Nivea Case Study

AN ODE TO NIVEA’s AN ODE TO NIVEA’s SUCCESSSUCCESS

Term Assessment Task - 2Term Assessment Task - 2

Presented byPresented by: - : - Tarun AryaTarun [email protected]

Tarun AryaTarun Arya 2204/11/2304/11/23

Introduction to caseIntroduction to case

The case describes: -The case describes: -Brand management strategies of the German Brand management strategies of the German

branded goods major Beiersdorf for its Nivea branded goods major Beiersdorf for its Nivea range of products. range of products.

Nivea’s journey from being a one-product brand to Nivea’s journey from being a one-product brand to a range encompassing fourteen product categories a range encompassing fourteen product categories

The strategies taken by the company to ensure that The strategies taken by the company to ensure that brand dilution did not hamper the umbrella brand dilution did not hamper the umbrella branding initiatives for Nivea. branding initiatives for Nivea.


Company OverviewCompany Overview

Nivea is brand of Beiersdorf a German based Nivea is brand of Beiersdorf a German based company owing various other cosmetics brand.company owing various other cosmetics brand.

In year 2003, company was present in over 14 In year 2003, company was present in over 14 product categories.product categories.

These product categories were serving peoples These product categories were serving peoples of 150 countries.of 150 countries.


Company OverviewCompany Overview

Nivea began its operations in the year 1911.Nivea began its operations in the year 1911.

Mr. Oscar Troplowitz was the owner of this Mr. Oscar Troplowitz was the owner of this company and also he was the person who company and also he was the person who named it Nivea.named it Nivea.

Nivea comes from the latin word Nivea comes from the latin word niveus/nivea/niveum niveus/nivea/niveum (meaning snow-white). (meaning snow-white).


Market ShareMarket Share

The brand had a 15% market share in the The brand had a 15% market share in the global skin care products market in 1990.global skin care products market in 1990.


Facts about Nivea (in year 2003)Facts about Nivea (in year 2003)

Market leader in: - Market leader in: - skin creams and lotions in 28 countries.skin creams and lotions in 28 countries. facial cleansing in 23 countries.facial cleansing in 23 countries. facial skin care in 18 countries.facial skin care in 18 countries. suntan products in 15 countries.suntan products in 15 countries.

Nivea was believed to be the brand of local Nivea was believed to be the brand of local origin in many of these countries which helped origin in many of these countries which helped them in becoming the market leader.them in becoming the market leader.


Growth of NiveaGrowth of Nivea

Between 1991 and 2001, Nivea posted double-Between 1991 and 2001, Nivea posted double-digit growth rates every year.digit growth rates every year.

For the year 2001, brand generated the For the year 2001, brand generated the revenues of 2.5 billion.revenues of 2.5 billion.

Nivea was the single largest factor for 4.4% Nivea was the single largest factor for 4.4% increase in the company’s revenues and increase in the company’s revenues and 10.7% increase in PAT for the year 2002.10.7% increase in PAT for the year 2002.


An Umbrella BrandAn Umbrella Brand


Nivea Sales WorldwideNivea Sales Worldwide


Marketing StrategyMarketing Strategy

The target segment of Nivea were primarily The target segment of Nivea were primarily women from the upper strata of society.women from the upper strata of society.

Mass-marketingMass-marketing Take the help of advertising for the brand Take the help of advertising for the brand

recognition.recognition. Expanding the brand globally.Expanding the brand globally.


Question1.Question1.

Why did Beiersdrof decide to extend Why did Beiersdrof decide to extend the brand to different product the brand to different product categories? In the light of categories? In the light of Beiersdrof’s brand extension of Beiersdrof’s brand extension of Nivea, critically comment on the pros Nivea, critically comment on the pros and cons of adopting an umbrella and cons of adopting an umbrella branding strategy?branding strategy?


AnswerAnswer

The main reason to extend the brand to The main reason to extend the brand to different product categories:different product categories: Beiersdorf wanted to go globally with Nivea Beiersdorf wanted to go globally with Nivea

brand, so they extended their product categories.brand, so they extended their product categories. Geographical condition of various countries also Geographical condition of various countries also

motivated Beiersdrof to extend the brand Nivea.motivated Beiersdrof to extend the brand Nivea. Beiersdrof wanted to increase the brand equity Beiersdrof wanted to increase the brand equity

of Nivea brand, that’s why they adopted the of Nivea brand, that’s why they adopted the strategy ofstrategy of

product category extension.product category extension.


