1.

Introduction

Nivea
BRAND VALUE$8.1B
INDUSTRY Consumer Packaged Goods
FOUNDED1911
COUNTRY/TERRITORY Germany
SALES $5.2B
HEADQUARTERS Hamburg
The first oil and water based revolutionized cream brand was founded by the parent company
Beiersdorf in the year 1911. The logic behind the name Nivea is that it is derived from the
Latin word “nix, nivis” which means snow white.

The originally formulated cream was a mixture of oil, water, glycerine, citric acid, and rose
fragrance, this formula has changed little over the period of more than 100 years.

In 1980, with rising customer trust in the brand the company introduced new products in skin
care, bath care, Men products business segments

Nivea Creme launched in 1911 and revolutionized skin care as the first stable oil-and-water-
based cream in the world. The largest brand for the German firm, Beiersdorf, expanded its
product portfolio to include deodorant, face creams, sun protection and a men's line. Nivea
was voted Germany's most trusted brand in 2016 in a Reader's Digest survey. Global organic
growth was 2.8% last year, fueled by strong results in Germany, India, Saudi Arabia and
Mexico. A decline in market share occurred in Italy, Poland and Thailand.
In 2019, the revenue amounted to approximately 7.65 billion euros, an increase compared to
the previous year at roughly 7.22 billion euros.
The Nivea brand is owned by BEIERSDORF , a company listed in Frankfurt.
Beiersdorf AG is a German multinational company that manufactures personal-care products
and pressure-sensitive adhesives. Its brands include Elastoplast, Eucerin, Labello, La Prairie,
Nivea, tesa and Coppertone. Wikipedia
Headquarters: Hamburg, Germany
Revenue: 705.6 crores EUR (2017)
CEO: Stefan De Loecker (1 Jan 2019–)
Number of employees: 20,059 (2018

2.History

From Kotler Book

3.Situation Analysis

3.1 SWOT analysis of Nivea

3.1.1 Strengths

The Cold cream domination – Nivea absolutely dominates the cold cream market. Whenever
you are traveling to colder regions, you cannot do without your Nivea cream, the brand has
that kind of hold on consumers. No other brand has reached the brand recall level of being a
cold cream as Nivea has. The popularity of the brand lies because of its popularity as a cold
cream – a niche which it covered smartly and all to well to date.

Brand equity – Naturally, because of its concentration on this niche, the Brand equity of
Nivea is only growing and has not been affected. Over the years, Nivea has gained
recognition for its brand and is the 225th brand in the world as of 2016 and is the 50th highest
rated brand of Germany. The brand is valued at 6.7 Billion dollars.

Distribution and global presence – Nivea has around 20 products and is present in 50

countries overall. This contributes towards its distribution potential which is growing year on
year.

Brand colors – The brand colors of White and Blue are recognizable in a huge shelf of

personal care products. The colors have stayed constant over the years and are synonymous
with the brand. For this, the Marketing department has received praise time and again along
with praise for using the brand colors across the communication channels of Nivea.

3.1.2 Weaknesses

Competition restricting Nivea’s sale in other segments – Where Nivea is absolutely

dominating in the cold cream segment and not allowing others to enter, others are not
allowing Nivea to enter in their territory. Hence Nivea is finding it hard to establish itself in
personal care segment with body care and facial care products because there is huge
competition in this segment already.

Investment needed to change brand image – This is a double edged sword. On one side Nivea
has a fantastic advantage by covering a niche which is profitable – Cold cream. But on the
other hand, if it has to survive, then it needs to change its brand image and become more of a
personal care brand. It is doing so for the mens cream. But the overall brand is strongly
skewed towards cold creams.

Expansion – Many experts criticize Nivea because the brand is present only in 50 countries
even though it has such strong brand image. A problem Nivea faces is that unlike FMCG
companies, it does not have too many products in its brand portfolio. Hence it has to go slow
with expansion. But saturation is a problem with Nivea and expansion is the answer for
higher revenues.
3.1.3 Opportunities

Innovation with new product lines – Nivea has to keep adding products and product lines to
its brand portfolio. This will help the company in having a bulky product line with which it
can establish itself in new markets strongly and break the image of being a cold cream
provider.

Market potential is growing – Another advantage is that the market potential for personal care
products is always growing. Not only is the demographic market potential growing,
the geographic market potential is growing also, therefore promising a good future for the
brand.

Targeting Mens segment – There are fewer personal care brands in the mens segment and this
segment is ripe for the picking with more and more men realising the importance of taking
care of their skin and the role it plays in their overall well being and healthiness. Nivea has
already introduced face wash and body wash in this segment and it has been received
positively. The same can be expect with more product lines that it introduces.

