P&G Case Study

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In this case of Procter and Gamble (P&G) and Wal-Mart’s partnership, the main issue seemed to be caused by a third-part company’s collaboration with Wal-Mart which interfered the healthy partnership between P&G and Wal-Mart, also threatened P&G’s leading position in the diaper market. P&G’s diaper brand – Pampers has been the industrial leader in the relevant segment for years. P&G has been developing a long-established partnership with Wal-Mart based on a just-in-time ordering and delivery system for disposable diapers featured with the electronic-data-interchange system linking Wal-Mart vendors with P&G factories. The result of this collaboration created a win-win situation which let Wal-Mart reduced both …show more content…

Furthermore, unfortunately to P&G, the manufacturer of Wal-Mart’s private-label diaper – Kimberly-Clark is not an anonymous brand. It is also one of the biggest health care manufacturers which also has 20 percent share in the diaper market. It is fair to say that the quality of Wal-Mart’s private-label diapers provided by Kimberly-Clark will be as good as what P&G’s Pampers can possibly provide to the consumers; at least it will not be far off. Hence, a significant price gap would be Wal-Mart’s private-label diaper way more competitive than P&G’s Pampers diaper in this free market. It is worth to mention that Wal-Mart has the ultimate power of their shelf placement. Although Wal-Mart probably would not reduce P&G’s shelf space for their own private-label regarding to the healthy partnership between these two companies, it is hard to say that whether or not Wal-Mart would emplace their private-label diapers aside P&G’s on the shelves. If so, this could potentially further reduce P&G’s sales because this arrangement would exaggerate the price difference when consumers are comparing the two brands side by side. Based on the research data, I believe that at least one fifth of the consumers would make the decision based on their financial status and choose the relatively cheaper brand. In conclusion, based on these facts and concerns listed above, it seems to be more reasonable for P&G to reduce the price of their Pampers

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