Procter & Gamble (P&G) and its competitors package laundry detergents in various sizes and packaging alternatives. Tide® liquid laundry detergent is available in sizes ranging from 40 ounces (25 loads) to 150 ounces (96 loads). Current packaging requires lifting and pouring from bottles weighing over nine pounds into a small measuring cup. The intent of this marketing strategy is to identify feasibility of an alternative dispensing system for the largest size containers of Tide® liquid laundry detergent.
Marketing Strategy for Tide
Tide Mission Statement:
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We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper. (Procter & Gamble, 2010)
Tide® is one brand in P&G’s Household Care business unit. Total net sales for this business unit totaled $37.3 billion during 2009 and 20% global market share (2010a, b).
The purpose of this initiative is to increase consumer ease-of-use and perceived value to increase sales volume. Our objective is to increase sales by 20% during the first 12 months for Tide® liquid laundry detergent in 150 ounce bottles following launch of the Measure Trigger dispenser. In addition to gaining market share from our competitors we expect sales to shift from smaller bottles to the larger bottle, both of which will offset any manufacturing constraints and the higher cost dispenser.
Tide SWOT Analysis:
P&G’s greatest strengths are, consumer understanding, innovation, brand-building, go-to-market capabilities, and scale (2010c). P&G understands its consumers by engaging five million consumers each year in marketing analyses (2010c). Internal product innovation and external relationships have allowed the company to consistently deliver benchmark results across multiple consumer products manufacturers (2010c). P&G has 22 brands with net sales exceeding one billion dollars each (2010c). Tide® is one of these brands with very high brand recognition in the market. P&G has the highest customer service levels industry wide with results exceeding 99.5% on average. These results are one reason that P&G has been recognized as a preferred supplier among leading retailers (2010c). Scale is a strength that allows P&G to produce large volumes of Tide® and other laundry detergent brands and move them rapidly through the supply chain to many customers across the globe.
P&G constantly works to identify and eliminate internal weaknesses. The company continually acquires companies and divests brands. Although many “heritage” brands (Tide® included) are core to P&G’s business there is a significant amount of anxiety among employees at manufacturing facilities as to the significance of their personal contribution to the company’s success. It is to be expected that these anxieties have a negative effect on employee loyalty and productivity. This is significant for a company with over 140,000 employees worldwide.
One external opportunity is to take advantage of the recent spin-off of Sun Products Corporation from our largest competitor, Unilever, Ltd. P&G has an opportunity to position themselves rapidly in the market by introducing a packaging change to the Tide® brand before the competition has an opportunity to respond.
Threats to successful launch of the Tide® Measure Trigger dispenser bottle are recognized as coming primarily from our competitors with established brands in the market. For this reason no other changes, including formulas, will be made to Tide® products currently offered as part of this initiative.
Tide Detergent Target Market:
A thorough market opportunity analysis shall be conducted using P&G’s current strategy for engaging current and prospective consumers. That being said, the primary focus of marketing will be targeted to women, or more specifically mothers across multiple demographics including, but not limited to ethnicity, age, income, and education level. This strategy is based on P&G’s experience in marketing strategies and a general understanding that women make a majority of household purchasing decisions in the U.S. market. Marketing Mix:
The Measure Trigger dispenser uses a pull and dispense handle with trigger on liquid laundry detergent bottles. A dip-tube will be attached under the cap and a hose will connect the cap to a trigger handle. A simple clip would hold the trigger handle on the bottle when not in use, in order to keep it out of the way. The consumer will open a small vent cap, pull a handle on the back of the trigger handle and indicator marks molded on the stem will display load sizes (i.e. sm, med, lg). Then the consumer will pull a trigger to dispense a pre-measured amount of detergent into the washing machine.
The new dispenser will increase consumer safety by minimizing heavy lifting and risk of dropping a large bottle of laundry detergent. In addition to safety, avoiding measuring cup overfilling and spillage will increase the perception of consumer value. Aesthetics will improve for consumers by eliminating drips often associated with residue remaining in a measuring cup. From a manufacturing perspective, all other components and raw materials will remain the same, which will reduce overall costs compared to other chassis modifications. Another opportunity that currently exists is to have molded parts for the Measure Trigger assembly manufactured at P&G’s South Boston Manufacturing Center (SBMC). Taking advantage of SBMC’s mold-making expertise and injection molding capability will allow the company to establish and sustain a product differentiation competitive advantage.
As part of P&G’s pricing strategy, a break-even analysis will be conducted. Taking into account that further analysis is necessary, initial pricing is planned to remain constant with products currently in the market. Although profit margin is expected to be lower during initial launch, other pricing strategies may be pursued once the new packaging becomes established in the market. P&G has a steep experience curve indicating a significant decline in manufacturing expenses as experience and production reliability increase. Of course, pricing must continuously be evaluated throughout the product lifecycle.
Place (Distribution) Decisions: Tide® laundry detergent is already establish in the market, which is managed through a highly successful supply chain. The new product packaging would debut in the U.S. market. This is contrary to many P&G brand launches that test in smaller markets (typically Canada or European countries), but the primary market for the largest size containers of liquid laundry detergent is in the U.S.
A pull strategy will be used to drive consumer demand. This approach allows for more accurate demand forecasting and utilization of just-in-time manufacturing practices, while maintaining superior levels of customer service. Advertising campaigns targeting consumers will remain consistent with current P&G methodologies focusing on the ease-of-use feature of the product. One opportunity that exists to build product recognition is to bundle advertising with Tide loads of hope™ charity program. This approach also provides an opportunity to increase brand loyalty among consumers.
The first step in the implementation process will be to engage P&G’s product development engineering resources and other business partners to evaluate manufacturability of the Measure Trigger dispenser. Although this engineering technology is not new, it is a new application for this product. Prototyping will aid in conducting marketing panels and buzz in the market. Therefore, details such as product viscosity, ability for the trigger housing to store the correct amount of product, and other characteristics must be taken into consideration in product design. Engineering design reviews and overall risk assessments must be conducted prior to entering the manufacturing phase of this initiative. Finally, the product will be put on retailer shelves before phasing out traditional packaging until first evaluation is complete. P&G will offer its retailers a discounted product buyback program for unsold product in traditional packaging following the first quarter of sales.
Evaluation and Control: The product will be carefully evaluated using a systemic approach during the first quarter after launch following a data based decision-making technique. Adjustments to the marketing strategy will be implemented as necessary using the proper controls. On-going decisions will by driven by feedback received from consumers, retailers, and sales data. P&G will continue to monitor its competitors and the effect this initiative is having on market share. The product will be considered successful if sales volume, market share, and revenues increase to profitable levels justifying continued production.
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