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P&G plans new economy pack for a clean sweep

04-March-2004
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P&G plans new economy pack for a clean sweep

After announcing a steep reduction in leading detergent brands Tide and Ariel on Tuesday, Procter & Gamble (P&G) today said it was contemplating introduction of an economy segment brand in India.

“We have few brands for the economy segment in some of the markets where P&G is present. We are thinking of introducing low-priced product for the Indian market as well,” J P Kuehlwein, brand manager for (fabric and home care), ASEAN, Australia and India, said.

The popular segment of soap and detergent contributes 75-80 per cent of total market in the country. P&G, on the other hand, is present only in the premium segment competing with brands such as Rin and Surf Excel from Hindustan Lever (HLL). However, P&G has some popular segment (mid-priced) brands — Bonux and Mr Clean.

However, the company is yet to finalise its strategy for the new product launch.

“Let us see the response to the initiative (price cut) we have taken. At present, the focus would be more on Ariel and Tide,” he clarified.

The popular segment of Rs 5,000 crore laundry soap and detergent market in the country operates in Rs 15-20 price band. P&G admitted that it does not have any brand which can exactly fit into that category.

“Providing the international quality and then selling at such price point could be a tall task,” he noted. P&G is a major player in the global laundry detergent market. Detergent sale contributes $12 billion or 35 per cent of company’s annual turnover.

Indian market for soap and detergent has been stagnating for the last five years but P&G claimed to have recorded growth. Kuehlwein said the aggressive pricing strategy adopted earlier for sachet packs, has given good result with volume growth of ‘many times’.

With the new round of price cut, P&G is trying to close the gap between popular and premium segment. “We want to initiate as many new customer to try our products as possible. Moreover, we would like to have more repeat sales,” Kuehlwein noted.

P&G dropped Ariel price by 19-29 per cent while in case of Tide, the reduction was 45 to 50 per cent.

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