Name

Name: Yosra Khoffi

Case study: Nivea
Question 1:
Nowadays, customers have easiest ways to shop and compare products on websites such as Bizrate.com or Shopping.com. They now can express satisfaction and influence friends and surroundings by sharing their experience (websites as Epinions.com). Therefore, they can change the brand, or the company whenever they want.
To gain the trust of the consumers, companies must accept that customers are now in charge. Creating a customer-led marketing culture is the best way to succeed in your business. Consumer led means that the company should develop a new product or service to the market according to the need of the consumer. It is not about producing and then willing to find customers and satisfy them. Thus, a company must understand study the target market through a market research before starting anything.
Question 2:
NIVEA’s brand is best known for providing quality skin care (Clean, fresh, natural and pure) as well as trust and reliability. Besides, Nivea’s products have a reasonable price while maintaining a high quality.

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As it is said in the case study, Nivea is a synonym of care and protection for the skin. That means it is a universal caretaker of skin since it expanded all over the world.
Their source of brand equity comes from their recognizable logo (which is simple) and packaging as well as their colour (blue).

Consumers continue to purchase and trust this product based upon its uniqueness (caretaker of skin). Nivea’s brand has also a strong association to the concept of family’s experience starting from infancy (Nivea baby) to male gender (Nivea Men) including intimate care for all the family.

The brand image and source of equity doesn’t vary across product class.

It maintained a unique image of protection and care. All products have a high quality with a reasonable price. They don’t seek to solve a problem. In fact, they are just willing to share a good experience with their consumers.

NIVEA’s brand hierarchy would be as follows:

Question 3:
Pros:
Set a positive perception and extend brand equity
Higher share of market for Nivea
It can increase profit because of the promotion of new products
Gain recognition
Establish brand loyalty and trust
Facilities regarding retail stores
Efficient brand marketing and management (specific segments and differentiation)
Cons:
If it is unsuccessful, it will affect the main brand and even others sub brands and reduce their impact Cannibalization
It can also disorient the image of the company to a profit seeking instead of customer oriented.

Confusion between the main brand and the sub-brand for the consumer.

Increase competition
Nivea has a wide product line (15 products under its name (Nivea)). It is always willing to innovate its product and fulfil its customer’s needs. As I mention in the previous question, it has a strong brand equity for a unique brand. All the products send the same message and image to the customer.

Therefore, running an umbrella brand would be more suitable for its situation since it will provide competitive advantages.

Nivea began advertising in 1912. Advertising has covered through these years an informative and guiding role such as ‘blue bible’. It is also more about the image and the message than about the words and the content. “Pictures travel, words don’t” as said Norbert Krapp, Nivea’s vice president of skin care. They use the image of the brand (Colour and logo) at European beaches each summer, promoting bus in Russia and posting advertisement covering the outside of the Kremlin. Nivea was there in the most important events of its consumers such as Christmas (Blue Santa Claus giving Crème in Germany), sports tour, school education program and even concerts.

It should continue to enhance its quality and resonate with costumers since it will reinforce the brand history (100 years) as well as the strong awareness of the brand. I believe they shouldn’t change it because it provides a huge support for the sub-branding strategy.

Question 4:
Benefits:
Awareness to the brand as well as faster access to the market
Enhance consumer recognition and brand association
Nivea can make profit in different departments
Easier for retail distribution
Risks:
Lack of clarity
Negative effect on the parent’s brand image in case of failure: Damage the brand equity
Restriction towards the positioning of new products
Requires coordination and continuity between the products
Difficulty of retail distribution
The use of the ‘Blue bible’ which includes details, information and guidelines for product of the brand and its sub-brands has helped to make it clear in the consumer’s mind. According to Norbert Krapp: “The best (branding step) we did in recent years”. It goes also with the global website of Nivea.
The fact that each sub brand has its president and each country has its local agency affiliate empowered the brand.
Workshops for body and soul (Germany, UK and USA) as well as partnering with hospitals and sponsoring young mothers in maternity wards allows the customer to be more aware of the brand extension. “House of Nivea” (in Hamburg, Germany) is another way to manage its extension. Nivea continued also to innovate its products and develop ad executions.

