Germany's Henkel in the Indian FMCG Industry

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Case Details:

Case Code : BSTR086
Case Length : 15 Pages
Period : 1996-2006
Organization : Henkel Spic India Ltd.
Pub Date : 2004
Teaching Note :Not Available
Countries : India
Industry : FMCG

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Henkel's Growth Trajectory

The first such deal was in September 1997, when Henkel acquired Modern Home Care Products Ltd., an FMCG goods company with a good presence in south India. This company owned brands such as Brisk (floor cleaner and disinfectant), Limeshot (utensil cleaning bar) and Attack (mosquito repellant).

In early 1998, Henkel launched two premium detergent brands, Henko Megastar and White Giant, in south India. In mid 1998, the company re-launched its flagship brand, Henko Stain Champion, with a new 'transparent window' packaging. The new advertisements for the product emphasized its German origins with statements like 'Henko Stain Champion's German formula contains stain fighting enzymes that remove the toughest of all stains like oil, grease and coffee.' The advertisements also highlighted the fact that the detergent contained Zeolite, which helped prevent dirt from settling back on the clothes during washing and helped retain brightness and colors. A new, distinct perfume was added to differentiate the product from other detergent brands...

Marching Ahead With New Product Launches

In 2002, Henkel continued to launch new products even as it maintained its focus on strengthening its existing brands in the market. In April 2002, it re-launched the Fa toilet soap range; while a new variant Wild Sandal was introduced, an existing variant, Exotic Garden, was dropped.

Henkel said that the re-launch was the result of a complete rework on the product formulation, packaging and graphics. The price was also reduced from Rs 15 to Rs 12 (for a 75 gram pack). Henkel's decision to re-launch Fa came at a time when the growth in the premium soaps category was declining as consumers down-traded to brands in the mid-priced and popular segments. Also, innumerable promotional offers and freebies offered by companies operating in mid-priced and popular segments had taken a toll on premium brands. Commenting on this, Satish said, "The entire marketing mix has been overhauled. We had certain objectives in mind in terms of market share and volumes for the toilet soap which were not achieved...


Exhibit I: A Brief Profile of Henkel Kgaa
Exhibit II: FMCG Market Segments Tapped by Henkel
Exhibit III: Henkel Spic India Ltd. - Financial Highlights (1998-2002)
Exhibit IV: Henkel Spic Ltd. - Financial Highlights


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