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 breakthrough—an anti-aging
coenzyme called Q10—that 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 €1.4 million billion in 1995 to €3.8 billion in 2005 (see
Exhibit 1). In addition, Beiersdorf’s share price grew from €25.69 in 1995 to €85.6 in 2004 after peaking
at €127.50 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 products—Nivea Crème, Milk, Soap, and
Sun—to a full range of skin care and personal care products. Over time, these different product lines had
established their own identities as “sub-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 “sub-brand strategy” where
individual sub-brands received budget allocations for independent marketing communications activities,
rather than an “umbrella 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 “boundaries.”

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
Nivea Crème in Germany during the holidays, a double-decker Nivea-branded blue promotional
bus in Russia, and a “mega-poster” advertisement covering the outside of the Kremlin.
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 samplings, and a
birthday gift. Similar to the Nivea Club, Nivea opened the Nivea Care Center in South Africa and
planned to open its first “House of Nivea” store in Hamburg, Germany in 2006. The house will offer
Nivea’s product line and expert beauty advice. Similar to Tupperware parties, 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 “workshops for body & soul” in Germany, the United Kingdom and
United States where small groups of women could attend a three-day conference at resort locations.
Nivea partnered with hospitals and sponsors young mothers in maternity wards by sending
them “care packages” containing Nivea products. The company also provided free product samples
and informational brochures for the mothers for one year after the birth of their child. Through the
first three years following birth, Nivea provided important baby care information to mothers at regularly
scheduled intervals that corresponded with stages in infant and toddler development.

Event Marketing
Nivea devoted a portion of its marketing budget to event marketing activities. Each country has an event
manager that coordinates sub-brand marketing activities and is responsible for developing special events,
such as sponsorship. Nivea sponsored various organizations in Europe, including beach lifesavers
(lifeguards), children’s sailing programs, and a beach volleyball tour. Nivea sponsored school
education programs for safe sunbathing in several countries under the auspices of its Nivea Sun
brand. And, Nivea sponsored beauty contests in diverse markets such as Poland, the United
Kingdom, and Thailand.
Nivea created a branded double-decker bus that traveled to concerts and other youth-
oriented events. The bus promoted such youthful products as Nivea Hair Care Styling and Nivea Beauté.
Consumers could get a total hair and face makeover at the bus.
During 2000, Nivea developed a promotion for its Nivea Hand products in the Netherlands. Free
with each tube of Nivea Hand Anti-Age Crème Q10 was a pair of metal relaxation balls. The balls, which
are designed to stimulate circulation in the hands and calm the nervous system, came with instructions on
use.
Nivea also worked with its retail partners to create Nivea shops in large German
department stores. Nivea Shops included extensive point-of-sale display that integrated Nivea’s sub-
brands and had a beauty advisor in-house to help customers.

Nivea.com
Nivea.com is a global website with information about the company and its history, products,
markets, beauty advice, and games. The website is designed with the popular Blue Harmony theme and
each country has its own version—again to give the brand a local presence. Each sub-brand also has
a website, with information about individual products and specialized beauty and skin care tips.
Nivea.com has become an important information center, especially for new consumers like men.
In the early 2000s, Nivea experimented with viral marketing campaigns, including online
sweepstakes, chat rooms, and promotions like the 2004 sponsorship of “Bridget Jones: the Edge of
Reason” where consumers sent in 10-second video clips. However, while Nivea continued to interact
more and more with its consumers online, as a whole, Nivea brand managers felt that traditional media
like print and TV still best portrayed the Nivea image. ii
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New Media Age, July 31, 2005.