Assignment

of
Strategic Management

Group No.: Eight (8)

Submitted to: Prof. G. Ahmad Rana

Submitted by:
Members:
Ali Sher -----------------------------------
Syed Hussain Zain ul Abiden -----------------------------------
Ayesha Saeed -----------------------------------
Asif Sheikh -----------------------------------
Najeeb Najam -----------------------------------
Syed Ali Kamran ----------------------------------

UNIVERSITY OF CENTRAL PUNJAB LAHORE

Question No.1) what is the brand image and sources of equity for the Nivea brand?
Does it vary across product classes? How would youy evaluate or rate Nivea’s brand
extension strategy? How would you characterize the brand hierarchy?

The legacy skincare brand Nivea can be easily found in 150 countries around the world.
Approaching its 100th birthday, "Nivea" derives from the Latin word "nivius, meaning
snow-white." The first brand to bring skincare products from the privileged elite to the
mass market, its initial product offering, Nivea Crème, was created by a team of
dermatologists in 1911 who claimed it was "the world's first long-lasting skin cream."

By 1924, Nivea initiated the use of its blue and white tins, still in use today. A brand born
of dermatological expertise, consumers continue to associate Nivea with trust, reliability
and accessibility. Owned by Beiersdorf AG, an international branded goods company in
Germany, Nivea has grown from one signature product to over 300, encompassing
fourteen product categories, which include a vast expanse of sub-brands such as Body,
Visage, Beauté, Sun, For Men, Hair Care, and Baby. Through the years, Nivea has found
success with new product rollouts by maintaining a rock solid consistency in its brand
messaging, both visually and verbally.

Brand Values
Over the years, NIVEA - primarily through NIVEA Creme - has acquired a unique,
universal brand identity as a caretaker of skin. NIVEA is synonymous with protection
and caring for the skin. “Mildness,” “reliability,” “gentleness,” “protection,” “high
quality,” and “value for money” are all strongly associated with the NIVEA name.

Innovations & Brand Extensions

Innovations and brand extensions went hand-in-hand for Nivea. Extensions had been
made back in the 1930s itself and had continued in the 1960s when the face care range
Nivea Visage was launched.
However, the first major initiative to extend the brand to other products came in the
1970s. Naturally, the idea was to cash in on Nivea's strong brand equity. The first major
extension was the launch of 'Nivea For Men' aftershave in the 1970s...

The 'Global-Local' Strategy

From 1910 onwards Nivea was made available in Europe, and from 1920 onwards, it was
made available in the US markets. Over the next few decades, the number of countries in
which Nivea had a presence kept on increasing due to Beiersdorf's focus on global
expansion. The cream's rapid acceptance in many parts of the world highlighted its truly
global appeal...
 The main reason to extend the brand to different product categories:

1. Beiersdorf wanted to go globally with Nivea brand, so they extended their product
categories.
2. Geographical condition of various countries also motivated Beiersdrof to extend
the brand Nivea.
3. Beiersdrof wanted to increase the brand equity of Nivea brand, that’s why they
adopted the strategy ofproduct category extension.
4. As the competition increased in skin care market it was necessary for Nivea to
extend it brand to be a-step-ahead of the competition.
5. To tap all age group of consumer both male and female, it was essential for Nivea
to extend its brand.
6. Brand Extension is of the new product development strategies, which can reduce
financial risk by using the parent brand name, so Nivea decided to extend it
product categories to tap new set of consumers.

Question No.2) What is the role of the Nivea crème advertising? Should it be
changed?

NIVEA Crème Brand Identity and Values

Over the years, NIVEA—primarily through NIVEA Crème—had acquired a unique,
widely-understood brand identity as a ‘caretaker’ of skin. Throughout Europe, most users
were first introduced to Nivea crème during their childhood learning that it was a product
that could be used by the entire family to satisfy all kinds of needs.

Because of consumers’ own personal history with the brand and the company’s
advertising, NIVEA had become strongly associated with shared family experiences and
had a rich set of other brand associations such as ‘care’, ‘mildness’, ‘reliability’,
‘gentleness’, ‘protection’, ‘high quality’, ‘feeling good’, and ‘reasonably priced’. Over
time, the NIVEA name became synonymous with protection and care for the skin.

Early Nivea Advertising

BDF first began advertising Nivea products—primarily Nivea Crème—in 1912. The
company viewed advertising as a means of strengthening consumer perceptions of a
quality product. For over 60 years, Nivea advertising promoted the basic themes of skin
care and protection. Ads were always simple, plain, and informative. In the 1910s and
1920s, BDF advertised three main Nivea products—crème, soap, and powder. Early ads
established the image of the Nivea woman as clean, fresh, and natural. Over time, Nivea
ads were altered to reflect changes in self-images and lifestyles. For example, in the
1920s, when German women were becoming more athletic and active, Nivea ads began
to show women in more outdoor and active settings. In the 1930s, when tanning came
into fashion, BDF responded by highlighting the skin protective qualities of Nivea crème
and introducing a new product—Nivea oil—for sunburn. In the 1950s, following the end
of World War II, Nivea ads reflected the German population’s desire to enjoy life by
showing Nivea products used in relaxed and happy settings. While the settings of the ads
changed, the clean, fresh, and natural image of the Nivea woman remained essentially
unchanged. While she was modernized to reflect the styles of the time, she was always a
face with whom the average woman could identify. Over time, Nivea ads sought to link
the clean, fresh, and natural image of the Nivea user to related elements of nature—fresh
air, light, and sunshine.
ded a series of television and print ads highlighting Nivea Crème. Because Nivea Creme
was still the company’s most important image carrier, but was plagued by stagnating
sales, Cosmed decided first to develop a worldwide ad campaign that presented a
common brand image for Nivea Creme. The first ad showed a group of seagulls flying
together through the air as circus music played in the background. The headline read:
“Harmony in Blue.” “Harmony” was written in the Nivea logo lettering while “in Blue”
was written in white cursive letters. At the end of the ad a picture of a tin of Nivea Creme
flashed on the screen with the tagline “ All that skin needs to live.”

