Sunday, November 30, 2003

Pseudo-variety and laundry detergent The US laundry detergent business is a $2 billion a year industry. Although there are a multiplicity of colorful brands on the shelf, the market is dominated by three companies that control some 77% of the market. While consumers appear to have a wide variety of choices, powder or liquid, and a wide variety of brands, that variety is a pseudo-variety. Foremost by far is Procter & Gamble, which owns the top three brands and two more variant brands in the top ten. Tide, the company's flagship product, accounts for 44% of all detergent sales, if you count its subbrands. Gain and Cheer are also P&G brands, as well as smaller brands Bold, Dreft, and Ivory Snow. All together the P&G  portfolio products make up almost two-third of all US detergent purchases. By comparison, Unilever and Arm & Hammer account for a relatively modest share of all detergent sold. Furthermore, brands like All (Unilever), Fab (Colgate-Palmolive), Purex (Dial), and Oxydol have tiny shares of the market. (Oxydol was a Procter & Gamble product bought by Redox Brands, a company that is dedicated to reviving outmoded brands.) As with other areas of shelf-capable products there are a number of minor variants on each mark. For example Cheer variants include Cheer Granular, Cheer Liquid, Cheer Ultra with Bleach, Cheer with Triple Color Guard, and Cheer with Triple Color Guard Ultra. Arm & Hammer varieties include: Arm & Hammer Concentrated, Arm & Hammer Fabricare Advanced, Arm & Hammer Fabricare Advanced with Color-Safe Bleach, Arm & Hammer Fabricare Advanced with Clean Mountain Scent, and Arm & Hammer Liquid Detergent, Sensitive Skin Formula. In Europe there is more competition from Unilever's Omo brand and Henkel's Persil. But P&G has pushed its Tide and Ariel brands worldwide. In general, the two brands are equivalent, so that in countries where Ariel is established (Europe and Japan), Tide is not seen, and vice versa. In India, both brands have been introduced. Here's the thinking, according to an article ("Why Tide, With Ariel There?", 26/6/2000) an Indian business website called domain-b.com,. The site quotes a marketing executive for P&G India: In some categories, it helps to have a portfolio of brands. While it may be true that in the US, P&G has only Tide, there are different variants to it. And there are other brands from the P&G stable -- Cheer, Bold, Gain. In Europe, there is an additional brand in Daz, besides Ariel. But in Saudi Arabia and Egypt, both brands exist side by side. In Saudi, Tide and Ariel have a 60:40 share of the two brands' total turnover. In Egypt, it's the reverse. According to the article, P&G admits its strategy in India is to create two tiers, with Ariel as the everyday brand and Tide as the premium, high-priced detergent. The P&G exec admits that this is a deliberate grab for market share through offering a variety of products, seemingly tailored for different needs. It is clear, however,  that this differentiation is simply a product of marketing, not chemistry: pure pseudo-variety.   US Detergent Brands and Market Share Brand Manufacturer Market Share 2000 Tide Procter & Gamble 34.8% Gain Procter & Gamble 11.8% Cheer Procter & Gamble 8.4% Ultra Tide with bleach Procter & Gamble 5.4% Surf Unilever 4.3% Tide Free Procter & Gamble 3.8% Arm & Hammer Church & Dwight 3.6% Ultra Surf Unilever 2.7% Private label brands   2.6% Wisk Unilever 2.4% Source: AdAge 1:48:56 PM

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