WHAT WILL WE MAKE OF THIS MOMENT? HENKEL SHOWER PROJECT: MARKETING CAMPAIGN FOCUSED ON SUSTAINABILITY

Transcription

1 WHAT WILL WE MAKE OF THIS MOMENT? HENKEL SHOWER PROJECT: MARKETING CAMPAIGN FOCUSED ON SUSTAINABILITY Exploring Sustainability as a Strategic Opportunity ( ) Anastasia Lavrentyeva, Davide Bramati, Jessica Lawson, Mario Emanuele Panu, Mehak Gandhi

2 Agenda 1 Company Analysis 2 Market Analysis for Russia 3 Henkel Shower Challenge 4 Henkel Shower Calculator App 5 Summary 6 Appendix 2

3 1 Company Analysis Market Presence - Geographies Henkel s focus on saturated western markets and weakness in key emerging markets is depriving it of future growth potential % CAGR Australasia Henkel AG & Co KGaA: BPC Presence 2013 and Growth Prospects by Region Middle East and Africa Eastern Europe 0 20,000 40,000 60,000 80, , , ,000 Market size 2013 (US$ million rsp) Note: Bubble size indicates company share of region in 2013, range displayed: % Latin America North America Western Europe Asia Pacific Western Mature Markets Growing Eastern Europe Developing Markets Henkel s regional balance does not appear to be a favourable one The company is dependent on the mature Western markets, accounting for over 65% of its total BPC* sales in 2013 Source: Euromonitor Research (2015) Russia and Ukraine in Eastern Europe, and Algeria, Egypt, Iran, Israel, Morocco, Saudi Arabia, Tunisia and UAE in Middle East combined accounted for 14% of the company s BPC sales in 2013 Limited presence in Latin America, even though the region has high potential for growth Very small presence in China and in 2011,the company withdrew from India *Beauty and Personal Care segment 3

4 2 Analysis Russian Beauty Market Strong and steady growth is expected in the Russian Market over the forecast period to 2018 Key Statistics for the Hair Care Market in Russia The Russian haircare market grew by 3% in 2014 to reach a value of $1.51 billion. In 2018, the Russian haircare market is forecast to have a value of $2,521.2 million, an increase of 41.9% since 2013 Shampoo is the largest segment of the haircare market in Russia, accounting for 44.1% of the market's total value Russia accounts for 10.7% of the European haircare market value Henkel AG & Co. KGaA is the leading player in the Russian haircare market, generating a 25% value share in 2014 International players are more successful within hair care compared with domestic companies due to their wide experience in developing and manufacturing hair care products Sales of Hair Care by Product Type Premium vs Mass Category Brands by Value Share 44% 12% 4% 25% 13% 1% 1% 2-in-1 Products Colourants Conditioners Hair Treatments Salon Hair Care Shampoos Styling Agents Mass, 95.80% Premium, 4.20% Segment Player 2014 Schwarzkopf & Henkel ZAO 24.9 L'Oréal Russia 14.4 Kalina Concern OAO 7.7 Procter & Gamble OOO 6.2 Russwell OOO 3.2 Source: Euromonitor Research (2015) 4

5 3 Analysis Key Cities in Russia Moscow and St. Petersburg, the two largest Russian cities, are strongly influenced by international trends in consumer behaviour Moscow Moscow has high appeal towards international brands that are recognised globally, rather than local ones Population: 13 million Ranked as the ninth most expensive city in the world by Mercer One of the world's largest urban economies Highest annual disposable incomes in Russia Beauty and personal care products in Moscow accounted for a 17% value share, reaching RUB81.2 billion Current value growth of 7% in 2014 St. Petersburg St Petersburg has demand for premium brands is high and this is due to the higher level of disposable incomes Population: 5 million St Petersburg is the second largest city in Russia Financial, cultural and industrial centre with developed infrastructure, resulting in appeal to both local and international companies Beauty and personal care products in Moscow accounted for a 5% value share, reaching RUB24.2 billion Current value growth of 7% in

6 4 Analysis Henkel Shampoo Product Range Much of Henkel s brand portfolio and product development is aimed at allowing consumers to re-create a salon experience at home Premium Brand for Henkel Salon-Focused Brand Mass Market Brand Schwarzkopf is the company s principal BPC brand, generating 45% of sales in the market in 2013 Western Europe remains the brand s principal territory, generating over 50% of BPC sales in 2013 Syoss is a retail brand in the hair cosmetic sector Branded as professional products developed with and tested by hairdressers Presence in salon hair care Launched by Schwarzkopf, Schauma is the leading family hair care brand in Europe Schauma as a mass market brand offers hair care products for each hair type, age, gender, babies, kids and adults Leading position of the company is due to its strongly diverse portfolio, a presence in various categories and new product launches supported by strong marketing promotions Company s brand strategy of seeking to generate a greater share of total sales from a smaller number of brands Most popular brands are Syoss, Schauma, Schwarzkopf Gliss Kur and Taft Source: Euromonitor Research (2015) 6

