Executive summary

1.1 Introduction to Beiersdorf

Beiersdorf is a Germany based company focused on the development, manufacturing and

distribution of high quality skin care and personal care products which has its international

presence in different brands names such as Nivea, Eucrein, Labello, Hansaplast, Nivea for

men, SBT, Slek, Florena, 8x4 and La Prairie. Beiersdorf was found in 1882 by Paul C.

Beiersdorf. It operates in two main segments. One is consumer business segment which deals

with skin care and personal care products. Another one is tesa business segment deals with

self adhesive products and system solutions for industry, business and consumers.

Beiersdorf employs 21,700 employees worldwide and it trades its shares in the main stock

exchange of Frankfurt and Hamburg in Germany. It is also a part of DAX, the index for 30

top companies in Germany. The company generates revenue of EUR 5.78 billions in which

87% of its revenue comes from consumer business segment.

Nivea is the most successful and highly recognized international brand of Beiersdorf. Nivea

has a great brand image as it is awarded as the most trusted skin care brand in Europe by

Reader’s digest survey in 16 countries. It holds this position from the past 6 years. Nivea

produces all kind of skin care products for men, women and children’s. It is well known for

its quality and innovation.

Beiersdorf’s step towards organic skin care products. Launch of a new organic Nivea

crème to increase its global market share and closeness to customers around the world.

Environmental degradation, ecological crisis, social injustice and hunger are some of the

major problems hitting globally and turning people towards global warming. “Organic
principle of agriculture is a multifunctional solution to many of these global problems” said

Katherine T. DiMatteo, President of IFOAM Organisation.

Keeping environmental relationship in mind and considering the future demand for organic

products, The Europe’s most trusted brand Nivea is planning to launch an organic skin care

product to sustain its market position and increase its global market share.

A marketing plan is been prepared based on the

2.1 Marketing plan to extend the product line of NIVEA Creme

NIVEA is the most valuable brand of Beiersdorf. It is well known for its multipurpose skin

care product NIVEA Crème. It is the most successful and traditional product of NIVEA,

which launched in 1911 and still continues its glory. NIVEA is planning to add more value to

its legend, by manufacturing the product through organic principles and launching it as an

updated product named NIVEA Organic Crème. A marketing plan is been prepared to

evaluate the value that the new product creates to its company and to identify how the

product contributes to the company’s mission.

2.1.1 Mission statement of Beiersdorf

Beiersdorf is a world leader with strong brands and innovative products. Mission is to work

continually to further strengthening consumer trust on the brands to sustain its market

position and to increase its global market share through outstanding research & developments

and innovative products. It also aims to increase the closeness to consumers around the

world.

In order to be on track of the mission a situational analysis is been conducted to identify the

current position of its brand NIVEA.

2
2.2 Situational analysis for the brand NIVEA

NIVEA is the most trusted brand in Europe. It has a very good reputation and brand image. It

offers wide range of skin care product that targets a wide market segment. It covers the social

grouping from A, B, C1, C2, D & E. NIVEA uses multi channel distribution to cover the

wide market segment. Its end customers mostly buy it from high street shops, supermarkets

and other grocery chains that stocks beauty products.

2.2.1 Current product analysis

NIVEA the most trusted brand in Europe offers a wide range of products for different target

customers. The major segments of customers are Girls, Men’s, Women, and Kids.

Fig 2.2.1 NIVEA Products and end customers

Sun Care
Make-up
Face care Baby care products such as Skin
Bath care protection, cleansing and special
Deodrants products
Body care
All purpose creams
Hair care and styling
Lips care
Girls Kids

Men's
Shaving & After shave WomensAnti-ag care
Face care
Mature skin care
All purpose creams Eye make-up remover
Deordrant Sun care
Shower and body care Bath care
Lip care Body care
Deodrant

NIVEA maintains its product to be young and attractive. It understands the customer’s needs

and offers the products that are best suitable for their skin. It uses 98% natural ingredients.

3
It is planning to produce alcohol free hair care products as well. NIVEA is against animal

testing that creates a reputation on its brand and shows the ecological responsibility of the

company.

