Graco's Stroller Recall

On October 20^th, Graco recalled about 2 million of its strollers. In-between 2003 and 2005, four babies were strangled due to Graco’s stoller models. It is said the US Consumer Product Safety Commission (CPSC) warned the industry about possible deaths in strollers and urged companies to redesign their strollers. The CPSC ordered the recall today after a fresh review of old cases involving strollers and finding that additional fatalities can be tied to Graco Products. CPSC spokesman, Scott Wolfson, recently stated, "We reached a point where we needed to do a recall of this product to help prevent any further harm to children.” In March of this year, Graco also recalled 1.2 million highchairs which was prompted by 464 incident reports and 24 injuries.

As a consumer, it seems as if Graco is not a very good company to trust, especially when concerned about infant safety. It is likely that these recalls will continue to be very detrimental to Graco’s company and their customer satisfaction.

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/10/20/bloomberg1376-LAK8OS07SXKX01-5L4IHVTMGROHLKM2V9H2QUKA4H.DTL

P&G Puts Marketing Spotlight on Newer Products

According to the Wall Street Journal, recent consumer trends have affected the consumer product market, enough to change companies’ marketing techniques. Consumers have been opting towards purchasing cheaper private-brand products, which are sold and produced directly by retailers, rather than spending the extra money for company manufacturers’ products. Companies, P&G in particular, have started reacting to this trend.

P&G, under its new market leader Melanie Healey, has launched a promotional campaign called “Have you tried this yet?” designed to spur consumer awareness and revamp consumer loyalty. The company will open a temporary store in NYC at which location customers will have the opportunity to try a variety of product lines. The campaign will also establish a website in which customers can post reviews of the products. If this campaign is successful, P&G will regain its customer loyalty. At first, its products perhaps were only a customer preference; however, by showing such consideration for its customer base, P&G hopes to have customers insist on its products.

http://online.wsj.com/article/SB10001424052702304011604575564420769116624.html?mod=WSJ_Consumerproducts_leftHeadlines

Consumer Products Lift L'Oreal

As stated in the Wall Street Journal, L'Oreal's sales increased 5.8% during the third-quarter of this year. Their products range from deodorants sold at grocery stores to loftily priced Lancome creams and scents; the lower-priced items have proven necessary in L'Oreal's growth. Since the market has been static in the current stressed economic environment, any growth has been due to market shares. In the mass-market consumer products division, sales rose 6.5% and only 5.7% in the luxury item division. Their mass-market items, such as Maybelline make-up, allows L'Oreal to gain profit from the ever-growing middle-class.

L'Oreal's widening product mix (e.g. adding a new line of deodorant this past year) has increased its target consumers, enveloping the middle-class market. Evident by third-quarter rates, positive results ensued. Perhaps increasing products that are within reach of the middle-class's price range will allow L'Oreal to continue its growth without having to lower prices of existing products.

http://online.wsj.com/article/SB10001424052702304023804575566244149896672.html?mod=WSJ_Consumerproducts_leftHeadlines

Just One Word: Bioplastics

According to the Wall Street Journal on October 18, 2010, there is a growing demand for eco-friendly products in the Consumer Products Industry. This is expected to increase the use of bioplastics for this industry that include companies all over the world. Some drivers of this new movement into eco-friendly materials include Procter and Gamble, Johnson and Johnson, Coca-Cola, and PepsiCo.

Not only is this trend going to help the environment, but it is also cheaper for the companies.

Helping to fulfill the "Green Niche," "some of these companies say their goal is not to completely replace petroleum-based plastics." All they want to do is make a product that will please customers (while making money at the same time, of course).

Again, as said in my earlier posts about the Green Movement, this will increase the competition in the Consumer Products Industry. As long as there are niches that need filling, competition will continue to increase. But will the need for aiding in the Green Movement ever stop? I don't think so because there can also be improvements--nothing is ever the best it can be.

http://online.wsj.com/article/SB10001424052748703989304575504141785646492.html?mod=WSJ_Consumerproducts_leftHeadlines

Unilever's Sustainability Strategy

According to Unilever's website, Unilever understands that the world is changing and has decided to change with it. They are focusing not only on their factories but they are also focusing on the bigger picture: from sourcing their natural resources to how their consumers dispose of their products.

