P&G looks to value in the UK

29 July 2009

LONDON: Procter & Gamble, the FMCG giant, is seeking to move into the value sector in the UK, having introduced a new, lower-priced version of Pampers, its nappy brand, in the country.

Companies like P&G are coming under increasing pressure in many advanced markets, both from the rise of own-brand products, and as a result of the growing prominence of hard discount chains such as Aldi and Lidl.

In the US, the Cincinnati-based firm has adopted a mixed approach, increasing its presence in the retail sector, as well as purchasing the premium male skincare brand Zirh, and launching a new discount version of its fabric care brand Tide.

Similarly, the consumer packaged goods titan has now added Simply Dry to its portfolio in the UK, with this brand extension being specifically targeted at "price-conscious" consumers looking to save money in the downturn.

A basic pack of Simply Dry is priced at £3.99 ($6.55; €4.63), or 11p per nappy, which can be measured against the comparative figure of around 20p per nappy for Procter & Gamble's premium brand, Active Fit.

While the fast-moving consumer goods manufacturer has always offered products across a range of price points, such as its premium Ariel Excel Gel and value brand Daz in the fabric care sector, its latest move is regarded as a major development.

Charlotte Highfield, managing director of Clear, the insight company, said "I can't think of another house-hold brand that has taken this step."

"P&G will have worked out how much this will cannibalise the sales of its premium lines, but the biggest question surrounds brand value long-term," she added.

Moreover, as parents are often unwilling to move away from familiar brands in the babycare sector, Highfield said using the market as a testing ground could "be a very smart move for the company as it could end up gaining many periphery customers."

Data sourced Marketing; additional content by WARC staff