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and leveraging scale. Ghadi in the low tier segment and Surf in the premier segment. P&G. Despite trying to up-tier from popular tier. Tide Brand Background Tide was launched in year 1946 and was touted as the biggest innovation in the detergent industry. Procter & Gamble afﬁrmed that a strong momentum in developing markets continues to be a key part of its strategy.000 pounds of Tide! Tide entered India in the year 2000 spearheading P&G’s entry into the extremely competitive. increasing market share.6% in year 2008. With 69% of India residing in the rural areas it was imperative that P&G win across all segments of the Indian population and delight all consumers. the expectations from the laundry business were huge. Over the years. Every hour. with its renewed focus on Emerging markets decided to explode the category. Shantanu Khosla. improving mix. the Tide brand has had a history of path breaking innovations credited to its name. Nirma. Tide mirrored the company’s progress in India.8%). a 14% increase in just one year. with Tide rapidly growing market share in the Tier 2 category to 8. Over the years. 3rd December 2012: In a recent global investor meeting. rapidly progressing from 3MM cases (per annum) to 3MM cases per quarter. and aim for proﬁtable expansion by focusing on growing markets. localizing production.The Dream Team Season 2 Case Study for Strategy Development S T R AT E G Y F O R T I D E I N I N D I A Case Background The Mint. which required a different approach in managing the supply chain end to end and make lower pricing sustainable. who heads P&G’s India operations. “Tide Safedi” was the new slogan of the washing business. also addressed this meeting. In 2003. and consumers using its products have risen to 700 million. It is doing all of that in India. (1MM = 1000.000 units). and said that the company’s value share has risen to 12% in FY12 from 2% a decade ago and sales have risen by 30% for each of the past two ﬁscals. It said it will invest resources on the biggest opportunities. The need of the hour was to unlock the fortune at the bottom of the pyramid! ! Released on 27th December 2012 . India Laundry business. From being the world’s ﬁrst compact detergent to being the ﬁrst detergent to break carbohydrate and protein stains. Its distribution footprint has increased by 25% in the past two years. Tide was 2.4 times more expensive than the popular tier detergents and the overall product proposition was not geared to win in the rural household.With the India business surging. Tide was not able to play meaningfully in the bottom tier (Market Share: 2. thereby ushering in an era of discontinuous growth of >20% CAGR per annum. Tide has grown to be one of P&Gs 26 billion Dollar brands. P&G produces over 400. India ranks as one of P&G’s top 10 developing markets. the category had been dominated by Wheel.
5% Rural 46% 5. and develop a product to break into their households. delivering a solid value that was now affordable for more than 70% of Indian consumers! The Laundry Powders Category The laundry powders category was deﬁned into Tiers as below: Brand Tier 1 Pricing Priced 4 times of popular tier Ariel. P&G set out to ease the burden of everyday washing for these consumers. unlike most competitive products in the low price range.5$ billion laundry market meant developing a detergent with just the right balance of cleaning performance and mildness. thereby launching it as an extension of the existing Tide brand. The challenge was to differentiate the beneﬁt of Tide and Tide Naturals clearly.5% Semi Urban 45% 20. most Indian consumers settle for the lowest priced powders.7% Tide Naturals . at an affordable price. it also upgraded the original Tide product and restaged it to Tide Plus with reinforced superior whiteness messaging.Genesis Reaching more consumers in India’s 1. Hence as P&G launched Tide Naturals. It also dissolved in water. About 80% of consumers in India—200 million households—wash their laundry by hand. By 2009. With ingredients developed at P&G’s Innovation Centers. With the introduction of Tide Naturals. which can irritate hands during after washing. There was a signiﬁcant chunk of consumers who wanted to buy Tide but decided otherwise only due to affordability issues. With their extremely limited laundry detergent budgets. Tide had established itself as an important Tier 2 detergent and had been consistently growing equity year on year. which leave gritty materials in the wash water that can be harsh to hands. now offered laundry detergents at three distinct performance and pricing levels. P&G which was earlier playing in the Urban and semi urban market.The Dream Team Season 2 Case Study for Strategy Development Fig 1: India Laundry Category Split and P&G Market Share by market segment * Nielsen Data Pre Launch Category Size (Laundry) P&G Laundry Share Urban 9% 32. this product aimed to balance cleaning and mildness at a price 30% lower than the existing Tide detergent. so that consumers understood Tide as the superior product of the two. Surf Brands ! Released on 27th December 2012 . Its unique scent containing natural oils offered an attractive beneﬁt to Indian consumers that other low-cost detergents did not. Hence P&G decided to leverage this equity it had built with Tide to bring this revolutionary product to market and named it Tide Naturals.