Question No.3) what would you do now? Provide recommendations to Nivea

concerning next steps in their marketing program?

An umbrella brand:

i. Market penetration

Selling more products involves either growing the market as a whole or taking market
share from competitors.

NIVEA increases its sales by adjusting the marketing mix:

• Product - reformulating products to make them more effective e.g. better at

moisturising.

• Price - reflecting good value but at a premium to retailers' own or private labels to
represent quality.

• Place - finding new outlets through which to sell the products.

 • Promotion - finding more effective ways of reaching the target market,
e.g. samples on beauty magazines.

NIVEA Lip Care is a good example of the way in which NIVEA is building an existing
product in an existing market, i.e. market penetration. Despite the seasonal nature
of demand for lip care products and their relatively low selling price. NIVEA lipcare has
developed the brand through monitoring trends in the market and matching these with its
existing core competencies in skin care. The core products of this range are 'Essential',
'Repair', 'Rose' and 'Sun'. However, NIVEA has extended the product range with:

• (2000) Strawberry and Cherry

• (2002) Pearl & Shine

• (2003) Gold & Shine and CareGloss & Shine.

The launch of new products, which combine cosmetic trends with NIVEA's traditional
skincare expertise, has been very successful. The brand which has around 90% brand
awareness, is well recognised by the consumers, whilst the new launches reinforce and
reflect known standards. By Christmas 2003, Pearl & Shine had become the market's best
selling product.

ii. New product development

Beiersdorf's investment across a broad range of existing products illustrates its

commitment to new product development. NIVEA is the master brand that drives the
success of the whole NIVEA portfolio of sub-brands. It is the No. 1 skincare brand
worldwide. Beiersdorf continually strives to strengthen this position through research in
products and markets.

A further example of new product development was the launch of NIVEA Visage Soft
Facial Cleansing Wipes in 1999. Market research at the time showed only 66% of UK
women used a facial cleanser, whilst only 27% has a face care regime (cleanse, tone,
moisturise). Women were looking for an easy, convenient, face care routine. NIVEA's
Soft Facial Cleansing Wipes remove eye make-up and cleanse and tone in one simple
step thus meeting customers' known requirements. This is the basis of the product's
success. Not surprisingly, NIVEA rapidly became the No.1 brand.

iii. Market development

The UK launch of NIVEA deodorant is a good example of market development within

the NIVEA range. This is Europe's No. 1 brand. The chart shows 2004 figures for
selected countries in Western Europe. It indicates the growth potential for NIVEA
deodorant in the UK.

The UK deodorant market is currently worth £300m annually. It is a

highly competitive market, dominated by one major manufacturer, Unilever, who account
for over 60% of all sales. NIVEA believes its traditional skincare expertise will help to
bring new UK consumers into the brand. Currently, 5 million UK consumers buy into the
NIVEA brand, all of whom are potential NIVEA deodorant users. By capitalising on this
potential Beiersdorf intends to maintain its rapid and consistent growth.

Launching the product in the UK required careful product and market research.
Recognising Unilever's dominance of the market, through pre-launch research, NIVEA
identified a strong match between traditional NIVEA brand values and those required in a
skincaring deodorant, i.e.:

• protection

• suitable for my skin

• mild/skin friendly

• pleasant fragrance

• reliable brand

• high quality.

This allowed NIVEA to enter the market in the more specialist skincaring
deodorant segment, away from the bigger, high-performance focused brands, with which
the NIVEA brand image had fewer synergies. This market segment gives greater scope
for expansion than the entire deodorant market. NIVEA aims to become the number 1
skincaring deodorant in the market, and to control this area, rather than to control the
market as a whole. Given the size of the UK deodorant market, dominating the skincaring
segment, which accounts for nearly 20% of the market, can be as rewarding as being the
leading brand in a smaller market.

iv. Diversification

Beiersdorf has a history of being an innovative company. It has always been prepared to
develop new products for new markets. This is well illustrated by the development of the
NIVEA FOR MEN range.

This development results from several trends. These include:

 • The softening and blurring of "male" and "female" gender roles

• Increased spending on lifestyles with more people attending gyms and caring
about their appearance

• New media developments, e.g. the revolution in men's magazines provide direct
contact with men through advertising.

The Marketing Game plan for Nivea

Millions of customers across the world have been familiar with the Nivea brand since
their childhood. The visual (color and packaging) and physical attributes (feel, smell) of
the product stayed on in their minds. According to analysts, this led to the formation of a
complex emotional bond between customers and the brand, a bond that had strong
positive undertones...

NIVEA was the first mass-market brand to set out to develop male facial
care/moisturising. The NIVEA FOR MEN range provides straightforward practical
solutions to men's skincare needs. It targets men who value their appearance and who see
it as a key contributor to self-confidence i.e. NIVEA has diversified into the male sector
of the market.

The NIVEA FOR MEN range built on the NIVEA brand heritage. At its launch in the
late 1990s, the product range included:

• shaving foam

• shaving gel

• aftershave balm

• sensitive aftershave balm

• moisturising lotion

• intensive cream.

But basically the top level would be the Corporate Brand/Parent Brand (where in a high
proportion of situations are really just the name of a large corporation and do not hold the
key/core brand associations/values consumers relate to)

The next level would be the Core/Master brand from which brand or line extensions and
new products tend to make use of as a launch pad to leverage brand equity.