Behind the Success of Tide's Pods: Innovation Coupled With Truth

Consumers Will Pay More for a Product They Know Is Designed to Prevent Overuse

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The first results of consumers using fixed, "proper" doses of Tide Pods laundry detergent are in. Overall, category sales fell 2.1% in the 12 months to March, according to Nielsen, but P&G may collect a tidy half-billion in sales for its fiscal year ending in June. Its competitors are crying foul and complaining that innovation shouldn't reduce sales. P&G couldn't be happier, and it's right to be thrilled, for at least two reasons.

First, P&G is stealing customers from the competition, and those buyers are paying more per unit purchased. This is a textbook example of the power of innovation: Tide didn't invent a new type of product or concoct a wholly new formula for its Pods, but rather innovated a better solution to a customer problem (limited time, messy bottles) in a somewhat sleepy category. It also made that improvement tangible instead of relying on a marketing gimmick, which is an outcome of the company's significant financial commitment to product development. Now, consumers are paying more for a better Tide product. No wonder its competitors are mad.

Second, P&G is proving by example that telling the truth is the ultimate platform for brand positioning and differentiation.

Many consumer product categories rely on consumer overuse or misuse to deliver sales-volume goals. Some do so explicitly, like those big openings on toothpaste tubes (they used to be far smaller) and marketing imagery that shows the stuff applied to toothbrushes like cake frosting, or directions on shampoo bottles telling users to wash their hair twice. There'd be no hand-sanitizer industry if folks weren't encouraged to use it as frequently as they do through packaging, availability and communications.

There are also the implicit instances, from there being no truly "small" size for soda pop at movie theaters and car speedometers that range far beyond legal limits, to mobile phone plans that make it all too easy (or impossible to stop) overuse of calling and text minutes. Laundry detergent falls into this latter category, especially as manufacturers have been distributing concentrates to cut shipping and display costs (and reduce waste, to be fair). People end up using too much of it. Like other instances of improper use, brands are supposed to shrug it off as "consumer choice" and cash-in the added sales.

I get the idea that we're all responsible for our own choices. It's why obesity is considered a stigma of individual weakness, and compulsive smartphone checking a quirk of personality. But providers of goods and services are not without culpability, and to suggest otherwise is, at best, dishonest. The fact that so many brands willfully ignore it contributes to the underlying unease (if not outright distrust) people have for businesses these days. Corporate reputations are in the tank, and brand loyalty is often a fleeting moment in time, despite all of the engagement and relationship-building that brands purportedly deliver online. Long-term, I think consumers figure out that they don't just use brands, but that some brands use them.

Maybe no brand can be a consumer's "friend" unless it tells the truth, just as we expect from real friends in the real world. I think that's what the marketers behind Tide Pods decided to do, and why it's paying off for them. Consumers "get" it, whether overtly or not, and my bet is that Tide can sell more product for a longer time by encouraging its proper use. Perhaps that's what Coke is trying to get at with those smaller, almost "one-shot" cans, too.

The brands that rely on improper use can complain all they want. Successful innovation and differentiation require truth. Now, if only my toothpaste didn't squirt out like Play-Doh.

JONATHAN SALEM BASKIN is the author of "A Thousand Words: Why We Must Fight The Tyranny of Brief, Vague & Incomplete," and the president of Baskin Associates, a marketing consultancy. You can follow him on Twitter: @jonathansalem.
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