When Customers Dilute the Brand—Literally: What Can we Learn from P&G’s Sales Dip

Discount retailers boomed in 2025 as both budget-conscious and affluent shoppers flocked to chains like Walmart, Aldi, and Dollar Tree in response to higher prices and economic uncertainty. Here we highlight a couple of recent articles on that trend and suggest how this idea can be explored in your marketing class.

While rising costs have pushed lower-income households toward discounts, a growing share of middle- and high-income consumers are also bargain hunting, with nearly 28% of high-income shoppers now visiting discount stores, up sharply from four years ago. Aldi, in particular, has doubled its customer base earning over $100,000 since 2021, pairing low prices with higher-quality and organic options, while Walmart reports strong sales from wealthier shoppers as well. The common driver across income levels is simple: value pricing that resonates with everyone. You can read more details in “Discount stores are having a moment in America, drawing high- and low-income consumers alike,” (Sherwood News, December 17, 2025).

This Wall Street Journal article explores the growing frugality among American consumers as they respond to rising costs by rethinking product usage, delaying replenishment, and avoiding unnecessary purchases. From diluting dish soap to switching to Aldi’s private labels, shoppers are creatively stretching household budgets—sometimes at the expense of traditional brand loyalty. Procter & Gamble, for example, reported a 2% decline in volume in its home and fabric-care segment, even as consumers aren’t necessarily switching to private labels but rather using less.

This behavioral shift challenges long-held assumptions about consumer loyalty and purchase patterns. It offers marketing educators a real-time case study of how economic pressures impact the consumer decision process, perceived value, and brand strategy. The article also opens the door to a discussion about how companies should respond—through pricing, packaging, and messaging—when customers begin literally diluting their brand’s value

A first draft of this blog post was generated by ChatGPT.

Relevant Chapters in Essentials of Marketing

Consumers’ concerns about “affordability” can be addressed by producers and retailers through adjustments to their marketing mix. Thus, these ideas might play well in a variety of chapters, including cover Chapter 3 (economic environment), Chapter 5 (economic influences on consumer behavior), Chapter 8 (packaging and private label), Chapter 9 (new products), Chapter 12 (retail), or Chapter 17 (value/price).

Class Discussion Ideas

One or both of these articles could be assigned to students and then discussed in class. Alternatively, a brief lecture on this content could provide sufficient preparation for students to engage in the in-class activities or discussion questions below.

In-Class Activities

The following are ideas for in-class activities that might emerge from this topic.

• Budget Re-Branding Workshop: Students work in teams to rebrand an existing P&G product (like Tide or Dawn) for a more frugal, value-conscious consumer. (Chapter 8)
• Consumer Behavior: Students outline the new “thrift-based” buyer journey and identify pain points, moments of influence, and brand responses. Ask students to specifically consider products like: a) the purchase of a new car, b) renting an apartment, c) going out with a group of friends, d) buying/consuming toothpaste. How are consumers likely to behave differently? (Chapter 5)
• “Would You Dilute It?” Debate: Divide the class and debate whether companies should adapt to or resist consumers diluting products to save money. (Chapter 5 or 8).

Discussion Questions (and Answer Ideas)

1. What factors are contributing to this rise in frugal consumer behavior? (Chapter 5)
   • Answer: Inflation, stagnant wages, economic uncertainty, and rising costs of essentials are driving consumers to stretch their dollars. It is also important to recognize that this is consumers’ perceptions that matter. Often economic data tells a different story.
2. How does this behavior affect brand loyalty for companies like Procter & Gamble? (Chapter 5)
   • Answer: It weakens habitual loyalty and shifts focus toward functionality, price, and product lifespan.
3. Why might consumers dilute products rather than switch to private-label alternatives? (Chapters 5 and 17)
   • Answer: Brand trust and perceived quality remain strong, but economic pressures force more conservative usage.
4. What pricing strategies could companies consider in response to this consumer behavior? (Chapter 17)
   • Answer: Introduce value packs, concentrate formulas, refill stations, or tiered pricing to retain customers.
5. How might marketing managers reposition their brands to appeal to this thrifty mindset? (Chapter 4)
   • Answer: Emphasize product longevity, multi-use benefits, and cost-per-use metrics in messaging.
6. What does this trend suggest about shifts in the traditional “buy more” model of consumerism? (Chapters 5 and 19)
   • Answer: Consumers are moving toward “use what you have” behavior, challenging traditional growth models.
7. How can brands measure and respond to consumers who are stretching usage rather than switching brands? (Chapters 7 and 9 )
   • Answer: Use loyalty programs, usage tracking, and smart packaging to gather consumer data and offer customized solutions.
8. Could this consumer behavior inspire new product innovations? If so, what might those look like? (Chapter 9)
   • Answer: Yes—possible innovations include reusable containers, smart dispensers, or app-connected dosage guides.