There is a clear, present and dangerous gap between brand and product in the toilet paper sector. For Andrex, and its manufacturer Kimberly-Clark, it is a problem that applies constant pressure to its market-leading position. It is easy to see why, whether a voluntary or forced action, K-C stepped out on the price-cutting route.
Market dominance for Andrex looked unassailable when Procter & Gamble launched Charmin in 2000. There was the problem of lower pricing, of course, but it was one that K-C had been faced with by a host of own-label competitors. So in 2001 it took the battle to them all and cut prices to own-label levels - confident that it would be the last to blink.
K-C's success in winning share back for Andrex has been greatly diminished by the financial damage caused to the company by ongoing price competition.
The problem for K-C is that it is banging its head against an apparent market share ceiling of 30% - and its ability to break through is severely hampered by its implication in the '18 for the price of 12' message.
What are consumers to make of the contradictory message? At best they will assume they're getting a better product for the same price as 'cheap' alternatives; at worst they will believe there was never a real product difference and that the branded variety was being sold at rip-off prices.
Either way it's a tricky position for a brand to extricate itself from, as K-C is still realising to its increasing cost.
There are relatively few markets where these pressures exist to such an extent, and unfortunate for K-C that it operates exclusively in them.
Price competition is intense in facial tissue and nappies, where K-C owns Kleenex and Huggies respectively. These are strong brands, but loyalty can be weak. At a push - price being one - consumers will replace their usual brand with a competitor's without too much of an emotional wrench.
There is no lesson for K-C that it hasn't already learned. Competitors have more to gain, and much less to lose, from discounting new brands.
Any gains that are to be had in value, or even overall share, will come from stronger customer insight, relationships and brand innovation.
With a new marketing structure in place and recent signs that it is embracing added-value innovation, it may be that K-C has an exit strategy from price-cutting that rivals will be keen to follow.
- Kimberly-Clark's fight for share, page 22.
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