Objective

Project: Drive portfolio premiumization to improve P&L health and deliver on profitability targets

Role(Fulltime): This is one of the many projects I worked on as the brand manager for Pampers in India. Diapers are expensive to manufacture, especially in India because the raw materials are imported and taxes are high. Hence, the per unit gross margin is low. However the diaper category opportunity in India is huge. For perspective, the consumption of diapers was one diaper per day for every 2/10 babies, as compared to 4 diapers per day for 9/10 babies in the USA. The idea was to improve the profitability of the portfolio. 

Challenge

1. For families that consume diapers for their babies, the diaper spends were a huge contribution to the expenditure. Hence, the switching cost after a particular point(once the baby becomes slightly older and less sensitive) is low. Even a Re 1 increase in cost per diaper, could cause switching.

2. Our overall share within the diaper category was high and premium care was only 5% of our revenue. Driving premiumization was a long term project- that happened over 3 years and continues to date.

   
   

Strategy and Actions

1. Target point of market entry(POME)- which is at the newborn stage. Mums prefer to use brands suggested by doctors. 

   1. The babys skin is extremely sensitive at this stage. We partnered with premium hospitals and gave out Premium Care( our premium product proposition), thus winning a trial with the POME consumer. 

   b. We also amped up visibility and distribution at pharmacies near hospitals via our sales and distribution efforts. We developed special units for storage( trigger:diapers are bulky and revenue per unit is less for the store owner), and gave them for free.

   c. Incentives for the fleet on street(sales) were rejigged to target premium point of market entry SKUs( Newborn and small size)

2. Shift of sales channel- the move to Ecommerce

   1. It was the time when consumers were slowly shifting purchase to E-commerce sites like Amazon in India. Especially the premium consumer. We also learnt that, Diapers are a strategic category for Amazon, because once a consumer comes to buy diapers she also buys other things for the baby. 

   b. We negotiated for higher visibility and targeting, via marketing and pricing to enhance conversion on Premium care products

   
   

3. Counsellor Chassis- CRM in store

   1. We identified the top doors( top modern retail outlets in the country) and revamped effort to premiumize our instore sellers who are the direct touchpoint with the consumer

   2. We equipped her with 4Ts- training, tools(premium uniforms, demo kits, tablets), talent(hire well to reduce attrition and incentivize), tracking( to ensure she has full inventory and visibility)

4. Revamping communication:  Tier 1 consumers in India, are well educated and are a part of mom communities that actively discuss baby care issues. While she chooses a diaper, not only is it important that the diaper absorbs well , it is extremely important that it does not react to the skin. 

   a. We realized that our consumers were using Aloe Vera gel for their babies bottoms to keep it moisturized. Learning from this, we made changes to the product( added lotion to the diaper and enhance cues to the product)

   b. Launched a communication that focused on skin sensitivity, while calling out the benefits of Aloe Vera. This was later adapted globally. Watch

5. Premium Care It Takes Two: 

Engaging with premium consumers requires going beyond immediate sales to foster brand love and talkability, driving long-term brand building. This strategy, though not resulting in direct conversions, enhances brand loyalty and reputation. For more details, watch this activity and this one.

6. Launch of exit sizes: Indian babies are typically potty trained by 1.5 years, so we initially stocked inventory only up to Large size. However, with more women in the workforce and the influence of Westernization, demand for larger sizes increased. Competitor insights and market visits revealed this trend. In response, we launched two additional sizes, which have proven to be more profitable than the smaller sizes.

   
   

Outcome

1. Profitability in the two years improved by 4 points, and the share of premium care doubled.

2. Stores with counsellors, delivered 3X the revenue versus similar outlets without counsellors