Territory expansion – Besides launching new products, Nivea needs to expand to new
geographies. If it does not do so, there are competitors like Ponds cold cream which will soon
cover the market because of their excellent distribution potential.

3.1.4 Threats

Competition taking away its core strength – While Nivea plans to expand into uncharted
territory, brands are attacking its core strength of being the go to cold cream. Namely two
brands are the dominant competitors – Ponds cold cream and Johnson and johnson cold
cream. Both are strong competitors for Nivea because they have deep pockets and fantastic
distribution coverage.

Threat to bottom line – Because of its expenditure on marketing and because of competition
in its core segment, Nivea which had the cold cream as a cash cow has a threat to its bottom
line. Where there were a couple of cash cows, there are now majorly Stars in the portfolio of
Nivea. This bottom line threat has to be nullified by Nivea by acting swiftly. Nivea deos are
complete question marks in the BCG matrix because there are just so many Deo’s in the
market including Axe which is the major market share holder.

Regular issues in Marketing – Nivea has faced several Racial issues in their marketing as
well as huge fines imposed due to wrong marketing claims made. Such wrong marketing
issues make a dent on the brand and will affect the brand if repeated.

3.2 Competitive analysis

Nivea compete in the market on the basis of the array of the products that the brand has for
the different customer groups which help it in being connected with the customer in whole
customer lifecycle i.e. Men products when the customer is unmarried, Women products when
he gets married and baby products when they have a newborn baby.
Nivea competes with its own parent company’s skincare & body care brands such as Labello,
La Prairie, Eucerin, Florena, Hansaplast and 8*4 and peer brands in the market such
as Loreal, Ponds, Jhonson & Jhonson and Lakme.

3.3 Market analysis

Increase in penetration of social networking sites and people getting crazy over their

personality acceptance in the society, there is the rise in the skincare and beauty care
industry. Nivea has been following product line extension, market development and product
development strategy like introducing Nivea baby care products, licorice extract body lotion
in India in 2017, Urban Skin detox, Deep Moisture Serum and sunscreen with the cooling
effect.

In order to understand the emerging and developed economies in a better way company have
a team of 600 researchers working in research & development labs in Brazil, Japan,
USA, China.

3.4 Customer analysis

Customers of the brand are those who give extra care to their skin tone, cleaning, softening
and tanning. Majority of the customers of the brand are in the age group of 20-45 years and
the brand has been focusing on Men & Women grooming products for those customers who
are in the upper middle or upper-income group social class and are either are working
professionals or are studying in colleges.

Customer purchase the brand offerings as they feel that it soften their hard screen, have little
ono side effects and make customers feel confident.

4. Problem definition

The problem that Nivea faces is not one of supply or demand, but one of culture. Nivea will
have to navigate the challenge of maintaining its own corporate culture, as well as adapting to
various cultures around the globe as it continues its trek of expansion. Like all enduring
brands, Nivea has laid a solid foundation on which it wishes to build. In Nivea’s case, that
foundation is the European skincare and cosmetics market, where the brand is well-known
and considered a source of high-quality, reasonably priced products. However, much of the
rest of the world has only a passing familiarity with the brand: “the name rings a bell, but
what do they make?”

As Nivea has grown globally, it has struggled to maintain a brand-wide marketing strategy,
most often choosing instead to market its sub-brands (such as Sun, Hair, and Visage)
independently. This lack of an overarching brand image has contributed to the lack of
familiarity with the name beyond Nivea’s core European market. In the meantime, Nivea has
sought to gain market share and compete with brands like L’Oreal and Neutrogena by
expanding its product lines. In doing so, it challenged the core principles it began with: “be
simple and uncomplicated” and “do not offer to solve only a specific problem.”
Nivea knows that market position can always be improved. Nivea is currently considered a
strong and modern company, but remains concerned about ways it can improve itself. Nivea
must maintain its quality differentiation strategy in order to offer superior products and
increase sales and profits. Nivea must find a way to allow itself to continue to grow without
sacrificing its core principles, while embracing the needs and cultures of the societies in
which it wishes to expand. We present a number of possible options that will allow Nivea to
do just that.

