Snarky Behavior

Why is Tide the most expensive detergent? Is it worth it?

January 26, 2008 · 6 Comments

Waiting for the South Carolina results to come in, I am struck by how silly some of the pundit analysis comes across when dissecting voter preferences. 

Now that the field has been whittled down to two front-runners for each party, we are left with narrowly defined either/or considerations to explain the “rational choice” between Candidate A and Candidate B.  This reductive analysis seeks to find justifications for expressing preference between two similarly marketed products (i.e. Pepsi v. Coke). 

In fact, I just heard Keith Olberman refer to the “Clinton brand” as a potential panacea to the economic anxiety many voters are now experiencing.  Buying the Clinton “brand” thereby reinforces the voters’ self-image as someone whose primary concern for the future is economic security.

When people approach an election the same way they approach a consumer choice, it’s destructive to democracy.  It reduces the candidates, it atomizes the electorate, and it biases our “rational choice.”

But that’s neither here nor there… back to the question at hand.     

I ran across a conversation at Marginal Revolution asking the question:  Why is Tide so Popular? 

I thought… no really, why is Tide so popular?  Why do I buy Tide instead of Gain, which is cheaper?  What does Tide say about me, as a person? 

It’s more expensive, so I presume it’s the highest quality product.  I like to think that I can afford the highest quality, because I’d prefer that my clothes be as soft and clean and fresh as possible. 

But is that a reasonable assumption?  What if Proctor and Gamble just spends more on branding/marketing?  What if all laundry detergents are essentially the same mix of chemicals, with different bells and whistles? 

Well, here’s the breakdown, from the comments section.  VERY interesting stuff:

As a former market research service provider a Home and Beauty Care company most often butting heads with P&G in the Laundry Category, I have a lot of perspective on it based off findings. And bear with me, when it comes to market research I have pretty robust information:

* Echoing the sentiments and actual reports above of many, P&G detergents typically perform better in terms of both cleaning and the conditioning of clothing. Granted, we now wash clothes in modern america not to clean them per se, but to “refresh them”.

* The “mere refresh” needs as opposed to “Deep cleaning” being a priority opens the door for price segments in lower tiers for consumners: A&H, Xtra, Purex, Store Brands that do significant volume, even if dollars are more modest. Testimony to this is P&G has a 55-60% share of sales dollars, but a 40-45% volume share of sales since its products are premium largely.

* P&G manages their Fabric Cleaners, Conditioners (By the way, Downey is their brand and is by far number one conditioner), and Dryer Sheets (By the way, Bounce/Downey is the number one/two brand by far there too) as a massive portfolio, with each targeting certain segments:

** Tide is the best performer, most expensive, most high end benefits included.

** Gain is the experiential and frgrance brand, and has strong ethnic performance: quality and an experience. BTW, it challenges for status of 2nd biggest brand itself.

** Cheer is a the Color-Safe premium brand

** Dreft is the Baby, non-irritating brand

** ERA is the Budget Brand to compete in that segment

* Consumer segmentation studies and a Decision Trees suggests that with Laundry category the first decision is whether you are a Tide customer or not. Then, if not, you typically believe “All are the same”/”I am poor” and your decision is based on price. This harms mid-level brands such as ALL or Wisk that try and have a hybrid of some quality and innovation, but competitive mid-level pricing.

* Consumers pay more and get excited over high order benefits that Tide is a leader in providing new versions of on a yearly basis. What are those? High Efficiency, With Touch of Downey, With Bleach Alternative, With Color Protector, Free & Clear, Cold Wash, Scented, Various Sizes, etc. By the way, when you bu yany of these, note the number of loads per bottle changes (lower), even if bottle is same size. that’s their marging boosting! Only ALL sometimes comes out with benefits such as these first. (Small and mighty, anti-allergen)

* Shelf-Sets and sales are dictated by P&G due to their demanding share. If shelves were organized by TYPE rather than BRAND, it would help smaller brands and change consumer mentality about choice of product. Scented onlyt first, then High efficiencies, THEN with Bleaches, etc. Insrtead, you have the ubiquitous wall of orange taking up the whole section.

* Also, P&G’s budget for discounts and specials is much larger, as well as tie-ins with its other leading brands Febreze, Downey, and Bounce that synergistically boost each other.

This all said, the biggest challenge for Tide and P&G go-forward is the changing face of the US consumer (Hispanic, etc.), the rising costs of raw materials (partial petroleum basis for liquid detergents), sales rise only as population does (no new markets or consumers), quality ceasing to be a key differentiator.

People alluded to Heinz’s dominance as well – there are small chips in the facade, they always must remain vigilant. Remember, Heinz doesn’t compete with Ketchup only – it competes with all condiments. mayo, Vinegar, Ranch, Mustard…Staying relevant is important.

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6 responses so far ↓

  • Rohit // January 27, 2008 at 12:59 am | Reply

    I use Tide because all other brands I’ve tried have caused some degree of an allergic reaction. Actually, I don’t even know that for sure. My mom told me that when I moved out of the house (and started doing my own laundry), and I think my pediatrician told her that when I was 2 years old. But nonetheless, I have always bought Tide, and I see no reason to experiment. The marginal cost savings aren’t worth the potential for some sort of devastating allergic reaction, no matter how slim the chances.

  • Maya // January 31, 2008 at 5:41 pm | Reply

    hmm, I am an ALL small and mighty girl (the anit-allergy kind, specifically) ever since moving to a city that requires me to walk home from the store. Carrying a big ass bottle of Tide is just plain inconvenient.

  • Seamus // August 13, 2008 at 10:37 pm | Reply

    My wife gets rashes from something unknown she assumes that all detergents but tide works better. I hate spending big bucks on clothes soap i go for sales like ALL 32oz 2/$8. But wife will not budge an it pisses me off! I snuck in the cheap stuff did a normal load – NOTHING happened to her skin NOTHING!!!!

  • love v // September 29, 2008 at 6:34 pm | Reply

    you are wierd go get a life

  • Darren // January 6, 2009 at 12:01 am | Reply

    That’s not weird, love, its a legitimate experiment. Kudos to you Seamus for proving the old lady wrong! Now its a matter of convincing her!

  • byron // February 18, 2009 at 2:18 am | Reply

    My Mom and Dad raised 8 children, starting with me in 1947. Laundry was a constant chore. My Mom used the cheapest brands, but did not become really pleased about the results until she switched to SA8. I asked her what she liked best about SA8, and she said it made the clothes cleaner. There are other great things to say about this product, but you can only get it from an Independent Business Owner supplied by Amway Global/Quixtar

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