As a devout fan of Procter & Gamble, I am sad and disappointed to see the company returning to a strategy that failed so quickly and recently… and is simply a bad idea.
The last time P&G faced low price competition during the 2008 recession, they reacted by introducing Tide Basic. The product was a cheaper and cheapened version of the iconic Tide product, an attack on the almost $3B Tide brand that no competitor could do as effectively as P&G did to itself. Fortunately for the Tide brand, the launch was regional and quietly ended within a year.
I generally regard price discounting as the worst strategy for defending a brand but this move may represent a new low. Price promotions, though very costly, may be needed when caught off guard by a competitive entry to buy time to respond more creatively. But they can eventually be reduced, usually after some loud complaining from customers who obviously love the discounts.
A “Good/Better/Best” strategy is a terrific approach for a brand, where degrees of performance are clear and appreciated by customers. In fact, P&G has a developed and nurtured a portfolio of laundry detergents positioned to meet their deep understanding of the subtle variations in consumer laundry needs. Though it all, however, Tide has been positioning as the best overall performance in cleaning, adding new benefits and forms along the way to add value. It has been a master class in brand innovation.
CEO A.G. Lafley recently expressed confidence that Simply Tide will not be “very interesting to regular Tide users.” That is a daunting challenge given consumer awareness and retailer shelving strategies. Moreover, I fully expect competitive brands will insure Tide users become very interested as part of their defenses. I honestly hope P&G will simply let this launch fade away as quickly and quietly as they did the last time…