LOVELY INSTITUTE OF MANAGEMENT

DEPARTMENT OF MANAGEMENT
TERM PAPER

OF
Product and Brand Management
ON
TOPIC: Brand extension opportunities and exploration including marketing
program and its effect on parent brand equity of Nivea

Submitted to
Regards
Miss Mr. Krishan Gopal
Ashish Kumar (RT1902A30)
REG
. – 10900892
SEM
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ESTER -3rd
 PRO
GRAMME CODE -194
Subjec
t code- Mgt-532

ACKNOWLEDGEMENT

I would like to take this opportunity to express my gratitude towards all those
people who have helped me in the successful completion of this term paper,
directly or indirectly. I would also like to express my sincere gratitude towards Mr.
KARISHAN GOPAL (my term paper guide) for his guidance and help which he
willingly provided at every step of my term paper.

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ASHISH KUMAR
 M.B.A 3RD
SEMESTER

TABLE OF CONTENT

Introduction of Nivea…………………………………………………..

Brand extension opportunity…………………………………………….

The reason to extend the brand to different product categories…………..

Brand extension framework …………………………………………………

Advantage of brand extension of Nivea……………………………………

Disadvantage of brand extension of Nivea……………………………….

Brand exploration opportunity of Nivea…………………………………….

Effect on parent of brand equity of Nivea………………………………….

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Conclusion……………………………………………………………………..

Bibliography……………………………………………………………………

INTRODUCTION OF NIVEA- Nivea is a global skin- and body-care brand,

owned by the German company Beiersdorf. The company began in 1911 when Beiersdorf
developed a water-in-oil emulsifier as a skin cream with Eucerit, the first stable emulsion of its
kind. The company's owner, Oskar Troplowitz, named it Nivea, from the Latin word
niveus/nivea/niveum (meaning snow-white)

NIVEA Creme is a product that has reinvented itself over and over again for around 100 years.
Plus, NIVEA has recently become the world’s largest brand of skin-care products. 80 percent of
all consumers become familiar with NIVEA during their childhood and throughout the world
NIVEA is listed again and again among the most trusted brands of skin-care products.

It’s been a long road: A patent application was submitted in 1900 for an emulsifier called Eucerit
(“beautiful wax”) and in 1911 chemist Isaac Lifschütz and his team used a water-in-oil emulsion
with Eucerit as a basis for developing the world’s first refatting and moisturizing cream. Its
white color is what gave the cream its name, which is derived from the Latin “nix, nivis” – snow.
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A global brand
Although the original plant was located in Hamburg, NIVEA became what we would now call a
global brand at a very early point in its history. By as early as 1914, NIVEA was already
represented in 34 countries around the world and 42 percent of its sales were from abroad. In the
1930s the company introduced “NIVEA White paste,” a powder developed especially for
women in Japan and China, who welcomed the new product with tremendous enthusiasm. And
now – at last – men are having their turn: just two years after it was launched, NIVEA for Men
became

the local market leader in men’s personal care products.

“In addition to Europe, we’re focusing on the Brazilian, Russian and Indian markets, but with a
special emphasis on China,” explains Thomas-B. Quaas, chairman of the Beiersdorf AG
executive board. “The Chinese cosmetics market is growing at a phenomenal rate, especially in
urban areas – and we’re growing right along with it. Sales of NIVEA brand products have gone
up by around 50 percent over the past two years.”

Product Segments

The three main ways in which the sun care market is segmented reflect the reasons why people
buy sun care products:

• Protection - NIVEA Sun provides products that enable people to protect themselves from
the harmful effects of the sun. It is the market leader by value in this segment. This
segment can be further sub-divided according to skin type and location (both factors will
affect the level of protection needed).

• After Sun - this is a rapidly expanding market segment.

• Self-tan - tanning products used for cosmetic appeal.

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Brand vision

NIVEA Sun's brand vision is 'To be the number 1 brand in the UK sun care market in
penetration, sales and likeability'. Penetration means how many potential consumers in a
segment actually purchase and/or use the brand; sales are measured by value or volume and
likeability refers to whether the brand is enjoyed. NIVEA strives for the vision by continually
segmenting consumer markets.

Consumer segmentation

Markets are segmented by certain factors. Two important ones are demographics, referring to the
different characteristics of populations, and attitudes, referring to why people buy products.
Market research was used to identify different types of users. People were asked when they used
a sun care product (e.g. holiday, garden, sports) and why. The first relates to the Sun Protection
Factor (SPF) required, the second to the type of product (e.g. a spray or a product for children).
There are five main types of buyer:

• Concerned consumers have protection as a priority;

• Sun avoiders, who prefer to stay out of the sun rather than protect against it. This
segment needs to be convinced by easier to use products.

