QUESTION 2

Case Scenario 2: Henkels Fox Brands Like many European companies, Henkel, the German consumer-brands corporation, has globalized mostly via acquisitions, and, consequently, it has a portfolio of localized brands with a national heritage and good local market shares. As the portfolio grew, escalating media costs, increased communication and stronger linkages across markets, and the globalization of distribution created pressures for parsimony in the number of the firms brands and the consolidation of architecture across countries and markets. Henkel executives understood very well that a focus on a limited number of global strategic brands can yield cost economies and potential synergies. At the same time, they also knew that they needed to develop procedures for managing the custody of these brands, and that these should be clearly understood and shared throughout all levels of the organization, thus promoting a culture focused on global growth. They knew that failing to do so would likely trigger territorial power struggles between corporate and local teams for control of the marketing agenda. While many companies would have focused on deciding between sacrificing local brand equity to develop global power brands (aggregation) or continuing to sacrifice global marketing economies of scale by investing separately in its portfolio of local brands (adaptation), Henkel chose an ingenious middle path. Henkels choice serves as a model for globalization of marketing concepts without loss of local brand equity through the grouping of all its value-for- money brands under the umbrella Fox brand. In each country, Henkel retained the local brand name but identifies it with the Fox umbrella brand. (In most cultures, the fox is seen as clever, selfish, and cunningthe sort of character who would buy a value-for-money brand but not a brand so cheap that its quality might be compromised.) Micro -Credential of Principle of Marketing CONFIDENTIAL Final Examination 5 By using a fox to represent smart and cunning shoppers, Henkel has created a global power brand concept that can travel to almost any culture to enrich a local brandespecially local brands that individually could not have been globalized. But the scale economies Henkel gains from this program are more managerial than economic in nature. Programs and ideas to promote the Fox brands, and the concept of value-for-money detergents, are managed centrally and offered as a menu to all local markets in which these brands participate. Thus, a manager experienced in managing one of the Fox families of brands in one market can be transferred to another market and rapidly reach effective levels of performance. Because each brand still requires local investment, financial economies of scale are more modest. Compare Henkels success to the failures of its major competitors as they tried to fully globalize their brand portfolios. Years ago, P&G, for example, attempted to globalize its European laundry detergent operations. In 2000, the company renamed its popular Fairy laundry detergent in Germany Dawn to position the latter as a global brand. There was no change in the products formulation. But by the end of 2001, P&Gs market shares of Dawn in Germany had fallen drastically. While Fairy had represented a familiar and trusted brand persona to German consumers, Dawn meant nothing. With the renaming, the bond between consumers and the brand was broken; not even changing the brands name back to Fairy could restore it. Source from: https://opentext.wsu.edu/mktg360/chapter/chapter-9-3/. Retrieved date: 10 May 2022.

QUESTION 2

a) Discuss FOUR (4) types of brand architecture that a company can organize its brand offerings. Provide examples from the case study.

b) Identify ONE (1) importance of brand architecture in global market. Relate example from the case. (5 marks) c) If you are appointed as Henkels consultant, describe FIVE (5) strategies to promote global brand successfully. Support your examples from the case given.