"That would never happen here," Mr. Lafley said.
In the end, that was the story of how one of the most fabled marketing battles of the past century was won -- and lost. P&G had its head, literally and figuratively, in the laundry room. Unilever didn't.
Unilever put its $1.1 billion North American laundry business up for sale last week, ending nearly seven decades of struggle between the two global soap behemoths for the $7 billion U.S. laundry business.
Some marketing executives trace the beginning of the end all the way back to the late 1940s, when P&G decided to roll out its synthetic Tide detergent nationally -- while Lever Brothers was still cautiously test-marketing its own synthetic offering under the long-ago discontinued Rinso brand.
But the bottom line is that P&G won the laundry war because it was bigger, better, more focused and more aggressive in a business that's become much more important and profitable to it than to competitors.
Scale is important in many categories, but particularly in laundry, which is relatively costly to produce and ship. P&G's laundry business is widely seen as a cash cow that has fueled other ventures for years, while still having plenty of margin to outspend the competition. Last year, P&G outgunned Unilever on media spending for laundry brands $218 million to $25 million, according to TNS Media Intelligence.
Entering a new millennium, even though its U.S. market share was well over 50% in laundry detergent, P&G kept raining blows on Unilever and all other comers with stepped-up product launches. Such products as Tide with Downy, Tide Coldwater and the scent-focused Simple Pleasures lineup for Tide and Downy helped P&G steadily gain a share point or two per year in recent years, so that it owns a 62.5% share of the $3.6 billion laundry-detergent market as measured by Information Resources Inc. to Unilever's 12.9%. It has an even bigger lead in fabric softeners -- 66% to 8.4% for Unilever.
Unilever's sale plan ends a major and storied marketing war where hundreds of laundry players bludgeoned one another over decades.
With liquid Wisk and its classic "ring around the collar" advertising of the 1960s, Unilever made steady inroads as leader in a new segment until P&G launched liquid Tide in 1985. There were fireworks, literally, as Unilever spent lavishly with promotions such as a 22-city Grucci display for Wisk, then the leading liquid detergent, as part of a $10 million push in 1987.
But ultimately, the defense fizzled. People familiar with the laundry wars from both sides believe that when P&G, after two decades of contemplation, put the Tide brand name on a liquid detergent, the handwriting was on the wall for Unilever in liquids, too.
Working on that liquid Tide launch in the mid 1980s was Mr. Lafley himself -- then an advertising manager -- and Bob McDonald, then Tide brand manager. If you need further convincing that P&G put its top guns on laundry, consider this: Not only did Mr. Lafley become P&G's chairman-CEO, Mr. McDonald is chief operating officer, and widely seen as a leading candidate to succeed him.
On P&G's earnings conference call Aug. 3, Mr. Lafley was clearly heartened by P&G's victory, noting that it was the No. 2 player in laundry globally even in the early 1990s but today leads Unilever 34% to 17% in global share.
Unilever isn't admitting defeat, but said it prefers to invest in faster-growing and more profitable businesses, such as personal care, where, at least for the past two quarters, it's been outgrowing P&G globally. Unilever remains the leading laundry player in emerging markets overall.
Top candidates to buy the business are Church & Dwight, Henkel and Vestar, owner of private-label manufacturer Huish. Any of the three could be a bigger and potentially more effective No. 2 in the business than Unilever was. But even at that, P&G will remain at least three times bigger than its nearest competitor in laundry.