Proctor & Gamble (P&G) is built on Marketing. P&G lays claims to being the founder of Brand Management.
Over the years, those brand managers have improved, enhanced, and extended brands in many directions. Generally, all products are new, improved and more expensive.
Turn of Events
In a recent article, The Wall Street Journal reported in a shocking reversal, P&G is now test marketing Tide Basic. Tide Basic is new but NOT improved. In fact, it has less effective ingredients and cleaning power.
The Tide brand is heading down market. P&G is leading with a lower price, which is the antithesis of their current approach.
Why reverse a decades long successful brand strategy?
The economic meltdown in the last year has cost Tide market share. Brand managers are trying to hold market share even if the revenue is lower and potentially a drain on the bottom line.
The Tide strategy reminds me of the glory days of General Motors (GM) when it held commanding market share just like Tide does now. The difference was that GM had a well-developed entry-level strategy with the Chevrolet brand.
Traditionally, P&G tries to build the next new Cadillac instead of the next new Chevrolet. Suddenly, they realized they need a Chevrolet in the product line-up.
Brand Equity
Tide is one of the crown jewels of P&G and is symbolic of P&G’s transformation to up market products and pricing. Enormous sums have been invested in Tide’s image and positioning resulting in significant brand equity as a premium product.
The Takeaway
Keep an eye on the competition and make sure you are not outflanked. Protect your brand equity by having the necessary breadth and depth in your product or service offerings.
Over to you. What do you think?
- By playing the “price” card is P&G reducing its brand equity?
- Will P&G withdraw Tide Basic from the market when the good times return?
- How does Tide continue to claim premium pricing with bargain products in the brand line up?
Update: The Wall Street Journal reported on June 24, 2010 that “P&G Ends Test of Cheaper Version of Tide”
