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Direct Marketing

Direct Marketing

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Published by Saurav Shrestha

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Published by: Saurav Shrestha on Jan 09, 2011
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NIVEA: MANAGING A MULTI-CATEGORY BRANDi BACKGROUND As 2005 drew to a close, executives at Beiersdorf¶s (BDF) Cosmed division reflected

on the growth of their Nivea brand over the last decade and a half. Nivea, the largest cosmetics brand in the world, had successfully defended its position during intense competition in its major European markets. Additionally, the company had expanded into many new markets in South and Latin America, Eastern Europe, and Asia. Nivea had created a number of new sub-brands that broadened the company¶s product offerings, including the 1997 launch of a decorative cosmetics line, Nivea Beauté, and the aggressive expansion of Nivea for Men. Nivea also introduced a major scientific breakthrough²an anti-aging coenzyme called Q10²that became an unqualified success and was included in a number of sub-brand products. Nivea¶s growth during this time was reflected by its net sales. Sales in Beiersdorf¶s Cosmed division, primarily driven by Nivea, grew from ¼1.4 million billion in 1995 to ¼3.8 billion in 2005 (see Exhibit 1). In addition, Beiersdorf¶s share price grew from ¼25.69 in 1995 to ¼85.6 in 2004 after peaking at ¼127.50 in 2001. As Nivea¶s product portfolio expanded, the company faced a new challenge: maintaining growth while preserving the established brand equity. During the 1970s and 1980s, BDF¶s Cosmed Division had successfully extended the Nivea brand from a limited range of products²Nivea Crème, Milk, Soap, and Sun²to a full range of skin care and personal care products. Over time, these different product lines had established their own identities as ³sub-brands,´ independent of and yet still connected to the Nivea Crème core brand. Given the breadth of products sold under the Nivea name, however, there had been debates in the 1990s as to how to achieve the proper synergy between the Nivea Crème core brand and the sub-brands from other product classes. In planning new product developments, Cosmed management sought to ensure that the Nivea brand met the market needs while also remaining true to the heritage of Nivea, as exemplified by flagship moisturizer product Nivea Crème. Nivea¶s marketing program in the 1990s and 2000s followed a ³sub-brand strategy´ where individual sub-brands received budget allocations for independent marketing communications activities, rather than an ³umbrella brand´ strategy where the Nivea corporate brand was promoted first and foremost. Internally, however, executives debated whether the Nivea Crème brand should continue to receive significant marketing dollars. Some felt that Nivea Crème was the core brand in the Nivea brand franchise and therefore played the most valuable role. Others worried about how the traditional Nivea Crème image could be maintained if the company also needed to innovate and modernize it. Now that the company had a broad spectrum of successful sub-brands, the big question going forward was how the company could best manage its brand hierarchy. Additionally, management wondered from where the next surge of growth would come and whether it would be crossing Nivea¶s brand ³boundaries.´ Direct Marketing Nivea initiated a number of direct marketing programs around 1995, primarily for its Nivea Vital and Nivea Visage brands. Nivea¶s largest national direct marketing campaign, in France, involved a database with more than one million consumers. Consumers in France receive periodic mailings that contain product samples and information, coupons, and a survey. They have also published of Nivea magazines, which started in Germany, with articles for the whole family, including ones specifically for men and younger adults. A total of more than 10 million of these magazines appear as inserts in other periodicals two times a year and were distributed throughout Europe. In addition to the latest Nivea advertising, they contain information about a wealth of Nivea products, beauty advice, decorating tips, feature articles related to beauty, and other content commonly found in fashion magazines. Non-Traditional Marketing In addition to its print and television advertising, Nivea engaged in numerous non-traditional advertising methods. For example ± They distributed the blue Nivea beach ball at European beaches each summer. These balls had been standard issue for more than 30 years, and helped to reinforce Nivea¶s image as a caretaker of the skin in a fun way. They created a Blue Santa Claus giving away

as a whole. chat rooms. However. consumers in Austria could host the party in their home and Nivea would pay for a beautician to visit with an assortment of Nivea products. Nivea also organized ³workshops for body & soul´ in Germany. which are designed to stimulate circulation in the hands and calm the nervous system. between four and six new product samplings. the United Kingdom. Nivea provided important baby care information to mothers at regularly scheduled intervals that corresponded with stages in infant and toddler development. and a beach volleyball tour. Each country has an event manager that coordinates sub-brand marketing activities and is responsible for developing special events. . especially for new consumers like men. Similar to Tupperware parties. And. Each sub-brand also has a website. Nivea Shops included extensive point-of-sale display that integrated Nivea¶s subbrands and had a beauty advisor in-house to help customers. Nivea experimented with viral marketing campaigns. with information about individual products and specialized beauty and skin care tips. such as sponsorship. The bus promoted such youthful products as Nivea Hair Care Styling and Nivea Beauté. markets.com has become an important information center. a double-decker Nivea-branded blue promotional bus in Russia. including beach lifesavers (lifeguards). including online sweepstakes. beauty advice. Nivea sponsored various organizations in Europe. Nivea opened the Nivea Care Center in South Africa and planned to open its first ³House of Nivea´ store in Hamburg. and games. Nivea. The balls.com Nivea. The house will offer Nivea¶s product line and expert beauty advice. the United Kingdom and United States where small groups of women could attend a three-day conference at resort locations.ii ii New Media Age.Nivea Crème in Germany during the holidays. Nivea brand managers felt that traditional media like print and TV still best portrayed the Nivea image.com is a global website with information about the company and its history. Free with each tube of Nivea Hand Anti-Age Crème Q10 was a pair of metal relaxation balls. Event Marketing Nivea devoted a portion of its marketing budget to event marketing activities. Nivea sponsored beauty contests in diverse markets such as Poland. Through the first three years following birth. Nivea created a branded double-decker bus that traveled to concerts and other youthoriented events. The website is designed with the popular Blue Harmony theme and each country has its own version²again to give the brand a local presence. Nivea developed a promotion for its Nivea Hand products in the Netherlands. Nivea sponsored school education programs for safe sunbathing in several countries under the auspices of its Nivea Sun brand. For an annual membership fee of about $10. and a ³mega-poster´ advertisement covering the outside of the Kremlin. During 2000. Nivea partnered with hospitals and sponsors young mothers in maternity wards by sending them ³care packages´ containing Nivea products. members received a quarterly magazine. Nivea. In the early 2000s. Consumers could get a total hair and face makeover at the bus. and Thailand. children¶s sailing programs. and a birthday gift. products. Nivea also worked with its retail partners to create Nivea shops in large German department stores. 2005. Similar to the Nivea Club. while Nivea continued to interact more and more with its consumers online. and promotions like the 2004 sponsorship of ³Bridget Jones: the Edge of Reason´ where consumers sent in 10-second video clips. Germany in 2006. The company also provided free product samples and informational brochures for the mothers for one year after the birth of their child. Nivea also built a Nivea Club in Austria in 1995. July 31. came with instructions on use.

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