• Sun lovers are consumers who adore sunshine and know about protection. These
consumers will show loyalty to a brand they trust.
• Careless tanners - like the sun but don't protect properly.

• Beauty conscious - want a good sun tan, know protection is important, but don't really
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understand about SPF's.

Brand strategy

The brand is based on the key proposition of protection. It also concentrates on making sun care
simple and educating about the dangers of sun. Product launches have therefore included spray
products that are easy-to-apply (aimed at men), coloured products to be more fun (aimed at
children) and products offering better protection. The education message is reinforced through
advertising and a school educational programme. A 'Sun Sense' primary school pack goes out to
10,000 teachers each year.

BRAND EXETENTION OPPORTUNITIES OF NIVEA- The

brand Extent ion opportunity in the brand management strategy of the German branded goods
major beiersdorf for its Nivea range of products. Nivea journey from being a one product brand
to a range encompassing fourteen product categories and over 300 products by the beginning of
the 21 century is explored. The brand exetension opportunities of Nivea in detail beirsdorf:s twin
strategy of brand extension and globalization which made Nivea the number one skin care brand
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in the world. It studies beiersdorf strong focus on innovation led product development and
customer focused marketing and examines the strategies taken by the company to ensure that
brand dilution did not hamper the umbrella branding initiatives for nivea.

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 Beiersdorf to extend the brand
Nivea.

3. Beiersdorf wanted to increase the brand equity of Nivea brand, that’s why they adopted the
strategy of product 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
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Brand Extension frame work

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

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

• To differentiate their product from competitors, Nivea adopted strategy of product

variants, so that they can tap every consumer from the all corner of the world.

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.
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Advantages of Brand Extension
Brand Extension has following advantages:

1. It makes acceptance of new product easy.

a. It increases brand image.
b. The risk perceived by the customers reduces.
c. The likelihood of gaining distribution and trial increases. An established brand
name increases consumer interest and willingness to try new product having the
established brand name.
d. The efficiency of promotional expenditure increases. Advertising, selling and
promotional costs are reduced. There are economies of scale as advertising for
core brand and its extension reinforces each other.
e. Cost of developing new brand is saved.
f. Consumers can now seek for a variety.
g. There are packaging and labeling efficiencies.
h. The expense of introductory and follow up marketing programs is reduced.

2. There are feedback benefits to the parent brand and the organization.
a. The image of parent brand is enhanced.
b. It revives the brand.
c. It allows subsequent extension.
d. Brand meaning is clarified.
e. It increases market coverage as it brings new customers into brand franchise.
f. Customers associate original/core brand to new product, hence they also have
quality associations.
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Disadvantages of Brand Extension

1. Brand extension in unrelated markets may lead to loss of reliability if a brand name is
extended too far. An organization must research the product categories in which the
established brand name will work.
2. There is a risk that the new product may generate implications that damage the image of
the core/original brand.
3. There are chances of less awareness and trial because the management may not provide
enough investment for the introduction of new product assuming that the spin-off effects
from the original brand name will compensate.
4. If the brand extensions have no advantage over competitive brands in the new category,
then it will fail.

Issues:

• Management strategies which are aimed at cashing in on the equity of an umbrella brand.

• Rationale behind extending a successful brand into other related (and slightly unrelated)
product categories.

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BRAND EXPLORATION OPPORTUNITY OF NIVEA-
An investment in your brand is an investment in your credit union's future. Studies show that
perceived brand quality drives financial performance, proving that investments in brand equity
do pay off.

Whether you're in the midst of a credit union charter change, changes in SEGs or sponsor
companies, a shift in business strategy or a merger, name change and re-branding have become
critical next steps. The primary goal of DHA's strategic corporate branding process is to assist
your credit union in developing a unique and well-defined brand name and visual identity that
will both appeal to existing and potential members and effectively differentiate your brand in the

Marketplace. The tactical components of a credit union brand include the positioning statement,
the name itself, the logo icon, the tagline, graphic standards and messaging guidelines. The
credit union's new brand - the sum of all these parts - will reflect your business strategy,
positioning, and your identity.

Working with your brand team, DHA will explore the state of your brand today, the aspired-to
state for your brand tomorrow and the steps that must be taken to launch the brand to all your
constituents, internal and external. Together, we will create a brand that distinguishes you from
your competitors, today and for years to come.

Projects related to credit union branding may include:

• Qualitative & Quantitative Market Research

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• Management Team Branding Workshop

 • Name Development
• Logo and Icon Development
• Tagline Development
• Board Presentations
• Launch Campaign Development

Based on the quality of the team's exploration and commitment, they can arrive at four distinct
brand strategies:

1. Fragmented
2. Diffuse
3. Conformist
4. Authentic

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To make better sense of these strategies, let's put business aside for a moment, and see how this
works with people.

