evaluation in the minds of our consumers and get them to see disposables in a new light

Before, we didnt have any knowledge of disposable nappies; we thought we were just wasting our money buying them.

Proves disposable nappies are better than cloth nappies.

I thought it was nothing but wasting money, but it is more than that, because it can save your baby from nappy rash, not like a cloth nappy.

It is so compelling that one immediately wants to try what is said and see if it really works.

Educate mothers on the baby benefits of disposables

It shows us that cloth nappies can cause rash.

Our whole family was getting so tired because we couldnt sleep at night. This makes me think my baby will sleep at night and grow well.

I feel like my nappy rash problem has been solved it is a big problem for my child. It will help him.

Make Pampers the brand of choice in disposables

It has helped me a lot by making my shopping a lot easier. Before I saw this advert, I used to spend a lot of time in supermarkets trying to figure out which disposable to buy. This one is even better than other disposables because your baby is always dry.

I like it because it shows us how to use Pampers as it is good for babies, because they protect us from nappy rash.

It shows us that Pamper(s) products are worried about our babies health. It also shows us how the nappy soaks up all the water to keep the baby dry.

But what of human truths and touching mums hearts?

I like it because it showed the real feelings of the mother and baby.

It feels like it is speaking directly to me.

We can believe it because it tells us about things we know and experience as mothers.

It really felt like the advert was made for me and I am sure other mothers feel the same.

It is clear that mums were connecting with the advertising and starting to see the baby benefits of using disposables.

Justifying premium pricing

Perhaps one of the most important contributions advertising investment can deliver is premium pricing reducing price elasticity.

Paul Freeman, Strategies 4 profits

It is too early to establish whether we have had any effect on reducing price elasticity yet. However, the fact that we managed to increase share in spite of the dampening effect of price is significant (see Econometric modelling). In effect, we have started making inroads into helping mothers see the real value of putting their babies in Pampers.

Bringing nappy rash out of the closet

In the past mums were reluctant to admit that nappy rash could have been due to a wet nappy it was attributed to teething, diarrhoea and a variety of other causes. Qualitative research conducted now shows mums quite readily talk about a wet nappy being the worst thing for nappy rash.

Nappy rash is really bad for my babys skin. It happens when the nappy cant hold the wetness and it touches his skin instead of staying in the nappy.

Project Comfort, The Solution Workshop, November 1998

Exporting The Learnings

From being a country that used to constantly Search and Re-apply, South Africa has become a cloth conversion success model. Our insights and advertisements have been used as a template in developing Pampers advertising in the Middle East, Africa region in countries such as Pakistan, Morocco, Kenya, Nigeria and Lebanon.

Siza and Simpiwe has a place on the Saatchi & Saatchi worldwide show reel and is one of the commercials that regularly features on P&G training show reels as breakthrough advertising.

The campaign is an internationally successful advertising template because it was skilfully nurtured from in-depth strategic research, through to casting and final production. The big idea can be reapplied across many countries with differing religions and cultures because it talks about an internationally, commonly shared dilemma for mums.

Joy Coulton, Saatchi & Saatchi. Regional Account Director

Recognition

The Network recognition for this campaign has been overwhelming. The campaign was a finalist on three counts at the P&G internal awards. The print campaign and the one that follows it have been recognised as the best Pampers print advertisements in the world for two years running. Saatchi & Saatchi in South Africa moved up four points in the Agency evaluation with P&G, with the work on Pampers being cited as the prime mover.

What Effect on the Crusaders?

The team morale is extremely high, with a sense of purpose and a can do attitude driving all the work that is being done today. The conviction that we have a strong foundation to work from has inspired a will to carry on the crusade until disposable penetration is 100%!

The process involved in making the new Pampers advertisements is now regarded as a benchmark for developing breakthrough business-building strategies in South Africa. More than anything it reminded the team that the best way to win is to understand the consumer. Our challenge now is to grow with our consumers to continually know their changing needs, and meet them first and best.

Martin Franklin, Brand Manager, Pampers

We understood that to communicate with mothers, we would need to speak their special language and to understand their very real concerns and challenges. Only genuine empathy could produce the big ideas that drove our efforts. To enter the exclusive club of motherhood is a major achievement.

Wyn Crane, Creative Director, Saatchi & Saatchi

Results like this make our job worthwhile. At Saatchi & Saatchi, we only succeed when our clients succeed, and success on such a magnitude has elevated the status of South Africa within two very successful global organisations.

William Leach, CEO, Saatchi & Saatchi Africa

Isolating the Effects of Advertising

So far, we have shown that the brand has met and surpassed its marketing and advertising objectives. We have provided evidence that strongly suggests that advertising was the prime mover in achieving these goals. Now we need to prove that advertising for Pampers caused the increased penetration of disposables in the South African market and led to the increased market share of Pampers.