NIVEA offers value for money. Its prices are more appropriate for its end users. It offers a

profitable and competitive price to its wholesalers and retailers that increase the distribution

efficiency. The end user buys its product from high street shops, super markets and other

grocery chain that stocks beauty products.

Retailers of NIVEA products like TESCO, Sainsbury’s and Boots offer sales promotions to

its end customers. It uses effective media for advertising and makes its brand awareness. It

uses celebrities like Duffy and Kristin Cavallaier etc for its advertising camping to familiarize

the brand. It participates and sponsors in sports events to promote its brand name. It offers

free skin advice through its website that creates customers interaction with the company more

closely.

2.2.2 Current target market analysis

NIVEA offers wide range of products suitable for a mass market. However its marketing mix

differentiates the market into social economic segments. According to the Fig.2.1.3 the mass

market is broadly divided into four social economic segments that is Men’s, Women’s, Girls

and Kids. And the products are specially formulated to its target market. As NIVEA has a

close relationship with its customer, it can understand the customer needs and adjust its

marketing mix accordingly. According to the survey NIVEA’s current target market is very

effective and potential cash cows.

2.2.3 Current distribution channel analysis

4
NIVEA’s products are purchased in the high street shops, supermarkets and other grocery

shops that stocks beauty products. It directly supplies to the retailer if the order quantity is

under economics of scale. If it not under the economics of scale NIVEA recommends the

retailers to come through another channel that is through wholesaler. Orders will not be

placed in NIVEA’s website. It will be directly ordered with the wholesales and they will

distribute the products. Through wholesaler the product reaches a wide market and it offers

discounts to the wholesalers according to the bulkiness of the order quantity.

2.2.4 Current competitor’s analysis

Current competitors of NIVEA are Olay, CHANEL, L’Oreal make-up, Revlon etc. However

there are lot of competitors in the market who targets a particular product of NIVEA. For e.g.

Fa, AXE, Adidas, Guuci, Hugo Boss are the direct competitors of NIVEA’s deodorant.

NIVEA sustains its core competency in innovation, trust, ecological and social

responsibilities. That creates a brand value and its very effective advertisement campaign

keeps NIVEA loyal to its customers. NIVEA offers the best products in a reasonable price

whereas the competitor’s products cost double.

Its superior talent in lean organisation and best supply chain keep the brand away from

competition. Its systematic global consumer strategy “Passion for Success” strongly

highlights the superiority of the brand.

2.2.5 Current Financial analysis

The company enjoys a significant growth in sales year by year. However it faces a downturn

in 2009 due to high recession and change of customer purchasing attitude. But its 2010 first

quarter report shows the sales are approaching and it is higher than the same period of

5
previous year. In 2010 the company also enjoys the increased consumer EBIT margin up to

11%. The consumer segment sales increased by 2.6% compared to previous year.

Fig 2.2.5 Annual & Quarterly Group sales report from 2008 to 2010.

Sales
Approaching

Number of employees increased by 1349 compared to the figure of December 2009 report.

The company aims to generate and sustain the EBIT margin of 11% all over the year.

2.2.6 External forces analysis using PESTEL

Due to current economical crisis in the euro zone may cause lot of political policies changes.

This high pressure generation may cause some of the countries to leave the euro zone.

Taxation policy changes in UK are also a political impact which may affect the price of the

product and may change the purchasing attitude of customers. Economic development of

2010 remains uncertain. However the sales approach in the first quarter is a positive sign to

assume the global cosmetic market will improve again and take a long run trend.

NIVEA and Plan international have launched a long-term partnership in focus to give better

education to the socially disadvantaged children’s and youth as a global initiative. It creates a

brand image in front of its loyal customers. NIVEA is well established with local media and

its advertising campaign sustains its social relationship strong. NIVEA blogs and Facebook

6
presents gives a close connection between its customers. It is a well established brand with

125 years of experience in research and development. That supports the company to stand

ahead in innovation and trust. NIVEA’s corporate responsibility is more concerned towards

environmental relation that the company keep growing through the trend. NIVEA is against

animal testing and it is very responsible to the ethical laws that keep the company ahead in

compliance.