Unilever added sustainability to their goals in the 1990s and then in 2005, they began to use Brand Imprint to integrate their new agenda into their old one.

Their main idea is that if they educate their consumers and then in return their consumers make a small change, this will quickly add up and make a big difference.

Stating this objective outright on their website shows their consumers that they are serious about "going green." Because of this, they will most likely gain more consumers because people know that Unilever cares and since the company is caring, maybe if they (the consumers) buy their products it means that they too care. This can increase competition because it seems like many companies are jumping on the Green Movement bandwagon. If more and more companies improve their sustainability, competition will increase and our world will be in much better shape overall.

http://www.unilever.com/sustainability/strategy/vision/index.aspx

Illinois Consumer Product Enhancement Competition

The Nielson Company, along with Walgreens and the Women's Business Development Center, is holding a Consumer Product Enhancement Competition in Illinois. Eligible candidates are females who own Illinois-based consumer product businesses. The winner receives $10,000, $5,000 worth of technical support, and advice from the Nielson Company, which is "a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related assets." The winner will be announced on December 15th and by using the prizes, the winner will have the opportunity to place her products on the shelves at Walgreens.

This is a great way to introduce new players in the consumer products industry into the mainstream market (via Walgreens). It will also strengthen such players with the help of the Nielson Company. As a result, competition among similar companies may increase, leading to a wider variety (and higher quality) of goods for consumers.

http://www.kansascity.com/2010/10/11/2297518/the-nielsen-company-joins-with.html

http://www.nielsencpecompetition.com/

"Ghost" Brands

Marketers have recently been trying to revive old and faded “ghost” brands. “Ghost brands” are brands that have become ghosts of their former, successful selves and that have now been moved down to the bottom shelf below newer products. The idea is that it “can be less expensive to stimulate consumer memories of once-famous products, which had been backed with considerable ad budgets, than to spend enormous sums to introduce all-new products.”

Two specific “ghost brands” that are attempting to be introduced are the Sure line of antiperspirants and deodorants and Pert Plus line of hair care products, both sold by the Idelle Labs division of Helen of Troy. It is said that there has been no money spent on advertising for either brand since 2007. However, Idelle is going to spend an estimated amount of $15 million on each campaign. Marketers are hoping to “reconnect with lapsed users” and “re-establish the brand name.”

I believe it’s going to be very interesting to see what will happen when these “ghost” brands are reintroduced and what the consumer response will be.

http://www.nytimes.com/2010/10/11/business/media/11adnewsletter1.html?sq=Consumer products&st=cse&adxnnl=1&scp=1&src=busln&adxnnlx=1286848899-aesJT/86swf1WCpUGkDBzQ

Retailers' Holiday Hinges on Discounts

This article comments on the common goal of consumer attraction among various consumer packaged goods companies during the holiday season. A 2.3% increase in overall holiday sales is expected for this year over last year, and much of this increase, as Wal-Mart Stores’ chief executive says, will be as a result of a “price-focused” approach to marketing.

This past September, the back-to-school season increased the consumer demand; however, lately, customers just aren’t buying as much. A mother of two in St. Louis explained: “I can’t spend what I would like to spend in fear of the well running dry.” It is evident that this price-focused device of marketing is highly necessary. The increasing prevalence of sales on consumer-packaged items will boost companies’ net profit substantially.

http://online.wsj.com/article/SB10001424052748703298504575534322091748554.html

Moody's Upgrades Clorox On Debt Reduction After Burt's Bees Buy

According to the Wall Street Journal on October 5, 2010, Moody's Investment Service increased its rating of Clorox by one step because of their great earning in profits which brought them out of debt--In 2008, they earned $925 million because they took over Burt's Bees. This acquisition brought Clorox closer to the "health-and-wellness" department of the consumer products industry.

However, Moody's Investment Service does not see a change in rating due to Clorox's recent selling of a "private-equity firm" for $780 million.

