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NIVEA: MANAGING A MULTI-CATEGORY BRAND1

NIVEA, one of the oldest and biggest cosmetic brands in the world has successfully transformed itself from a single skin care brand to a trustworthy and contemporary personal care brand for all family types. The brand stretched itself by sub-branding to many new segments, always nursing the core mother brand NIVEA and its Gestalt. [Company Background] Background As 2005 drew to a close, executives at Beiersdorfs (BDF) Cosmed division [Brand DNA] 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 Central America, Eastern Europe, and Asia. NIVEA had created a number of new sub-brands that BDFs success in establishing NIVEA as a broad skin care and personal care brand primarily driven by NIVEA, grew from 1.4 billion in 1995 to 3.8 billion in 2005. During the 1970s and 1980s, BDFs Cosmed Division had successfully extended the NIVEA brand from a limited range of productsNIVEA Crme, Milk, Soap, and Sun product lines had established their own identities as sub-brands, independent of and yet still connected to the NIVEA Crme core brand. Executives at NIVEA believed that growth would continue to come from product innovation. In 2004, Beiersdorf spent 38 million on its new and improved research and development center in Germany, making it the largest and most modern skin research center in the country employing over 650 scientists. [Brand Roots] Start of the NIVEA brand industrialisation led to the emergence of mass markets and branded articles. Societywomen in particularbegan to appreciate to a greater degree physical appearance and look for products to both care for and beautify the skin. NIVEA protection at a reasonable price. The NIVEA name came from the Latin word, nives, [Brand Values] NIVEA Crme Brand Identity and Values Over the years, NIVEAprimarily through NIVEA Crmehad acquired a unique, widely-understood brand identity as a caretaker of skin. Throughout Europe, most was a product that could be used by the entire family to satisfy all kinds of needs.
2 While NIVEA Skin and Personal Care products are sold in over 140 countries worldwide, this case study focuses primarily on NIVEAs European market position and brand strategy.

by the entire family. NIVEA Crme was introduced throughout Europe in 1912; in the United States in 1922; and in South America and other parts of the world in 19262. Throughout this period, NIVEA Crme remained the companys primary product and the carrier of the NIVEA brand name. The famous NIVEA Crme blue tin with white lettering, standardised in 1925, was a familiar sight in millions of households worldwide. In addition to NIVEA Crme, the brands other primary products included body soap and powder and two sun care productstanning lotion and oil.

Understanding the NIVEA Brand By the early 1990s, it was clear that BDF had succeeded in extending the NIVEA brand from skin crme to a skin care and personal care brand.

now presented the company with a new set of issues and challenges. In the process of establishing sub-brands, there was concern that the NIVEA brand imagein particular, the NIVEA Crme imagehad been weakened through all the product introductions. Kunisch, former CEO of Cosmed, believed that in preparing to develop a new NIVEA communications strategy, a formalised brand philosophy was necessary. Kunisch explained: NIVEA is the most fascinating brand in the world, second only to Coca-Cola. The company had done a tremendous job over the last 50 years to keep the NIVEA was a lack of conscientiousness of what it meant to be a brand. In the good old days, BDF had a brand relationship that was highly personalised. Only three people knew how it had all been doneone retired, one left the company and one died. In addition, there were three advertising agencies that did not talk with one another. I began with the basics and asked: What is NIVEA? The data was all there, the feeling was there, but no one had put it on a piece of paper.

This case was made possible through the cooperation of Dr. Rolf Kunisch and Cosmed Division management, including Norbert Krapp, Franziska Schmiedebach, and Inken Hollmann-Peters for Beiersdorf AG in Hamburg, Germany. Leslie Kimerling and Keith Richey prepared this case under the supervision of Professor Kevin Lane Keller as the basis for class discussion.

Because of consumers own personal history with the brand and the companys 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.

ticular product class associations to reinforce and elaborate on the image of NIVEA as a skin care specialist. Because facial skin care represented 75 percent of the European skin care market and was very closely related to NIVEAs strong association of general skin care from NIVEA Crme, NIVEA Visage was considered the primary sub-brand to upgrade NIVEAs image into the 1990s. [Brand Extensions]

By 2005, the NIVEA brand portfolio had grown from six product groups in 1993 to Skin CareNIVEA Body, NIVEA Visage, NIVEA for Men, NIVEA Sun, NIVEA Baby, NIVEA Crme, NIVEA Vital, NIVEA Soft, NIVEA Hand, and NIVEA Lip. Personal CareNIVEA Deo, NIVEA Beauty, NIVEA Hair Care, NIVEA Bath Care, and NIVEA Intimate Care.

sub-brand experienced sales growth and gained market share. By 2005, NIVEA was a leading international skin care company and voted the most trusted brand in Germany by Readers Digest from 20012004. NIVEA Crme.

water-in-oil emulsion available in the world. Original NIVEA Crme tins were pale yellow with NIVEA Crme in blue print in the centre and a red and blue Art Nouveau border, but were changed in 1926 to the now-familiar blue and white design. The tin simplicity and caring embodied by the brand. [Brand Strategy]

Extending the NIVEA Brand In addition to strengthening the brand image of NIVEA Crme, BDFs second objective was to use the recognition and reputation of the NIVEA brand name to introduce new productsboth in categories where NIVEA products were sold currently as well as in related categories.

