The U.S. Disposable Diapers Market: A Competitive Profile

Y. Datta


This is the sixteenth paper that follows the footsteps of fifteen studies that have tried to analyze the competitive profiles of U.S. consumer markets: Men’s Shaving Gel, Beer, Shampoo, Shredded/Grated Cheese, Refrigerated Orange Juice, Men’s Razor-Blades, Women’s Razor-Blades, Toothpaste, Canned Soup, Coffee, Potato Chips, Alkaline AA Battery, Facial Tissue, Toilet Paper, and Paper Towel.

Michael Porter associates high market share with cost leadership strategy, which is based on the idea of competing on a price that is lower than that of the competition.

However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.

In most consumer markets, a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run.

The middle class is the socio-economic segment that represents about 40% of households in America.

Quality, however, is a complex concept, consumers generally find difficult to understand. So, they often use relative price, and a brand’s reputation, as a symbol of quality.

For 2008 the U.S. Disposable Diapers market had sales of $2,411 million.

Using Hierarchical Cluster Analysis, we tested two hypotheses: (I) That the market leader is likely to compete in the mid-price segment, and that (II) Its unit price is likely to be higher than that of the nearest competition.

For both 2008 and 2007, the results did not support Hypothesis I, because both the market leader, Pampers, and the runner-up, Huggies, were member of the super-premium segment.

However, the results did support Hypothesis II for both 2008 and 2007, because Pampers’ unit price was higher than that of the runner-up, Huggies.

We found that relative price was a strategic variable, as hypothesized.

A pattern is emerging in price-quality segmentation analysis. In ten of the sixteen studies—that exclude Men’s and Women’s Razor-Blades, Ground Coffee, Toilet Paper, Paper Towels, and Disposable Diapers—the market leader was found to be a member of the mid-price segment, as we have hypothesized.

Moreover, results in seven markets supported Hypothesis II.

Finally, we also discovered three strategic groups in the industry.

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