Global Branding - Hans-Willi · PDF fileGlobal Branding Opportunity Or Risk? ... Henkel Strategy •Marketing ... Per Capita Detergent Usage Number of Washes per Month

18.10.2001

International Market Research, Henkel KGaA

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Global BrandingOpportunity Or Risk?

Dr. Hans-Willi SchroiffHenkel KGaA, Düsseldorf

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Global Branding:The Marketing Buzzword of the 90‘s

• Global Branding, yes ....... but what about :

– Heineken ?– Mercedes Benz ?– Campbell Soup ?– ??????

• What do we derive from these observations?– A brand is not the same brand everywhere.– A product is not the same product everywhere.

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A „Road Map“ Of This Talk

Henkel Strategy•Marketing•Business Int.

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Basic Strategies of Euro-Marketing Operations•Standardization•Differentiation

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ConflictingMarketing Targets•Market Penetration•Economies of Scale

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ConflictingMarketing Factors•Consumer•Trade•Competition

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(1) Conflicting Marketing Targets

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Market Penetration:Need for Differentiation

• Main Criterion: Sales/ Share• maximizing penetration (reaching as many

households as possible)• maximizing repeat (keeping as many households as

possible) • closing „white (regional/ local) spots“

• THE „OUTSIDE-IN“ VIEW (Consumer Orientation)• SENSE AND RESPOND

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Efficiency through Integration:Need for Standardization

• Main Criterion: Profit• maximizing economies of scale (in design/

advertising / brand/ production/ ...... etc.• minimizing diversity (e.g. going for the smallest

number of brands and SKUs as possible)• Applying Euro learnings (knowledge transfer)

• THE „INSIDE-OUT“ VIEW (Company Orientation)• MAKE and SELL

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How To Make A Dovetail Joint?

• There is a perceived dilemma between standardization and differentiation - entailingdifferent branding strategies.

• In order to obtain further evidence in favour of oneof the alternatives we look at:

• the EUROPEAN CONSUMER.• the EUROPEAN TRADE.• the EUROPEAN COMPETITION.

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(2) Conflicting Marketing Targets:CONSUMER

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Percentage of Liquids Percentage of Compacts

D

F

I

E

B

NL

17%

29%

23%

9%

30%

14%

17% 71%

31%

9%

12%

46%

95%

Consumer Usage Patterns:HDD Product Preference

SOURCE: REPRESENTATIVE STUDY, 1999

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Per Capita DetergentUsage

Number of Washes per Month

Washing Temperature- up to 40°C- 60°C-95°C

Households with Dryers

D F I E B NL

13,5 16,4

34%

42%

15,6

59%41%

16,1

63%37%

8,2 kg 10,8 kg 16,0 kg 16,4 kg 11,1 kg

67% 61%39%

k.A. k.A.

6,6 kg

12,8 18,6

57 %43 %

95 %5 %

17 % 17 % 62 %

Consumer Usage Patterns:Habits/ Equipment


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Short program

Eco-program

Pre-soak program

Special program for extremely stained wash

D F I E B NLUsage of:(Basis: Households)

36%

19%

40%

11% 11%

37%

21%

24%

31%

7%

19%

26% 35%

29% 21%

5%

k.A. k.A.

52%

39% 11 %

1% 21 %

28 %

Consumer Usage Patterns:Washing Programs


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39%

82%

58%

DPersil

E Wipp

IDixan

Persuasion-Score

Hygiene Detergent:Concept Acceptance Across Europe

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B/NL

DE

ES

FR

IT

TR

ATBlue Pink White Green Yellow Orange Lavender

Henkel Fabric Softeners:Vernel Fragrance Variants (1997)

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Differentiation Factor:European Consumer Habits

• Purchasing Habits– normal powder vs. Compact powder– powder vs. Liquid detergent– bleaches (Northern Europe vs. Southern Europe)

• Usage Habits– washing temperatures– washing machine equipment– fragrance preferences– per capita volume– need structures (e.G. with respect to hygiene)

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Consumer: Summary

• Consumer structures still different - still no „Euro-Consumer“.

• Different local brand portfolios.• Different need/ attitude structures.• Different usage/ habit structures.

