Kimberly-Clark Manages to Innovate in Long Established Markets

Kimberly-Clark (NYSE:KMB) is a leading manufacturer of baby care non-wovens (Huggies & Pull Ups), professional and consumer tissue (Kleenex & Scott), female care products (Kotex & Depend) and disposable health care products. It competes mainly with P&G (NYSE:PG) and Johnson & Johnson (NYSE:JNJ) in the baby care and feminine hygiene care business segments.

We estimate that Huggies & Pull-Ups baby care brands constitute 35%, while Kotex & Depend brands constitute 28% of Trefis price estimate for Kimberly-Clark’s stock. We believe that Kimberly-Clark will continue to leverage its customer base to find new unmet needs, drive innovation and create new products that will drive profitability for Huggies, Pull-Ups, Kotex & Depend.

KMB Leverages Customer Outreach To Find New Products

Kimberly-Clark has been supporting product innovation through novel initiatives such as the “Mom Inspired Grant Program,” under which award grants of up to $15,000 will be given to mothers whose fresh and innovative product ideas address an unmet parenting need. Kimberly-Clark’s underlying strategy associated with such social initiatives is to identify innovation that will support its expansion beyond the core product categories and help it redefine the market.

Maintain Presence in Feminine Care Market with Consumer-Need based Innovation

Kimberly-Clark’s potential to bring radical shifts in the marketplace by means of consumer need based innovation is evident from the fact that it was a pioneer in feminine care. KMB has the second largest share of global feminine hygiene care market. Kimberly-Clark created an entire new market of female incontinence products, with brands like Kotex and Depend, when all other consumer goods firms lacked such products.

New Product Launch Will Drive Sales for Baby Care & Feminine Care Brands

In line with its innovative strategies, Kimberly-Clark plans to launch several new and improved products beginning in 2010. Noteworthy prospective launches include several new products under Huggies and Pull-Ups brands, new Poise and Depend incontinence offerings as well as a premium line extension to the Kotex feminine care brand.

These new launches are being made at the most apt time, when global consumer demand is recovering and consumers are willing to spend more for better and improved products.

You can modify the forecasts above to see how KMB’s stock is impacted by changes in the company’s market share.

Disclosure: No Positions

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