Henkel's Strategy: Should Persil Launch in Spain, Replace Brands?

This case study analyzes Henkel's strategic decision regarding the launch of Persil in the Spanish detergent market, considering whether to discontinue existing brands Wipp and Dixan. It argues that Henkel should launch Persil as a premium brand while retaining Wipp and Dixan as alternative brands due to established customer loyalty and market share. The analysis considers the competitive landscape, including the presence of brands like Aerial, and the potential risks associated with disrupting established consumer preferences. The case study also highlights the favorable macro-economic conditions in Spain for launching multiple products and the importance of maintaining relationships with suppliers, drawing parallels with Henkel's successful multi-brand strategy in other countries like Italy. Ultimately, the study suggests that a multi-brand approach would allow Henkel to capture a broader market segment and mitigate the risks associated with introducing a new product in a competitive market.

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Should Henkel Launch Persil In Spain And Discontinue Wipp And Dixan?
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Should Henkel Launch Persil In Spain And Discontinue Wipp And Dixan?
Henkel should launch Persil in Spain and at the same time continue with Dixan and wipp.
The customers of Dixan and Wipp have developed trust in the brand after great performances for
the previous years. The market share of the products indicates that the products still have high
consumptions and satisfies customer needs. Furthermore, In Spain, the detergent market is highly
attractive and customers have built trust in the available products. The brand trust in the
detergent market acts as a barrier to any new entrant. For example, the launching of Persil in the
detergent market may face rejection from the customer who had established trust on Dixan and
Wipp. Furthermore, Henkel purchased whip because it offers blue colour detergents that are
historically preferred by Spanish consumers. Launching the Persil that is white in colour may
experience low customer switching.
Consumers always switch brands without much concerned with whether the two brands
come from the same company (Pickett-Baker and Ozaki 2008 p.281). Despite Diwan being
considered to have recently lost its value and significant fall in terms of the revenue, the product
still has some local consumers who are loyal to the brand. Furthermore, some consumers find it
hard to switch from Diwan and Wipp products to other brands because of their preferences,
beliefs and some inbuilt cultures. With whip having marketing share value of 12 percent in Spain
markets, it is clear that launching of Persil and terminating Whip and Dixan will expose loyal
customers of this brands to competitors like Aerial which has a higher market share value of 25
percent (Thomas 2017 p.49). Therefore, Henkel should go ahead and launch Persil as a premium
brand under Tier A and whip and Dixan as alternative brands under Tier B. Although with time a
large number of increasing retailer will take Tier A, some will also consider and remain loyal to

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(Tier B) products. Therefore, discontinuing Tier B brands that includes Dixan and whip will lose
some loyal retailers and customers who are still attached to the brand. Previously, in some
countries like Switzerland, Austria, Belgium and the Netherlands the strategy of having both Tier
A and Tier B has worked well and some companies have more than two brands operating at the
same market and industry and each product generates a profitable revenue. Therefore, by having
Persil, Dixan and whipp products in the same market will not impact profit and operations
significantly. Furthermore, there will be more profits as potential customers are likely to switch
from one brand to another under the Henkel Company.
The macro economies situation in Spain is favorite for a company launching different
products. The GDP of Spain is not that high indicating that detergents consumption in the
country is medium. Furthermore, the country has high tariffs and market entry restrictions that
restrict any multinational company launching a new product. For example, launching Persil in
the Spanish market will require the corporation to pay huge license fees and 30 percent corporate
fee monthly (Bundgaard and Dyppel 2009 p.295). The high entry fee with new products
possesses a threat of company closing in case it fails to attract many potential customers.
Therefore, the company should consider having both Dixan and wipp as alternatives before the
products gain a competitive advantage.
. The Dixan and wipp detergents firms compete customers under narrow market
segmentation and therefore they have created strong relationships with suppliers. Further
research by Swoboda and Löwenberg (2011 p.842) shows that a relationship that is direct has
been in existence in Spain’s detergent insights and implications between sales revenue and
investments of Dixan and Wipp. For example, Henkel has ownership of two local brands in Italy:
Atlas and Dixan. The two brands had been successful over time in the Italy market as they have

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established a strong relationship with vendors and suppliers. On the other hand, Henkel owns
Dixan and Wipp in Spain where both Dixan and Wipp has gained momentum for many years.
Therefore, discontinuing Dixan and Wipp expose Persil to the competitive environment as a
supplier will shift to other successful detergents firm like Aerial
References
Bundgaard, J. and Dyppel, K., 2009. Corporate Tax Implications of Denmark’s Unilateral
Termination of its Tax Treaties with France and Spain. Bulletin for International Taxation,
63(7), pp.295-301.
Pickett-Baker, J. and Ozaki, R., 2008. Pro-environmental products: marketing influence on
consumer purchase decision. Journal of consumer marketing, 25(5), pp.281-293.
Swoboda, B. and Löwenberg, M., 2011. The Global Sustainability Initiative at Henkel's Laundry
and Home Care Sector. In Fallstudien zum Internationalen Management (pp. 837-854). Gabler
Verlag, Wiesbaden.