What Nivea might miss as an opportunity is to grow its market segment by including more products for men.

I believe that foot care can be added to Nivea Body. However, I don’t think that developing perfume would be a good idea for the brand because it will spread too thin from the mere brand and it will engender confusion for consumers. It will be over-extendable because there is no correlation and real connection with the brand equity.

Question 5:
Nowadays, men take care of themselves more than in the past. Since the target market represent an effective segmentation (As it is measurable, substantial, accessible, differentiable and actionable), I believe that Nivea should go for a men’s grooming category.
Thus, I don’t think that pursuing a men’s grooming category will risk alienate its core customer base. On the contrary, I believe it will enhance the concept of family experience (adding men to the list of child, women and teenagers or young consumers).

Question 6:
Marketing Mix refers to the 4 controllable elements (the 4Ps) of a product which are Product, Price, Place and promotion. In order to build an effective mix, we need to understand what the customer wants, the valuable price, where to sell it and how (through a market research)?
The product is the first step to take into consideration since it represents the centre of marketing mix. It is developed through a market research and once understanding what customers want.
Secondly, we have to fix a price which is related to the cost and the quality of the product. We should also be aware of our competitor’s price. High price will make our customers distant and low price will make the company lose money. Price is key because any product need it to enter the market.

Place is where the customer can access to the product. Should it be on internet or in shops? It has to be in an appropriate point of sale that meets its characteristics.

Finally, Promotion is about choosing the perfect time and place to deliver your product to the market target. It is a key because it will establish the awareness of the product.

Question 7:
All the elements of the marketing mix have an interaction with one another. They are all important to maintain the balance for marketing the product. If the product is not enough desirable for market, they won’t purchase it. Without a suitable and valuable price that meets customer’s expectations, the purchase won’t take place. Without adequate promotion, no one will know about the product.
In other words, we cannot put a luxury product at affordable price and selling it in supermarkets. We cannot also sell a low quality bag at high price and in a very attractive area of the shop. This is the main reason why the 4 factors should cooperate and be connected.
Moreover, the 4 elements of the marketing mix have an impact on marketing strategy since they affect positioning (based on your price), targeting and segmentation decisions (Both based on the product).

A company should emphasize on each element to have a balance and satisfy the customer which will allow its growth and development.

Question 8:
Young consumers wanted more specialised face care that fit their age. They want to avoid medical products and focus more on a healthy lifestyle that can afford them a pure and fresh skin. As it is said in the case study, this gives Nivea a competitive advantage.
The product has been revised (Changing of the formula, changing in the description of the product and its packaging, changes related to environment such as recycling and waste) and recreated to the special needs of young consumers.
Nivea concentrate more on the high volume of market purchases while providing products at a low price (Using methods as loss leader or BOGOF). It encouraged customers to buy more and more. This has generated a lot of benefit to the company. Nivea Young pricing represents 7% of Nivea visage sales.

According to researches, the majority of purchases was made by mums, buying for their daughters. Young women don’t have usually the time to take care of their skin even if they want to. It is usually mums who think about that. In my case, it is usually my mother who buy for me skin products. Therefore, Nivea didn’t just put its products into large high street shops but also at retail outlets and in supermarkets (where mothers can buy it while doing their grocery shopping). It used a central distribution point.

Along with this for enhancing the awareness of the brand, Nivea has launched an online magazine called FYI. Nivea took into consideration the power of social network sites for young people. They could not pay attention when people come in the street to ask them about Nivea but they will definitely take enough time to considerate what the magazine is about and how can they benefit from it on internet. The magazine aims to be friendly with its customers. Thus, Nivea used traditional methods (samples) as well as modern methods (Hit40UK and TMF) including active pages in Myspace, Facebook and Bebo.

I believe that these additional advantages gave the opportunity to develop more the business.
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