P&G confirmed that in February it will start shipping nationally a reformulated liquid and powder Tide. The new formulation, following last year's successful new "grease releasing" formula, will use the carezyme technology first used in the U.S. last year for P&G's relaunch of Cheer. The technology helps keep fabrics looking newer by reducing fuzz buildup.
The new marketing push will include the national introduction of Refill Tide, a new packaging idea that uses a resealable polybag for both Tide and Tide With Bleach powders.
While P&G is struggling to remake its cosmetics business (AA, Jan. 24), the company's marketing and technological know-how is coming in loud and clear in the key laundry and cleaning sector.
P&G's aggressive push behind the category's dominant brand will put second and third tier brands at risk of losing shelf presence, analysts believe. Consumers will either trade up to Tide, sister brand Cheer and Lever's Wisk and Surf or buy a price brand like Dial Corp.'s Purex. P&G is making it clear it intends to dominate this profitable category with product innovation to justify a somewhat higher cost.
Wisk, which has seen sales decline in both powder and liquid formulas, is likely to respond to P&G's new push with heavy promotional spending. The No. 2 liquid laundry detergent has been dueling with No. 1 Tide for years, and Lever isn't about to let up on one of its core brands.
P&G said ad plans were still in development, but those close to the company expect Tide's marketing efforts to be "significant" this year, especially for powder. Ad spending for the brand is in excess of $35 million annually.
A campaign for reformulated Tide and Refill Tide is likely to begin this spring. Saatchi & Saatchi Advertising, New York, is Tide's agency.
"P&G is determined more than ever to make Tide the gold standard in detergents," said one executive familiar with the brand. "There will be a big consumer push behind Tide-more is coming."
The efforts to make No. 1 Tide even stronger follow 16 months of strategic tinkering, including the move to everyday low pricing, a tactic that reduces promotions and provides consistently lower prices. In a separate move, P&G cut prices on Liquid Tide by 15% in August.
"They're doing everything they can for Tide because they're on a big offensive," said Gabe Lowy, analyst at Oppenheimer & Co., New York. "Why not raise the spending level on new-product development efforts on your leading brand at a time when weaker competitors can ill afford to keep pace? Even Lever is taking a pounding."
In the $1.6 billion liquid segment, Tide in 1993 had a sales increase of 17.5% to $416 million, for a 25.1% share. By contrast, No. 2 Wisk saw sales slip 8.6% to $232.2 million, for a 14.3% share. Figures, based on the 52 weeks ended Nov. 28, are from Information Resources Inc.
Wisk's slump is surprising since Lever in May put $100 million in ad and promotion support behind its new superconcentrated liquid detergents-Double Power Wisk, Surf and All.
Ad spending alone for Double Power Wisk reached nearly $17 million through November-the single largest expenditure in the laundry detergent category, according to Competitive Media Reporting. P&G spent nearly $14 million on Liquid Tide for the same period.
Recently, Lever began airing a direct comparison ad for Wisk that pits the brand against Liquid Tide, a clear signal Lever isn't taking its losses lying down. The company could not be reached for comment.
J. Walter Thompson USA is Wisk's agency.
Last year is being referred to as the year of liquids at P&G, and this year the company clearly will concentrate on reinvigorating its powder business.
Tide, the No. 1 powder with nearly $932 million in sales, nevertheless had a 7.4% sales decline for the 52 weeks ended Nov. 28, according to IRI. The entire $2.5 billion laundry powder segment slid 7%, with P&G's Cheer, the No. 2 brand, showing the most strength with a 14.5% jump to $281.9 million.
Cheer's reformulation last March, like the one now being introduced for Tide, is what boosted sales.
Lever's Surf, the No. 3 powder, and Wisk, the No. 4 brand, didn't fare so well. Surf's sales were down 4.8% to $186.2 million, while Wisk dropped 12.4% to $147.2 million.