We will do this:

  1. By eliminating the possible effects of other variables.
  2. By using econometric modelling to prove that the advertising expenditure on Pampers had a positive effect on Pampers market share and the total market size.

Eliminating Other Variables

Population Trends

Overall, population trends have not been a significant factor in Pampers success, as there has not been a dramatic increase in the number of babies in LSM 68 in 1998, nor has there been a sudden change in the number of women with babies in LSM 68 (Figures 12 and 13).

Economic Factors

It might seem plausible to suggest that the penetration of disposables has been influenced by economic growth in LSM 68. However, as the disposable income in this segment of the population was on a downward trend in 1998 (Figure 14), it makes the purchase of perceived luxury items like disposables more meaningful.

Lifestyle Characteristics

Three distinct lifestyle characteristics were considered as possible influences on a change in diapering system: a change in the number of households with income in excess of R4000; the proportion of working mothers, either part-time or full-time; and washing machine ownership. In all three cases, the prior assumption was that a strong change in any of these measures would go some way towards explaining changing demand patterns in disposable nappies. The evidence in all instances (Figure 15) shows that the lifestyle characteristics did not change significantly. The incidence of domestic help was not a factor either, as the number of domestic workers in South Africa actually rose to 700,000 in 1998 compared with 650,000 in 1997 (Race Relations Survey, 1998).

The El Niño Effect

The weather has a direct effect on the disposable diaper market. However, there was no significant change in South African weather last year, which would have led to wetter conditions and therefore an increase in demand for disposables.

Increase in Other Sources of Information

There have been other sources of information such as press articles in baby publications that could have influenced mums to use disposables instead of cloth. However, these have been limited to a steady four a year in all the publications (source: editors of Living and Loving, Your Baby and Your Pregnancy), and thus cannot explain the increase in disposable penetration.

In addition, Pampers have been involved with Bounty packs 3 since launch and have traditionally used them to educate mothers on the benefits of disposables. However, there was no change in this activity in the period under consideration and hence it cannot explain the increase in disposable penetration.

Improved Product

P&G, as stated earlier, constantly strive to provide better quality products to consumers and have launched four product upgrades and at least as many new product features in the last four years. It is also worth remembering that Pampers Baby Dry Plus could claim dryness superiority anyway. So whilst the improved dryness performance of New Pampers Extra is undoubtedly a factor in the success of Pampers, it cannot be a significant one.

New Packaging

If anything, the new unisex pack in green could have been a stumbling block. Many consumers really liked the fact that you could have boy and girl nappies in pink and blue packs. However, the advantages of pampers as a unisex nappy were clearly established in the announcement advertisement and it did not turn into a big issue. In addition, any effect of the new pack on sales is likely to have been fairly short term anyway and could not have driven the dramatic increase in penetration of all disposables.

Price

Pampers Price per SU4 rose by 13% in real terms between February 1998 and February 1999. It has been the most expensive brand since early 1998 in absolute terms, and in relative terms it has been consistently rising against the average price of the competitor brands. The relative price ratio 5 (Figure 16) has been above unity since October 1997.

Thus, in straight price competitiveness terms, Pampers have been steadily losing ground against their competitors. Given that we have had a market share increase in spite of the dampening effect of price, it is at least plausible to suggest that advertising has been effective in counteracting the negative demand impact that the rising relative price might be expected to have. We will return to this question in the econometric discussion which follows.

Promotional Activity

P&G regularly have trade promotions for their brands, in which extra in-store display and prominence is achieved. The customers also run in-house consumer promotions on selected brands at different points in the year. However, there was nothing out of the ordinary in 1998, which could explain the results.

Distribution

Pampers weighted distribution 6 did not increase over this period as shown in Figure 17. However, in preparation for a major launch, efforts were made to increase the depth and breadth of distribution. This could have had an impact on the penetration and we recognise the value of a sound marketing mix in the success of the launch. This will be dealt with in more detail in the section on econometric modelling.

Competitive Activity

There were no efforts by either of the key competitors Huggies and Cuddlers at any specific cloth conversion attempts. It is possible that their communication attempts could have influenced some cloth users to change to disposables. However, since the message of their communication has remained consistent over the last three years, the dramatic shift in disposable penetration cannot be explained by competitive communication.

Direct evidence that it was advertising

Descriptive Evidence

There are two good pieces of evidence. Firstly there is descriptive evidence (Figure 18) that there is a strong relationship between advertising activity and Pampers share gain. It appears that the new campaign ratcheted share up from 30.4% in January/February 1998 to 34.9% in May/June 1998 through to 36.1% in September/October 1998.

