Question

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.

i)Describe the target market for that product, its demographic and psychographic characteristics.

ii) Looking at the market segmentation methods proposed by the theory, which method is best for Tide Pods? Why;

iii) Based on the success of Tide Pods, think about the other categories of products that can be benefited from the dosing volume.

Answer 1

i) Tide Pods are three-chambered liquid detergent packs that make laundry more efficient and convenient. Its designed to work with high effeciency washing machines and aims to provide a solution to 3 different products in one, namely,

• laundry detergent
• stain remover
• brightening agent

P&G is also charging a premium of about 10-25% over their regular detergents for tide pods. So, Tide pods are clearly targeted to middle to upper classes, especially those who enjoy a fast paced lifestyle, are open to trying new products, and willing to pay a significant premium for convenience.

Demographics:

• The Tide pods are aimed at urban working age group people, between 18-64 years of age. The target population belongs to middle and upper middle class (income US$ 60000/year or more).
• In this demography, the focus is on families with working parents and multiple children, and also young working professionals & college students. who have busy lifestyle.

Psychographic Characteristics:

• The target segment is likely to be liberal as the product is showcased as less wasteful and therefore more efficient and less harmful for environment.
• They would also be heavy users, especially the families

ii) Since the main selling point of the Tide pods is their ease of usage and the combination features of 3 products in one, its serving the needs of people across different demographics. So, targeting based on demographic segmentation won'tbe as effective. Instead, the psychographic and behavioural characteristics are actually more important in gaining the interest of the users. So targeting based on psychographic segmentation would the most effective for tide pods.

iii) Products which have a potential to introduce dosing volumes-

• Dishwashing liquids
• Nutrition premixes for fitness enthusiasts