5.Evaluation of Alternatives

5.1. Launch Existing Product Lines in North America

Nivea has the opportunity to launch existing sub-brands in the North American market. In
several cases, Nivea has created products specifically for geographic regions, such as the
whitening cream sold in some Asian countries, where tans are unfashionable. While the from-
scratch creation of new products is probably not necessary for the North American market,
Nivea already possesses a wide range of products that are not available in the United States in
particular (some products not available in the U.S. are available in Canada and/or Mexico).
For example Nivea’s Sun line (sunscreens and tanning oils) has a full release in Mexico and
no products available in Canada. In the United States, only Nivea’s sunless tanning lotions
are available, which are part of the Body line of products – not the Sun line. The Visage
(Face) and Deodorant lines are available in both Canada and Mexico, but not in the U.S.,
Nivea has no hair or cosmetics products available anywhere in North America. We suspect
that many of these products could see great success in the U.S., the Sun and Visage lines in
particular. The U.S. market features a growing desire for natural, mild, and uncomplicated
products, all of which Nivea has a strong reputation for in its home market.

Nivea would be expected to leverage that reputation, as well as Europe’s general reputation
as the epicenter of the beauty and skin care world, in its marketing efforts in North America,
particularly because the brand does not have a very strong identity in North America. In
addition, Nivea would emphasize the high quality of these products in its marketing efforts in
order to justify the corporate partnerships that will be discussed in Potential Solution #4.
Following are two simple advertising concepts utilizing Nivea’s long history in the European
skincare market, as well as the irreverent tone endeared by Millennials .

An obvious advantage of this course of action is that the products already exist. They are
almost guaranteed to adhere to governmental regulation in North America, as they already
adhere to European regulations, which tend to be rather strict (especially compared to the
United States). Because Nivea already has a foothold in the North American market, it may
be relatively easy to negotiate shelf space in retail locations where the brand is already sold.
Also, because some of the products that are being proposed to be brought into the States are
already distributed in Canada and/or Mexico, NAFTA guarantees that importation costs will
remain low in the case that manufacting the products in the States is unfeasible.

The potential downfall of this option is the possible flop of the products.  Just as the Nivea
Baby line “failed to meet sales targets in Austria, Germany, and Holland,” in the 1970’s,
there is always the possibility of a product launch producing less-than-desired results. This is
why we would recommend a somewhat cautious approach at first. Marketing for the “new”
products could piggy-back on marketing for the existing products and/or spending on
advertising should be somewhat minimal and very focused (for example, launching and
advertising for the Sun line only in select Florida locations, at first). Then again, Nivea could
make use of their “fast marketing” approach again. Also, product should be imported at first
and existing manufacturing facilities refitted/ new facilities built only after the products have
proven success.

5.2 . Launch All-New Product Line(s)

Nivea could also launch completely new product lines, both at home in Central Europe and
beyond. Some possible products include a line of fragrances, massage oils and creams,
feminine care products, a line of products for people of color, nail care, and/or foot care
products. There are almost certainly more possibilities than these for new products, but these
are what we came up with without the resources of Nivea’s extensive R&D teams.

The advantage of this plan is that the new products would increase the number of channels
available to lure new customers into the Nivea “universe” of products. For example, a
massage therapist who tries and is satisfied with a  Nivea massage oil is likely to continue
using it, as well as to recommend it to their colleagues. In addition, clients of these massage
therapists may be inclined to ask their therapists about the product and possibly try it (or
another Nivea product) themselves.

Some disadvantages of this option include, of course, the possible flop of products (which is
why we would recommend a similar introduction plan to that previously discussed in
Potential Solution #1). In addition, some of these products seem to work counter to Nivea’s
promise to never “offer to solve only a specific problem.” However, it would not be the first
time Nivea has done so; consider the “day” and “night” (specific situations) creams in their
Visage line, as well as specialized face and hand creams (specific body parts). There is some
rationale for these products; for example, the skin of the face and hands has very different
needs from the rest of the body (which is usually protected from the elements by clothing). In
the case of fragrances and massage products (which tend to be pretty heavily fragranced),
these products also go against an unspoken code of non-fragrancing in Nivea’s products.
However, again, while the majority of Nivea’s existing products steer away from fragrance
and more toward function, a few products do have fragrances, such as their Cocoa Butter
lotion with an “indulgent cocoa scent”

