NIVEA umbrella branding

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Table of Contents y y y y y y y y

Introduction History  Brand Nivea-evolution Core values Marketing strategy  Current scenario S.W.O.T Recommendation

Introduction y

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Presence in maximum max imum product categories and

countries countries  Queen of Mega Brands Brands Home country country  Germany  Germany  Parent arent Compan Companyy  Beiersdorf  Beiersdorf  15% share in global skin product produc t market market during the late 90s Maintained double do uble digit growth rate throughou throughoutt the 90s One product wonder wonder to multi product categories using Umbrella Branding

History y y

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120 year old brand based in Germany  The Beginning Beginning of Beiersdorf: Beiersdorf : Body care products  Adhesive tapes Bandages Introduced brand NIVEA NI VEA which acted as a Game Changer

Introduction y

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of brand NIVEA

 A skin cream based on Eucerit, Eucerit, the first ever ever water water  in  oi oill emul emulsi sifier fier Revolutionary Revolutionar y product for cosmetic buyers with stable, stable , long lasting formula Product name based on Latin word NIVIUS meaning Snow White Target audience expanded from Upper strata women to masses

Revamping y

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the Brand

First ever extensive revamping exercise in global glo bal

corporate world NIVEA was given new packaging  A blue tin with NIVEA crème written in white on it Revamping advertising imagery to expand NIVEAs NIVEAs usage from ladies to the whole family 

BEIERSDORF in blue y

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 World  World war  II enve enveloped loped Beiersd Beiersdorf orf with with political political problems of Germany  Expropriation of NIVEA brand by other countries  Assets  Assets and trademarks associated with the brand b rand were were forcibly sold off  Next three decades were marked by brand consolidation

Core Values of the br brand and y

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 Visual and physical attributes attributes of the product formed a complex emotional bond between customer and brand  which had strong positive undertones NIVEAs blue color denoted sympathy, harmony, friendship friendship and loyalty loyal ty..  White color suggested external cleanliness and inner purity  NIVEA had an aura of an an honest honest brand Brand Values Values  Mildness, reliability, reliability, gentleness, gentleness, protection, high quality and value for money 

Umbrella y y y

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branding

Selling related products under one brand name Contrast with individual product branding  Advantage: Several products can be efficiently  promoted with a single advertisement or campaign. Challenge: Greater burden to maintain consistent quality and brand dilution

Innovations y y y

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and Product Extension

Began with extensions through throu gh 1930s NIVEA Visage in 1960s 196 0s Major breakthrough in 1970 1970 s with the launch launch of  NIVEA for men men aftershave aftershave  A runaway runaway success success  Along with Umbrella brand approach the product diversification diversification was also inf influenced luenced by competitive competitive pressure. Research team of 150 researchers Over 300 products across 14 segments of health and beauty market

Umbrella

Branding strategy for

NIVEA y

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 Any new product was evaluated based bas ed on two parameters The new product had to be based on the qualities that the mother brand offered The new product had to benefit benef it the consumer consumerss in the same way as the other other brand Product extension extension and expansion

The Th e Glo Globa ball  Lo Loccal Strategy y

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Rapid acceptance all over the world world highlighted its global appeal However, according to company sources, the brand retained its strong German heritage Conscious decision decision to globalize the appeal of NIVEA  by forming a team of International  International Experts having local expertise  Adaptation of international advertising advertising campaigns at the local level to reduce the costs of different different product formulations and packaging

Advertising y

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features

NIVEA advertising was simple, unpretentious unpretentio us and human. No use of supermodels for promotion campaigns were blue and Predominant colors in all campaigns  white Local Local issues issues were were well well kept in mind Communication strategy was localized

Mark arket et y y y

Position

Present

across 14 product categories countries Presence across 150 countries Leadership Leadership position positio n as on May 2003 Market Leader fo for product

Country  

Skin creams and lotions

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Facial cleansing

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Facial skin

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care

Suntan products

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Brand NIVEA and what it meant for its customers y y

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NIVEA more than a skin care product  Associated with good health, graceful ageing ageing and a nd better living Sporting, Sporting, fashion fashio n and other lifestyle events gave NIVEA a long lasting appeal brand  Innovati Innovation, on, brand exten extension sion and and Pillars of the brand globalization

The BEIERSDORF ownership issue y

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Insurance major Allianz, the largest shareholder intended to sell its it s 44% stake in the company  Prospective buyers included Proctor & Gamble, the cosmetics cosmetics major LOreal, LOreal, and the coffee specialty  Tchibo which already had 30% stake stake in the company. company. Tchibo enter price war to buy out Beiersdorf. Beiersdorf. P&G and Tchibo

The BEIERSDORF ownership issue y

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German household household products products major player Henkel and US based FMCG major Unilever also entered the fray  for Beiers Beiersdorf dorf buy out  Analysts suggest a US based b ased company to be the ideal buyer for the brand sighting low market share of the brand in the US market Declining growth rate (17% in 2001 and 6.9% in 2002)a cause for worr worry  y 

S.W.O.T. analysis

Strengths y

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max imum product categories in over 150 Presence in maximum countries Market leader in skin care and men's care Umbrella branding Global local strategy  Continuous expansion Emotional bond between customer and brand Capitalization on strong brand equity 

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cont..

 Advertising:  Advertising: simple, unpretentious unpretentious and human Set of guidelines for marketing mix of any new product launch Brand of local origin in many countries which helped them in becoming the market leader Mass marketing

Weakness y y y

no t Presence in US not

as strong as in Europe Europ e Lacks Lacks size compared to its competitors Decline Decline in growth rate rate since this decade

Opportunities y y

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Expansion to US markets Bring excitement to the brand by interactive advertisement Build relationship relationship with retailers to make Nivea Nivea products more visible visible in retail stores

Threats y

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If brand is not not managed well, well, there is a threat for for its associate brands  Associate  Associate brand may overshadow core brand Not able to different segments of market due to umbrella branding Unable to capitalize capitalize on different segments of market Competitors aggressively undertaking promotions

Recommendations y

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Should not let intensifying competition and and the ownership imbroglio affect the brand performance Should Should position positio n themselves in such a way way that they can influence the big retailers and markets where they  dont have a large presence. Being acquired by a U.S. firm beneficial to Nivea