• Current status suggests a differentiation strategy.

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(2) Conflicting Marketing Targets:TRADE

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Need for Standardization:The European Trade

• Euro accounts represent 50% of turnover• Top 10 trade between 36% (I) and 90% (F) of food

retail turnover• Acquisitions and fusions

– Carrefour/ Promodes– Intermarche/ Spar

• Euro negotiations for new listings are the rule!• But: tendencies towards regional assortments (e.g.

WalMart) !!!

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45%

•In 5 years

+41%

21%

32%

•5 years ago •Today

+52%

European Trade:Top 5 Turnover

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Italy Spain Germany France Switzerland30 % 57 % 63 % 77 % 85 %

Coop ItaliaCarrefour-PromodèsRinascenteEsselungaMetro

Pryca-PromodèsEroskiAlcampo-SabecoMercadonaEl Corte Inglés/Hipercor

Edeka/AVAReweAldiMetroTengelmann

Carrefour-PromodèsIntermarchéAuchanCasinoLeclerc

MigrosCoop SchweizBon appétitDennerManor

Top 5 Retailers in InternationalComparison (1998)

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53

44

25

23

23

22

# of countries1992

1. Metro

2. Wal-Mart

3. Rewe

4. Aldi

5. Promodès

6. Carrefour

10

1

1

8

6

7

1998

1. Wal-Mart

2. Promodès/ Carrefour

3. Metro

4. Kroger

5. Intermarché

6. Albertsons

9

26

23

1

7

1

137137137

55

49

43

37

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Trade Internationalization(Turnover in Bill. US$)

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1990‘sinternational

89: F 97: CZ92: I 98: IRL93: E 98: A94: GB/B

1980'snational

End of 80‘ies:more than 750 Outlets

1970'sregional

1973:First Outlet

Growing Euro Accounts: Example Lidl

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Trade: Summary

• Trade structures are merging across Europe.• Trade partners emphasize lean, global, and

profitable brand portfolios.

• Current situation suggests standardization strategy.

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(2) Conflicting Marketing Targets:COMPETITION

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No. 1 No. 2 No. 3D Persil 31 % Ariel 22 % Sunil 9 %

F Ariel 25 % Skip 16 % OmoX-tra 9 %

I Dash 34 % Dixan 27% Bio Presto 8 %

E Ariel 25 % Wipp 12 % Colon 11 %

B Dash 24 % Ariel * 19 % Dixan 11 %

NL Ariel 25 % Witte Reus 10% Omo 9 %

: Henkel : P&G : Lever

Heavy Duty Detergents:Top 3 Brands in Europe

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Competition: Summary

• Different importance of Private Labels in variousEuropean countries

• In Western Europe: 5 competitors with more than 33 HDD brands

• In no (!) European core country (i.E. UK, E, F, I, D)same top 3 competitors

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(3) Basic Strategies of Euro-Marketing Operations

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Branding Strategies:Global Vs. Local

Global Strategy

Local Strategy

Global Market Share

Low CostProduction

Low Complexity

Speed

Regional Market Pene--tration

Near to Consumer

FlexibleResponse

Standardization Differentiation

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Challenges for Euro-Marketing

• Challenge to design alternative strategic paths forbusiness strategies on the European marketplace governed by the common need for

STANDARDIZATION and DIFFERENTIATION

• In order to reconcile local brand heritages with trans-national efficiency

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Branding Strategies:The Big Soapers

• Global– move towards a reduced portfolio of global brands with

identical features to maximize efficiency (fixed strategy)– Example: P&G

• Multinational– exploit existing local brand heritages to secure current market

penetration (fixed strategy)– Example: Lever

• Transnational– maintain a balanced portfolio of global and local brands to

exploit economies of scale while securing market penetration; migrate towards a global portfolio (adaptive strategy)

– Examples: Henkel

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Procter & Gamble:Going Global?

• Example 1: BOLD Re-branding of several European HDD brands (mainly DASH) under the BOLD brand name with a strong emphasis on built-in fabric softener (the „softness“ position) - after One year in the market no visible success despite huge media investments!!

