P&G finally realises Indian

This comes almost a year after P&G cut the price of its feminine hygiene brand Whisper Ultra from Rs 80 to Rs 65 on the basis of a research conducted by the company which suggested that though 88 per cent of women in the upper middle income category preferred Whisper Ultra to other brands, they said they could not afford it.

The $3-billion detergent Tide is Procter and Gambles flagship brand, and is available in over 23 countries. It is one of P&Gs best-performing brands globally and, therefore, it was unlikely that the company would watch silently when the brand failed to take off in a big way in the Indian market.

Tide was launched in May 2000 at Rs 120 a kg. Its positioning was midway between concentrates like Ariel and Surf Excel (Rs 160 a kg) and the premium segment (Rs 85 a kg) of the detergents markets, occupied by Hindustan Levers Surf.

At present, curiously, the premium compact powder market is growing at a faster pace at 16 per cent than the overall growth rate of the powder detergent market, which is growing at the rate of about 5 per cent. Thus, for P&G, the route to expansion in the detergents market is clearly through its best bet Tide.

Analysts see the company's price cut on Tide as a threat to HLLs Surf detergent brand, which is currently priced at Rs 86 a kg. To counter P&G's move, HLL is expected to shore up its brand too.

And they may well be right.