Authentic
Take a teenager for example. It is natural, at some point, for teenagers to explore their "brand".
Rocker. Punk. Tough. Sweet. Shy. Risk taking. The list goes on. This is considered healthy
human identity development... so long as at some point the exploration slows and the person
commits to a defining personality. The identity theorists call this "Achieved Identity". We call
the business equivalent, done right, an "Authentic Brand."

Fragmented
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If the person, or brand, never stops exploring - never commits - then they are "Fragmented". At
the extreme, in a person, this would be psychiatrically diagnosed as Dissociative identity
disorder, where one body shares multiple personalities. As far as branding is concerned, this is at
best, the team that is full of ideas but can never agree on the best one. At the worst, it is the
sickness of a firm that is making contrary promises every which way to Sunday.

Conformist
Of course, there are a great many people who are not allowed this healthy kind of exploration.
The culprit is usually cultural, making it against the rules to explore and enforcing commitment.
The teenager must conform to a way of dressing, behaving, even thinking. In people, this results
in what the Identity Theorists call the "Conformist Personality." Obviously, the same inability to
explore and enforcement to commit result in "Conformist Brands".

Diffuse
finally, there are brands and individuals that never explore, nor commit. It is not in their DNA,
not in their culture. There is no drive for identity. The outcome is a "Diffuse" personality or
brand. From a business perspective, this translates to the inability to get even the most reptilian
form of strategy in play.

Don't be diffuse, fragmented, or conformist

Far too many brand strategy failures can be traced back to pathologies in the decision making
process. A failure in exploring ideas and/or a failure to commit to the best brand idea can result
in a diffuse brand, conformist brand, or fragmented brand. The authentic brand is the end goal
of branding and the key to presenting a clear, consistent, and compelling image to your
customers.

Effect on parent of brand equity of Nivea-:

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Brand equity is explaining as the main concern in brand management and IMC campaign. The
every marketer should pursue the long term equity and pay attention to every strategy in detail.
Because a small message dissonance would cause great failure of brand extension. On the other
hand, consumer has his psychology process in mind. The moderating variable is a useful
indication to evaluate consumer evaluation of brand extension of Nivea.

Throughout the categorization theory and associative network theory, consumer does have the
ability to process information into useful knowledge for them. They would measure and
compares the difference between core brand and extension product through quality of core
brand, fit in category, former experience and knowledge, and difficulty of making.
Consequently, the following point of brand extension of Nivea into is.

1. Quality of core brand creates a strong position for brand and low the impact of fit in
consumer evaluation.
2. Similarity between core brand and extension is the main concern of consumer perception
of fit. The higher the similarity is the higher perception of fit.
3. Consumer’s knowledge and experience affect the evaluation before extension product
trail.
4. The more innovation of extension product is, the greater positive fit can perceive.
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 A successful brand message strategy relies on a congruent communication and a clear of
Nivea brand image. The negative impact of brand extension of Nivea would cause a great
damage to parent brand and brand family. From a manager and marketer’s perspective, an
operation of branding should maintain brand messages and associations within a consistency and
continuum in the long way. Because the effects of negative impact from brand extension are
tremendous and permanently. Every messages or brand extension of Nivea can dilute the brand
in nature.

Conclusion
By knowing about its market segments, NIVEA Sun can successfully target them. Segmentation
enables NIVEA Sun to stay as the Number 1 protection and after sun brand in terms of value
sales of Nivea brand.

The brand management strategies of the German branded goods major Beiersdorf for its Nivea
range of products. Nivea's journey from being a one-product brand to a range encompassing
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fourteen product categories and over 300 products by the beginning of the 21st century is
explored. The case examines in detail Beiersdorf 'twin-strategy' of brand extension and
globalization, which made Nivea the number one skin care brand in the world. It studies
Beiersdorf strong focus on innovation-led product development and customer-focused
marketing, and examines the strategies taken by the company to ensure that brand dilution did
not hamper the umbrella branding initiatives for Nivea.

Bibliography

http://www.icmrindia.org/casestudies/catalogue/Marketing/MKTG087.htm

http://www.thetimes100.co.uk/case-study--how-market-research-supports-new-product-
development-process--87-260-1.php
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http://www.always-inspiring-more.com/Nivea.78.0.html?&backPid=9
http://www.scribd.com/doc/32488654/nivea

http://fmcg-marketing.blogspot.com/2007/11/nivea-brand-study.html

http://www.beiersdorf.com/About_Us/Our_History/Brand_History.html

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