A manfacturer of biodegradable, disposable diapers attacks a singular market with two different strategies.
Ken Dafoe had a choice between two marketing strategies for one product -- so he picked both. His product, advertised as the first biodegradable, disposable diaper, is marketed in upscale stores at upscale prices under the brand name TenderCare Biodegradable. But an almost identical diaper -- with the brand name Nappies -- is also found in grocery-store chains, priced below industry leaders Pampers and Luvs.
Dafoe's company, Dafoe & Dafoe Inc., in Brantford, Ontario, didn't have the financial muscle to launch a new product in the vast U.S. disposable-diaper market. So it lined up two U.S. distribution channels -- with two quite different approaches. The high-end distributor is RMED International, a Sedona, Ariz.-based concern that sells nationally through mail order and regionally through specialty and natural-foods stores. To reach its target market of environmentally conscious parents, RMED emphasizes both the problems that conventional disposables pose in landfills and their higher chemical content. Ads in such upscale magazines as Child exhort parents to "change the world one diaper at a time" -- while paying a premium price for the privilege. So far, RMED's audience is responding enthusiastically. In its first two months TenderCare brought the distributor $500,000 in sales to become its best-selling product. "We can't keep them on the shelves," says Sandy Gooch, co-owner of a Los Angeles natural-foods store. "We're selling $13,000 worth of these diapers a month."
Meanwhile, back on the East Coast, a Brookline, Mass., broker called Eco-Matrix is aiming for a broader market. It sells Nappies to major grocery chains at about $1 below brand-name products. The theory? That such a pricing strategy -- coupled with above-average margins for retailers -- is the key to wide distribution and thus, greater sales. As another way to boost demand, Eco-Matrix is providing Nappies at a wholesale price to a day-care center, which sells them to families and other centers. "When children come home from day care wearing Nappies, mothers will ask for them at the store," predicts Eco-Matrix president Jennifer Gordon.
What happens when the two distributors compete head-on? For now, Dafoe isn't worrying. He reports that major player Kimberly-Clark Corp. recently inquired about his diapers' bio-degradable film. But at this point, it's just Dafoe versus Dafoe -- which is fine with him. "I'd rather compete against myself than some-one else," he says. Who wouldn't?