Tide Turns
Last November, two managers walked into a meeting and turned the tide at Procter & Gamble, reports Ellen Byron in the Wall Street Journal (8/6/09). "Just listen and keep an open mind," Suzanne Watson, one of the managers, told a roomful of executives. Her message was that P&G should introduce a bargain version of its iconic Tide detergent, whose strategy has always been to persuade shoppers to pay a higher price for a better product. P&G actually had already gone the downscale route with its Charmin and Bounty brands, but Tide is the company's best-selling brand in America.
That P&G decided to test the idea in about 100 Kroger and Walmart stores in Southern states says a lot about the American economy, but it also represents a shift from P&G's "new and improved" mantra to something decidedly less aspirational. "Now, some of the biggest innovations in our company are geared toward making products more affordable," says P&G's Bruce Brown. That's at least partly because P&G was creating products for developing countries, but now they're applying that kind of cheap and cheerful know-how at home.
The new Tide product, called Tide Basic, is powdered, boxed, and contains less of "the anti-pilling and color-preservation technologies embedded in regular Tide." It was created using "the company's existing fragrances, whitening agents, stain-fighting enzymes and other technologies," and costs about 20 percent less. The packaging is yellow -- not Tide's trademark orange -- picked precisely because P&G hopes it will "discourage current Tide users" from trading down and cannibalizing sales. The question, of course, is whether Tide Basic will boost sales, damage Tide's brand equity, or both. What do you think?
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Tide Basic
The Bounty Basic and Charmin Basic strategies must have been working for them to have taken this risk, but "working" is always a relative measure. Stemming an outgoing Tide (pun intended) may be seen as success, however it seems inconceivable that this move could come close to winning over private label and generic offerings unless it is priced similarly. Loyalty, inertia and trust/fear (of a substitute not performing as well) are what makes this brand the icon that it is, and Tide Basic will have none of these. This is laundry detergent people, and getting consumers to "trade up" to an "aspirational" brand is just not going to be easy. Toilet tissue, maybe.
Ebb Tide
This move strikes me as canabilzation, not segmentation. A rather risky, short-term focused view to take advantage of a disadvantaged economy. A much better example of planned business line expansion would be the announcement by Wal-Mart of new outlets, geared to the Hispanic market, with product lines targeted to that segment.
Tide Turns
That's the beauty of marketing....it's not what I think, but what the market thinks.
P&G is doing a smart market test of an brand extension idea. Why they are doing this only in a few Southern states intrigues me. Are these areas where Tide is not strong? Or are these chosen markets indicative of the rest of the country?
Let's hope P&G doesn't fall in love with the results of this test and automatically transfer these results to other brands. Buyers of Tide may not react the same way buyers of Charmin will. Product test results should not be extended universally across all brands.
I look forward to reading about the results of this market test in due course.
Good Strategy, Wrong Brand
Tide Basic is not a good idea for the Tide brand. Sure, create affordable options for your consumers, but don't do it with that brand. It makes you question what you need the real Tide for, if this one works.
Tide basic
Questions.
To serve what need for what customer? What's the Tide Basic message? What ingredients or benefits are unique to traditional Tide that would prevent current Tide customers from switching? Especially if they're tempted by lower priced substitutes in a tough economic market? (thus the cannibalization fear is realized...).
On the surface it seems a little weird, but there isn't enough info here about the marketing strategy to give a good answer.
Try reading ...
... the article again. All of the answers to your questions are in the piece.
Tide Basic
I'm willing to bet this will only boost P&G's bottom line.
If they were smart, it's priced slightly above the entry brands, with a similar cost. At 20% less retail, there should be no reason that they can't make the same dollars per box/bottle.
If it cannibalizes sales, they will be able to return to the New & Improved strategy, or spend their marketing dollars telling people why they need Real Tide when the economy turns around. Either way, they shouldn't lose money.
Tide and the time will tell
P&G should know better. Line extensions are notoriously ineffective, and it's unlikely that people who don't use Tide will opt for a product that's promoted as "close but not quite Tide" when they can continue to use a competing product that they already admit isn't Tide (they may even think that it's better for various reasons).
If P&G wants to attract new customers with "low" Tide, they should simply create a new brand, give it its own characteristics, and target the market they feel will be most likely to buy. It's easy to go up -- car makers do it all the time with increasingly feature-rich models -- but down? Not so much. Think of the Cadillac Cimarron.
The moment P&G suggests that their best brand can be cheapened, the reaction is more likely to reinforce loyalty to other brands that promise to do what Tide does than to switch to a Tide that doesn't.
tide turns
The article has the air of desperation about it, not a word one usually connects with P&G. But one wonders why else the P&G Laundry Leadership Team agreed to the Tide Basic intitiative. They already have a portfolio of detergents that indluce lower-price brands such as Gain and Era. Why not leverage these against the low-price consumer target rather than squander the Tide brand team's time, talent, and budget creating a low-price Tide? Hence the test, I suppose. Still, why not take advantage of resources you already have in place?
Tide Basic
Smart move. In the weak U.S. economy that we've been experiencing, I think customers appreciate companies that find ways to help reduce our home product costs. We still want quality products such as Tide, but if we can't afford it, would have to buy a cheaper product of less efficacy. Thank-you Tide for giving us loyal consumers a low-cost alternative!
Ridiculous!
I do not know why companies keep doing this. BMW is destroying it's "luxury" brand by offering a cheapo version(the 1-series). P&G is risking their best selling product. Why? When you try to appeal to everyone, you usually end up appealing to no one. They just don't get it.
re: Ridiculous
The BMW 1 series is hardly a "cheapo" car. The concept was to return to the original scale of the 3 series. The current three series is as big or larger than the original 5.
Regarding it's cheapo status...it's nearly as expensive as a 3, is only available in the US with a six cylinder engine, and the convertible has a folding rigid roof.
By the way, I do not own a BMW, nor do I work for them.
The beginning of the end.
The beginning of the end. I'm always surprised how companies are willing to trash years of brand equity for short term gains.
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