In a market category that is growing at a snail's pace, is there place for another brand new brand?
Why launch another brand in a segment when you already have one, especially when you have worked very hard over the years at making the existing brand a success?
These are the questions that most practitioners of marketing have been asking recently! The new brand in question is Tide, which Procter & Gamble (P&G) recently launched in India. And, it has been launched in the premium segment of the detergent powder category, where the company already has Ariel (P&G defines premium in the detergents category as being any product over Rs 70 per kg). Stranger still, Tide and Ariel are seemingly seen by the company as interchangeable and are normally not launched in the same market anywhere in the world. So in the US, Tide rules the roost but there is no Ariel. In Europe, Ariel is what the company offers; Tide has not been launched in any country out there. In Japan, there's only Ariel.
Moreover, by P&G's own estimates, the overall Indian urban detergents market has been growing at a dismal pace of just over one per cent per annum. But, points out Mr. Shailesh Jejurikar, marketing director at P&G India, the premium detergents market has been growing at three-to-four per cent in value terms. "And compacts have been growing at around 13 per cent (in value terms); Ariel, in fact, has registered a 14 per cent growth over the last quarter." He adds that over the last quarter, the maximum growth in the detergents category has been from Surf Excel (a product from competitor Hindustan Lever's) and Ariel, both compacts.
A portfolio of brands
Mr. Jejurikar responds, "In some categories, it helps to have a portfolio of brands. While it may be true that in the US, P&G has only Tide, there are different variants to it. And there are other brands from the P&G stable -- Cheer, Bold, Gain. In Europe, there is an additional brand in Daz, besides Ariel. But in Saudi Arabia and Egypt, both brands exist side by side. In Saudi, Tide and Ariel have a 60:40 share of the two brands' total turnover. In Egypt, it's the reverse."
It all depends, he says, on one question: is there a consumer need? In India, the premium segment is growing. There is a specific consumer need for great quality of cleaning -- a dimensionalisation of whiteness. Tide has been launched to address that -- the quality of whiteness in cleaning.
In that, P&G is drawing a distinction between Tide and Ariel. "In all markets where both brands have been launched," says Mr. Jejurikar, "Ariel stands for the best in cleaning. It will keep redefining the standards of cleaning plus something more. Could be germs-free. Or as we had advertised sometime back, no pilling. Ariel will always give the best in performance; it will talk about the best in global technologies, helping the consumer redefine standards in cleaning. For the non-Ariel consumer in India, yellowing of whites will be addressed by Tide. So Tide and Ariel are not exactly interchangeable."
In the pricing of the two brands too, P&G has drawn a distinction. While Ariel comes for Rs 145 per kg, Tide's price is Rs 120. For a half kg, Ariel comes for Rs 80 and Tide, Rs 68. For 200 gm, Tide is priced at Rs 30 against Ariel's Rs 36. And unlike the US, there are no plans, in the immediate future, for variants in Tide. "We have launched the regular Tide here," says Jejurikar. "As of now, there are no plans for launching variants. If specific consumer needs come up in the future, we may consider variants."
More market share
Then there is the issue of a market share for P&G. In India, says Mr. Jejurikar, P&G still has three-fourth way to go in powder detergent market dominance. In Saudi, it commands 70 per cent of the market. In some other markets, it enjoys around 40-to-45 per cent share. "In India," he admits, "we have a fair way to go." And a portfolio of brands, feels P&G, may be the answer. For example, what used to be Ariel Super Soaker in the regular powder detergents segment, has now become Gain, priced at Rs 49 per kg. "Even in the US, Gain is offered more as a value proposition."
Consumers in India haven't exactly been showing predictable patterns in product usage and brand loyalty. Their upgrades and yes, even downgrades, have been unpredictable in the recent years. Given this, isn't there a possibility that Ariel users may shift to Tide? "Yes, there is that possibility," admits Mr. Jejurikar. "But our challenge is, can we bring more people into the P&G detergents fold? Ariel has to find new ways of bringing in consumers. As the year unfolds, we have strong plans for both Tide and Ariel. You may even wonder at the high levels of activity on Ariel. Over the next 12 months, we have planned strong action on Ariel to ensure that its consumers will not want to switch to another brand."
And what about competition. Won't it respond as strongly? "Competition may come up with special direct offers," Mr. Jejurikar guesses, declining to comment further. Incidentally, if you have been watching detergent ads on television, there seems to be some competitive action on. Tide's advertising has shown the offer of this unnamed product for maximum whiteness effect. The consumer tries the product and lo and behold, she gets the promised whiteness. After which the product's brand name is revealed as Tide.
Cut to Hindustan Lever's Rin Supreme ad where this unnamed detergent powder that is offered for trial does not provide that super whiteness. And then along come this woman talking about the super whiteness that Rin Supreme offers, while the man who had offered the unnamed detergent gets pushed to the background by a group of women talking about the excellent performance of the Hindustan Lever brand.
Comparative advertising? Sure sounds like it. And if it is, it looks like the year's competitive action will find Rin and Tide at war.
Whatever the warfare may unfold, Mr. Jejurikar is convinced that the planned action on P&G's two detergent brands will have an impact. "Between June this year and July next year (P&G's financial year), we plan to significantly and meaningfully grow our category share. Most laundry consumers know the difference between the products on offer. You provide a performance and the consumer evaluates it vis-a-vis price."
More action this year
On "why P&G chose to launch Tide this year, and not last year or the year before or even next year?" he says, "Our reason for the launch happening this year is that globally, changes at P&G have allowed for faster launches. Over the last three years, we have been working on existing brands, building a solid base. Now there are new launches coming up."
Sure enough, this year finds P&G getting active with new launches. January this year, saw the national launch of Whisper Ultra, the most technologically advanced sanpro product in P&G's global stable. Tide followed on May 3. Since April, Tempo, a tissue brand and Tampax, P&G's global tampon brand, are being test marketed at Tamil Nadu and Delhi, and Tamil Nadu respectively. "Tempo and Tampax are between nine-to-twelve months away from a national launch," estimates Mr. Jejurikar. "And even here, we will still have to evaluate. Tampax, after all, is in a very nascent segment in India."
This year then, at least in terms of advertising communication, Indian consumers will see a lot of action in laundry detergents. It is unlikely that P&G's competitors, specially arch rival Hindustan Lever, will not react strongly, or even go detergent proactive. So get ready for a lot of action, hype and high noise levels. Surprising how something as mundane as washing clothes can be made so much of by its solution providers.