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Global Branding Chances And Risks For A Transnational Company.Pdf
 

Global Branding Chances And Risks For A Transnational Company.Pdf

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La presentazione della dott.ssa Panajia tratta del Global Branding, dei relativi rischi e opportunità che un’impresa transnazionale (Transnational company) incontra nella sua gestione.

La presentazione della dott.ssa Panajia tratta del Global Branding, dei relativi rischi e opportunità che un’impresa transnazionale (Transnational company) incontra nella sua gestione.

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    Global Branding Chances And Risks For A Transnational Company.Pdf Global Branding Chances And Risks For A Transnational Company.Pdf Presentation Transcript

    • Global Branding Chances and risks for a Transnational company Mara PANAJIA Roma, May 7th 2008
    • AGENDA 1. Who’s Henkel 2. Globalization: a road map on “Global Branding” 3. Two Examples 4. Conclusion
    • AGENDA 1. Who’s Henkel 2. Globalization: a road map on “Global Branding” 3. Two Examples 4. Conclusion
    • Who’s A more than 130 years old, German “family owned”, chemical company, making business in 125 Countries with more than 50.000 people employed and 10.000 products.
    • Henkel Headquarter Düsseldorf-Holthausen
    • Henkel Worldwide • Sales 13,074 mill. euros • 52,300 employees • 125 countries
    • Fiscal 2007 13.1 bill. € 1.3 bill. € + 15.4 % Sales Operating profit Return on capital (EBIT) employed (ROCE) Organic sales Earnings per growth Net earnings preferred share + 5.8 % 941 mill. € + 7.5 %
    • Our Vision Henkel is a leader with brands and technologies that make people's lives easier, better and more beautiful.
    • Three Areas of Competence Laundry & Cosmetics/ Adhesives Home Care Toiletries Technologies Quality with Brands & Technologies
    • AGENDA 1. Who’s Henkel 2. Globalization: a road map on “Global Branding” 3. Two Examples 4. Conclusion
    • GLOBALIZATION: necessary? Globalization Business Business opportunity & necessity economies of scale Technologies Laundry & Home Care Cosmetics/Toiletries Consumer Adhesives
    • A „Road Map“ On Global Branding Conflicting Marketing Targets • Market Penetration • Economies of Scale
    • Market Penetration: Objective: Increase of sales and Market Share How: maximizing penetration (reaching as many households as possible) maximizing loyalty (keeping as many households as possible) closing „white (regional / local) spots“ THE „OUTSIDE-IN“ VIEW (Consumer Orientation) Need for differentiation
    • Economies of Scale: Objective: Profit increase How: maximizing cost efficiency through integration (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) Need for standardization
    • A „Road Map“ On Global Branding Conflicting Marketing Targets • Market Penetration • Economies of Scale Basic Strategies of Euro- pean Marketing Operations • Standardization • Differentiation
    • How to Make the Right Choice? There is a perceived dilemma between standardization and differentiation - entailing different branding strategies. In order to obtain further evidence in favor of one of the alternatives we look at: » the CONSUMER » the TRADE » the COMPETITION
    • Consumer: NO EURO/GLOBAL CONSUMERS! Purchasing Habits – normal powder vs. compact powder – powder vs. liquid detergent – bleaches (Northern Europe vs. Southern Europe) – fabric softeners Usage Habits – washing temperatures – washing machine equipment – fragrance preferences – per capita volume – dryer‘s penetration Need for differentiation
    • The European Trade: Euro Accounts represent 50% of turnover Top 10 trade between 50% (I) and 90% (F) of retail turnover Acquisitions and fusions Need for standardization
    • Competition: Different importance of Private Labels in various European 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 Need for differentiation
    • A „Road Map“ On Global Branding Conflicting Conflicting Marketing Targets Marketing Factors • Consumer • Market Penetration • Trade • Economies of Scale Basic Strategies of Euro- • Competition pean Marketing Operations • Standardization • Differentiation
    • Branding Strategies: The Big Soapers • Global move towards a reduced portfolio of global brands with identical features to maximize efficiency (globally fixed strategy) Example: P&G / Lever • Multinational exploit existing local brand heritages to secure current market penetration (locally fixed strategy) Example: Benckiser • Transnational maintain a balanced portfolio of global and local brands to exploit economies of scale while securing market penetration; migrate towards a global portfolio (glocally adaptive strategy) Example: Henkel
    • A „Road Map“ On Global Branding Conflicting Conflicting Marketing Targets Marketing Factors • Consumer • Market Penetration • Trade • Economies of Scale Basic Strategies of Euro- • Competition pean Marketing Operations • Standardization • Differentiation Henkel Strategy • Euro-Model • Euro-Organization • Euro-Systems • Euro-Culture
    • Branding Strategies Standardization Low-cost- Close to production consumer Low think act Flexible complexity Roll-out of GLOCAL LOCAL GLOBAL response Regional concepts/ market speed penetration Differentiation
    • 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.
    • AGENDA 1. Who’s Henkel 2. Globalization: a road map on “Global Branding” 3. Two Examples 4. Conclusion
