Lessons from a Business Growth Consultant: How Dial Soap Got Cleaned Out

Always think about how the competition will react. Case in point, Molly Lindblom was once an assistant brand manager for Dial who accidentally waged war with Proctor & Gamble (P&G). I suppose you could say the result was… a bloodbath.

Get It?!

Antibacterial products were new and exciting by sanitation industry standards back in the 1990s. (This was before it became common knowledge that antibacterial products are dangerous to overall public health and contribute to the rise of drug-resistant “superbugs” like MRSA.) Dial Dishwashing Liquid had a potential big winner on its hands with their new antibacterial soap, and studies showed that salmonella was a major concern in consumer kitchens. Thus, Lindblom thought a great tagline would be, “Kills germs on dishes.” She was right. And additionally, they decided to go for the jugular, selecting a competitive price point to go head to head with a competing P&G product. This proved to be a mistake.

P&G’s lawyers informed Dial that their claim of soap killing germs on dishes had to be backed up by the EPA, and not the FDA which Dial had used. Dial then had to rush to recall, re-label, and get EPA approval for their soap, while P&G meanwhile unleashed its own equivalent product at a lower price point and with EPA approval. Lindblom goes on to say:

P&G saw the pricing of Dial’s product as a direct existential threat. If I had priced the product at a premium level, they would have seen my concept’s launch as an experiment in the category and simply monitored its performance. But by pricing my product on par with theirs, they believed I was trying to eliminate a multi-million dollar-revenue product entirely, and they reacted as aggressively as possible. In fact, I later heard that, while Dial’s product had to be retired a few years later, P&G was able to grow the category.

The takeaway for consultants is that engaging in competitive behaviors without thinking about how much retaliatory damage your competition can really cause is dangerous. Like the saying goes, there is nothing more dangerous than a wounded lion. You can read the original story here: http://www.cleverpm.com/2015/05/14/lessons-from-a-business-growth-consultant-how-dial-soap-got-cleaned-out/

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