“Is inexpensive” and “Overall cleaning”. Ghadi and Nirma (as well as local Tier 4 brands because these are cheaper. Good fragrance and good everyday cleaning deﬁne good laundry for her.National Brands Popular tier . She currently uses brands like Wheel. She is not sure how better Tide is vs.4 times popular tier Popular tier . She wants to provide the best to her family but and actively seeks superior performance brands that ﬁt into her monthly budget. who expects good cleaning from her detergent which should come within her limited budget. however she feels that it is expensive. Tide Plus The consumer is a Tier 3 brand user who expects superior whiteness and is not completely satisﬁed with her current brand. Awareness of product is extremely critical to develop belief that both virtues can be provided on one product”. She currently believes that Tide is better than her current detergent. Wheel Brands Oorvashi (South India). Safed (North India). ! Released on 27th December 2012 . There was difference in the different consumer segments targeted for Tide Plus and Tide Naturals. A need based segmentation carried out. Rin Ghari.The Dream Team Season 2 Case Study for Strategy Development Brand Tier 2 3 4 Pricing Priced 2 to 2. her current detergent and whether it’s worth the premium. Nirma (West India) The Consumer for Tide Naturals (Source: P&G CMK) Tide Naturals “The Tide Naturals consumer is Tier 3/Tier 4 brand consumer. She is a risk-averse consumer and does not want to switch from her current detergent as she believes other detergents at the same price point will damage her hands. revealed that beneﬁts like “Keeps white clothes white” and “cleans well with only a small amount” are amongst the top drivers for Tide Plus consumer whereas Tide Naturals consumer was driven by beneﬁts like “Does not irritate skin”.Local Brands Tide.
The Green colour package with Sandal.3 times the popular tier. India laundry category was clearly impacted by it and the category came under the impact of signiﬁcant cost pressure due to commodity prices.3 Grow share in Tier 3 via sourcing volume from Competition – Ghadi / Wheel/ Nirma Tier 3 is 70% of the category Volume Launch Strategy The overarching strategy for Tide Plus and Tide Naturals was to attain growth by increasing penetration into Tier 3 consumer households. Moreover. Pricing Tide Naturals was priced at 1. pricing much closer to Tier3. Lemon icons communicated mildness & cleaning helped bring-to-life the beneﬁt which the product was offering while the price on the pack helped re-emphasize the differentiate. The biggest challenge was on ensuring no cannibalization of Tide Plus with the launch of Naturals.g. Packaging Visual cues are extremely important in deﬁning the product. However speciﬁc states were targeted (e. UP. taking the overall portfolio into consideration. The most popular way of taking price ups was to ! Released on 27th December 2012 . Since the launch of Tide Naturals. Almost all laundry players started taking several price ups in the past 2 years. macroeconomic conditions have been on a somewhat downward spiral. 1. consumers identify the product by its colour. This needed a whole new launch approach.2 Grow size of Tier 2 segment via up-tiering from tier 3 Tier 2 currently only 15% of category volume Tide Naturals Tier .The Dream Team Season 2 Case Study for Strategy Development Strategy to Win Tide Plus Tier . MP Rajasthan) as the key growth priority states in India for which P&G adopted a very different pricing-sizing strategy for Tide Naturals. 2.
