Paper’s new role
Paper products manufacturers are utilizing technological advances to produce new toilet papers. The rising cost of raw materials increases the pressure on manufacturers to justify price increases by offering something new. Among the innovative products are toilet papers that use baking soda to combat odor and moist wipes to provide better cleaning. Manufacturers are also focusing on convenience, offering larger rolls and bulk packs.
There are some focus groups you wouldn't mind conducting just before lunch. But the groups Scott Paper convened before extending the Cottonelle line of bathroom tissue are probably not among them.
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"When you ask consumers what they're doing in the bathroom behind closed doors, you discover they have all this makeshift behavior," said Maria Smith, senior brand manager for Cottonelle.
Unseemly though it might be, the information gleaned from these peeks behind the bathroom door led to the launch last month of three toilet paper products positioned around cleansing, rather than the more traditional emphasis on softness or price.
The new products, which Scott not-so-modestly claims will "change the way people think about personal hygiene in the bathroom," are but one example of the heightened level of new product and marketing activity in the mature personal-care paper products category, a $6 billion market, excluding diapers and feminine hygiene products.
"You're going to see new product activity, trying to bring technology to bear on the category," said Gabe Lowy, president of research and consulting firm The Lowy Group. "It toughens the competitive landscape."
After turnaround artist Albert Dunlap took over as Scott chief executive officer last year, the company redoubled its efforts on extending and marketing its consumer brands. Competitor James River announced a similar strategy last fall.
While all segments of the category are likely to see new products, bath tissue has been first to enter the spotlight. Both companies are now in the process of launching new, value-added products with multi-million dollar marketing campaigns. The hope is that features like added ingredients or extra softness will help justify rising prices due to increased costs for raw materials, and will spare their products as retailers look to prune the crowded paper aisle in search of maximum efficiency.
With a proposed merger between Scott and Kimberly-Clark, the category seems certain to keep on heating up. The merger will bring together such well-known brands as Kleenex, Scott and Brawny, the better to do battle with Procter & Gamble's Puffs, Charmin and Bounty. The deal will also provide Kimberly added clout in Europe, where Scott is strong. The result will be stepped-up activity in the facial tissue, paper towel and bathroom tissue categories, both here and abroad.
The result, Lowy said, will be "more spending, more new products."
That's already happening to some extent. The new Cottonelle products will get $13 million in support their first year, compared to $502,000 spent on the brand in 1994.
Kimberly does not have a strong presence in the $3 billion bathroom tissue market, which is dominated by P&G, James River and Scott. Kleenex bath tissue has a 5.8% share of the market, compared to 29.5% for Charmin, 14.6% for Quilted Northern and 13.8% for Scott's eponymous brand. Cottonelle, which is only now going into national distribution, has a 5.6% share. The Scott merger will allow Kimberly to dive into the category as it's swirling with increasing activity.
"As the marketplace continues to develop, we're all looking for more narrow opportunities to increase profitability and broaden the appeal to our consumer base," said Tony Morakis, marketing director for bathroom tissue at James River, maker of No. 2 brand Quilted Northern. "We've done that through line extensions, which everybody is pursuing.
"As retailers look to consolidate their merchandising lines, paper's one of the ones that comes fight to the front. You want to ensure that you're differentiating and having that broad appeal at the same time."
Pulp prices, which have risen as much as 50% in the last year, add to the need for differentiated products to justify higher prices. "Costs are pushing prices up across the spectrum," said Bruce Kirk, an analyst who follows paper companies for S.G. Warburg. "So to try and focus on pricing is to sort of be mispositioned."
James River created a unique point of difference last August with the launch of Quilted Northern Wet or Dry, the first toilet paper made to stay together when moistened. An ongoing $5.5 million national TV and print campaign sought to bring the product to the attention of the 40% of consumers who, James River says, regularly use a wetted supplement to dry bathroom tissue in order to achieve what the company calls "better cleansing." Sales of Quilted Northern were up 5% in the year ending April 2, 1995, according to Information Resources.
This summer, Scott is also going after a cleansing positioning. The company will spend $13 million on advertising and consumer promotion to herald the launch of its Advanced Personal Hygiene products, including hypo-allergenic Cottonelle, Cottonelle with baking soda, and Cottonelle moist personal wipes, which are baby wipes for grownups, meant to be used in conjunction with toiletpaper.
"The category's be-all and end-all has always been softness," said Rob Wallace of design firm Wallace Church, which created the packaging for the new Cottonelle products. "Nobody's really talked about cleaning and deodorizing."
In focus groups, consumers talked about supplementing their toilet paper usage with a damp washcloth or even showering to ensure cleanliness.
The moist wipes are meant to meet that need, while the baking soda toilet paper alleviates concerns over odor.
Consumers told the Scott team that they "would really like to have products that not only wiped away what needed to be wiped away but also left them feeling odor-free," said senior brand manager Maria Smith.
With the new products, Scott will take the Cottonelle brand national for the first time. Until now it's been sold only east of the Rockies. To help retailers make room for the new products, Scott streamlined the brand, removing some older colors and patterns, Smith said.
Other new products are in development for 1996, but launch plans have been temporarily suspended due to the pending merger. Though Smith would not describe the products in detail, she said they will meet needs such as "freedom from germs, further freedom from odor."
Quilted Northern's next big new product focuses on softness. The coming year will see the national launch of Quilted Northern Ultra, a competitor to P&G's two-year-old Charmin Ultra, already in distribution on the West Coast. A $24 million advertising and promotion plan heralds the launch. Ultra-soft products now account for about 8% of the category, Morakis said.
"It's a big subsegment where there's only one guy [Charmin]," he said.
Offering time-pressed consumers the opportunity to go longer between toilet paper purchases is another area where marketers are focusing their efforts.
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P&G in May went national with Charmin and Charmin Ultra double rolls, with twice the number of sheets. Last year, the company created a new brand, Summit 1100's, to compete with Scott's 1,000-sheet single roll under the Scottissue brand. The rise of club stores has also led marketers to package up to 36 rolls together.
That's the direction the category is likely to focus on most heavily in the future.
"Convenience continues to be the big driver in this category from a consumer and a retailer standpoint," Morakis said.
"Adding ingredients is an area I don't see the category moving towards," he added, noting that P&G's 4-year-old Charmin Plus, which is impregnated with lotion, has never achieved more than niche status.
"I don't see a proliferation of SKUs because the retailer is consolidating," Morakis said.
Smith agreed that the category is evolving towards larger rolls and packages. But Scott will continue to focus also on products like baking soda toilet paper. Scott and its competitors are hoping to enliven what Smith called a "boring and tired" category, one that's not meeting consumers' hygiene needs, as they are only too happy to explain.
"It's something people use every day," Morakis said. "At some point, people have thought about it and want to tell you about it."