• Example 2: DAWN Re-branding of several European dishwashing Brands (mainly FAIRY) under the DAWN Brand name

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Procter & Gamble:„Chaos in Ohio“

• Article in „Manager Magazin Oct. 2001“• About the pitfalls of a strategy (“Organization 2005“) that

ignores the Consumer• By centralizing all kinds of decisions and disempowering local

management and thus the local Consumer• P&g‘s FATAL FLAW: „Globalisation of Economy entails

Globalisation of Consumers“• Local consumer penetration matters – no penetration, no

turnover, no profit !!!• Bold, Dawn, Pantene, Dryel are corpses of P&G‘s recent

marketing strategy. • A. Lafley (CEO P&G, Feb 6, 2001): „We were too rigid and

forcing our principles and strategies upon the consumers instead of cooperating with them“.

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(4) Henkel Strategy Of Global Branding

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Henkel Strategy:HDD European Portfolio

Country DIXAN PERSIL WEISSERRIESE

NATIONALBRAND

NATIONALBRAND

NATIONALBRAND

A X X X

B X X

CH X X NIAXA

D X X SPEE

E X WIPP BLANCOL

F LE CHAT (X) X-TRA SUPERCROIX

I ATLAS

X X

X

NL X

X

X

P

X

PL

XX

POLLEMA

HR XX

TOMI

SK

X

PALMEX

X

TR TURSIL

CZ PALMEXH

MIXAL

RO X REXX X

ORION

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The Henkel Strategy:„Glocally Adaptive“

• Grow existing global brands.• Maintain existing national brands - strive to

globalize whenever appropriate (adaptive).• Create economies of scale with existing brands by

successively harmonizing technical product features(adaptive).

• Build new global brands.

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From Product to Brand:The Standardization Path

Basic Values

CoreBenefits

Product Features

FunctionalConsequences

TechnicalSpecificationValues

Family Excitement "Smart buy"

Safety Driving Control EconomicalValue

Traction Durability Purchase Price

Radial Tires

COMPANY CONSUMER

(adapted from Farquhar, 1997)

Product(Lab)

Brand(Mind)

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Henkel Strategy:Strategic Quadrants

Standardization ofBrand Elements• Aesthetics- Fragrance- Colour- Texture

• Design• Advertising• Brand Name

Standardization of Product Features• Formula/ Packaging Formats/ Production Technology

„Brand Plat-form-Strategy“

„Differentiation-Strategy“

high

low

low high

„Euro-Strategy“

„Product Platform-Strategy“

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Henkel Strategy:Standardization Paths

New Brand / Category Launch

� Standardized Approach� Fast Roll-Out� Euro-Production

Existing Brand(s)

� „Brand Migration Approach“� Stepwise Standardization

- Formulas + Packaging- Design- Selling Proposition- Campaign- Brand Name

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A Summary of the Transnational Approach

• For New Brands:– Go for global standardization right from the start - choose

identical product, positioning, design, advertising etc. - use predominantly for REAL(!!) innovations and roll out as fast as you can.

• For Existing Brands:– Go for global standardization - but in carefully orchestrated

steps, starting out with a product standardization and then moving on to a brand standardization (but only if appropriate from a consumer‘s perspective);

– accept that standardization has its limits (e.G. SPEE in East-Germany), no standardization at all costs - accept diversity asan opportunity, not a threat (innovation source!).

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Transnational Marketing Strategy

• European business governed by Strategic Business Units (SBU) with strong ties to the country/ regional level

• Management of balanced (global/ local) brandportfolios via transnational working groups

• Product development irrespective of geographies (transnational R&D)

• Transnational production/ logistics• Transnational market observation/ business

intelligence

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Transnational Business Intelligence

• Managing across borders requires a transnational Business Intelligence system - integrating data and insights across countries/ regions and(!) data sources ....

• .... entailing a pan-European business model with identical structures („White Book“) across geographies ....

• .... permitting a fast switch of perspective between local and global business monitoring.

If you cannot see from the top - you cannot act from the top !!!

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Thank You !!!

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Global Branding - Hans-Willi · PDF fileGlobal Branding Opportunity Or Risk? ... Henkel Strategy •Marketing ... Per Capita Detergent Usage Number of Washes per Month