As the competition increased in skin As the competition increased in skin care market it was necessary for Nivea care market it was necessary for Nivea to extend it brand to be a-step-ahead of to extend it brand to be a-step-ahead of the competition.the competition.

To tap all age group of consumer both To tap all age group of consumer both male and female, it was essential for male and female, it was essential for Nivea to extend its brand.Nivea to extend its brand.


Brand Extension is of the new product Brand Extension is of the new product development strategies, which can development strategies, which can reduce financial risk by using the parent reduce financial risk by using the parent brand name, so Nivea decided to extend brand name, so Nivea decided to extend it product categories to tap new set of it product categories to tap new set of consumers.consumers.


Umbrella BrandingUmbrella Branding

An umbrella brand is a brand that covers An umbrella brand is a brand that covers diverse kinds of products which are more diverse kinds of products which are more or less related.or less related.

It applies also to any company that is It applies also to any company that is identified only by its brand and history. identified only by its brand and history.

an umbrella is a place brand used by a an umbrella is a place brand used by a locality to attract the attention of different locality to attract the attention of different kinds of audiences, e.g. incoming tourists, kinds of audiences, e.g. incoming tourists, investors, or students.investors, or students.


Pros of using umbrella branding Pros of using umbrella branding strategystrategy

The same brand supports several products The same brand supports several products in different market.in different market.

The main advantage of using umbrella The main advantage of using umbrella branding strategy is the capitalisation on branding strategy is the capitalisation on one single name.one single name.

The umbrella branding strategy also helps The umbrella branding strategy also helps new product to penetrate in the market.new product to penetrate in the market.

Umbrella branding strategy also helps in Umbrella branding strategy also helps in brand awareness and brand recall.brand awareness and brand recall.


Pros of using umbrella branding Pros of using umbrella branding strategystrategy

An umbrella brand strategy allows An umbrella brand strategy allows the core brand to be nurtured by the core brand to be nurtured by association with products with which association with products with which it was not previously associated.it was not previously associated.

An umbrella brand strategy also help An umbrella brand strategy also help companies to reduce promotional companies to reduce promotional and advertisement cost.and advertisement cost.


Cons of umbrella branding Cons of umbrella branding strategystrategy

If the brand is not managed well, there is a If the brand is not managed well, there is a threat for its associate brands.threat for its associate brands.

If the core brand is not stronger than its If the core brand is not stronger than its extension, it may destroy the brand extension, it may destroy the brand image.image.

Some times the brand communication Some times the brand communication strategy of core brand affects the strategy of core brand affects the extension brand, the message that the extension brand, the message that the core brand is communicating is not clear.core brand is communicating is not clear.


Question 2.Question 2.

What are the core values of the What are the core values of the Nivea brand? What type of brand Nivea brand? What type of brand extension framework did Beiersdrof extension framework did Beiersdrof develop to ensure that these core develop to ensure that these core values did not get diluted?values did not get diluted?


AnswerAnswer

Core values of Nivea:Core values of Nivea: They were not using animal fats in their They were not using animal fats in their

product. Their product is made off product. Their product is made off natural ingredients. natural ingredients.

Nivea has a strong brand personality Nivea has a strong brand personality which is emotionally involving, based on which is emotionally involving, based on childhood, trust and love.childhood, trust and love.

Nivea products meet consumer needs.Nivea products meet consumer needs.Nivea is the mass market brand which Nivea is the mass market brand which

offers the largest skincare assortment.offers the largest skincare assortment.


Nivea always concern of keeping its Nivea always concern of keeping its brand young, attractive, energetic and brand young, attractive, energetic and sympathetic. sympathetic.

The Nivea brand has always been The Nivea brand has always been closely linked with consumer.closely linked with consumer.

Nivea is truly global product, and its Nivea is truly global product, and its product are same everywhere.product are same everywhere.


Brand Extension frame workBrand Extension frame work

To maintain the brand extension framework, To maintain the brand extension framework, Nivea made sure that product extension Nivea made sure that product extension that they are offering to the consumer is that they are offering to the consumer is really adding value or not.really adding value or not.

They were offering their consumer a They were offering their consumer a innovative product, so that consumer can innovative product, so that consumer can try their product.try their product.

To differentiate their product from To differentiate their product from competitors, Nivea adopted strategy of competitors, Nivea adopted strategy of product variants, so that they can tap every product variants, so that they can tap every consumer from the all corner of the world.consumer from the all corner of the world.

Business

Nivea Case Study