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A Potential Supply Stumble for P&G Turned Into a Market Win

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Earlier this year, Supply Chain Matters wrote of the uncharacteristic supply stumble for Procter and Gamble, specifically related to the market introduction of its new Tide Pods laundry detergent. Our byline was that in these challenging business times, even superior rated supply chain organizations can experience a supply snafu.

The supply snafu involved the market introduction of the newly branded line of Tide Pods, a capsule blended laundry detergent that was originally planned for market introduction in August of 2011.  P&G product management had to push the market entry date to early 2012 due to production supply challenges that limited how much supply that would have been available at retail outlets to support a broad product launch. Meanwhile, P&G’s competitors in the home laundry market segment were given a market opportunity to perhaps garner market-share in the one-dose, convenience segment, which is more profitable than the bulk laundry detergent segment.

We can now share an update to this former P&G challenge with Tide PodsA mid-December article published on AdvertisingAge notes that P&G is now projecting first year retail sales of $500 million for the Pods product offering. This article notes: “… a major feat considering that of the 1,500 new consumer-packaged goods launches tracked by SymphonyIRI in 2011, only 21 percent reached one year sales of even $50 million. Moreover, because of product scarcity, P&G has not offered promotions on the premium-priced Pods, so discounting hasn’t had a role in its success.

The article goes on to note that supply shortages still linger and that smaller bag packs remain on allocation to retailers.  Despite all of these challenges, P&G’s supply chain and product marketing teams have successfully managed to garner a 73 percent share of the unit-dose market segment including notable retail outlets such as Wal-Mart. All of this has been accomplished as sales in the broader laundry detergent segment are actually down 0.2 percent.

Once again, the cross-functional efforts of P&G teams have turned the challenge of supply adversity into a major market win.

 

 

That qualifies for a hearty 2012 thumbs-up award from Supply Chain Matters.

Bob Ferrari

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