2.2.7 Summary of situational analysis

According to the above analysis it is clear that NIVEA has a very good brand image and its

customers are loyal to the brand. It offers wide range of innovative skin care products. It has

diverse distribution channel to cover its wide market. Its lean organisation and supply chain

system add value to the company and creates a competitive advantage. Its diverse marketing

mix serves its customer better and in close relationship. Its skin care advice service plays an

important role in promotion of new products. It has a good financial strategy and growing

sales figures encourages the company to pursue in extending the product lines. Its social and

environmental responsibilities increase the brand value.

2.2.8 SWOT Analysis

Based on the above analysis the company’s internal strength & weakness and external

opportunities & threats have been identified. As an over view the company’s innovation,

brand trust and clear corporate strategy add value to its brand and popup lot of opportunities

to grow its business in the global market. The below Fig 2.1.9 shows the SWOT report.

7
Fig 2.2.8 SWOT Analysis on NIVEA

6. Strong financial background

5. Lean system and superior supply chain
4. Skilled team meambers
3. Traditional prodtcts that has a long product life cycle Weakness
development.
2. 125 years of experience in Research and
1. Brand identity & Trust. 1. Sustainablity to recession and other economical
Strengths impact.

NIVEA SWOT
Analysis

Opportunities of recession.
1. Organic products 3. Risk of competitors to enter its market taking favour
2. Oppurtunity towards social attitude that men's are 2. Political policies change s due to economical infunce
interested in skin care products 1. Current Economical crisis in Euro zone
3. Market development in developing countries like Threats
India, China and Brazil etc

It shows the brand is well positioned in its current market. To sustain its position and to

increase global market share it has to utilize the opportunities appearing to be favourable.

And it has to formulate its strategy according to the threats and uncertainties.

2.3 Marketing strategy and objectives of NIVEA

NIVEA is planning to extend its most successful and traditional product NIVEA Crème to a

next level that is Organic crème. It finds lots of opportunities in the growing market of

organic industry and its vision towards environmental friendly products. It sets its marketing

strategy and objectives to meet its mission.

2.3.1 Marketing strategy

Based on the situational analysis and according to the company’s market position it is

necessary to launch a product that attracts the customers in a new dimension. Following to

the trend of organic products growing 20% year by year, NIVEA takes its safe step to launch

8
an organic multipurpose skin care product in its existing market to sustain its position. As an

overview it is clearly a product development strategy to strengthen its brand identity among

the customers.

Fig 2.3.1 Ansoff matrix

Existing Product New Product

Product
Existing Market Market Penetration Development

New Market Market Development Diversification

In the SMART way its strategy can be explained as NIVEA is planning to sustain its position

in the current market using Product development strategy to maximize its sale. It also

measures to obtain an EBIT profit of 15% in its beginning of the product life cycle and grows

along with the overall organic industry growth. According organic trading association’s

survey for 20 years says that”The overall industrial growth of organic products will increase

by 5 to 10 % until 2025”. NIVEA is a result oriented brand which launches its best products

and take the advantage of long run product life cycle. It plans to achieve the EBIT profit of

15% by the very next year of launch of the product and grows gradually.

2.3.2 Financial Objective

NIVEA the most valuable brand of Beiersdorf has to contribute its parent company with an

EBIT margin of 15% through this product line extension. It has to pick up the market to

achieve the growth in revenue by increasing sales. NIVEA expect to increase the sales by

9
10% with its organic product within a year of launch. Due to recession and downturn on sales

in 2009, the working capital of the company went in negative and it is planning to increase

the cash flow towards positive which was approaching in first quarter of 2010. It expects

growth of sales in Men’s segment 20% based on the changes in social attitude where men are

interested in skin care products these days. Invest more in marketing of organic products to

create awareness.

