Can Procter & Gamble Get Tide to Do More for Less?

Tide, Procter & Gamble

Source: http://www.flickr.com/photos/bnilsen/

Tide is one of Procter & Gamble’s (NYSE:PG) billion-dollar leadership brands and a backbone of the company’s fabric care and home care business unit. For the year ended June 30, the unit accounted for 32 percent of net sales and 27 percent of net earnings, the largest of P&G’s five reporting segments in both categories. Tide and other leadership brands owned by P&G claimed more than 25 percent of the global market share in their segments.

With this in mind, it’s no surprise that small changes to the products that bear the brand name can have a sweeping impact. Particularly because Tide is largely a premium brand — successfully selling at a higher price point due to a mix of higher real and perceived quality — many consumers are just one good reason away from switching to a cheaper competitor.

In fact, anemic economic growth is the only excuse consumers seem to need: data compiled by Nielsen show that for the year ended June, 41 percent of U.S. households were customers of value-priced laundry detergent compared to just 29 percent who were premium-brand customers. In the three-year period ended 2012, value-priced laundry detergent increased its dollar share of the market from 25.9 percent to 29.2 percent while the premium-brand share has remained flat.