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Nivea Discussion

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Robin lau

on 27 May 2013

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Transcript of Nivea Discussion

• Successfully transformed from a skincare brand to a personal care brand

• Broad coverage in the personal product industry and all sub brands experiencing growth in sales and market share.

• Use of Nivea brand confined to personal care industry

Opportunities for Growth:

• Product development

• Market development strategies Must maintain the common emotions in all ads as it represents a universal complex of positive human values woven together.
Consumers associate the ads from the histroical legacy of the Nivea brand.
The brand exhibits trust, reliability, care and gentleness. Introduction 1912 World's first water in oil emulsion 1922 Entered USA market 1925 Standardized Font and Logo Entered Global market Discussion Q1 What is the brand image and source of equity for the Nivea brand? How would you characterize brand hierarchy? Discussion Q2 What are the pros and cons of sub-brand strategy? Should Nivea run a corporate brand or umbrella ad for all of their products? What is the role of Nivea Crème advertising? Should it be changed? Discussion Q3 What are the risks and benefits of Nivea's brand extension into new product categories and customers? How has Nivea managed these extensions? Have they missed opportunities? Are there boundaries Nivea should not cross? Started in
German market 1925 2013 1926 Resonance Pyramid Salience Performance Imagery Judgement Feeling Resonance Caring Quality
Gentle Mild Family Credible Safe Loving Warmth Trust Reliability NIVEA Universe Universal Product Reasonably priced Protection •Introduction of Mono-product philosophy

•Continuity plus innovation

•Continuous improvement of existing products

•Respond to market trends through research and development PROS CONS Disassociation between
products and customers Risk of diluting
identification of sub-brands Physique Personality Culture Relationship Reflection Self Image Strengths Opportunities Weakness Threats Brand leverage Product innovation Consumer trust Global Presence Broad consumer
base New market segments Emerging international
markets Brand exposure Expand market share Weak product categories Restricted innovation in
niche product segments eg. organic, anti-aging,
breakthrough products Brand dilution Loss of message
consistency Reliance on flagship
products in new market Varying price points New/Existing
competitors • Internal Blue Bible document outlined brand image and brand identity of Nivea
Stated guidelines and the role of sub-brands
Key document for branding decisions • Entering new country markets launched with flagship product Nivea Creme
A hierarchy sub brand roll-out followed

• In advertising campaigns used local models to mirror local culture, while ensuring the Nivea brand Identity remained consistent • Consider missed opportunities from the perspective of 2005 when the case study was written. • Drop in Sales

• Less money to invest in research and development

• Led to rethinking of brand strategy in 2011 that contracted Nivea brand boundaries

• Withdrew from make-up and reduced focus in hair care

• Emphasising core brand values and sales of existing products and line extensions

• Increased focus on emerging marketsResults of brand contraction:• 2011/12, sales increased by 13% • Company share price grew by 41% after being in the doldrums for four years • Extensions had to be compatible with Nivea brand.

• Ensure ‘continuity and innovation’