2.3.3 Marketing Objective

NIVEA plans to increase the overall market share by 15% through its organic product. It

follows the trend of overall organic industry growth in combination with the demand for

organic products in its existing market. It expects 20% growth in Men’s segment, 15%

growth in women’s and kids segment and 10% growth in girls segment. It expects its

wholesale distribution works more closely to bring the organic product within economics of

scale. It plans to invest more in advertising and train up the sales representative to make the

product successful. Its research and development may plays an important role in continuous

up gradation of the new product according to the actual feedback.

2.4 Tactical Marketing programmes

Marketing mix of NIVEA Organic Crème is tactically designed to attract its customers with

ecological concept. The product is designed in organic principles and packed in recyclable

materials. It shows the environmental responsibility of the company and interest of customers

on environment.

2.4.1 Target market

The target market of NIVEA Organic Creme is tending to be same as NIVEA Creme. Since

the cost of Organic crème is little higher, there will be decrease in the sale in cost sensitive

10
students segment. However there will be significant increase in the men’s, women’s and kids

segments due to high demands for organic products.

Fig. 2.4.1 – Target market of NIVEA Organic Creme in demographic approach

Women's
Kids
Men's
Girls

This product will be launched worldwide in the same distributional channel. However there

will be slight changes in the channel intensity to bring the product under economics of scale.

It will concentrate more on the wholesalers to achieve economies of scale and increase the

distribution efficiency to reach wide market.

Product positioning

Based on the trend for organic product demand the launch of Organic crème will be appear to

be a significant highlight in the industry. It creates a brand value to NIVEA and pulls the

customers towards its product. Europe’s most trusted skin care brand is offering more value

to its customers through organic natural product. Its value for money concept motivates

people to buy the product without hesitation. By that way it gains the competitive advantage

among its competitors.

Sales forecast for NIVEA Organic creme

11
Based on market research the expected sales for NIVEA Organic crème will start with

1,000,000 units in various packing. That will create revenue of 11 million Euros. Then its

starts growing in a rate of 25% per year and saturate in 3 years. After saturations it sustains

its growth based on the overall organic industrial growth rate of 5 to 10 % in a long run.

However continuous research and development should be conduct on the product according

to the customer feedback and improvement that required to be done in future to sustain the

growth.

This forecast is included with the basic risk such as economic downturn, political factors etc.

However uncertainties may cause drop in sales that to be monitored in future course.

2.4.2 Tactics in Product

A new dimension of approach has been given to the product by manufacturing through

organic principles. It added more ecological value to the product and following the current

trend of global environmental focus. The organic crème is totally made up of organic

ingredients in ethical way. The packing of NIVEA Organic crème is changed to green instead

of the old blue packing. Recyclable packing materials is been used to make the product more

environmental friendly.

2.4.3 Tactics in Pricing

The price of NIVEA Organic Creme is been set based on the old price by adding 20% extra

cost for the organic way of manufacturing and new packing method. This price is expected to

be reasonable in the market when compared to the competitors. Wholesalers and retailers

price margin is been increased by 2% to promote the product. However the price will be

adjusted according to the bulkiness of the order. Payment terms and other financial systems

remain same.

12
2.4.4 Tactics in Promotion

All 4 types of promotion will be used to create awareness about the product. Advertising,

sales promotion, personal selling and public relation will be carried out in to mass market. It

targets the existing customer to try the new product and attracts new customers too. It also

offers distribution discounts to its wholesalers depending upon the scale.

Promotional spending will be high in the first 3 years until the market get fully saturate. As

soon as the market used to this product it will reduce the promotional spending. Celebrities

will also be used in advertising and to pioneer about the organic product.

2.4.5 Tactics in Distribution

NIVEA believes in indirect distribution channels. One is to sell retailers and another through

the wholesalers. NIVEA focuses on bulk distribution rather than small quantities. Bulk order

reduces the product costs and keeps the product in economics of scale.

Fig 2.4.5 Distributional channel for NIVEA Organic Creme

End
Retailers
Customers

End
Wholesalers Retailers
Customers

End
NIVEA Retailers
Customers

Gaint Retailers End Customers

NIVEA’s lean organisation and supply chain system will help it in making better profit

through distribution.

