P&G Plans Bargain Version of Tide

But it could erode premium Tide sales and start a price war


tide185 P&G Plans Bargain Version of TideSources tell the Wall Street Journal that Procter & Gamble is discussing the launch of a new discount liquid detergent with retailers.

The new product would be a lower-priced version of its popular Tide laundry detergent, possibly called Tide Simple. It would mark the second time in several years that Procter & Gamble has attempted to launch a bargain brand for Tide.

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In 2010, the company cancelled plans to launch Tide Basic, which had been in development for more than a year. In research, Procter & Gamble found that consumers confused the discount brand with the higher-priced flagship detergent. Consumers also expressed dissatisfaction with the bargain brand’s cleaning performance.

Fears that a discount version of Tide could cannibalize regular Tide sales remain. However, with a lingering sluggish economy, many consumers have become budget-conscious and a discount version of the popular detergent could find a ready market. Recent Nielsen market research data showed that only 29% of U.S. households purchased premium brands over the past year, compared to 41% of homes that bought discount laundry detergents.

Procter & Gamble generates $4.5 billion annually from detergent sales in North America. Introducing a lower-priced version of Tide could increase pricing pressure in the segment, possibly igniting a price war with other manufacturers.

Tide isn’t only popular with consumers. The detergent has become a sort of underground currency among thieves due to the ease with which it can be exchanged for cash.

Shares of Procter & Gamble slipped slightly in Wednesday morning trading.

Article printed from InvestorPlace Media, http://investorplace.com/2013/09/pg-plans-bargain-version-of-tide/.

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