5.3. Marketing to Millennials

    A third option is to create a marketing campaign directed specifically at Millennials. This
campaign would essentially be a revitalization of the 1970’s “Only Me” campaign, which
sought to update the image of the brand. This campaign would have the same goal, but use
more modern methods. The first method we encourage is an expansion of one of Nivea’s
existing techniques: event sponsorship. One event that Nivea currently sponsors regularly is
the Nivea New Year, wherein Nivea distributes samples of lip balm and various other New
Year paraphernalia at Times Square in New York, under the tagline “Kiss and be Kissed.”
Another ongoing event sponsorship is Nivea’s blue beach balls, which are distributed
(presumably also with samples of sunscreen) on European beaches in the summer (see the
first ad concept – in Potential Solution #1 – for an image from one of these events). First and
foremost, we recommend expanding these two events internationally; celebrate the Nivea
New Year in more major cities (where kissing at midnight is traditional) and take the blue
beach balls (and sunscreen) to more beaches, such as those in Australia and the Americas.
Also, additional events could be identified as opportunities to distribute samples and easily
identifiable blue and white paraphernalia. For example, charity runs, marathons, and obstacle
races. There are a plethora of these various races in the U.S. (the Iron Man, the Tough
Mudder, the Boston Marathon, the Walt Disney World Marathon, to name just a few), each
of which presents unique opportunities to distribute samples depending on the location and
the season. The Tough Mudder and the Color Run, for example, would be great opportunities
to distribute samples of body wash and shampoo. The Walt Disney World Marathon in
Orlando, Florida would be a perfect opportunity to distribute sunscreen samples, and runners
in any race taking place in autumn or winter would likely appreciate pretty much any kind of
lotion and lip balm.

The reasoning behind this increased use of event sponsorship and sample distribution for a
campaign directed at Millennials is that this generation appreciates and spends money
on experiences rather than stuff. They also pay less attention to traditional advertising. Not to
mention that for many of them, free stuff generates loyalty, especially when the stuff has
demonstrable quality.

Supplementing the increased use of event marketing, Nivea could use traditional advertising
emphasizing values important to Millennials. Fortunately for Nivea, the brand already values
many of the same things; In particular, multi-functionality and simplicity. Following are two
more advertising concepts emphasizing these values.

Nivea’s traditional advertising would need to use the language of the Millennial customer (as
has been attempted in these examples); irreverent and direct. You can see that these ad
concepts (approximately) incorporate Nivea’s umbrella “Blue Harmony” campaign through
the use of the block and cursive fonts. Although the ads are (apparently) for Nivea Creme in
particular, by invoking the umbrella campaign’s themes, the goal is to increase awareness of
the brand name more generally. In addition, Nivea Creme may serve as a “gateway” product
for Millennial consumers who want an all-in-one product at first, but are familiarized with the
more specialized products (such as body wash, sunscreen, and/or lip balm) through
satisfaction with the introductory Nivea Creme.
The primary advantage of this plan is the (hopeful) access to a huge market segment that is
conveniently aligned with the values of the company. Also, it does not require any major (and
potentially costly) changes in manufacturing or distribution, as would be the case with the
previous two options. It hardly requires changes to the existing marketing strategy – just a
shift in focus.

A disadvantage that this option presents is that it actually could turn out to be rather
expensive. If this strategy were implemented in addition to marketing strategies targeted at
other consumer segments without “stealing” from the budget for those other strategies, it
would simply be an additional cost. That additional cost could possibly be quite high as well
because giving out a lot of free product at more events could get rather pricey. And of course
there would be the cost of researching the needs and preferences of the Millennial market
segment, although quite a bit of that research has already been done, by Nivea as they
conducted research for their Beauté and Visage Young lines, and by others.

5.4 Corporate Partnerships

    Within our various strategic plans to expand and improve the Nivea brand, we plan to
partner with exquisite brands within the hospitality industry.  Inparticular we are looking to
partner with the German based airline Lufthansa.  As a company located in the same country
we believe we could use our domestic partnership towards our advantage.  Nivea and
Lufthansa will be able to prove the power of German strengths and longevity in both markets.
Currently, Korres is the sole provider for Lufthansa, but as a Greek company we deem Nivea
more suitable and logical for a partnership.

Our second option within hospitality are hoteliers.  For example, The Ritz Carlton, a world
renowned brand represents quality, integrity, and consistency across all markets.  We would
like to partner with Ritz Carlton domestically in Germany to show a local tie for foreign
travelers.  This is a great opportunity to expand our European brands into international hotels
for the world to see and become familiar with.  We understand such partnerships take years
of delegation and resources, but we believe in the future of Nivea with worldwide prowess
for being a leader in simplistic cosmetics.

5.5 Nivea Haus

A fifth option for Nivea is to open a few new Nivea Haus’ in the United States and in
Australia. A nivea Haus is a spa run by Nivea with only Nivea products. At Nivea Haus there
is no need for appointments. Nivea Haus offers both cosmetic and beauty treatments, along
with presenting all of their products. New Nivea Haus’ in more locations can help increase
brand awareness. It would get the word out about Nivea and would allow Nivea to have time
alone with consumers to show them how their products are supposed to be used and to show
off how great their products are. A negative about this idea is that there are already a lot of
spas, and opening this Nivea Haus is attempting to break into a new market which could be
difficult for Nivea.
6. Alternative solution

We believe that Nivea’s best option moving forward is to combine three of the five proposed
potential solutions. Nivea should a) introduce existing product lines in North America, b)
engage in a marketing campaign directed at Millennials, and c) promote the quality of
products through corporate partnerships with organisations renowned for their classiness.

