Monday, May 25, 2009

The Recession Hits P&G

According to, we're going to see something exciting in Cincinnati this Thursday. Apparently, P&G CEO AG Lefly is going to announce a price cut for Tide.

What's more disturbing about this are the data points they post with the article:

Could this mark a down turn CPG prices across the board? I don't know. What I do know from this data is that nearly one of five consumers are leaving Tide behind and most of them are not going to come back. This situation leaves me with two questions.

1) Are stalwart brands - like Tide - not recession proof?

2) Or, did P&G rest on its market dominance laurels too long to preserve their brand during the economic downturn?

Well, if this price cut pans out we'll never really know for sure. The price cut could register in the minds of the consumer as P&G saying, "our product is great, but not great enough for you to pay what you used to."

In reality, they're probably going to run an ad that says, "Times are tough and we're going to help you out but cutting our prices because no one should sacrifice being 'Tide clean,'" or something like that.

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