This boost in ratings could potentially increase the variety of their consumers. Since they are moving more towards the "health-and-wellness" department, their types of consumers will most likely increase because they are now selling a larger variety of products.

http://online.wsj.com/article/BT-CO-20101005-711045.html

J&J Admits Misleading U.S. Motrin Recall

Johnson & Johnson were recently reprimanded in Congress over their Motrin recall in 2009. This year J&J has had to pull over 300 million bottles of top selling brand medicines from American shelves this year, including child brands.  The recall came about when the FDA found contaminated ingredients and fifthly equipment at a Pennsylvania factory and then problems with a Puerto Rico Plant. The FDA was told of the Motrin recall in April of 2009, however they did not hear about a recall plan till months later. A unit of J&J did not alert stores and the FDA about the 2009 recall and instead bought back the stock through contractors posing as customers. Although there were no reported injuries due to the product, lawmakers have accused J&J of placing their profits over the welfare of their customers.

It is said that the company is spending $100 million to improve manufacturing and they are trying to get some of their products back on the market. Many store shelves that once held J&J brands, now are empty giving other companies an advantage. J&J’s stock has decreased and experts have said that J&J will have to convince buyers to consume their products once production consumes. As a consumer, it’s frightening to hear that commonly used cold medicines are being recalled because they are being considered unsafe.

http://www.reuters.com/article/idUSTRE68S5DP20100930?pageNumber=2

FDA Warns on Mouth-Rinse Marketing

Sodium Fluoride, an active ingredient in Johnson & Johnson's Listerine Total Care Anticavity Mouthwash and CVS and Walgreens's generic brands of mouthwash, has been claimed by such companies to prevent gum disease and reduce plaque. The FDA disproved the claim after clinical studies proved that sodium fluoride only prevents cavities. All the companies must revoke the claims "within 15 days or risk seizure of the product or other civil or criminal penalties" (WSJ).

Johnson & Johnson reported an increase in earnings, but forecasts a decrease for the rest of the year; CVS is struggling to keep up with the prospering Walgreens Care Corp.

Since many consumer products deal with the health of their consumers, it is important for FDA warnings to be taken into account quickly. Although no health risks have been reported from sodium fluoride, consumer loyalty may be tested if the companies do not take the warning seriously. The companies have to prove their interest in their customers. Johnson & Johnson has much to prove since many of their over-the-counter medications have recently been recalled (WSJ).

http://online.wsj.com/article/SB10001424052748703882404575520111491711620.html?mod=WSJ_Consumerproducts_leftHeadlines

P&G Sets New Environmental Goals

P&G, the worlds largest consumer products company, proves to us that even the most efficient and profitable businesses can continue cutting costs on their production. The company has recently pledged to improve its energy efficiency by reducing waste build-up. P&G plans to accomplish this goal by using only renewable energy to fuel its factories as well as renewable inputs to construct and ship its products. Bob McDonald, CEO of the company, is motivated by social recognition and “do[ing] the right thing;” however, there are other benefits as well.

By converting 100% of its inputs into renewable resources, P&G will cut its production costs enormously. Money that would go towards purchasing non-renewable materials could be tacked onto the company’s net revenue and either saved or put towards another function of the business, like advertising. Although it is a lofty goal, this 100% reduction of waste could help solidify P&G’s top spot in the industry for many years to come.

http://online.wsj.com/article/SB10001424052748704654004575518122291029064.html

Unilever's Expensive New Sheen

In the Wall Street Journal on September 28th, it stated that Unilever is paying $37 million for Alberto Culver, a deal that may be looked as a trick. This new acquisition should increase Unilever's after-tax profit .5 percent. In the future, Unilever will need to expand its beauty products such as TRESemme because this part of the company is only a small part of the sales at this moment in time. This acquisition has also made Unilever the "world's top supplier of hand conditioner and No. 2 in shampoo to add to its leading position in deodorants." However, competition is growing with L'Oreal and Procter and Gamble right up with Unilever in the hierarchy.

This competition is proving to be a good thing for Unilever. Without it, they probably would not have tried to buy Alberto Culver or any other companies they have acquired. They wouldn't have to because there would be no threat of anyone taking over their company. But the question is: will this very steep price paid for Alberto Culver actually pay off?

http://online.wsj.com/article/SB10001424052748704654004575518103803288226.html?mod=WSJ_Consumerproducts_leftHeadlines