Case Study of P&G Tide

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season

Strategy for

2

in India

Brand Strategist

The Dream Team Season 2

Case Study for Strategy Development

S T R AT E G Y F O R T I D E I N I N D I A

Case Background
The Mint, 3rd December 2012: In a recent global investor meeting, Procter & Gamble affirmed that a strong momentum in developing markets continues to be a key part of its strategy. It said it will invest resources on the biggest opportunities, and aim for profitable expansion by focusing on growing markets, increasing market share, improving mix, localizing production, and leveraging scale. It is doing all of that in India. India ranks as one of P&G’s top 10 developing markets. Shantanu Khosla, who heads P&G’s India operations, also addressed this meeting, and said that the company’s value share has risen to 12% in FY12 from 2% a decade ago and sales have risen by 30% for each of the past two fiscals. Its distribution footprint has increased by 25% in the past two years, and consumers using its products have risen to 700 million, a 14% increase in just one year.

Tide Brand Background
Tide was launched in year 1946 and was touted as the biggest innovation in the detergent industry. Over the years, Tide has grown to be one of P&Gs 26 billion Dollar brands. From being the world’s first compact detergent to being the first detergent to break carbohydrate and protein stains, the Tide brand has had a history of path breaking innovations credited to its name. Every hour, P&G produces over 400,000 pounds of Tide! Tide entered India in the year 2000 spearheading P&G’s entry into the extremely competitive, India Laundry business. Over the years, the category had been dominated by Wheel, Nirma, Ghadi in the low tier segment and Surf in the premier segment. In 2003, P&G, with its renewed focus on Emerging markets decided to explode the category, thereby ushering in an era of discontinuous growth of >20% CAGR per annum. Tide mirrored the company’s progress in India, rapidly progressing from 3MM cases (per annum) to 3MM cases per quarter. (1MM = 1000,000 units). “Tide Safedi” was the new slogan of the washing business, with Tide rapidly growing market share in the Tier 2 category to 8.6% in year 2008.With the India business surging, the expectations from the laundry business were huge. With 69% of India residing in the rural areas it was imperative that P&G win across all segments of the Indian population and delight all consumers. Despite trying to up-tier from popular tier, Tide was not able to play meaningfully in the bottom tier (Market Share: 2.8%). Tide was 2.4 times more expensive than the popular tier detergents and the overall product proposition was not geared to win in the rural household, which required a different approach in managing the supply chain end to end and make lower pricing sustainable. The need of the hour was to unlock the fortune at the bottom of the pyramid!

! Released on 27th December 2012

The Dream Team Season 2

Case Study for Strategy Development

Fig 1: India Laundry Category Split and P&G Market Share by market segment * Nielsen Data Pre Launch Category Size (Laundry) P&G Laundry Share Urban 9% 32.5% Semi Urban 45% 20.5% Rural 46% 5.7%

Tide Naturals - Genesis
Reaching more consumers in India’s 1.5$ billion laundry market meant developing a detergent with just the right balance of cleaning performance and mildness, at an affordable price. About 80% of consumers in India—200 million households—wash their laundry by hand. With their extremely limited laundry detergent budgets, most Indian consumers settle for the lowest priced powders, which can irritate hands during after washing. P&G set out to ease the burden of everyday washing for these consumers, and develop a product to break into their households. With ingredients developed at P&G’s Innovation Centers, this product aimed to balance cleaning and mildness at a price 30% lower than the existing Tide detergent. It also dissolved in water, unlike most...
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