7 5 External Analysis Target Segment The Marketing Campaign is Aimed at the Young Population as Early Adopters due to their Openness Towards Innovation and European Trends Hofstede s Cultural Dimensions Power Distance Individualism Masculinity Uncertainty Avoidance 81 Long Term Orientation Reasons for choosing university students in Moscow and St. Petersburg: Young people are more open to change and innovative and curious and increasingly imagedriven Russia is highly centralised; Moscow and St. Petersburg are hubs with significant influence over trends Collectivistic and long-term oriented society with high risk avoidance Western lifestyle trends in Russia Roger s Diffusion Curve Outside-in strategy in order to leverage on the opportunities Early Adopters - young, innovative and curious people Pioneering role in promoting sustainability in Russia through Schauma Spread to other regions through the network of students à 40% on average come from other regions Increase in smartphone usage 7

8 6 Marketing Campaign Cold Showers Focus on cold showers as a sustainable practice and the development of the marketing campaign Key Message Water Scarcity 884 million people do not have access to clean water More than 3.5 million people per year die from water-related diseases (WHO) Approximately half of the world's population will be living in areas of high water stress by 2030 Cold showers Ø Refines your hair and skin Ø Improves your immunity system and mood Ø Increases circulation and weight loss Primary Research We did a survey of 47 university students from Moscow and St. Petersburg (F:51%, M:49%) 95% think that Russians are more sustainble today than 5 years ago. In a primary survey of Russian students, 87.2% would be interested to help an international company to promote sustainability in Russia. 67% do not think that their university did not provide them with enough networking opportunities Imagine that an international company would come to your university and propose you to participate in a team marketing/ strategy challenge, would you be interested? 8

9 7 Marketing Campaign Shower Challenge Henkel Shower Challenge among leading universities in Moscow and St. Petersberg Primary focus on key universities Vision To become a pioneer in sustainable education for Russian young adults. Main activities will include : Kick-off session Workshops Mission To create sustainability oriented young Russian community though educational and proactive initiatives Key speakers Company visits Objectives By the end of the first round of competition, have at least 2% of student body involved The Project will kick off in two phases Phase 1 Phase 2 Round 1: Within University Competition Round 2: Competition between Universities Round 3: Competition between Cities 9

10 8 Marketing Campaign Benefits of Shower Challenge The campaign lets Henkel take a pioneer role in promoting the importance of sustainability practices among Russian young adults Benefits of University Sustainability Challenge For Henkel Visibility for the Company Internal Benefits reinforcing Henkel s sustainability culture Increased sustainability awareness Building on the brand image of the company Local solutions with unique sustainability promotion strategies coming from Russian people itself For students Increase student awareness towards the importance of sustainability on the global scale Opportunity to apply the academic knowledge obtained to the real life circumstances International opportunities and career development through participation in sustainability movement Opportunity to participate in exclusive events 10

11 9 Marketing Campaign Shower Calculator App A Shower Calculator App that allows you to track your shower time and know your sustainability The Schauma Resource Calculator website offers limited user engagement We focus on developing an app that helps the customers calculate their sustainability footprint The app will be modified to suit the Russian market and the local currency The app serves as a key platform for the sustainability movement and enhances brand recognition Catchy Guerrilla Marketing campaign to spread the app outside the university context Key Benefits of the Henkel Sustainable Shower App Fit with the Russian Culture Customer Oriented Ideal for Henkel goals The Russian society is of a collective nature; Russian people follow trends which have already been tried by other, since they are generally risk avoidance oriented The app will create a sense of community and stimulate large scale competition within it Free for the final users and user friendly Provide real incentives for money saving Various features update the customers on current trends Product information for the customers Reach a high number of users and provide a new sales channel Address the aim of the campaign: Make yourself beautiful, make the world beautiful It is a low cost project within the company s budget User data collection for Henkel 11

12 10 Summary To sum up. Schauma Sustainability Challenge Schauma Sustainability App Place: Moscow & St. Petersburg à trend setters Target market: Young peopleà Early adaptors Aim: To become an Ambassador in sustainability education in Russia User-friendly tool to help and motivate people to become more sustainable Build on the sense of community and a competition Fitting the mass market needs Main Benefits Cost Effective and easy way to spread awareness and build on the brand equity Low risk and high opportunities Main Benefits Easy tool to spread the awareness and change consumer behavior In-line with Innovative Sustainability approach of Henkel 12

13 WHAT WILL WE MAKE OF THIS MOMENT? APPENDIX

14 A Company Analysis Market Presence - Products Henkel s presence in beauty derives predominantly from hair care, accounting for nearly 60% of its total sales in beauty and personal care (BPC) segment Henkel AG & Co KGaA: BPC Presence 2013 and Growth Prospects by Category % CAGR Baby and child specific products Deodorants Men s grooming Bath and shower Hair care Skin care ,000 40,000 60,000 80, , ,000 Market size 2013 (US$ million rsp) Note: Bubble size indicates company share of category in 2013, range displayed: % Haircare as a Driver of Sales Key Performing Products Growth Potential Hair care, accounting for nearly 60% of its total BPC sales in 2013, is also the category in which it recorded the highest growth in absolute terms in comparison to other beauty categories over Within hair care, shampoos recorded the highest growth with a 14% CAGR between 2008 and 2013 Colourants are also expected to benefit from ageing populations Expanding Henkel s presence in shampoos is a move in the right direction Most of the world s growth in hair care is expected to be driven by shampoos Source: Euromonitor Research (2015) 14

15 A Primary Research Results Primary Research conducted among University Students in Moscow and St. Petersburg Did you university provide you with a lot of networking opportunities? Yes 33% No 67% 15