• Seven guidelines were set including

Meet a basic need to clean and/or protect
‘Adding a teaspoon of Nivea Creme to every new product’ € Millions 2007 2008 2009 2010 2011 2012 442 567 380 326 259 451 Beiersdorf Profits 2007 - 2012 •Emphasize and elaborate on the image of nivea as a skin care specialist. Increased efficiency Increased efficiency in promotional expenditures
Achieving economies of scale Acquiring an extended target market Reaching out for an audience that the parent brand 'Nivea Creme' was not able to Greater focus for the parent brand Opportunity to enhance products to specific market segments that are not familiar with the brand • Each sub-brand creates its own personality while developing brand associations that are consistent Nivea Crème core brand image. •Ability to nurture Nivea brands while widening their applicability. Concerns that Nivea Creme
brand image has been
weakened through multiple
product launches. Operational Perspective Costly to market, promote
and maintain May confuse consumers The Nivea Crème brand equates to the highest level of
Brand Equity – Resonance – where consumers feel “in sync with the brand” Loyalty Attachment Community Engagement By running a corporate or umbrella based ad’s for all of their products Nivea would be leveraging off their flagship product – Nivea Crème which has achieved strong Consumer Based Brand Equity. The Nivea Crème brand identity is – “caretaker” of the skin Brand associations such as “care”, “mildness”, “reliability”, gentleness, protection, high quality, feel good and reasonably priced. Physique High Quality Protector of Skin Personality Relationship Culture Self-image Reflection Caring and mild skin care for the
whole family Caring, nurturing, consistent, honest and trustworthy Protector of your family skin care European, conservative I am a nurturing, clean and fresh Caring and family orientated, with a
need for quality skin care “It was like taking a teaspoon of Nivea Crème and putting it into every new Nivea product as a special benefit - as an additional amount of care. In this way the new product was really a two-in-one product; satisfying a basic need plus offering the Care of Nivea Cream as a symbol." “Blue Manifesto campaign, for Nivea Crème" Nivea logo, consistent typeface and font, understandable and real message and content. The development of the Blue Bible, which was a brand guidelines for all its Marketing activity. Timelessness and ageless representing motherhood and family; honesty and trustworthiness and product benefits of quality and mildness. Nivea creates a “halo” effect which reinforce the core image of the Nivea brand across product sub segments. Continues consistency with association and messaging "blue tin & white letters" A mix of both strategies may be beneficial, use of umbrella strategy for the lesser known Nivea products such as (men/beaute), until they have developed their own personality and associations. "Nivea" has strong associations Automatically transfers goodwill to various product classes of Nivea

Recent Nivea Crème campaigns have featured brand ambassadors – such as Rihanna to celebrate 100 years.
The brand ambassador strategy is a good
attempt to modernise the Nivea brand and to appeal to a younger market.
Angelina Jolie vs Rihanna
Who has more in common with the brand values? Were they successful? • Some Nivea executives believed they were successful as increased sales and gained market share

• Norbet Krapp (Vice President of Skin Care) believed they failed. Nivea 2005: Opportunities: Product Development Strategy The Nivea personal care product portfolio had gaps in such big selling segments as fragrances and oral hygiene – potential missed opportunities. • Consumers may be able to perceive a fit between the Nivea Brand and oral hygiene

• Nivea brand was associated with quality – good quality brands extend further than average quality brands.

• Recent foray into personal products had broadened the meaning of the brand

• Highly competitive sector - but Nivea had demonstrated track record of successfully entering such markets

Nivea had limited footprint outside of Western Europe

Opportunity to expand into USA and developing countries

Less competition in emerging nations Opportunities: Market Development Impact of 2008 Global Financial Crisis on the Nivea Brand • 2011/12, sales increased by 13%

• Company share price grew by 41% after being in the doldrums for four years Results of brand contraction: Key learnings on Nivea’s brand extension and
market development boundaries Nivea is the global leader in body care - including bath, shower, deodorant, and has successfully launched Nivea Pure & Natural (95% natural ingredients) – this category is less sophisticated and requires less R&D Nivea has weakened its brand image and market share by not investing in advanced anti-aging product development, which is the main source of growth in the skin care market Nivea should be focused firmly on skin care – it accounts for 50% of overall sales, but the brand lost 30 basis points in market share between 2009-2010 •Nivea’s international market expansion into niche regions has been a success for the core brand Brand Image Universal
Care for skin
For everyone Beauty
Reasonable price World's leading skincare brand Then: Today: Charles Paul Beiersdorf Brand Elements Name Nivea = Snow White (Latin) Meaningful and easy to remember
Heritage Logo 2013 Standardized
Transferable Does it vary across product class? 7 Laws of Brand Extension 1. Meet a basic need 2. Offer special care and mildness 3. Be simple and uncomplicated 4. Not offer to solve a specific problem 5. Maintain leading quality 6. Reasonable price for cost-benefit 7. Broadest possible distribution Expansion Strategy Thank you Questions?
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