We chose to pursue this course of action because it best serves the proposed marketing goal
of the company – to increase its brand recognition outside of Europe. The true revenue-
generating factor in this plan is the introduction of existing sub-brands in North America, but
no product introduction is complete without an accompanying promotion plan. Indeed,
without it, how would people even know that the new products are available? Hence, we
want the introduction of existing product lines to be announced through a two-pronged
promotion plan aimed at getting the attention of a market segment hitherto relatively
untapped by Nivea; the Millennial generation. The increased event sponsorships and
Millennial-relevant ads discussed previously will pair nicely with corporate partnerships in
the hospitality industry because Millennials don’t just attend events – they travel to them.
Also, the older Millennials are joining the ranks of jet-setting professionals – who fly
internationally and stay at snazzy hotels – at ever increasing rates.

7.Learnings

7.1 Awareness

The majority of people know NIVEA for several reasons. First, NIVEA is existing for 106
years and most people have grown up with the brand. The second reason is its brand
architecture. Due to its umbrella brand strategy, Nivea occupies a large place on the shelf,
since it offers products under the umbrella brand in all skin care segments (for instance face
creams, deodorants, shaving, sun lotions and shower products). As a consumer, you cannot
escape the strong presence of the brand at the POS. The high distribution and availability of
its products are important factors. Third, NIVEA invests a lot in brand communication (for
example TV spots, print advertising and sales promotions). They follow an integrated
communication approach communicating consistently for all products over all channels using
the same brand elements.

7.2 Sympathy

NIVEA is perceived as a sympathetic brand. In my opinion, the main reasons for this are its
strong heritage, its price-performance ratio and its brand communication. NIVEA was
founded more than 100 years ago, surviving all obstacles like both World Wars. Moreover,
it’s a German brand and those are usually perceived as high quality and reliable which makes
the brand sympathetic. NIVEA is offering its products at a reasonable price with a good
price-performance ratio which makes it to a brand for the masses. Consumers can afford the
products and brand communication is helping additionally to build up sympathy and
customers’ identification with the brand. NIVEA’s visual communication is based on bright
colors, cheerful family situations as well as authentic and charismatic brand ambassadors (for
instance Jogi Löw, coach of the German national football team).
7.3 Image

NIVEA has a strong image. The brand stands for closeness, trust, authenticity, naturalness
and quality. The focus is also on family values, as protection and security for the whole
family, and the strong heritage of the brand. The NIVEA creme has been the world’s first
stable oil in water emulsion moisturizing cream in 1911 and therefore, NIVEA is holding the
image of the first mover which implicates expertise. Another part of its image is that NIVEA
offers good value for money. All brand values and associations with the brand are embodied
in the blue tin of the NIVEA cream since 1925 which makes it the most important brand
element.

7.4 Uniqueness

NIVEA is a unique brand. One of the reasons for it is its strong heritage and long history.
There are not many brands that consumers already know from their (great-)grandparents and
parents. This is a very important aspect that leads to brand trust. Moreover, the flagship of the
brand, the NIVEA cream, has a unique smell and a characteristic packaging – the blue tin.
Everybody knows the blue tin and NIVEA managed it very well to make only slight changes
over the years to modernize the packaging design without losing its uniqueness and
recognizability. In 2013, the company decided to change the logo based on the look of the
blue tin to have an even more integrated communication. The logo, the typology and the
colors white and blue, which Nivea consistently uses in brand communication, also contribute
to the uniqueness of the brand.

7.5 Satisfaction

The satisfaction of the consumers after buying a NIVEA product is guaranteed by its good
product quality and the reasonable prices. Moreover, consumers receive a satisfactory
purchasing experience due to the high availability of the products. It is very unlikely to not
find a NIVEA product in a supermarket. The products satisfy the customers’ expectations
because they almost stay the same over the years and new products are launched under the
umbrella brand with the same quality and price level as well as brand communication
elements.
In my view, all investigated factors contribute to explaining the high level of consumer trust
in NIVEA. They demonstrate how well the company managed to maintain the core elements
and values of the brand while adapting NIVEA to current market conditions. Using both
models was a good approach, since each model alone would not have covered all relevant
influencing factors.

8.Questions and answers