Last month Henkel, a German company founded more than 130 years ago in the western city of Aachen, appointed a 46-year-old Dane as the chairman of its management board. The decision to hand the top job to Kasper Rorsted, the company’s first chairman from outside the German-speaking area—as well as to appoint two other non-Germans to the five member board—is symbolic of the company’s transformation into a true global company over the past decade, says Hans Van Bylen, the company’s Belgian executive vice-president and keynote speaker at this year’s INTA Annual Meeting.
Van Bylen says that the adhesives, home care and personal care company has undergone major changes over the past decade. “Some people might regard Henkel as a rather old-fashioned German company—although I hope not! ... Its single biggest market in terms of turnover is now the US. Over the past 10 years the company has become a real global company. That has taken the issue of branding to a new dimension and protecting our intellectual property has become increasingly important as the company has become increasingly global,” he says.
The evidence of that globalization is clear: around 80% of Henkel’s employees are based outside of its home market and of all the companies listed on the German stock market index DAX 30, Henkel is number one in terms of the number of people that it employs outside of Germany. Emerging markets account for around 35% of the company’s turnover and it has made major acquisitions in the 1990s and beyond: it bought the cosmetics company Hans Schwarzkopf in 1995, acquired all the shares of Loctite Corporation in 1997, bought the US Dial Corporation in 2004 and deodorant brands Right Guard, Soft Dri and Dry Idea two years later.
This expansion has created new branding challenges for Henkel’s marketing team and new trademark challenges for its IP specialists. Around 80% of the company’s brands are global and 20% are local, says Van Bylen. “What makes us different [from some of our competitors] is that we also believe strongly in our local brands.”
Going “glocal”
In fact, the company has combined elements of both by developing a concept that it calls “glocal” brands. Van Bylen explains more: “These are often brands that we have acquired in the past, and which may have huge brand equity. When they do, then we keep the original brand name to take advantage of that equity, but use the same packaging that we use for products sold in other markets.” One example of a glocal brand is its FA range of deodorants and shower gels. In Sweden the products are sold under the Barnängen label—a Swedish brand that Henkel acquired in the mid 1990s—and in Italy as Neutromed—another local brand it bought around the same time. “We have three different labels for a product that is made in the same factory,” says Van Bylen. “That way we benefit from the local brand equity as well as taking advantage of the economies of scale that Henkel can provide.” Similarly, the glocal strategy is employed in its range of hair coloring products, which are sold in France as Soyance, and in Greece as Silken Color (see pictures).
The company has also used the same process in reverse, taking local, newly acquired brands global. One example is Got2b, a brand of hair styling products originally sold in North America by ARL, which Henkel added to its portfolio in 2004. The Got2b range of hair gels and mousses are now sold across much of the EU, Russia, Switzerland, Australia and China. Significantly, however, the Got2b brand was also integrated tightly into Henkel’s existing hair care brand Schwarzkopf as part of its strategy to create a single, strong hair care division. The acquisition of the Schwarzkopf brand from Hoechst in 1995, and the company’s subsequent marketing and branding strategy has proved to be a big success. Thirteen years ago, the Schwarzkopf range had a turnover of around e500 million. Now it exceeds e1.6 billion—making it the single biggest brand within Henkel (followed by Loctite at e900 million and Persil at e700 million) and the fastest—growing hair care company in Europe.
“We decided that we would treat Schwarzkopf as a master brand—given that it has huge brand equity—and emphasize this as much as the sub-brands that it encompasses,” says Van Bylen. Those sub-brands include Taft (the biggest hair styling brand in Europe), Gliss, Got2b and Palette. “That meant that all of our commercials start with the Schwarzkopf brand, include information about our innovations, and end with the Schwarzkopf brand.”
Van Bylen also attributes the growth of the Schwarzkopf brand since it was acquired by Henkel to the company’s decision to manage sales through two different channels: retail and salons. “We have the same master brand—Schwarzkopf—but different products and sub-brands for each channel. That way the sub-brands strengthen each other and the retail brands benefit from being associated with brands used by hairdressing professionals. I think that Henkel does this more explicitly than any other hair care company.”
When it comes to protecting its intellectual property, Van Bylen says that Henkel’s expansion into new markets has meant that employees have needed to become more proactive: “The IP people are increasingly involved in the commercial aspects of the business because they need to understand the company’s business strategy and its global expansion plans.” As a result, Henkel has taken steps to integrate its trademark specialists within the company’s business divisions, as well as offering more training on IP issues to its business people.
Henkel’s geographic expansion and the globalization of its brands have also created practical problems for the company—the kind of issues that will be familiar to many trademark counsel within multinational FMCG companies. As the number of registered trademarks around the world increases, IP owners with a global IP portfolio find it harder to clear one mark that they can register in dozens of countries. “Although the processes for searching and risk assessment are becoming more sophisticated, it is becoming harder to achieve global protection for one mark,” says Van Bylen. Another challenge faced by Henkel’s legal team is the lack of international harmonization of trademark laws and practice. “The IP team here tell me that the diversity means that it can be difficult to predict the scope of protection that is available to us for any particular mark, particularly when it comes to protecting colors and shapes for example,” says Van Bylen. N
Hans Van Bylen
Hans Van Bylen is executive vice-president of Henkel and a member of its management board. The company operates in three business areas-home care, personal care and adhesives technologies-and ranks among the Fortune Global 500 companies, as well as being in the German DAX 30. Van Bylen joined Henkel in 1984 and was named corporate vice-president in 2001, managing the strategic business units for skin, oral and hair care and holding regional responsibility for Western Europe, North and Latin America and Asia-Pacific. In July 2005 he was appointed to his current role, where he is responsible for Henkel’s global e3 billion personal care business.
Henkel’s worldwide reach
Europe, Middle East and Africa
Sales in 2007:
e 8,480 million
Employees: 34,166
North America
Sales in 2007:
e 2,557 million
Employees: 6,438
Latin America
Sales in 2007:
e 691 million
Employees: 4,268
Asia-Pacific
Sales in 2007:
e 1,103 million
Employees: 8,235