13
2.4.6 Additional consideration

NIVEA offers superior customer service through its website. It sends e-magazines and e-

newsletters to its potential customers to make them aware of new product. It has its customer

advice service in which it keeps a close relationship with the customers and assists them in

choosing the product suitable to their skin.

It offers customers service in finding the closest shop and availability of the product in that

store etc. It also collects feedbacks from the customer to improve the quality of the product

according to their needs.

2.5 Marketing budget and Performance analysis

Marketing budget is been prepared on behalf of market research and forecast. Basic risks and

uncertainties have been covered in this budget, however unexpected change in external

environment and accidents may be considered in future course.

Revenue Year 1 Year 2 Year 3 Year 4 Year 5 Total

7,421,875.0
Expected unit sale 1000000 1250000 1562500 1718750 1890625 0

Wholesale price 11.00 € 11.00 € 11.00 € 11.00 € 11.00 €  

Unit Cost 6.60 € 6.60 € 6.60 € 6.60 € 6.60 €  

11,000,000 13,750,000 17,187,500 18,906,250 20,796,875 81,640,625.0
Gross sales € € € € € 0
10,312,500 11,343,750 12,478,125 48,984,375.0
Cost of Goods sold 6,600,000 € 8,250,000 € € € € 0
489,843.7
Transfer Charges 66,000 € 82,500 € 103,125 € 113,438 € 124,781 € 5
32,656,250.0
Gross Margin 4,400,000 € 5,500,000 € 6,875,000 € 7,562,500 € 8,318,750 € 0

             

Marketing Expenses            
4,149,062.5
Advertising 880,000 € 1,100,000 € 1,375,000 € 378,125 € 415,938 € 0
1,632,812.5
Sales force- salary 220,000 € 275,000 € 343,750 € 378,125 € 415,938 € 0

14
 4,898,437.5
Sales promotion 660,000 € 825,000 € 1,031,250 € 1,134,375 € 1,247,813 € 0
4,898,437.5
Customer service 660,000 € 825,000 € 1,031,250 € 1,134,375 € 1,247,813 € 0
R & D for Product 3,265,625.0
modifications 440,000 € 550,000 € 687,500 € 756,250 € 831,875 € 0
653,125.0
Marketing research 88,000 € 110,000 € 137,500 € 151,250 € 166,375 € 0
Total Marketing 19,497,500.0
Expense required 2,948,000 € 3,685,000 € 4,606,250 € 3,932,500 € 4,325,750 € 0
Net Contribution 13,158,750.0
(Loss) 1,452,000 € 1,815,000 € 2,268,750 € 3,630,000 € 3,993,000 € 0

Total marketing expenses of 2.94 billion Euros required to launch the new product. The

product is planned to launch on the world environment day on 5th of June. Copy of marketing

budget will be sent to the finance department to organise the finance.

According the planned budget the product is contributing a significant profit in its first year

of launch and growing according to the forecast. The key values from the above chart should

be monitored periodically. And a sensitivity analysis to be conducted to improve the

marketing mix to achieve the mission.

Model Advertisement

Going
organic
3.1 Critical reflections

Value offered NIVEA

15
NIVEA is the most trusted brand in Europe. It offers superior quality product to its customers

in reasonable value. Not its purses its movement into organic industry to increase its market

share and global presence.

It offers a great customer service by guiding their customers to choose the suitable product

for their skin. It also guides the customer where to buy the product and also shows the

availability of stocks with the particular retailer.

NIVEA is more concern about its brand awareness and sustainability. It offers traditional

products to its customer with trust. The advertisement posted in this marketing plan creates

brand awareness and turns the customers towards its brand.

Critical reflections

When I starting the marketing module with high expectation and enthusiasms. I came from

engineering background the marketing management is gives completely different experience.

I love marketing because the engineer should know market conditions and customer needs,

then only the make the product design according to the customer needs. According to my

individual learning objectives, I learnt the value and need for of segmentation and targeting

of specific fields when advertising. Before starting the course, I had thinking that the aim of

any advertising campaign would be to simply target as many people as possible, regardless of

who they are and what is need of those. However, on the course I learnt that Only the mass

marketing approach is not suitable in most cases and instead, to help gain high level of

impact from the message is to be sending out, specific groups need to be identified and

subsequently targeted.