Media and Communication TV was used to target early adopters to build Word of Mouth. 4. Trade inputs focused only on Tide Plus in top channels with stronger trade input on Tide Naturals for Wholesale and smaller stores Visibility is a key in-store deliverable for all sellers.10. wire hangers and banners in top channels on Tide Plus. ✴ ✴ ✴ ! Released on 27th December 2012 .S. Tide Naturals was advertised more in Terrestrial (DD) while Tide Plus had higher presence on cable & satellite channels. 20 etc. Advertising patterns were based on electricity patterns by state and the time of viewing. 3. Overall. Media weight between Tide Plus and Tide Naturals was also varied by state depending on the states’ laundry demographics. of India came up with a regulation (Notiﬁcation No. In smaller stores and wholesale shops BOTH Tide Plus and Naturals were made visible and not just Tide Naturals. Tide Plus 500g became the “focus” SKU across all channels – this was made a part of the sellers recommended distribution list across all stores and the distribution of this SKU was incentivized.facebook. The series of price ups by way of grammage reductions on Tide Naturals have been leading to capacity challenges. (95% of Tide Plus business came from >500g packs which were all priced over Rs 30). This meant disproportionate investment on devices. Recently Govt. TV Channel choices for Tide Plus and Tide Naturals were deﬁned to ensure that the right consumers were targeted.G. 50% of rural consumers were covered. visit the Facebook page: http://www..com/PGTheDreamTeam. based on where the Tier 2 and 3 shoppers shop. Go To Market From a Sellers standpoint it was extremely important to have the right SKUs and quantities of Tide Plus and Naturals at the right place. To see the advertisements. Further watch-out with gram-mage reductions is that the experience for the consumer gets worsened as the pack size is not enough for sufﬁcient number of dosages which impacts the value seen by the consumer on using the product.8 MM stores generating a lot of incremental trials. Distribution grew to 0.R 784(E) dated 24th October 2011). hence it became a further challenge to rightly price and size SKUs. thereby communicating the beneﬁts strongly. that prohibited grammage play on a number of SKUs. with the intent of continuing to keep the product at popular price points like Rs. Radio was extensively used to reach the consumers whom TV could not reach. ✴ Tide Naturals was launched only at the Rs 10 and Rs 20 price point.The Dream Team Season 2 Case Study for Strategy Development reduce grammage.
The competition responded immediately to the launch and there were signiﬁcant price downs across the industry. Increasing the penetration of Tide Naturals in remote areas however. ! Released on 27th December 2012 . Following action steps were taken to support the unconstraint demand: ✴ ✴ ✴ ✴ Increased production reliability by making various changes on the line ( PR deﬁnition) Improved batch cycle time Expansion of existing facilities Introduction on contract manufacturing sites to meet the future need Today Tide Plus and Naturals are both at their highest ever shares and consumption is driving 50% of our growth in the current year. Along with this. further increases the reach cost and adversely impacts the cost structure. the demand exploded immediately. (Note: 1 SU = 12 kg/ 1MSU = 12 Ton / 1MMSU = 12000 Ton).98MMSU (36% YOY) and sales at $167. packing materials procurement time & deployment time within 2 months of competitive activity. The overall brand grew to 14.The Dream Team Season 2 Case Study for Strategy Development ✴ Launch of larger sized packs like 6 kg and consumer promotions drove consumption harder as a source of growth for Tide Plus What happened after Tide Naturals Launch The Tide India business exploded within a year of the launch with Tide Naturals becoming the fastest growing laundry brand-form in India since launch. The key to growth now lies in exploding the washing powder category and signiﬁcantly growing the Tide Brand with a sustainable cost structure. Post Launch (Latest) Category Size P&G Laundry Share *Nielsen Data Urban 10% 36% Semi Urban 45% 27% Rural 45% 11% Stiff competition from existing players through deep trade discounts/media spends has required signiﬁcant investments which have diluted margins. Sudden upsurge of demand put immense pressure on the supply team to increase overall throughput. The onus was on the Product Supply function to respond to the existing challenges as well as support the growth of Tide naturals by changing/modifying the manufacturing process and supply chain. The Product Supply team executed price off & free-bee promotion by crashing the artwork lead time.9MM (14% growth) with Tide achieving highest ever share towards year end behind the explosive entry of Tide Naturals into Tier 3 and ensuring the continued growth of Tide Plus despite competition collapsing prices by 30% on Tier 2.
