Drypers Corporation Harvard Case Solution & Analysis

 Drypers Corporation Case Solution

The Central Strategic Issue

The central strategic issue in this case is the probability of shift in brand positioning byspending $10 million of additional amount of new sales budget on national television for creating awareness for customers of Drypers as a national product with differentiated attributes.The company has less knowledge of advertising on national television as it had never advertised its product on television.

The factors that led to the Central Strategic Issue

The competitors are increasing their market share by heavily spending on advertising. The decrease in number of infants under age of 30 months can be a big issue for Drypers Corporation in increasing their market share. Drypers Corporation has very little knowledge of television advertising that can lead it to a failure and can saturate its market share.
On the other hand, Drypers Corporation has a very little budget for television advertising as compared to its competitors. The increasing cost of raw materials can influence the price of diapers, and this can lead to a more expensive product. The expansion in market share of mass merchant distribution entails Drypers Corporation to enter into a new distribution channel.

A. Alternative 1: Accepting the $10 million budget for Television advertising.

1. Advantages/Benefits

The Television advertising will improve the brand awareness of Drypers as a quality value added product. The advertising will boost the demand for the product as well as it will influence grocery stores to must have the product which reduces the extra cost of coupling and other promotions.Penetration would help the company to enter into mass-merchandise distribution. Moreover, it would influence the marketing strategy and positioning of product as a premium brand.

2. Disadvantages/Costs

The threat of failure in meeting the expected sales growth is always there for Drypers Corporation even if they are spending huge cost on television advertising. The budget is very low as compared to other competitors. Moreover, competitors may spend a lot on their television advertisement in order to fail the Drypers corporation campaign. The effect of television advertising shows the consumer approach to an uncertain direction, which shows a decline in sales.

B. Alternative 2: Development of the Product

1. Advantages/Benefits

The amount of $10 million can be spent on development of the product by investing in research and development for the product to be differentiated. Product differentiation can help Drypers Corporation to compete with its competitors. This can also evolve Drypers Corporation as a complete new innovative product for the consumers.

2. Disadvantages/Costs

High cost for the research and development of the product can influence other opportunities which the company can avail with this budget. However, it faces an issue of consumer awareness, as the consumers are not really aware of this innovativeness of Drypers Corporation.

C. Alternative 3: Expand Product Line

1. Advantages/Benefits

Introducing new products can increasethe profit margin of the company. This would further help the Drypers Corporation to enter into new segment which help the company to explore other markets for more market share.

2. Disadvantages/Costs

Expanding the product line can divert the attention of gaining share of the market. It also shows the consumers’ perception of brand name as diaper is a complete new product.

D. Alternative 4: Enter in New Markets

1. Advantages/Benefits

There are huge markets that are yet to be explored in the United States and outside the United States as well. Exploring new markets can help Drypers Corporation to increase its market share for disposable diapers and training pants. New markets have high infant rate which would help the company in achieving its goal of achieving the desired sales.

Drypers can acquire different companies for disposable diapers and training pants, which can increase consumers’ awareness for the brand. The entrance in new market can lead the company to increase its profit margin on sales.....................

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