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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"A wider product portfolio, new launches and enhanced distribution reach will enable the company to establish itself as one of the leading players in the consumer goods business." 1

- An Analyst, Speaking of Henkel's Growth Prospects in India, in February 2002.

Especially for the Indian Hausfrau!

In October 2003, Henkel Spic India Ltd., (Henkel) launched the Pril dishwash bar, marking the company's entry into the Indian dishwash bar market. The new product was an extension of the company's popular Pril liquid dishwash brand (it was a market leader in this segment with a 70% market share).

Priced at Rs 14 for a 400 gm bar, Pril dishwash bar was available in two variants (lime and vinegar, and orange and vinegar - all ingredients known to be strong cleaning agents). Henkel's Managing Director, A Satish Kumar (Satish), said, "While dishwash liquids do work efficiently against grease, consumers prefer scourers with an abrasive action to clean grease, so we decided to launch a bar."2 Analysts, on the other hand, felt that Henkel's entry into the dishwash bar market was prompted mainly by the 20% compounded annual growth rate (CAGR) during 1999-2003 of this 120,000 tonne, Rs 3 billion business. Pril dishwash bar was developed entirely by Henkel's Indian research and development (R&D) unit.

This was a significant development since till then, many of the company's leading products (including Pril liquid) had been sourced from the German parent company Henkel KGaA. Henkel opted for celebrity endorsement for promoting the dishwash bar.

The company roped in Sanjeev Kapoor (Kapoor), a famous chef and host of a popular television cookery show for this purpose. Henkel allotted Rs 50 million3 for a multimedia advertisement campaign. The idea behind the exercise was to transfer the strong brand equity of Pril liquid to dishwash bars. Henkel launched the product in south and west India initially, with plans to make it available nationally (in around 100,000 retail outlets) by November 2003. Industry observers opined that launching the Pril dishwash bar was yet another step from Henkel towards consolidating its presence in the Indian fast moving consumer goods (FMCG) industry Besides detergents and household cleansers, the company offered cosmetics and toiletries.

Germany's Henkel in the Indian FMCG Industry - Next Page>>

1] 'Spic-n-Span...Lather Your Portfolio,', February 12, 2002.

2] 'Henkel Extends Pril to Dishwash Bar,', October 21, 2003.

3] On December 16, 2003, Rs 46 equaled 1 US $.


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