[Branding Strategy] Marketing Guidelines In the mid-1990s, NIVEA began standardising its advertising formats to establish a consistent look among its sub-brands. Cosmed worked with agencies FCB and TBWA to develop the marketing concepts

Looking to the future, NIVEA executives pondered how best to manage the NIVEA hierarchy and from where the next surge of growth would come. There were many opportunities geographically, through product innovation and new target consumers.

The companys long-term objective was to evolve NIVEA from a skin crme brand into a skin care brand by providing a range of new products that would both complement NIVEA Crme and broaden the meaning of the NIVEA brand name.

and ad executions. In each market, they implemented perfect local execution with NIVEA brand appears local but the content remains consistent. As Norbert Krapp, NIVEAs Vice President of skin care, stated: Pictures travel, words dont.

steadily. By 1970, NIVEA held over 35 percent of the multi-purpose crme market in Germany and a majority market share in Europe. In the late 1960s and early 1970s, competition in 60 years. Concerned with new competition, BDF performed a study of the NIVEA brand image in the German market. The study found that the NIVEA brand enjoyed a high degree of goodwill and represented reliability, quality, and honesty. Yet, the brand had an older image and was not viewed as young, dynamic, and modern, as was the case with many of the recently introduced competitive brands. 7. BDF introduced larger sized units, altered its distribution strategy by shifting from special-line outlets to food outlets, and increased its level of promotional activities with the trade and within stores. The primary means to revitalise NIVEA Crmes brand image, however, was the introduction of a very aggressive ad campaign aimed directly at the competition. The brand philosophy centered on maintaining the association of universality for NIVEA products. Now that the NIVEA brand represented comprehensive skin care and personal care, the company wanted to develop a marketing strategy that would continue to nurture core NIVEA associations while widening their applicability and enhancing their meaning via sub-brands. Kunisch explained, We want to build on the image of the blue tin where we are number one almost everywhere in Europe. balm carried the tag line, Less alcohol, more care. marketan after-shave balsam. The product embodied the NIVEA brand extension [Brand Portfolio] NIVEA for Men To clarify the new brand extensions, the company established a set of guidelines that any possible new products had to satisfy: 1. 2. 3. 4. 5. 6. Maintain a leading position in terms of quality Be simple and uncomplicated Meet a basic need: clean and/or protect

The company also printed a booklet for internal use detailing its brand philosophy, called the Blue Bible. This Blue Bible contained basic information about NIVEAs brand identity, vision, mission, success factors, and the role of its sub-brands. The Blue Bible also provided guidelines for products, packaging, communication, promotion, public relations, direct marketing, and pricing. Norbert Krapp referred to the Blue Bible as the best [branding step] we did in recent years, calling it the key anchor for all brand decisions3. NIVEA also built a NIVEA Club in Austria in 1995. For an annual membership fee of about $10, members received a quarterly magazine, between four and six new product samples, and a birthday gift. Similar to the NIVEA Club, NIVEA opened the in Hamburg, Germany in 2006.

NIVEA strategic brand management models: [NIVEA CBBE Pyramid]

Resonance Attachment Community Judgment Feelings Warmth Fun Imagery Heritage For family Universal applications

[Brand Health] product to provide both an alcohol cleanser and a moisturizer to care for the face. From the beginning, the NIVEA for Men ads emphasised the mildness and caring of Overall Brand Health At the beginning of the 1990s, NIVEA was already a global brand with a wide range of products catering to the full spectrum of consumer segments. The company had a widely recognised and respected brand, which it leveraged across a range of sub-brands. Throughout the decade, NIVEA nurtured its existing sub-brands and moved into additional market segments by adding new sub-brands. The companys sub-brand strategy yielded remarkable results: between 1990 and 2000, every NIVEA

Credibility Superiority Performance Quality Mild & Gentle Caring & protective Pure

Salient - Multi-forms and purposes personal care needs of their target market segments and contribute back their par3 Norbert Krapp. Personal Interview

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[Hypothetical nivea mental map] Scent/Feel

Good Value

Care

Blue/ White

Protection

Heritage

Mildness

For Family

Gentleness

Multipurpose/ Universal Simple Pure

Trustworthy/ Reliable

Kevin Lane Keller is the E. B. Osborn Professor of Marketing at the Tuck School of Business at Dartmouth College. Kellers academic resume includes degrees from Cornell, Duke, and Carnegie-Mellon universities, award-winning research, and faculketers for some of the worlds most successful brands, including accenture, American Express, Disney, Ford, Intel, Procter & Gamble and Starbucks. His textbook, Strategic Brand Management, (see models above) has been adopted at top business schools with Philip Kotler of the all-time best selling introductory marketing textbook, Marketing Management.

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