    • TWO EXAMPLES: 1. Convergence Plan of Hand Dish Washing Category 2. Nelsen acquisition from P&G in Italy
    • Why HDW category: Fully penetrated in all western countries (>90%); Huge business dimension; Despite of being a quite “simple” and “standardized” product, consumer’s habits differ from country to country; Battlefield for all international players (Henkel, Colgate, RB, P&G, Unilever).
    • CONVERGENCE PLAN HENKEL HDW Background and general objective Henkel HDW-brands are to a great extend acquired brands with different histories. All brands have already a patrimony in degreasing, so it has been chosen as common positioning for the brands. Since this proved to be feasible, it is felt possible to converge the different elements of the marketing mix to achieve a more efficient steering of Henkel’s HDW category.
    • CONVERGENCE PLAN HENKEL HDW Ex ante portfolio situation
    • CONVERGENCE PLAN HENKEL HDW Philosophy Harmonize as much as necessary, as less as possible. “Avoid harmonization simply for pleasure to fulfill with crosses Excel sheets” G. Archi – Henkel International Management Conference ‘03
    • CONVERGENCE PLAN HENKEL HDW Strategy Alignment of the different European Brands towards one “Euro- Brand” on the base of the HDW Positioning System. This has been done by: taking from already existing country solutions (i.e. Vinegar) development of new “Euro- solutions” National brand names didn’t have to change!!!
    • CONVERGENCE PLAN HENKEL HDW European Core Variant Portfolio OLD NEW
    • CONVERGENCE PLAN HENKEL HDW Standardization vs Differentiation Standardized Differentiated Brand Name X Subname X Concept X Pay off X Positioning X Communication X Product Texture (additional RW) X Aesthetics - bottle shape X - logo X - lettering X - caps X - background X - key visual X - colour of the product X Formula - base X Convergence of the different - perfume X national brands into a EURO-brand respecting - active ingredient content X Format X Absolute Price level X localities.
    • CONVERGENCE PLAN HENKEL HDW 145 Financial Development HDW Category 139 125 NES 115 109 100 146 130 123 120 C1 100 111 146 162 120 123 133 C2 100 1 2 3 4 5 6 Source: internal figures – index 100 year 1
    • NELSEN ACQUISITION IN ITALY Nelsen history 1968 Launched by Melli family (local entrepeneur); positioning: -> FAST & EASY CLEANING -> MILDNESS 1989 Acquired by Procter & Gamble positioning: -> GREASE CUTTING POWER -> MILEAGE (value for money)
    • NELSEN ACQUISITION IN ITALY Melli Family Age 12,0 10,9 10,0 8,0 6,2 Nelsen 6,0 brand Core variant 4,0 2,0 0,0 '83 '84 '85 '86 '87 '88 '89 Just one SKU, the Core variant. Value market share constantly declining. Source: Nielsen/IRI Audit
    • NELSEN ACQUISITION IN ITALY P&G Age 18,0 16,0 14,9 14,0 12,8 12,0 11,7 Nelsen brand 10,0 9,7 Core variant Perfumed 8,0 Antibacterial Concentrated 6,0 4,0 2,0 0,0 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 Top result in 1997, then decline for both Core and Perfumed variants, while Concentrated disappear. Source: Nielsen/IRI Audit
    • NELSEN ACQUISITION IN ITALY P&G ADV Investments 5.000 18 4.500 14,9 14,9 16 14,3 4.000 14,6 12,9 14 3.101 4.058 3.500 SOV 49% SOV 42% 12 3.000 2.218 10 Media 2.500 SOV 22% 1.994 investments SOV 28% 8 Mkt. share 2.000 6 1.500 1.000 457 4 SOV 6% 500 2 0 0 1995 1996 1997 1998 1999 Market share poorly reactive to ADV investments -> limited potential for such a positioning? Source: Nielsen NASA/IRI Audit
    • NELSEN ACQUISITION IN ITALY Strategic Issues Why P&G sold Nelsen Why Henkel bought Nelsen Focus on global brands To reach 2nd position (DAWN for hand dish). in the Italian market and reinforce leadership in Europe Focus on concentrated products (whilst Italian market is 96% diluted). Henkel’s competence in both diluted and concentrated No alignement to Euro- products. pean price harmonization. LACK OF STRATEGIC FIT STRATEGIC FIT!
    • NELSEN ACQUISITION IN ITALY Challenges for Henkel Increase the brand profitability at Henkel’s standards. Manage two brands in the market (Nelsen and Dixan Piatti). Reach a continous and profitable growth for the HDW business in Italy, using Henkel know how.
    • NELSEN ACQUISITION IN ITALY The new Marketing Mix Superior aesthetics (new perfumes, PET bottles, labels) Superior performance (SAS vs LAS) New size 1250 ML Positioning: superior degreasing + easy dry Innovation: Active Coal, Fruit Acid
    • NELSEN ACQUISITION IN ITALY M/S Development 14,9 14,9 14,6 12,8 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 P&G Source: IRI Audit Tot.Italy w/o Discounts
    • NELSEN ACQUISITION IN ITALY M/S Development 20,4 19,9 19,1 17,6 14,9 14,9 15,8 14,6 13,5 12,8 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 P&G Henkel Source: IRI Audit Tot.Italy w/o Discounts
    • AGENDA 1. Who’s Henkel 2. Globalization: a road map on “Global Branding” 3. Two Examples 4. Conclusion
    • TAKE-AWAY There is not a single answer to the dilemma between standardization and differentiation. Standardization has to be an opportunity, not the objective! When dealing with standardization of existing mixes, never change more parameters than absolutely necessary at the same time a brand is much more than the sum of its elements, so it has to be managed very carefully Do not preclude local possibilities in the name of standardization and harmonization (see Nelsen case) In FMCG markets we are still very far from a global consumer: local identities are still predominant and in same cases stronger and stronger!
    • Thank you!