Rethinking segmentation and targeting: Diaper Edition

Diapers, Kotler and STP Theory

When does a joke become a Dad joke? When it’s apparent.

When you first become a Dad, you enter a big, new, sometimes overwhelming world that’s a bit like Narnia. It’s magical. It’s completely invisible to people who are not parents.  Time is very different — it both feels like forever and goes by in a blink. And it’s filled with talking animals. To be fair, most of the talking animals are battery-powered.

When you have a baby, you’re also tossed into a whole new consumer category called “stuff babies need.” This is larger and weirder and far more overwhelming. 

It’s divided into three subcategories — “stuff babies actually need,” “stuff that is useful and/or fun” and “Seriously, WTF? No! We are not spending money on whatever that is. Sigh. Okay, fine.” 

It’s a world filled with cribs, playpens, play sets, bassinets, rockers, rollers, activity mats, receiving blankets, swaddling blankets, burping blankets, onesies, twosies and threesies (probably), wildly colorful toys that go boing and squeak, over-engineered Swedish strollers, tiny books with thick cardboard pages, plush books, talking books, stuffed animals, singing stuffed animals, pacifiers, thermometers, breast pumps, a million kinds of formula, bottles, bottle washers, bottle washing brushes, bottle drying racks, bottle warmers, car seats, toys that attach to car seats, car seat covers, tiny turkey basters that are actually for sucking snot out of a baby’s nose, dinosaurs, small bathtubs, larger bathtubs that are still small, highchairs, portable highchairs, teething rings, baby gates, cupboard and cabinet safety locks, outlet covers, corner bumpers (a must!), baby mittens (so they don’t scratch themselves while sleeping), baby monitors, baby wipes, baby wipe warmers, changing pads, diaper cream, diaper pails, diaper pail liners and (this is not an exhaustive list, just an exhausting one) … diapers. 

In the US, there are two disposable diaper giants — Pampers (P&G) and Huggies (Kimberly-Clark). Together, they have a lock on somewhere around 75% of the US disposable diaper market.

Next up are the private label brands like Kirkland, Up&Up and Parent’s Choice. And then there’s Luvs, which is also a P&G brand. 

After that, there are smaller diaper brands like Coterie, Dyper, Earth & Eden and The Happy Hues Co. (a very cool brand and founder story) and a host of others none of us have ever heard of. 

Most of these smaller brands focus on “natural ingredients” with “no harsh chemicals.” Dyper, in particular, has positioned itself as a plant-based, eco-friendly alternative to cloth diapers.

From their website: “100% natural fibers touching your baby’s skin, free from harmful ingredients, and derma-tested for zero leaks and zero rashes.” And they go one step further. For a fee, they’ll haul away your used diapers and turn them into compost. Which? Amazing. 

Who is Dyper’s target audience? Who should it be?

Grab any US college marketing textbook from the past twenty years, especially one by Philip Kotler, and you’ll learn about STP theory — the need for proper Segmentation, Targeting and Positioning. 

We absolutely believe that clean, clear, tight positioning is critical. Your positioning helps define your audience as much as it defines your brand. Here’s Disney’s positioning statement:

“Disney provides unique entertainment for consumers seeking magical experiences and memories. Disney leads the competition by providing every aspect of related products and services to the world and appealing to people of all ages.”

Pretty good. We’d cut it in half:

“Disney provides unique entertainment for people of all ages who seek magical experiences and memories. Also, there’s merch.”

Who is Disney’s target audience? 

Rabid Disney fans? Millennials? Gen-Z? Virgos with the moon in Scorpio? People who unironically wear “I’d Rather Be Fishin” t-shirts? Uh, yep. It’s people who seek magical experiences and memories (and merch). So, you know, a whole lot of people.

Your audience is larger than you think. Okay, back to diapers.

Diapers have a very specific audience — the parents of very, very young children. Having or adopting a baby is far and away the single biggest entry point into the category. Baby showers are a distant second. No one else thinks about diapers, because why would they? And you stop thinking about them the nanosecond your kids don’t need them anymore. 

Smaller brands like Dyper start by reaching and preaching to the choir. In their case, it’s somewhat affluent parents who “want the best for their baby and the Earth.” Obviously, most parents want the best for their children, but having a baby is challenging enough, and plant-based, compostable diapers that are more expensive might not be a priority. Given the overwhelming market share of the top few brands, this seems to be the case. 

Or maybe that’s exactly the wrong way to think about it. 

In a recent paper, Byron Sharp, John Dawes and Kirsten Victory from the Ehrenberg-Bass Institute argue that STP theory is not at all how brands grow. In fact, segmenting the audience by demographics or psychographics or whatever limits the number of potential customers a brand could have. 

Who goes to Disney World? Who watches Disney+? Anyone who can and wants to. Who poops? According to this book, everyone. 

Competing diaper brands sell to similar customer bases. And really, it’s just the one base — parents of very, very small children. However, segmentation and targeting can lead marketers to focus on a very narrow idea of what potential buyers might care about. And when it comes to diapers, what do parents care about? 

• Leaks and blowouts — do the diapers work? 
• Comfort — are they gentle on my child’s skin? 
• Natural materials — is bamboo better than whatever Pampers are made of? 
• Cost — sweet, merciful Jesus, these things add up. 
• The Earth — maybe I’d rather not have thousands and thousands of my kids’ diapers clogging a landfill for the next 500 years. 

Arrange these in any order you like. 

Dyper is a niche brand, but niche really just means small. Which? Is perfectly fine. But what if they want to grow?

As Sharp, Dawes, Romaniuk and others have repeatedly shown, light buyers present the best opportunity for brand growth.

New parents will try multiple diaper brands before settling on one or two. They will also switch out from time to time, at least according to the many, many Reddit threads and parenting blogs I’ve looked through … and my own experience. New parents are, as Sharp puts it, “polygamously loyal”.  

If Dyper wants to grow, and it seems like they do, they will need to reach more and more light buyers. That means building mental availability through broad-reaching, emotional advertising, as well as boosting immediate sales with more targeted performance ads. It means taking up more space on more shelves. It means being relentlessly distinctive and consistent with their brand assets. It means building fame. 

Ultimately, it means stealing market share from Pampers and Huggies, as well as the other, smaller brands. 

What does this mean for you? 

No brand can reach everyone, which is why Sharp advocates for “sophisticated mass marketing.” That means understanding the differences that matter, such as channel preferences and geographical differences (e.g., Spanish language ads for Spanish speakers). 

It also means not ignoring vast swathes of the market because you think it might not be worth playing there. This includes, if you’re a diaper brand, people who don’t have kids but might one day. 

For those of you who already have kids, Happy Father’s Day. We’ll see you next time.

Sources!

1. “The market-based assets theory of brand competition” – ScienceDirect | Byron Sharp, Jack Dawes, Kirsten Victory
2. How Brands Grow, Part 2 –  Jenni Romaniuk and Byron Sharp