Running head: P&G PAMPERS PRICING STRATEGIES AND PRICING PLAN 1 P&G Pampers Pricing Strategies & Pricing Plan Sara Moffitt Indiana Wesleyan University
P&G PAMPERS PRICING STRATEGIES AND PRICING PLAN 2 P&G Pampers Pricing Strategies and Pricing Plan Procter and Gamble are known for their many household products that range from personal care, laundry needs, and over-the-counter medications. However, one product that has been around for many years is their line of Pampers diapers. Pampers were invented by a P&G engineer named Vic Mills in the 1950s and have been used by many parents since then (Pampers, 2019). The diaper industry is one that is challenged into today's eco-friendly shirt. While P&G has a sizeable market share in the diaper market because they have Pampers and Luvs diapers. However, they have not been immune to the changing customer needs, which is why the pricing strategy and plans used are growing to be increasingly important. Perceived-Value Pricing Pampers have long prided themselves on providing superior diapers to their customers, and the diapers are advertised as the diapers used most by hospitals (Pampers, 2019). In 2018 they even received the Good Housekeeping seal of approval, which is regarded as high praise for a product. Pampers also offers rewards for its customers via a smartphone app to provide customers with enhanced interaction with the product (Pampers, 2019). This will inherently cause customers to view Pampers as a higher value product. All of these factors attribute to the perceived-value pricing strategy (Kolter & Keller, 2016). On top of that, Pampers offers specialty diapers for premature babies, nighttime diapers, and enhanced technology for more active babies. Pampers even released a new Pampers Pure line in 2018 that focuses on non-toxic ingredients that are more natural (McIntyre, 2019). The variety in diaper offerings can signal to current and potential customers that while the price point is
P&G PAMPERS PRICING STRATEGIES AND PRICING PLAN 3 slightly higher, they will have a diaper for every occasion with the proven performance to back it up. While this may seem risky for a company to do with a product that has so many competitors, P&G has a unique ability in this particular market. P&G also manufacturers and sells Luvs diapers. Luvs have been commonly known as the budget-friendly diaper that still has everything a parent would want in a diaper without all the frills. Luvs has even stated in a commercial that parents are more likely to choose Luvs with their second child because they are more of an expert parent after their first born (Luvs, 2019). While Luvs has its own strategies outside the scope of this analysis, it can be determined that Pampers is able to have a riskier pricing strategy because those customers that care only about price can be absorbed with their budget brand, Luvs.
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- Spring '16
- Pricing, Procter & Gamble, Huggies, Pampers, Diaper, Luvs