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Customers are ready! Proctor & Gamble is confident that consumers will embrace a new innovation in laundry detergent—even though previous attempts have been less than successful, especially in the United States. The latest offering is Tide Pods, small dissolvable packets of detergent for single-use machine loads, which cost 25 percent more per load than liquid detergent.

Proctor & Gamble introduced Tide Basic during the recession, to compete with increasingly attractive, less expensive private-label alternatives. But it was not particularly successful in that venture and thus has changed its tactics. Rather than go bare bones, Tide is emphasizing its better quality and hoping to encourage consumers to switch to more expensive products that offer great convenience.

The $7.2 billion laundry detergent industry calculates that the average household washes approximately 400 loads per year. The cost of each load, using the recommended amount of Tide’s liquid detergent, is 22 cents. But most people use too much detergent, which means it actually costs them more. Tide Pods will cost 25–32 cents per load. Although consumers already may be spending this much on Tide, due to their overuse of the liquid product, the challenge will be convincing them of this equivalence. Previous attempts at premeasured detergent have failed too, as market research indicated that U.S. consumers prefer to measure their own amounts of detergent for each load—even if it is too much.

The laundry detergent category has not experienced a true innovation in three decades, according to Robert McDonald, CEO at Proctor & Gamble. However, the company believes its track record of success with high-end versions of consumer packaged goods—Crest 3-D Whitestrips, Downy Unstoppables in-wash scent boosters, and Gillette Fusion ProGlide style razors—give it insights into what people might really want in their laundry rooms.

Discussion Questions:

  1. What are Tide Pods?

2. Do consumers want a single-use laundry detergent?

Source: Emily Glazer, “Tide Rides Convenience Wave,” The Wall Street Journal, February 23, 2012.