Procter and Gamble (PG) has announced that it will delay the launch of the Tide Pods Liquid laundry tablets to early 2012 instead of September this year, as decided earlier.
The chain disclosed that it was compelled to postpone the revolutionary launch till next year on grounds of supply constraints, which may make it impossible for the company to meet the huge demand forecasted.
Moreover, the mega launch planned for an item like Tide Pods warrants heavy marketing and advertising spending. And a huge $150 million marketing budget allocated for Tide Pods' launch could be a seer waste if it somehow misses to meet the potential demand.
The three-chamber Tide Pods are similar to water-soluble tablets for dishwashers, which have been embraced by consumers whole heartedly. Analysts say that the delay may prompt P&G’s competitors to speed up the launch of competitive products and pose a threat to Tide. Analysts feel that The Cincinnati-based P&G is taking precautions because it has already stumbled before in such high-profile launches as in case of Gillette Fusion ProGlide.
.Analysts apprehends that in such a competitive scenario postponing such a 'breakthrough' launch could make situations tougher. Henkel and Unilever Plc. (UL) already sell similar highly condensed liquid-filled laundry tablets in Western Europe. Water-soluble tablets for dishwashers that can be easily adapted for laundry products also exist.
Besides, Management has revealed that a new Downy fabric-softener in bead form called ‘Unstoppables’ is also about to be launched. The product’s USP (Unique Selling Proposition) is its ability to keep clothes smelling fresh in the closet for up to 12 weeks.
An upgrade for Ariel laundry detergent that P&G says uses 3-D technology is also scheduled to come out in July this year. Aimed at consumers in developing countries, it will roll out to 50 markets over the next six months.
Currently P&G holds a Zacks #3 Rank. On a long-term basis, we maintain an Outperform rating on the stock with a short-term Hold rating.
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