To create a successful product, the brand must understand the market. They must focus on their internal environment, consisting of strengths and weaknesses that create their ability to compete in the marketplace. However, the market extends past organisations own controls and encompasses customers and competitors. To gain a deeper understanding of the complexities of the external market, Kleenex and Quilton are examples of competitors who influencers each others marketing objectives and strategies. I chose this product as facial tissues are an essential part of everyone's daily lives, therefore impacting a huge number of consumers.
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Kleenex is currently owned by the American company Kimberly Clarke. It was the first western brand to manufacture a facial tissue in 1924. Kleenex was first marketed as a facial tissue specifically aimed to remove cold cream in the 1920s and continuing on from their success they expanded internationally to Australia in the 1930s with consumers realising they could also be used for colds and ran a slogan “handkerchiefs you can throw away.” It is now sold in 170 countries cementing their continued success and main competitor in the facial tissue marketplace. (Kleenex, 2019) Quilton is relatively new to the market only establishing 3 decades ago through ABC Tissue. It is an Australian brand and prides itself on manufacturing locally and helping the wealth of Australia (Quilton, 2019) The brand has steadily built a strong Australian customer base dethroning Kleenex in the Canstar Blue’s customer ratings for facial tissues 2018 survey and proving their strength against such a large competitor as well as big home brand companies like Aldi and Woolworths.
Kimberly Clarke not only dominates the US facial tissue market (Appendix A) but is also a major leading global Fast-moving consumer goods (FMCG) brand which highlights its high product turnover and strong consumer reach (Hogan,2018) By having a lengthy history and with their global status, Kleenex is not only referenced as the brand of facial tissues but is used as a generic word for any soft facial tissue and becoming a household name (Bellis, 2019) Kleenex undergoes intensive distribution, making their product available to not only the main supermarkets in many countries but local newsagents as well. Based off this information we can confidently say Kleenex has cemented itself deeply and set the standard for their market, pulling in most of their consumers through loyalty to the brand.
Through social media campaigns, Kleenex have actively listened to their customers in key marketing decisions, campaigning in keeping their brand ambassador a Labrador retriever puppy. (Dawson, 2017) They also showcase innovative video ads with catchphrases like “timely care” and “caring is contagious” creating a sense of pride to own Kleenex. Rusty Zaspel, senior brand manager for Kleenex states “No matter the moment, Kleenex tissue is there for you; whether you're an active, busy mom, or settling into your first apartment, each of our new products is designed to help you 'Take care. Take it on,” (GmbH, 2017) Kleenex have smoothly taken into consideration the huge impact social media and advertising has done to create something more meaningful and build their brand reputation with society. They are active on all major social media platforms with an active hashtag ‘someone needs one’ to relate and affiliate with their customers. (MBA Skool, 2018)
However, as much as Kleenex is a multibillion-dollar product (Team, 2019) other companies such as Quilton have dove into the market, causing increasing competition in a decreasing category demand. (Appendix B)
Quilton lies most of its brand strength on the growing customer support for the Australian brand. Looking at their website there are recurring symbols of ‘Australian’ and ‘Love’ for their brand as well as loyalty and pride toward their product, employees and consumers. It has a more personal touch than Kleenex. (Quilton, 2019) Quilton has steadily built a strong customer rapport over the years and that is shown through its increasing revenue and tax profit lifting by 5% and 8% respectively from 2018 - 2019. (Bath,2019) In 2018 the product ranked number 1 in an Australian survey done by 2,300 people, surpassing Kleenex. (Appendix C) They had greater satisfaction in both price and packaging design to Kleenex, creating discussion surrounding consumers loyalty to a brand or a cheaper alternative. Especially the younger generations who don’t have an affiliation with Kleenex go for products that have the best value for money which Quilton leads in.
