From idea to store shelf: A new product is born

[March 05, 2012]  NEW YORK (AP) -- 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 to take 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 a quarter of a century.

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 doing that.

P&G, the maker of everything from Pampers diapers to Pantene shampoo, has built its 175-year history on creating things people need and then improving them. (Think: Ivory soap in 1879; Swiffer Sweeper in 1999.) Each year, the company spends $2 billion on research and development and rolls out about 27 products worldwide -- more than two a month.

That focus on innovation has paid off. P&G says 98 percent of American households have at least one of its products in their cupboards, broom closets or bathrooms.

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.

"What they've gotten very good at is being able to understand consumer expectations," says Robert Passikoff, president of Brand Keys Inc., a New York customer research firm.

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 to consumers.

"You have to develop a product that is meaningfully better than the ones out there, which is tough because generally speaking consumer products work pretty well," says Ali Dibadj, an analyst at Bernstein Research who follows P&G. "You then have to convince the consumer to try the product ... and then get that consumer to break their old habit to make a new one."

FIRST LOAD: A PRODUCT IS BORN

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, the research firm. But cheaper rivals have been gaining: For instance, the number of units sold of Church & Dwight's Arm & Hammer Oxi-Clean Laundry, the No. 2 detergent brand that costs $8 for 35 loads, rose 13 percent in the past year. Unit sales of Liquid Tide were flat.

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 seven-pound detergent bottle downstairs to the laundry room or a Laundromat and back.

Researchers also found that people rewashed loads about 20 percent of the time because they thought detergent didn't get their laundry 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.

Pod-like products had been on the market before. P&G introduced tablets filled with powder detergent in 2000, but yanked them from stores shelves two years later. The problem was that powder tablets didn't always dissolve completely, leading to messiness. They also worked only in hot water.

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 -- it won't break even when stretched over the top of a can of marbles and shaken -- but soft to the touch.

The film created another problem, though. Detergents, which mostly consist of water, would cause the pod to melt before it even 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 in the wash. 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 for all three liquids.

The result? A soft ball with three separate bubbles filled with liquids in Tide's trademark white, blue and orange colors.

INNOVATE, RINSE, REPEAT

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 where people can use the things it makes.

The Beckett Ridge Innovation Center, about 30 minutes from 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 babies' diapers.

About 50 P&G researchers work at the center, watching and videotaping about 20,000 people each year in their "natural" environment. The testers are picked by third-party companies and paid based on the task they complete.

"When we watch consumers in action, we can see things they can't otherwise explain or articulate," says Jessica Hall White, director of P&G's unit that makes fabric care brands like Tide, Gain and Downy.

When P&G researchers had consumers test Tide Pods at the center, 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 in order to stand out, Tide Pods needed to have see-through packaging. The company developed a clear fishbowl-like container that shows the pods clearly.

The product was developed. The consumer tests were done. The packaging was complete. Next, it was time to get Tide Pods to market. P&G was poised to be the first detergent maker to get its new dissolvable pods into stores. 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 supermarkets and retailers.

P&G declined to detail the manufacturing problems, but it says the issues forced it to push back the launch date of Tide Pods by five months to February. In the hyper-competitive world of consumer products, that might as well be an eternity.

Tide Pods entered a market that was already getting crowded. Henkel's Purex UltraPacks and Sun Products' All Mighty Pacs came out in February, too. And Church and Dwight plans to launch its Toss `N Done Power Packs- made of crystals -- this month.

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, so P&G hopes to win over shoppers with performance and brand recognition. 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.

"It seems when Procter does anything in the laundry category it makes a huge wave," he says.

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, one of TV's biggest events.

The tagline for the ad: "Pop In. Stand Out."

[Associated Press; By MAE ANDERSON]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.