The Kalina company of Yekaterinburg is hoping Russian parents can get behind its new brand of diapers, which will be launched in November with a $700,000 marketing campaign that will target the mid-level price sector.
Kalina, which also makes perfumes, cosmetics and toiletry items, will begin production of 165,000 Poppins brand diaper packs a month, with an eye on hiking output by the end of the year. Poppins will be priced at 65 rubles per pack of 10-14 diapers, about 25 percent lower than imported diapers, officials said.
Kalina is hoping to get a 15 percent share of the market that foreign companies now dominate with a 97 percent share. Some 946 million diapers a year are sold in Russia, a per-baby rate about eight times lower than that of Western Europe, Kalina officials said.
It will be the second foray into the diaper market for Kalina. Last year, Kalina became the first Russian producer of diapers when it introduced its Karapuz brand, targeted at low-income families. But low sales forced it to decrease production and reconsider its strategy in a bid to capture a larger share of the market.
Karapuz production started at 160,000 packs a month, but output was cut to 80,000 because of low sales. Since Kalina began production, another Russian company, Kondrovskaya Paper Co., also started manufacturing diapers, the Nika brand, in the low-price range. But Likhachev said that low Karapuz sales of the product were mainly due to poor marketing. "We entered the business, and our marketing was just based on the fact that we had low prices. Marketing in this sector really requires more than that."
Timur Goryaev, Kalina’s general director, said the company will use updated marketing techniques for Poppins, such as a strong television campaign and advertising based on a humorous approach. "Our ad slogan will read, ‘Nappies for dear behinds.’ I think Russian customers will be able to relate more to our product than to imported brands."
Poppins will compete in the mid-range market against Libero diapers by Swedish SCA Molnlycke and Huggies by Kimberly-Clark of the United States. As of now, company officials said, Kalina will not enter the high-end market. "We aren’t focusing on this now," said Aleksei Likhachev, chief specialist of the company’s marketing department. "We probably will sometime in the future, but this is a small sector and is dominated by Procter & Gamble’s Pampers brand."
Initially, Kalina will sell Poppins in three basic sizes for various weight groups, Likhachev said. "In half a year, we’ll expand the range with new products," he said. "When a company enters the market, they start with a standard range. After they gain a position, they add new products to the range. Probably, in May we’ll start a new series of air-penetrating and aloe-oiled nappies."
The diapers will be produced at the company’s facilities in Yekaterinburg. Kalina managers say they recently invested $1 million into equipment for hygiene products, with some of that going toward upgrading Poppins production. Officials said the investment will pay itself off in five months. Kalina’s distribution system includes 120 companies throughout Russia, officials said.
Likhachev said that Poppins, like the Karapuz brand, will also be exported to other CIS countries.