16
The module address about all marketing concepts. And also it addresses the different shifts

in the marketing like holistic marketing ,design the marketing program, implementation of

marketing program.

Basically I have some idea about four types of holistic marketing the internal, integrated ,

relationship, performance marketing . each type of marketing giving a different kind of

experience .It gives a knowledge about what is role of top management in the marketing

department and how it is affected the internal industrial environment .the Performance

marketing gives a detail idea about Legal ,ethical , social , environmental concerns. Example

in UK market and advertisement Law protects the unethical marketing and irritating advert.

Like NSPCC advert gives more painful to watch and also it is morally not acceptable . this

kind of issues are protected by UK law. And also UK is a good place to learn financial as

well as marketing strategy. The UK focusing on global markets it has a wonderful resources

to learn and assessing the company environment and financial backgrounds.

The module gives the how the market place success come via applying basic principles of

marketing , simply we getting the product from tesco or Sainsbury’s but when i start

studying about marketing strategise I came to know what are all the principles and concepts

and hard work and analysis involved in the marketing process. The companies focusing on

branding, value and customer satisfaction ,marketing channels, supply chain , competition ,

marketing environment. Each of these factors are very large portfolio, when studied many

case studies I understand how this functional areas are working. In example of wall mart case

they are very well on supply chain management their strategy is very strong in terms of

managing suppliers , and also they have good brand image, but they were struggled in online

marketing the wall mart frequently changes their website design , it might affect customer

buying interest.,

17
The basic marketing principles are more straight forward , but little confusion when i mixed

with two concepts, i had new view to promote a product in to market. according to my view

the marketing Mix is considers all basic view about marketing , it gave me wonderful basic

idea about 4ps. According to me the 4p is not covering many areas on current global

marketing. The 4p avoids to addressing the main functional area which is SERVICE but it

also consider under the first P(product), i had a different view on services which belongs to

the perspective of products. And it also lack of customer orientation , the context of building

the relationship with the use of 4p model it fails to address the individual customer needs. It

has avoid the human elements . mainly it is not focusing on strategic elements.

I felt that overall the course showed me that there are several levels to marketing, with a

many of factors that need to be considered in order to achieve an effective good marketing

strategy. I hope to now be more aware of these issues in the future and find myself looking at

advertising campaigns in greater detail in order to assess what the advertisers hope to achieve

and what type of customer they wish to attract.

Reference

Readers digest (2010) the brand you trust [Online] Available from:

http://www.rdtrustedbrands.com/ (Accessed on 15/08/2010)

18
The times100 (2010) Company information’s [Online] Available from:

http://www.thetimes100.co.uk/information/company-details--nivea---87.php (Accessed on 14/08/2010)

Soil association (2010) Organic market report [Online] Available from:

http://www.soilassociation.org/LinkClick.aspx?fileticket=bTXno01MTtM=&tabid=116 (Accessed on
15/08/2010)

Organic trade association (2010) Industry Statistics and Projected Growth [Online] Available from:

http://www.ota.com/organic/mt/business.html (Accessed on 14/08/2010)

Organic trade association (2010) The Past, Present and Future of the Organic Industry [Online] Available from:

http://www.ota.com/pics/documents/Forecasting2005.pdf (Accessed on 15/08/2010)

International Federation of Organic Agriculture Movements (2009) IFOAM Annual report [Online] Available

from: http://www.ifoam.org/sub/pdf/IFOAM_Annual_Report_2009_final_web.pdf (Accessed on 15/08/2010)

Marketing week (2010) Nivea for Men unveils England FC themed ad campaign [Online] Available from:

http://www.marketingweek.co.uk/nivea-for-men-unveils-england-fc-themed-ad-campaign/3013014.article

(Accessed on 12/08/2010)

Melvin Rhodes (2010) European financial crisis may result in significant political changes [Online] Available

from: http://www.wnponline.org/wnp/wnp1007/european-financial-crisis-political-changes.htm (Accessed on

15/08/2010)

19