Achieving this would mean that we explode the powders category and at the same time. Achieving the objectives would require innovative thinking. The Laundry category has been one of the oldest and the most explored category in the consumer goods space. Over the years. The Dream Team.The Dream Team Season 2 Case Study for Strategy Development The Mission The overarching mission is to take the Tide brand to market leadership from the existing 15% share to 25% share over the next 3 years. make sure that the Tide brand remains proﬁtable as a whole with gross margins increasing.] ! Released on 27th December 2012 . to accomplish the mission: Marketing and Brand Communication P&G’s Marketing & Brand Communication Function is responsible for all Brand Management activities. Marketing remained consistently on the cutting edge of marketing. P&G’s Tide Multi-function Team has put forth the following critical questions for you. the washing powder category in India has a penetration of 98% and washing bars category has a penetration of 97%. to answer. We need to keep in mind that currently. effective application and robust ﬁnancial planning to accomplish the mission. brand management. [P&G invented the concept of brand. and even the Soap Opera (originally designed to showcase our soap powders on TV). always ﬁnding new and exciting ways of reaching consumers.
e.25 MM non chemist outlets) in terms of SKUs and channel choices.5 MM stores (P&G covers ~1. communication to stores and trade incentive structures and strategies.What is the consumer insight that should be the focus of communication & copy? How would you communicate price/ grammage changes suggested in 1a while doing so? II. Big Idea/concept and related Beneﬁt III. consumer promotions and communicating “what’s in it” for the store.Key SKUs for Tide Plus and Tide Naturals ii.7 MM stores. Marketing mix i.In the context of sizes & price points iii.12g Sachet) are available in 1 MM stores. all SKUs other than the Re 1 . Communication Strategy" I.Promotion 2. 4 and 6Kg) on Tide Plus? Again the options available are SKU choices. Evaluate this on all brand parameters as below: 1. Pricing Strategy . ✴ What do we grow Tide Plus distribution to 1. While doing so. Tide Plus Bags (Rs 10) and bigger packs i.. Today Tide Naturals is available in about 1.The Dream Team Season 2 Case Study for Strategy Development What are the strategic choices the company needs to make as it explodes the washing powder category and takes the Tide portfolio (Tide Plus. Product Strategy . Consumer Insight . Tide Naturals) from 15% to 25%. Place iv. trade incentives. How best can we grow our larger packs (2. What is the right portfolio strategy for P&G to win in laundry category in Tier-2 & Tier-3 segment? (total portfolio includes Tide Plus and Tide Naturals) ! Released on 27th December 2012 .Touch-points for execution of communication strategy Customer Business Development (CBD) P&G’s Customer Business Development (CBD) Function is more than mere "selling" – it's a P&G – speciﬁc approach which enables us to grow our business by working as a "strategic partner" (as opposed to just a supplier) with those who ultimately sell our products to consumers. To grow Tide Plus further we need to instigate new trials (which would need Tide Plus to go into more than 1 MM stores) and to grow consumption via driving larger packs (usually in Modern Retail and larger stores). ✴ Consumer Market Knowledge (CMK) P&G’s Consumer & Market Knowledge (CMK) Function champions the voice of the consumer and be on the forefront of market trends makes CMK Managers critical leaders on multi-functional business teams.
2. depot. ! Released on 27th December 2012 . As we keep growing the Naturals business. distributor points 5. and our suppliers. 1. accelerates their ability to create and build value for P&G. performance etc) to ensure lower costs? How will you do the supply planning so as to ensure that the demand forecast is serviced effectively? Does the Supply Network design facilitate the agility needs (Plant-DC-DepotCustomer-Retailer-Shopper-Consumer)? What Capacity to Demand ratio would we maintain? ( Refer Supply network in appendix ) What is the ideal inventory you would maintain at retailer. 3. 4.The Dream Team Season 2 Case Study for Strategy Development Pointers to determine the portfolio strategy: ✴ What are the trial drivers of Tide Naturals and Tide Plus? How can we use these to ensure differentiation across portfolio? What are the trial barriers of Tide Naturals among the tier-2 & tier-3 laundry users? How do we design our portfolio strategy overcome these trial barriers? What are the key reasons for a current Tide Plus user not to downgrade to Tide Natural? (Understand different needs of the design segments) What is the right Sizing/pricing strategy for portfolio to minimize cannibalization and drive competitive conversion? What is the right channel strategy to drive total portfolio? ✴ ✴ ✴ ✴ Product Supply (PS) P&G’s Product Supply creates value in the supply network every day. PS is uniquely positioned to lead the supply chain from end to end – this position. what is your recommendation so that you help reduce/ maintain the Total Cost for Tide Naturals? (Refer Table 1 from Appendix ) What is the Production Innovation needs/requirements (Packaging design. our customers. along with their broad-based supply network mastery. features.
