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New Products and Stable Channel Relationships

Procter & Gamble and Walmart are key partners in a shared channel. P&G is one of Walmart's biggest suppliers, and Walmart provides extremely detailed scanner data about customer purchases of P&G products. Walmart has begun selling its own brand of Sam's Choice laundry detergent in bright orange bottles alongside P&G's Tide, but for a greatly reduced price. What do you think will be the impact of this new product on what has been a stable channel relationship?

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In my opinion this will lead to a decrease in the purchase amount of P&G's Tide but it will not create a very negative impact on the partners' channel relationship. As we know, manufacturer P&G and retailer Wal-Mart are both major players in their industries. P&G spends millions for the advertisement and promotion of its products including Tide. On the other hand we can't say the same for low cost Sam's Choice laundry detergent. Each product has different marketing strategy and they have different target markets. ...

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The solution discusses new products and stable channel relationships.