In 1924, Kleenex tissue was invented as a means to remove cold cream. The product was initially backed by a series of advertisements that included endorsements from the era's Hollywood stars, like Helen Hayes and Jean Harlow. After studying customer usage habits, however, the manufacturer (Kimberly-Clark) realized that many customers were using the product as a disposable handkerchief. The company switched its advertising focus, and sales more than doubled. Kimberly-Clark faced a significant challenge in trying to grow and defend its new product. At its core, Kleenex is simply tissue paper, a product that is not particularly difficult to replicate. As others in the consumer packaged goods industry saw the profits available from producing disposable handkerchiefs, they moved into the market. Kimberly-Clark management resorted to series of actions to obtain and maintain the leadership role in this industry. The actions included creating an innovative use for a relatively common product. The company introduced printed tissue in the 1930's, eyeglass tissue in the 1940's, space-saving packaging in the 1960's, and lotion-filled tissue in the 1980's. At the same time, the company invested in advertising and promotion, building a brand whose name became synonymous with disposable tissues. Explain and evaluate the Company's strategy and behavior.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 6MC

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Transcribed Image Text:Number 4 In 1924, Kleenex tissue was invented as a means to remove cold cream. The product was initially backed by a series of advertisements that included endorsements from the era's Hollywood stars, like Helen Hayes and Jean Harlow. After studying customer usage habits, however, the manufacturer (Kimberly-Clark) realized that many customers were using the product as a disposable handkerchief. The company switched its advertising focus, and sales more than doubled. Kimberly-Clark faced a significant challenge in trying to grow and defend its new product. At its core, Kleenex is simply tissue paper, a product that is not particularly difficult to replicate. As others in the consumer packaged goods industry saw the profits available from producing disposable handkerchiefs, they moved into the market. Kimberly-Clark management resorted to series of actions to obtain and maintain the leadership role in this industry. The actions included creating an innovative use for a relatively common product. The company introduced printed tissue in the 1930's, eyeglass tissue in the 1940's, space-saving packaging in the 1960's, and lotion-filled tissue in the 1980's. At the same time, the company invested in advertising and promotion, building a brand whose name became synonymous with disposable tissues. Explain and evaluate the Company's strategy and behavior.

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