Henkel hero

Henkel

Strategic brand architecture helps boost profits for an adhesives giant

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A hidden giant

Henkel AG is the world’s largest maker of industrial adhesives, earning more than $7.5 billion in revenue each year. Although its products are often hidden, they are integral to the manufacture of many things we touch every day—from cereal boxes and diapers to mobile phones and airplanes.

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A mixed bag of brands

By 2010, years of acquisitions and new product development had resulted in a daunting 44 product brands. Overlapping or competing offers and confusing categorization made Henkel’s adhesives portfolio difficult for customers to navigate.

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Asking the right questions

Henkel recognized the need to simplify its portfolio and asked Landor for a ranking of its brands by strength, to eliminate the weakest. Landor proposed that Henkel go one step further and strategically restructure its brand architecture by taking into consideration the equity of each of 44 brands and the decision-making processes used by customers.

We asked:

  • How do customers understand the Henkel offer? How do they find what they are looking for?
  • Which brands carry the most equity and recognition among customers?
  • What organizing principle should be used to structure product and subbrands?
  • What, if any, is the role of the corporate brand Henkel?
  • How many, and which, brands should be retained?

Predicting ROI

Landor conducted in-depth consumer research to determine how most customers navigate through Henkel’s product portfolio. Were they searching for a product according to the technology involved (e.g., water based, hot melt), the price, the customer’s industry, or local presence? We found technology to be the governing factor in product searches, an insight verified by impact modeling. A technology-based brand architecture was predicted to contribute to at least a 10.5 percent lift in revenue.

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Clarifying product choices

Based on this information, Landor developed a portfolio structure representing the five main technological types of adhesives. The strongest product brand in each category was retained under the Henkel master brand.

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Two years after restructuring, Henkel’s revenue had increased by 13 percent and profitability by 36 percent. As of 2015, the profitability lift had increased to 45 percent.

A success story

Antoine Philippe, Henkel’s branding and customer experience director, said of our work, “It exceeded our expectations. The customer journey Landor helped us develop was instrumental to understanding and implementing our new brand.”