The team is looking at solutions on mobile platforms as key-enabler. However. what competitive forces/ reaction should it gear up for? Identify the key internal and external risks for your growth plan of Tide. highlighting the gross and net margins we would be making based on the portfolio and 4P strategy that we adopt. Assuming that the interaction between the top and remaining tiers is small. the ﬁxed cost as a percentage of net sales will drop by 1% for Tide Naturals and 0. IDS expertise in deep knowledge of business operations and technology solutions to drive breakthrough Transformations. The store coverage at metros and Tier-1 cities is about 80% and we are reaching saturation.The Dream Team Season 2 Case Study for Strategy Development Finance and Accounting (F&A) P&G’s Finance & Accounting (F&A) Function is the custodian of shareholder value. Mobile penetration is increasing in India. With every 10% of volume growth. Information & Decision Solutions (IDS) P&G’s Information & Decision Solutions (IDS) Function spans across all the functions in P&G and leverages information to build relevant connections and drive better decision making. 3. Price Setting Glide path for FY 2015 – based on competitive pricing/trade terms/ commodities/ FOREX and product portfolio choices that we have made. Can we use Mobile platform to generate more trials by consumers? How should we track this to measure ROI? 3. while trade spends will grow by 11% for a 10% increase in sales. leading business partners in the understanding and application of ﬁnancial concepts and techniques. and guides the team into creating proﬁtable and sustainable businesses. wearing the business leadership hat. what will be the key challenges / potential issues? How can we plan to minimize/control them? What should be the real time data that needs to be reported/ tracked to ensure we achieve target ROI? ! Released on 27th December 2012 . While P&G tries to explode the category by growing Tide. there are various challenges to be overcome while meeting the shareholder objectives. and can present great opportunities if tapped well. As we look at mobile platform. A positive ROI for this increase is absolutely essential. Tier-2 and Tier-3 areas have potential. For an initiative of this magnitude. with the requisite back-end systems support. both domestically and globally.5% for Tide. it is important to know how the P&L for the brand will look like until 2015. But depending on the initiatives. F&A works across every area of the business. The important questions that need resolution are: 1. The ﬁxed cost component of the lines set up for is an inverse function of the sales. The key aspects you need to address are: 1. Understand and build a P&L glide path up to 2015. Marketing spends needed will grow by 6% for a 10% increase in sales. How do we use Mobile platform to increase the distribution coverage? 2. 2. In P&G. marketing spends needed for generating awareness and trade spends for ensuring availability move in the positive direction as % of net sales.
External Benchmarking: If we compare Tide naturals to the popular tier. a.The Dream Team Season 2 Case Study for Strategy Development Appendix Table 1 . Transportation & Wearhousing Cost Non Manufacturing Expenses Excise *Representative Data Competitor production take place in CM states across India ! Released on 27th December 2012 . d. This satisfaction is not measured with the 'missed cases' measure. T&W Cost – Transportation & Warehousing cost based on our supply network choice (Scattered Contract Manufacturing site model versus centralized plants in limited location and have depots across states) TDC = RM (Raw Material cost) + PM ( Packing Material Cost) + Plant Overhead + T&W PR . CFR – Case Fill Rate (Service Levels) – Case Fill Rate = cases received / cases ordered * 100 (%).It is a measure for the 'satisfaction' of the 'customer'. c.Process Reliability is a measure to understand how much product is manufactured and converted into sellable product (Net Production) during Scheduled Time at a set Target Rate Costs Raw Material Packaging Materials Plant Expenses Tide Naturals Vs Popular Brands Higher Higher Equal for contract manufacturing Higher for P&G Plant Higher Lower Higher Competitor plants in excise free zones Reason Superior raw materials Better Laminate used Higher people cost b. we ﬁnd the following benchmark data.
