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CommentsTide, “America’s Washday Favorite”, is taking on a newer, more affordable face. Observers are now on a look-see as to whether the gamble will pay off.
Cincinnati-based Procter & Gamble, Co (P & G), maker of the popular laundry detergent Tide is testing a cheaper version of the product as it attempts to boost new sales amid recession. P & G has suffered losses during the recession as its market share was reduced by heavy competitors like Church & Dwight while the consumers cut back on home basics expenses.
In the home products industry, Tide is an iconic brand. The cleaning properties of Dodecyl benzene sulfonate, the chemical basis for Tide, were scientifically confirmed by SRI in 1948. It received the 2006 designation as an ACS National Historical Chemical Landmark for its significance as the first heavy-duty synthetic detergent.
In profitability terms, it contributes over $3 billion in sales annually but has recently suffered losses to cheaper competitors, something P&G wants to correct.
The cheaper “Tide Basic”, which costs 20% less than the regular Tide powder detergent, debuts on the shelves of around 100 Wal-Mart and Kroger Co stores in southern and southwest U.S. P&G spokesman Kash Shaikh says Tide Basic is a “good clean at a good price.”
Revitalizing Tide is P&G incoming CEO Robert McDonald’s key priority. Not only does the brand have sentimental value, being a six-decade old consumer product, laundry constitutes more than 10% of the company’s sales. Even as the company came up with Gain, a cheaper brand, to equalize the Tide losses, there has been little progress because consumers want Tide, a premium brand.
This move also comes after P&G gained positive sales after it came out with cheaper “Basic” versions of products Bounty paper towels and Charmin toilet paper.
Company executives are optimistic about a good reading. Should that be the case, a full-scale rollout is expected.
Post Author: guest