nivea case study

AN ODE TO NIVEA’s SUCCESS

Term Assessment Task - 2

Presented by: - Tarun Aryatkarya@gmail.com

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Introduction to case

The case describes: -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 fourteen product categories

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

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Company Overview

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

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

These product categories were serving peoples of 150 countries.

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Company Overview

Nivea began its operations in the year 1911.

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

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

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Market Share

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

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Facts about Nivea (in year 2003)

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

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

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Growth of Nivea

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

For the year 2001, brand generated the revenues of 2.5 billion.Nivea was the single largest factor for 4.4%

increase in the company’s revenues and 10.7% increase in PAT for the year 2002.

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An Umbrella Brand

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Nivea Sales Worldwide

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Marketing Strategy

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

Mass-marketingTake the help of advertising for the brand

recognition.Expanding the brand globally.

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Question1.

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

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Answer

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

brand, so they extended their product categories.

Geographical condition of various countries also motivated Beiersdrof to extend the brand Nivea.

Beiersdrof wanted to increase the brand equity of Nivea brand, that’s why they adopted the strategy of

product category extension.

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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.

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

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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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Umbrella Branding

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

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

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

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Pros of using umbrella branding strategy

The same brand supports several products in different market.

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

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

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

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Pros of using umbrella branding strategy

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

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

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Cons of umbrella branding strategy

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

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

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

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Question 2.

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

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Answer

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

product. Their product is made off natural ingredients.

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

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

offers the largest skincare assortment.

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

The Nivea brand has always been closely linked with consumer.

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

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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.