6 10.4 Current 5.542 14.9 6.7 4.The Dream Team Season 2 Case Study for Strategy Development Table 2 .3 4.5 * Nielsen Data.0 4.15.9 7.9 9. Data indicates % Volume ! Released on 27th December 2012 .567 7.73.5 5.0 7.5 9.3 21.2 13.5 9.6 18.09 10.Volume share by Detergent (2008-2011): Brand Washing Powder/Liquid Total Tide Tide Plus Tide Naturals Ariel Rin Surf Wheel Ghari 2008 .5 21.1 5.1 22.214.171.124 18.2 6.200 13.2 6.7 18.43.5 2010-11 13.879 7.0 6.5 7.3 5.27.3 18.9 4.7 4.2 4.73.5 2011-12 13.5 2009-10 11.604 11.16.5 0.0 0.6 9.53.2 6.90.9 17.3 20.4 5.
7 4.2012): Brand Washing Powder/Liquid Total Tide Tide Plus Tide Naturals Ariel Rin Surf Wheel Ghari 2008 .5 0.4 5.8 16.1 6. Data indicates % Volume Table 4 .9 17.6 0.146 14.6 6.54.The Dream Team Season 2 Case Study for Strategy Development Table 3 . 52 10% 6% 14% 80% 5% 8% Rs.5 6.69.9 9.2 5.6 6.161 8.5 13. 92 10% 6% 14% 65% 10% 8% ! Released on 27th December 2012 .0 6.6 11.3 3.1 5.7 18.90.9 17.76.09 6.Cost Split for Tide: Tide Plus (1 Kg) Maximum Retail Price (MRP) %Retailer Margin (% MRP) %Distributor Margin (% MRP) %VAT (% Distributor price) %Manufacturing Cost (% sales realized after VAT) %Marketing Spend (%sales realized after VAT) %Trade spend (% sales realized after VAT) * Representative Data Tide Naturals (1Kg) Rs.0 8.3 5.7 18.4 2010-11 8.5 17.09.1 * Nielsen Data.361 9.79.425 13.86.8 Current 4.43.4 6.2 2009-10 7.3 2011-12 9.2 11.58.6 8.3 12.Value Share by Detergent (2008 .4 8.2 17.2 19.8 10.2 10.940 11.1 15.3 8.80.0 6.
5 44 43 Tide Plus (Rs/Kg) 90.5 78 77 Ariel (Rs/Kg) 178 175 Pack Sizes Rs. 10 Pack 500 Gm 1 Kg * Nielsen Data.9 90 92 Tide Naturals (Rs/Kg) 55.5 44 42 Ghari (Rs/Kg) 43. Figures as on December 2012 Table 6 .Find below details of Pricing/Grammage for 2012 Wheel (Rs/Kg) 42.The Dream Team Season 2 Case Study for Strategy Development Table 5 .5 56 52 Rin (Rs/Kg) 55.Find below details of Pricing/Grammage for 2012 Rs 10 Pack Wheel (Gm) Ghadi (Gm) Tide Natural s (Gm) * Nielsen Data Mar’1 1 310 300 Jun’11 290 280 Aug’1 1 280 280 Oct’1 1 300 265 Dec’1 1 280 265 Feb’1 2 265 255 May’1 2 250 245 Jul’12 235 235 Sep’1 2 235 230 Dec’1 2 235 225 290 270 270 240 240 220 220 200 190 180 ! Released on 27th December 2012 .
com/PGTheDreamTeam ! Released on 27th December 2012 .facebook.asia To know more visit to: www.The Dream Team Season 2 Case Study for Strategy Development Illustration .Contract manufacturing RM : Raw Material PM : Packing Material FWIP : Intermediate Product (Base Product sent for Packing ) FP : Finished Product DC: Distribution Centre FG: Finished Goods WIP: Work in Progress For queries email to: helpdesk@broadvision.P&G India’s Distribution System Suppliers( Domes&c( Supplies( (RMPM)( CM( Plants( FP( Distribu&on(Center( DC( Depot( Depot( FP( CM( FP( WP( FP( Satellite( DC( Depot( Depot( Depot( FP( Port(=( Mumbai( P&G(Site( FWIP( FP( Central( Distribu&on( Center( Depot( Depot( Customiza&on( Center( S a( l( e( Repacking( Imported( Suppliers( (RM)( Wareh ouse( FWIP( Depot( Depot( Repacking( FP( FP( FWIP( Export( FP( Repacking( Import( DC( Port(=( Mumbai( Depot( Depot( CM :.
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