From idea to store shelf: A new product is born
About 15 to 20 percent of all new products succeed.
The Associated Press
NEW YORK — It took eight years, 450 product sketches, 6,000 consumer tests and hundreds of millions of dollars for Procter & Gamble to create something that it hopes will be destroyed in the wash.
Tide Pods are palm-size, liquid detergent-filled tablets that are designed to be tossed in the washer, taking the measuring cups — and messiness — out of laundry. P&G says the product, which hit store shelves last month, is its biggest innovation in laundry in about 25 years.
Tide Pods aren't the sexiest of inventions, but they illustrate how mature companies that are looking for growth often have to tweak things as mundane as soap and detergent. The story behind Tide Pods provides a window into the time, money and brainpower that goes into it.
P&G has built its 175-year history on creating things people need, then improving them. Each year, it spends $2 billion on research and development and rolls out 27 products worldwide.
That focus on innovation has paid off. P&G says 98 percent of U.S. households have at least one of its products.
And while about 15 to 20 percent of all new products succeed, P&G has claimed a 50 percent success rate. Four of the top 10 new consumer products in 2010 were made by P&G, according to research firm SymphonyIRI.
But improving things like window cleaner and toilet paper can take years. It also can cost hundreds of millions of dollars — or up to 100 percent of first-year sales — to develop, make and market them. And even then, new products are a tough sell.
The laundry detergent industry, with $6.5 billion in annual sales, is always looking for the next big thing. Over the years, fruity scents were introduced, along with suds that work in cold water. There also were concentrated and super-concentrated detergents that need less packaging.
Liquid Tide, which costs about $15 for 32 loads, is the best-selling detergent, according to SymphonyIRI. But cheaper rivals have been gaining.
In 2004, P&G decided to try to freshen up the category. Surveys and observations of 6,000 consumers found that more than a third dreaded doing laundry. A big reason: Many apartment dwellers hated lugging a heavy detergent bottle downstairs to the laundry room or a Laundromat.
Researchers also found people rewashed loads 20 percent of the time because they thought the clothes weren't clean enough.
And many were confused about which detergent to use when they wash in different ways: in regular washers versus high-efficiency machines; in big loads or small; and in hot or cold water.
"We knew people felt laundry was complicated," says Alex Keith, vice president of P&G's unit that makes laundry detergents and fabric softeners.
So P&G set about creating a product that weighed less, cleaned better and could be used with any washing machine, any size load and in water at any temperature.
P&G introduced tablets filled with powder detergent in 2000 but yanked them from stores shelves two years later. The problem was powder tablets didn't always dissolve completely and worked only in hot water.
Cold water, too
To make sure Tide Pods would dissolve in cold water too, P&G turned to MonoSol, a company that makes water-soluble films. MonoSol developed a polyvinyl alcohol film that not only dissolves in any temperature water, but even in sweaty palms. The film also is strong but soft to the touch.
That created another problem, though. Detergents, which mostly consist of water, would cause the pod to melt before it got into the wash. So P&G made a detergent that is 10 percent water, compared with Liquid Tide, which is 50 percent water.
Next, scientists had to figure out how to combine cleansers, brighteners and fabric softeners into one product, while keeping them separate until the pod dissolves. Doing so would ensure each liquid would work better. After 450 sketches and iterations, P&G developed a proprietary technology that sections the pod into three chambers.
The result? A soft ball with three separate bubbles filled with liquids in Tide's trademark white, blue and orange colors.
Making the product was half the battle. Consumer testing is at the heart of product development for P&G, which has more than 25 facilities across the globe.
The Beckett Ridge Innovation Center, near P&G's Cincinnati headquarters, is one. Inside, there's a 3,000-square-foot grocery store packed with everything from Charmin diapers to Cascade dishwashing liquid.
There's also a 2,000-square-foot mock clapboard house where researchers analyze how people do laundry, wash dishes, take showers and change diapers.
The testers are picked by third-party companies and paid based on the task they complete.
When P&G researchers had consumers test Tide Pods, they found that 97 percent were satisfied with their experience, compared with about 68 percent who were satisfied beforehand using regular detergent. People also liked how Tide Pods felt in their hands.
When it came to packaging, P&G took a more futuristic approach to testing.
The company used three screens at the Innovation Center to project 3D images of a virtual grocery store. There, testers could see early designs of Tide Pod packaging on the virtual store shelves alongside regular detergents.
Researchers learned that people sometimes overlooked the product. So P&G determined that to stand out, Tide Pods needed to have see-through packaging. The company developed a clear fishbowl-like container that shows the pods clearly.
Hitting the shelves
Next, it was time to get Tide Pods to market. They were to cost $20.89 for 57 pods and land on shelves by September 2011.
But the company ran into problems making the pods, which require different equipment from what's used to manufacture regular detergent. At the same time, P&G was flooded with orders from retailers.
The issues pushed back the launch date of Tide Pods by five months to February. In the hypercompetitive world of consumer products, that might as well be an eternity.
Tide Pods entered a market that was already getting crowded. All of the products are priced similarly — more expensive than liquid or powder detergents. But P&G has a big advantage. The Tide brand is one of the most recognized in the world.
The company says it expects Tide Pods to ring up $300 million in sales during its first year.
John San Marco, an analyst with Janney Capital Markets, says P&G is at a slight disadvantage because it wasn't first to market its product. But he believes its Tide Pods product is likely to hit its first-year sales goal.
Still, P&G isn't taking chances. The company spent an estimated $150 million on a marketing campaign to roll out Tide Pods. The first commercial debuted during the Academy Awards.
The tagline for the ad: "Pop In. Stand Out."