The following sample essay on Strongest pressure for the brand harmonization was due to the consolidation of European retailers. Retailers are focusing on internationalizing with increasing activity of acquisition and mergers after getting consolidated at variable rates within markets. For instance: combinations of Carrefour and Promodes, of Intermarche and Spar. Products that those retailers are selling should become international also parallel to their evolution, at least those big retailers will have greater preference over international branded products over locally known ones.
They gained the awareness of the internationalization which is going to be their future in Europe. On the other hand, what counts most for the consumer is the local effect of the product because laundry and home cleaning are cultural related activities in which preferences are passed down through generations. The main difference is demographics ; Southern Europeans prefers less powerful detergents combined with bleach washed in low temperatures whereas Northern tradition involved with powerful detergents without bleach combination washed in hotter water.
Packaging differs also; north people want compact product but in south people want big boxes. Henkel implemented different strategies for different markets relying on those differences like; “whiteness with care“ for northern market like Germany and France but to catch the large green customer segment in Netherlands an environmentally friendly label named “Persil Grune“ is launched. Unilever and P&G did an outstanding job harmonizing their brand portfolio internationally.
Unilever was to reduce its portfolio from 1600 brands to 400 which they believed would allow to save on production from reduced stock-keeping units, concentrate their marketing support and the leaner, more powerful portfolio would give the company leverage with retailers.
P&G followed suit as they decided to internationalize the management of brands by category. Their consolidation of brands allowed them to re-brand items giving the company a face lift. I do feel that the consolidation of brands is a good idea because it gives the impression of a premium product that can also be exclusive. It might be a better idea to specialize in one brand or area in order to achieve Tier A brand status. Distinction between product and brand became the basis for Henkel`s international brand marketing strategy. In some cases rather than “Product Performance Strategy“. Henkel tries to standardize its brands,“ Brand Platform Strategy“ when market is prepared to change its brand preferences. The example for this strategy was standardizing around the light-duty detergent named, Vernel, which is launced in 95 and by 2000 became the companies` primary softener. However, the biggest competitor, P&G, decided to lead with Bold in markets which its type B tier product Dash is weak like Italy and Spain but brand is known as Bolt in Italy and Bold in Spain.
The 2-in-1 position requiring different advertising campaigns in different countries is not fared well in Europe detergent category 4. Introducing Persil in Italy and Spain turned to be a great idea as they were able to control the market with their premium brand. In Italy, they understood the consumers` needs by establishing a blue powder which was preferred because of the “azurrri“ (blue, national color) it was the national care. They entered the market with a strong idea that their performance brand, Dixan, would be able to achieve market leadership. In Spain, Henkel`s decision was quite simple. They decided to enter the market through acquisition and bought a strong market player, Wipp. Spain is also a performance driven market allowing Henkel to extend its brand image and cut costs by not launching a new brand. However, large retailers will increasingly only take one Tier A brand per supplier, making it harder to Henkel to distribute its various lines of detergent. Another concern is that likelihood that the consumer will try other brands and not stay loyal to the company. The best option would be brand standardization only because product standardization would be next to impossible.