P&G Seeks to Expand Pampers’ Reach
Pampers is a power brand in the baby care category and now it is looking to take equity built up over 46 years of positive consumer experiences and project that into complementary segments through licensing deals.
Procter & Gamble (a RetailWire sponsor) has signed a deal with the Beanstalk Group to develop Pampers-branded products in baby care categories such as bottles, furniture and HBC, according to a Brandweek magazine report.
Gayle Jones, manager for trademark licensing at P&G, told the magazine that the company was just taking its first steps in determining “where we want to go with the brand.”
P&G is also looking to take other power brands within its portfolio and grow awareness and market presence through licensing deals.
“Mr. Clean was one of the first brands we expanded through trademark licensing [circa 2001],” said Ms. Jones. “It has been so successful that many of our brands have taken notice. Everything was always done internally. But as part of our ‘connect and develop’ strategy, we’re migrating to bringing new innovations into P&G.”
Eli Portnoy, chief brand strategist at The Portnoy Group, said, “There is a lot of upside with licensing, aside from the profit aspect. It puts the branded name out into new aisles and new distribution channels, giving the brand greater presence at retail, so it can become a reminder for consumers.”
The risk with such deals is that licensed products may not meet established standards and imperil brand equity.
P&G is very aware of the value of its brands, said Ms. Jones. “We take our time to find the right companies to partner with, to find the right categories and to develop the right strategies in order to protect the equities of all of our brands. What we do, we want to do well.”
Discussion Questions: What do you see as the opportunity for brands to grow through licensing deals? What are the pitfalls? Will we see companies such as P&G doing more of this in the future?
I want to pick up on David’s #4 – whether a strong brand in one category can take that brand into other categories. As someone who has just recently left the Pampers “family” as a consumer after 5 years of diapers and training pants (for those with no children, you have no idea how wonderful it is to have all your children potty trained), I have to say that I’m highly skeptical of a Pampers brand extension into furniture or HBC. I mean, while the brand is high quality and actually innovative when it comes to the diaper crowd, it’s also associated with one of the most odious tasks of parenthood. Unless we’re talking diaper creams, diaper storage, and diaper disposal, lending the Pampers brand to either of these categories doesn’t hold any appeal at all to me. But I’m just one consumer, so who knows.
What I do know about licensing is that brands that look to expand through licensing tend to underestimate the value of consumer intimacy. Licensing completely outsources the relationship between the brand and the consumer to a third party. As soon as you outsource that, you’ve given up a degree of control over the brand elements you convey to the market. You better have a compelling business case to justify that.
The Pampers license will be most valuable if P&G requires the products to be superior. If the designs are unprecedented, if the quality is unusual, the Pampers brand will be enhanced. Pampers became a major brand because of design excellence. Its licensed products should enhance that positioning. If they’re just me-too commodities, the license won’t be worth much and the Pampers brand value will be hurt.
As a veteran of the licensing branding business, I have several thoughts about the P&G Pampers licensing discussion. A few thoughts off the top:
1. There is always a tremendous amount of risk that licensees will not be careful or diligent enough to protect the standards, quality, and consistency of the brand’s eminence, appearance, and uniformity.
2. P&G will need to go through great pains to police the standards, much in the same way as professional licensors do, such as Warner Bros., Disney, and others.
3. I’m speculating that P&G will place such a high value on the brand that there might be a limited number of licensee candidates that can pay the fees and royalties yet still have a price point in the retail marketplace that will be amply competitive. This factor has stunted lots of similar licensing possibilities in the past with other licensors and other products with great names.
4. Oddly enough, sometimes a strong name in one product category does not always resonate over into other product categories. Pampers might or might not be one of these cases.
5. Sometimes, when a strong name is used for other products and categories it has an erroneous impact. In other words, the reputation gets diluted for the core product itself. I’m not suggesting this will, or will not be the case for Pampers, but it’s a possibility.
This will be an interesting model to watch. If P&G executes this right, and they certainly have the capabilities to do so, it could be a successful development. It all depends how much time, experience, and resources, that they decide to invest and allocate. Time will tell!
The opportunity is there for the taking if the brand truly represents something that is worthwhile and has that elusive emotional component often spoke of (but rarely accomplished). When it comes to marketing expertise in the CPG universe, many conversations start and end with a deferential nod to P&G, so more than likely they will evaluate the possibilities carefully and avoid the potential negatives.
The licensed products have to fit into the perceived “umbrella” of what the brand represents to the market. For Harley Davidson to come out with a body wash or perfume (which was tried) would be a mistake. What image is conjured up when one thinks of H-D? Is that the same one you want to promote as a grooming or hygiene product? On the other hand, for the brand “Dreft” (detergent commonly used for newborn or highly allergic people’s clothing) to come out with a “personal lubricant” product would be equally jarring for the shopper. If, however, Land O’Lakes were to introduce a cottage cheese product to their list of other dairy products, it would not be inconsistent with what the brand stands for and represents to the shopper.
Harley Davidson may have stumbled with scent-related products, but they have done very well with apparel. Given the “rebel image” associated with the brand, t-shirts, even toddler clothing, or key chains, etc. have added significant streams of revenue for them.
If I were to bet, I would guess that P&G will likely make a wise choice in terms of expanding the Pamper brand to other product lines–and will avoid making mistakes that diffuse the brand image or lessen the trust associated with it.
Licensing Pampers makes sense as long as the licensed products do not negatively affect the “clear, distinct and desirable” place in the mind of Pampers users. Brand equity is a valued asset and needs to be treated as such. There is a big difference between a marginal brand with a strong positioning like Mr. Clean, whose licensing has little downside risk, and Pampers which is clearly a flagship brand with a strong share and the accompanying potential for significant downside risks.