In early 1994, Kimberly-Clark agreed to manufacture private-label training pants for Wal-Mart under the “Atta-Boy!” and “Atta-Girl!” labels. To place this decision in perspective, the case describes Procter & Gamble’s battle with Kimberly-Clark for market share in the disposable-diaper market. The case also describes Procter & Gamble’s adoption of value pricing, as well as Wal-Mart’s introduction of premium store brands. Students must use this information to answer three questions: (1) How should Procter & Gamble respond to the introduction of Huggies Supreme with Velcro fasteners? (2) What should Procter & Gamble do with Luvs disposable diapers, which had been repositioned against private labels with a 16% price cut in May 1993? (3) How should Procter & Gamble respond to Wal-Mart’s decision to sell private-label diapers manufactured by Kimberly-Clark?
Darden Business Publishing – University of Virginia