Exemplifying the power of brand communication in achieving and maintaining leadership positions. Spin-off as a strategy towards authentic and well-operative Lanxess company.
Spin-off Communication
“Our credo is impact in place of image. At Lanxess, we understand communication and brand strategy as an investment, which has to contribute substantially to the company´s success.” ~ Mr. Sieder, Senior Vice President, Head of Corporate Communication.
Bayer is known to be a traditional and global company of chemistry, agricultural products, and pharmaceuticals. While focusing on these lines, in 2001 Bayer decided to take the cholesterol-lowering medicine Lipobay off the market, which resulted in a decline in business. The company had to undertake major structural and strategic changes and decided to implement a new strategic orientation which led to a spin-off of the chemical sector.
Bayer founded a new chemical company, which at the beginning functioned under the name NewCo, but in 2004 the name changed to Lanxess. This change aimed to build an authentic, worldwide operative chemical company within just one year. In 2005 Bayer Chemicals was officially renamed Lanxess.
Lanxess proved its ability to re-organize the structure to improve overall efficiency and the initial public offering (IPO) until 2005. The company´s proactive attitude is easily noticeable in its values within corporate identity- courageous, capable, and lively.
Communication Activities
Lanxess aimed for independence, competitiveness, and profitability as its main goals. Corporate communication and future alignments of branding need to follow those goals in a value and market-oriented manner. Lanxess put a high emphasis on a profit-oriented corporate communication program, as most of the global businesses were connected to it. Thus, central concentration of communication was unavoidable for Lanxess. Additionally, the various countries have been placed under central leadership, taking account of regional circumstances, by the principle of “Think global, act local”.
To implement communication strategy effectively, Lanxess established communication hubs in Europe, the USA, Asia, South America, and India. These hubs combined various national markets, each with similar affecting factors, Lanxess combined these hubs under one region. This approach allowed the identification of the communication needs of individual entities. Such approach made it possible to communicate easily to different markets and customers’ specific needs. Since 2005 the company has focused on essential market needs.
Lanxess brand positioning is carried out in three steps:
- Analytical phase: to develop the first hypothesis for future positioning and communication focus.
- Strategy phase: approximation of target positioning which has implications for planning and budget allocation.
- Roll-out phase: plan to implement measures, detailed communication mix, and the budget allocation. The company has mostly completed the roll-out phase – building brand awareness among stakeholders.
Until 2006, the company’s history continued to affect customers’ perception of the brand. Optimisation in terms of image and value proposition was the key to dealing with this problem.
Key Takeaway
In conclusion, corporate communications helped Lanxess to attain brand leadership. With the use of targeted PR measures, the first branding success was achieved within less than a year. This resulted in doubled brand awareness. The company has made some great steps toward its development. Its corporate communication has already established a perfect mix between the company´s strategy and market orientation. Moreover, between globalization and local strategies.
Source: Kotler, P., & Pfoertsch, W. (2006). B2B Brand Management. Springer Berlin Heidelberg.