Econometric Modelling

Secondly, ERSA (Econometric Research Southern Africa) was commissioned to conduct an econometric investigation into the effectiveness of Pampers advertising campaigns from 19961999. The Johansen Vector Error Correction Model (VECM) cointegration analysis was used to determine the effectiveness of Pampers advertising. All the factors that could explain the growth in market and Pampers share were identified and either eliminated or carried forward into the model (see section Isolating the effects of advertising). The key drivers we were left with were quantified using econometrics. Separate co-efficients were provided for Pampers advertising, competitive advertising, relative price, media schedule characteristics (GRPs, Reach and Frequency) and distribution. The impact of these variables was considered on Pampers value share. (The results were not sensitive to the use of volume share in place of value share. Value share was considered more appropriate to profit objectives.) Modelling shows a very strong correlation between share and advertising (Figure 19).

The model has a fit of 99% and satisfies a battery of model validation diagnostics. The main findings of the report are set out below. (A detailed report is available, but is being held by the Agency for reasons of confidentiality.)

The main findings are:

  1. Pampers advertising was effective in increasing Pampers market share as well as increasing the total market size.
  2. The switch in advertising strategy in May 1998 was successful in improving advertising effectiveness.
  3. The magnitude of impact of the advertising expenditure suggested by the initial model estimated is that each increase of R100,000 in advertising expenditure increases market share by 2.1%, other factors remaining equal. However, once the quality of the distributional network for the Pampers brand is controlled for, it is likely that this impact will be reduced to a 0.41% increase in value market share for each additional R100,000 increase in advertising expenditure.
  4. The relative price of Pampers increased over the full sample period. This was found to have had a strong negative impact on the value market share of the brand: a 5.6% fall in market share for every 0.1% rise in relative price of the Pampers brand.
  5. The negative impact of the increasing relative price of Pampers was effectively counterbalanced by increased advertising expenditure. Indeed, the negative impact of the rising price was turned into a net positive gain in market share by the advertising intervention.
  6. The data suggests that the chief distinction between the advertising spend strategy pursued for Pampers and that pursued for Huggies and Cuddlers was its far stronger emphasis on television.
  7. These results were found to hold even after controlling for the impact of competitor advertising expenditure, and media schedule data.
  8. Results were found to be statistically sound within reasonable bounds given the small sample size on which this study was conducted.

Calculating Advertising Payback

Despite our earlier contention that the value of the advertising extended beyond sales, we will focus on sales alone in demonstrating that advertising proved to be a sound investment. The payback to advertising expenditure on the Pampers brand under the new advertising regime after May 1998 is illustrated in Figure 20. It is estimated that adspend alone has generated revenue worth at least three times the investment. The Marginal revenue and Marginal revenue less adspend line graphs are critical to the calculation of payback, where marginal revenue is defined as the increase in revenue attributable to the change in advertising. The marginal revenue less adspend graph is plotted to arrive at the net gain/loss. Both graphs indicate that there exists a positive net gain in revenue obtained from Pampers sales due to the impact of the changed advertising regime. (For reasons of client confidentiality, the real calculations cannot be made public.)

Finally, in terms of profit for the company, Pampers were able to contribute a greater percentage in 1999 than in 1998, confirming the value of the new campaign in supporting the brand.

Conclusion

We have clearly demonstrated how advertising helped Pampers increase the penetration of disposables into the South African market, and at the same time strengthened the brand for future development. We have also demonstrated a return on investment of over 300%.

This case study goes further and demonstrates the value of joined up thinking: the importance of an integrated marketing mix; the far-reaching effects of sound strategic thinking and innovative creative solutions; and most importantly that the real battles are won by inspired teams.

'Advertising is in an odd position. Its strongest protagonists think it has extraordinary powers and its severest critics believe them. But both are wrong.'

Anon Admap May 1997

This case will hopefully help, if even in a small way, to provide ammunition for another crusade the crusade to prove the value of advertising.

END NOTES

  1. LSM =Living Standard Measure, a South African research industry standard, calculated using community size, electricity and running water in the home, and ownership of durables. 
  2. Fair share is defined as share maintenance in a growing market. 
  3. Bounty packs are distributed nationally to mothers when they have children.  Bounty packs contain samples of various products relevant to new mothers, such as nappies and baby food.  The packs also contain accompanying literature, which gives guidance to new mothers. 
  4. Price per SU = price per Stat Unit, price per 180 diapers.  The measure of stat unit is applied so that real comparisons can be made with competition
  5. Relative price ratio = Papers' price per SU/average price of Huggies and Cuddlers.
  6. Weighted distribution:
    Numerical: No. of stores where the brand is available/total no. of stores in the universe.
    Weighted = (example) store A has 50% of the volume of the category moving through its doors, store B has 30% and store C has 20%.  Therefore, if our brand is available only in store A, we have a 50% weighted distribution. 
NOTES & EXHIBITS

FIGURE 1: TRENDS IN THE DISPOSABLE DIAPER MARKET (VOLUME IN MSU)