Quilton is also in discussion with Morgan Stanley an investment bank to sell or partially sell their brand to create more revenue and profit for the company. This creates many opportunities for Quilton to expand their brand globally and have a more solid presence in the facial tissue market as they only continue to grow. (Thompson and McDonald, 2019)
Unlike Quiltons’ increasing revenue, Kleenex are on a downhill slope. This sources from the high commodity costs the US are experiencing with the price of ingredients to make the tissues increasing by 60% since 2016. Also, as a global brand when there are trade concerns and poor currency exchange it directly and negatively impacts Kleenex and their stability in overseas marketplaces, putting a deeper strain on other stores globally. (Hirsch, 2018)
Opportunities Kleenex has created to combat competition involve expanding their facial tissue market and introduced a new packaging of “go anywhere” tissues which come in handy travel size packages, a factor Quilton does not have. (GmbH, 2017) Acknowledging their weakening stance in the marketplace Kleenex have launched “KC Strategy 2022” which looks to its 150-year anniversary. It recognises its strong foundations and looks to build from that to sharpen its focus to the consumer. Much of their financial plans are modest as they aim to achieve ‘balanced and sustainable growth.’ (Kimberly-clark.com.au, 2019)
I believe that Kimberly Clarke have made the right decision to formally assess and strategies for their future. With competition increasing Kleenex must adapt to the changing environment and rethink its marketing plans to fit the new generation of consumers. Another strategy they could implement would be heavily focusing on their environmentally conscious product and putting that at the forefront to consumers to combat against their price increases.
- Kleenex.com.au. (2019). Our Story - Kleenex AU. [online] Available at: https://www.kleenex.com.au/en/our-story [Accessed 20 Aug. 2019].
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- Hogan, R. (2018). Big manufacturers dominate FMCG innovation - Inside FMCG. [online] Inside FMCG. Available at: https://insidefmcg.com.au/2018/11/20/big-manufacturers-dominate-fmcg-innovation/ [Accessed 21 Aug. 2019].
- Hogan, R. (2019). Kimberly-Clark to close Sydney facility, moving production to Asia - Inside FMCG. [online] Inside FMCG. Available at: https://insidefmcg.com.au/2019/04/03/kimberly-clark-to-close-sydney-facility-moving-production-to-asia/ [Accessed 21 Aug. 2019].
- Bellis, M. (2019). What Year Was Kleenex Tissue First Introduced?. [online] ThoughtCo. Available at: https://www.thoughtco.com/history-of-kleenex-tissue-1992033 [Accessed 22 Aug. 2019].
- GmbH, f. (2017). Kleenex® Brand Introduces Two New Products for Modern Day Life | Markets Insider. [online] markets.businessinsider.com. Available at: https://markets.businessinsider.com/news/stocks/kleenex-brand-introduces-two-new-products-for-modern-day-life-1001969270 [Accessed 22 Aug. 2019].
- Dawson, A. and Dawson, A. (2017). Kleenex proclaims puppy will remain as brand ambassador - Mumbrella. [online] Mumbrella. Available at: https://mumbrella.com.au/kleenex-proclaims-puppy-will-remain-brand-ambassador-449053 [Accessed 22 Aug. 2019].
- MBA Skool-Study.Learn.Share. (2018). Kleenex Marketing Mix (4Ps) Strategy | MBA Skool-Study.Learn.Share.. [online] Available at: https://www.mbaskool.com/marketing-mix/products/17508-kleenex.html [Accessed 22 Aug. 2019].
- Team, T. (2019). Kimberly-Clark's Revenue To Remain Flat In Q2 2019?. [online] Forbes.com. Available at: https://www.forbes.com/sites/greatspeculations/2019/07/19/kimberly-clarks-revenue-to-remain-flat-in-q2-2019/#384e88fb72de [Accessed 22 Aug. 2019].
- Bath, G. (2019). Turns out toilet paper is big business. [online] Finance.nine.com.au. Available at: https://finance.nine.com.au/business-news/abc-tissue-products-for-sale-huge-profit-western-sydney/7637a682-9ad4-4208-80a3-c1d64636fe23 [Accessed 23 Aug. 2019].
- Thompson, S. and Mcdonald, A. (2019). Up for sale ABC Tissue financials nothing to sneeze at. [online] Australian Financial Review. Available at: https://www.afr.com/street-talk/up-for-sale-abc-tissue-financials-nothing-to-sneeze-at-20190114-h1a1ei [Accessed 23 Aug. 2019].
- Hirsch, L. (2018). Kleenex and Huggies will be more expensive as parent company raises prices on most products. [online] CNBC. Available at: https://www.cnbc.com/2018/08/15/kleenex-and-huggies-owner-kimberly-clark-to-raise-selling-prices-of-ma.html [Accessed 23 Aug. 2019].
- Kimberly-clark.com.au. (2019). Latest news from Kimberly-Clark Australia & New Zealand. [online] Available at: http://www.kimberly-clark.com.au/en/news/2019/newsbox/kimberly-clark-today-reported-year-end-2018-results,-provided-its-2019-outlook-and-introduced-its-k-c-strategy-2022-strategic-plan/ [Accessed 23 Aug. 2019].
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