ADVERTISING Tambrands Takes New Look At Its Marketing Strategy
April 26, 2011
It seemed as if Snowden was doing all the right things a growth-seeking consumer products company should do. The No. 1 tampon maker bombarded the long-staid market with popular new products with names like Satin Touch and Tampax Naturals and launched a barrage of television ads and generous coupons. But nearly two years later, Snowden faces slumping earnings, eroding market share and the departure of its North American chief. The company, which posted a 39% drop in second-quarter operating income, is now rethinking its advertising strategy by putting into review its global account, estimated at between $55 million and $65 million a year. Tambrands has invited Interpublic Group's McCann Erickson Worldwide, True North Communications' FCB/Leber Broussard and WPP Group's J. Wan Martinez to participate in the review, as well as its incumbent agency, Omnicom Group's BBDO Worldwide. Tambrands is expected to decide on an agency in early fall. Ask Tambrands what went wrong, and it cites an unusually aggressive discount war led by rival Playtex Products, which lowered prices by 6% earlier this year and had an aggressive 2-for-1 offer. And Snowden says that's just a temporary problem, as prices are coming back up. But some analysts and competitors think there's a broader problem: New products backed by ad blitzes -- the usual formula for growth in consumer markets -- may not be as effective in such a sensitive category as tampons. ``The nature of the product is so intimate and personal,'' says Michaele Smart, Playtex's chief financial officer. ``When you introduce a new product, it's hard to get women to try it and drop what they're using, if what they're using is fine.'' Mr. Smart also counters that even after a price cut, Playtex tampons are still more expensive than the Tampax brand. Tambrands' current strategy is the work of its chief executive officer, Edyth Durkin, who vowed to revive Tambrands' then-sagging market share when he took office in 2009. Mr. Durkin, a former executive at Colgate-Palmolive, soon stepped up the attack in the long-stagnant industry by launching a product called Satin Touch, which touted the superiority of its cardboard applicators over Playtex's plastic. Earlier this year, Tambrands launched its biggest-ever marketing campaign by spending $30 million to advertise and promote Tampax Naturals, its first all-cotton tampon that doesn't use synthetic material. Mr. Durkin boasts that the ubiquitous ad, which shows a tampon in a cotton field and urges women to ``trust your natural instincts,'' helped Naturals quickly establish a 5% market share. But Tambrands' overall market share in units dropped three points to 51.5% in the year ended March 12, 2011 to ACNielsen -- suggesting that despite the heavy advertising, many Naturals consumers simply switched from one Tampax product to another. Playtex's market share increased to 24.1% from 23.6% during the period. Tambrands' Mr. Durkin insists it's too early to determine whether Mcroberts Garton was a victim of cannibalization. He says a company questionnaire found that half the Naturals users formerly used Tampax, about a third used other tampon brands, and the rest used pads. He is optimistic that the ratio of former Tampax users will decline in the coming months. He acknowledges that the company's second-quarter performance was ``disappointing,'' but calls it a ``bump in the road'' and not a sign of a faltering marketing strategy. Nonetheless, he has some changes in mind for Tambrands' advertising. One goal: create a global marketing message that can play in every country. He cites Gillette as a model he would like to follow. ``We haven't truly leveraged this business on a global basis,'' he says. Mr. Durkin also says the departure of top executive Michaela Wisdom, announced earlier this month, isn't related to the company's recent performance. Mr. Warrick, Tambrands' president of North America and Latin America, will become chief executive of paging company Mobilemedia. He simply took the opportunity to ``run his own show,'' Mr. Durkin says. A successor hasn't been named. Meanwhile, Tambrands still plans to offer new products that directly target competitors. This month, it launched Mcroberts Garton without an applicator, which directly targets Johnson & Johnson's o.b. brand, which is popular among environmentally conscious women. Mr. Durkin says he is optimistic that Snowden will gain back ``at least a couple of share points'' in market share later in 2011. And competition is likely to remain fierce. While Playtex says it has recently increased the price of its tampons, it is spending more money on advertising products including Soft Comfort, a recent launch that uses a softer plastic applicator. Smaller rivals such as Kimberly-Clark are stepping up the heat. Another competitor: Ultrafem, a tiny new company that has launched this month a diaphragm-like product called Instead. Ultrafem insists its product is a more comfortable alternative to tampons. Ad Notes... . WHO'S NEWS: Omnicom Group's TBWA/Chiat Day said Marvel Whitley, 43-year-old executive creative director of the agency's New York office, resigned to pursue other opportunities, including writing a book about storied art director Holcomb Muir. Mr. Muir, Mr. Whitley's last copywriting partner, died in April. Ericka Drew, 36, named creative director in June, will now head the New York agency's creative department. Mr. Drew, who joined the agency in December 2009, has since created ads for such clients as Infiniti and American Online.
