Henkel's CEO reveals game-changing tactics for amplified marketing efficiency

Henkel’s CEO attributes the increased efficiency in marketing to the company’s optimized structure. Since 2022, Henkel's consumer division, encompassing popular laundry brands like Bloo and esteemed haircare brands like Schwarzkopf, has been undergoing a comprehensive reorganization. This involves merging the laundry and homecare divisions with the beauty division to form an integrated consumer brands business unit.

CEO Carsten Knobel informed investors today (August 10th) that the restructuring efforts have yielded enhanced marketing efficiency.

"We are now able to execute marketing activities with greater focus and efficiency due to our streamlined portfolio," he stated.

He further mentioned that the marketing efforts of the company were more targeted than before. Nevertheless, he acknowledged that Henkel is still undergoing a transformative process. "I believe that it requires time to make the necessary decisions and adjust the product range appropriately," he stated.

In an interview with Our Website regarding the restructuring last year, Nikki Vadera, the marketing and digital director, emphasized that the merger would allow their brands to expand and benefit from marketing synergies.

Knobel also acknowledged that their increased investment in marketing played a significant role in maintaining the value of their brands amidst challenging market conditions. The company saw a double-digit rise in marketing expenditure.

The company decided to invest in order to enhance brand reputation, especially considering the rapidly changing consumer landscape. He mentioned that this approach has proven successful, pointing to a 40 basis-point increase in the company's haircare market share worldwide. Additionally, he mentioned that the company is combining innovation in their brands with targeted marketing campaigns.

Henkel is currently undergoing a global repositioning of its brands, which has resulted in some market share losses. However, these losses are in accordance with the company's expectations. In the consumer division, volume sales declined by 8.4% in the first half of the year. Despite this, the company achieved a sales increase of 5.7% to €5.4bn (£4.7bn) due to price increases. The average increase in prices during this period was 14.1%.

Henkel plans to increase its marketing expenditure in the second half, with a specific focus on price-sensitive markets, in order to facilitate a resurgence in volume growth.