Henkel Marketing Management

Septian W. Baskoro – 22049247

Henkel Group: Umbrella Branding and Globalization

Having a great brand is critical that every company is wanted undoubtedly, yet there is always some factors that can influence the brand value amongst the customers. The quality of the product, the service level of distributors or agents and the competitive market with the other company are few of many causes the condition or the value of a brand. This condition might be solved by some strategies applied by the company, such as Umbrella Branding Strategy and House of Brand Strategy.

In the case of Henkel Group (Harvard Business School Case), I believe the management team could solve the sales decreasing condition and make a rebound by using the strategy. The strategy that they might use to solve this condition is umbrella branding approach. They want to associate the unprofitable product brand with the most profit product; therefore they need to study and doing the comparison with the competitor product, UHU.

The theory

In this case, the management of Henkel face the condition of flat sales number, and it even worse; therefore, they want to use the strategy to rebuild their brand in customer's eyes. This lack of sales condition had happened in many years, except the sales of Pritt glue stick.

The umbrella branding, other also said as Family Branding, is a strategy that used to associate one brand to two or more related product. This umbrella brand should already have a positive or good image in customer perspective. This marketing practice could help the company to promote and market their product, especially the new one. This practice also considered as the extensive way to promote the brand. Henkel uses the strategy of umbrella branding to leverage the other products to have a better position in the customer perspective.

The other theory that might relate with Henkel branding strategy is the “three question that must be answered by the company about their brand” (Keller, Sternthal & Tybout 2002). This theory explains that before we do something to our brand, we must do the reasonable and reliable survey or study about it. Moreover, from the case that it is almost impossible to re-brand the bad brand into a new good brand, yet it means that Henkel has a lot of homework to run their strategy.

The Henkel Strategy – Umbrella Branding (Questions)

1. If some products are selling into a very deep segmented market, they might do the recovery strategy that will help them into a better position. Since the condition of drawn into a very deep segmented market, they will only get a very limited number of customer. Then, if this condition continued, it will critically affect the profit amount of the company, Henkel. The challenges that we could find in this type of marketing condition, as said by Keller et al. in 2002 studies are (a) company haven’t got the clear brand position, (b) in many cases, company build the unnecessary work at the field that not related with the customer satisfying, (c) company also make sure that its strategy are hard to be copied by the other competitors, (d) many companies frequently try to handle the competitors movement rather than focus on their strategy and try to build this condition furtherly, and finally (e) the company wants to give the response directly to the competitor movement by doing branding, in many cases, considered as nearly difficult and almost impossible.
2. For the umbrella branding strategy run by Henkel might face several conditions in the future, on the other hand, they also should assess the risk that might come before and along with the strategy they applied. The risk that might come such as losing the current safe position could not get the new brand position, losing the customers, and the worst is bankruptcy caused by the low level of sales.

For the rewards they might get by applied the umbrella branding strategy are having a rebound position that better than the previous position, enhance the number of customers, and their sales level.

1. About the globalization, Baalbaki and Malhotra in their journal said in 1993 that there is a lot of burdens to apply a standard product worldwide. So, in my opinion, if Henkel want to extent their market abroad, they should do some analysis related to the targeted country. Like the condition of the customer in Africa continent that love to a colorful packaging of a product, while in the maybe in another part of the world might be forbidden to use specific color such as “red” and “black” that associated with a bad image.
2. Associated with the “Pritt Umbrella”, I suggest Von Briskron to be more focus whether with “pritt” or “Pattex”, yet since the “pritt” brand reach the flat level of growth, Von Briskron should give the Pattex Brand more chance and build to the next positive level especially with the industry-level customer. While, for Pritt Brand they must keep their position in direct, young (student) and household customers; furthermore they should introduce and strengthen the “Pattex” brand amongst the “Pritt” customers.
3. For the structure of the organization, I suggest Henkel to re-arranging their organization related with their plan to go abroad (Globalization) and their umbrella strategy. They should more focus on their new strategy, so they must change to fit their organization with their strategy. One of the alternatives is to make a new department or restructuring their current department.

Conclusion

Umbrella Branding and Globalization Decisions strategy are the alternatives amongst another marketing alternatives that might help the company to encourage their brand value to their customer. This might be risky, but if we prepare it with the good result of analysis and plan, we could use this strategy to get better sales. Furthermore, this strategy needs a lot of sacrificing and a well-prepared action since, in many cases, this strategy is really difficult to run to make it succeed.