Competitive Analysis – Tide Pods Essay
Proctor and Gamble has spent nearly a decade developing Tide Pods, and thus far, it appears that their work has paid off. Tide Pods have claimed a 68% market share in the new laundry pods category, which now accounts for 7. 3% of the total multibillion dollar laundry industry (Monk, Tide Pods successful enough to boost P&G’s earnings). Tide Pods are unit-dose liquid packets that are twice as compacted as liquid detergent. They contain three different chambers and products: a liquid detergent, stain remover, and brightening agent.
Tide Pods unique chemistry and packaging add a little magic to a despised chore. Existing Competition Proctor and Gamble gave their competitors a great advantage in the laundry pod market by delaying the launch of Tide Pods twice (“Proctor & Gamble Delay Tide Pods a Second Time”). Church & Dwight, a competitor of Proctor & Gamble, was able to launch Arm & Hammer Toss N’ Done Power Paks slightly before Tide Pods were released into the market.
Power Paks are a single-use laundry pod, but they contain a powdered detergent as opposed to Tide’s liquid detergent Pods.
Power Paks also contain a brightening agent and a bleach product for stains, which is a considerable strength for them (Leverette, Arm N’ Hammer Toss N’ Done Power Paks Laundry Review). No other unit-dose pack has these features besides Tide Pods. They also contain baking soda, a quality that has off put some consumers. Consumers have noted that the Power Paks are not soluble in all washing machines or water temperatures, and they sometimes leave a film residue on clothes. Another complaint that consumers have had with Power Paks is their scent; many have complained about an unpleasant smell after washing their clothes with the Paks.
They do not have a cost advantage over Tide Pods either; they actually tend to run about $0. 02 more per ounce (Amazon. com). Laundry Giant Sun Products was able to launch the All Mighty Pac before Tide Pods hit the shelves. All Mighty Pacs are single-use laundry packets much like Tide Pods, but they only contain detergent, and do not include a stain remover and brightening agent. They are four times as concentrated as liquid detergents, compared to Tide Pods’ 3X concentration (Leverette, All Mighty Pac Product Review).
This is a product strength because All Mighty Pacs can be used for larger loads than Tide Pods. Many consumers have had problems with the Mighty Pacs solubility, and noted that the residue from the Pac was left on their clothes. This actually became such a problem that the brand manager for All Mighty Pacs had to issue an apology statement. He also offered the solution of re-washing your clothes with no detergent if they had residue on them, which completely defeats the purpose of the convenient capsules (Leverette, All Mighty Pac Product Review).
All Mighty Pacs are rightfully less expensive than Tide Pods; they cost about $0. 10 less per load (Amazon. com). Henkel Corporation’s brand, Purex, created a unit-dose laundry pod called Purex UltraPacks. Purex UltraPacks contain concentrated liquid detergent, and are Tide Pods’ largest competitor according to market share. A bag with 18 UltraPacks costs about $0. 27 less than an 18 count bag of Tide Pods (Amazon. com). Purex dissolves very well in all washing machines, which is a major strength for Henkel, and something that other unit-dose competitors have problems with.
They do not leave residue on clothes like other laundry packets. Their solubility has also caused some issues. Many consumers have complained that the packets often burst open while still in the bag, which causes a chain reaction of many of the packs dissolving, leaving a goopy mess. Consumers who live in high humidity areas would not want to purchase this product, because they dissolve so easily when in contact with any moisture. Product reviews also reveal that the Purex UltraPacks have a strange scent or no scent at all. Threat of New Entrants
Although many competitors have already launched their answer to Tide Pods, Proctor and Gamble still has some laundry giants to worry about. Unilever, a giant corporation who owns laundry brands Comfort and Surf, has yet to come out with a laundry capsule. This could indicate that they are spending a lot of time and millions of dollars to create a product that is as innovative and superior as Tide Pods. Many of Proctor and Gamble’s competitors released a product very quickly to compete with Tide Pods, but their products definitely had some issues.
Phoenix Brands, who owns laundry giants Ajax and Fab, has yet to enter the laundry pod market. This should also be a concern for Proctor & Gamble. Proctor and Gamble has low barriers to entry in terms of competitors because the laundry market is a 7 billion dollar industry, and there are so many different brands that could develop their own laundry capsule ( (Monk, Procter & Gamble Washing Out Rivals with Tide Pods). Competitive Advantage Although Proctor and Gamble has many competitors to face, Tide Pods have developed a strong competitive advantage over other laundry products.
It could have actually been advantageous for Proctor and Gamble to delay the launch of Tide Pods, because it made their competitors jump the gun and put inferior products on the shelves. Proctor and Gamble spent $150 million dollars and over a decade developing Tide Pods, which has proven to be very beneficial (Neff). A study that Proctor and Gamble conducted found that only 68% of consumers are satisfied with the time and effort they spend doing laundry, and after using Tide Pods, 97% of consumers were satisfied with the time and effort spent to achieve excellently washed laundry (Branna).
Proctor and Gamble capitalized on convenience by designing the Tide Pod to contain three different laundry products; a liquid detergent, a stain remover, and a brightening agent. None of Tide Pod’s competitors contain these ingredients, and they are also not that much cheaper. Consumers who use Purex UltraPacks or All Mighty Pacs would have to add a stain remover or whitening agent to their laundry, which conflicts with the purpose of the unit-dose laundry package (convenience).
Competitor’s products are technically not less expensive than Tide Pods if consumers have to add stain remover and a brightening agent to their loads. Not only do these three ingredients help Tide Pods wash laundry more effectively, the orange and blue colors also help create a highly recognizable brand image. Each time a consumer places a colorful pod into their washing machine they are reminded that they are using Tide. Another reason that Tide Pods have been able to command such a large share of the laundry pod category is their ability to dissolve in any water temperature and in any washing machine.
The main complaint that consumers have about competing products is that they don’t fully dissolve, and leave a sticky residue on their clothes. This is a big problem; consumers will most likely completely discontinue the use of these products if that happened to them even once. This gives Tide Pods a major advantage because there have been no reports of Tide Pod users experiencing this residue, most likely due to the time and money Proctor and Gamble spent ensuring that their product was perfect. Conclusion In conclusion, Tide Pods have an advantage over their competition because they have designed a superior product.
They are the only unit-dose packet that has a liquid detergent, a stain remover, and a brightening agent, which makes them the most convenient and superior product. They also are the only laundry packet that doesn’t have problems with solubility. Tide Pods created $131 million dollars in 2012 revenue, five times the amount that Purex Ultrapacks earned, who leads second in the market share for unit-dose laundry. Tide Pods are the most innovative product in an incredibly new and innovative laundry industry. Proctor and Gamble’s announcement of Tide Pods created a game of “follow the leader” and P & G was able to come up on top.