Proctor & Gamble’s Tide laundry detergent is the dominant player in the premium laundry detergent market. However, the company is thinking of potentially launching a lower-end Tide product – Tide Simple. One of the threats in doing so would be the buyers of regular Tide could switch to the lower-priced Tide thereby hurting Proctor & Gamble’s sales. P&G tested a lower-priced Tide about three years ago but consumers found it difficult to distinguish between the Tide models. Of the consumers that made the switch were unsatisfied with the quality of the Tide brand. P&G is undecided how it will tackle this issue to target price-sensitive consumers. Laundry detergent companies are seeing potential growth in the value-priced laundry brands as 41% of U.S. households were purchasing value-based brands compared to only 29% for premium laundry detergents. Currently Church & Dwight is the market leader in value-based laundry detergents. If P&G were to start a lower-end Tide product, it could start a price war between the companies which would only worsen the margins of the companies.
P&G is currently the largest in North America with regards to detergent and it would be interesting to see how P&G will seek to capture the value-based laundry detergent market especially because it has always been associated as a premium laundry detergent. This move could potentially damage the brand name of Tide. Nevertheless, the market for value-based detergents is growing and P&G should find some alternative to maintain its brand name and also increase its market share in this value-based laundry detergent market.