Case Study Nivea

Case Study #8: NIVEA NIVEA, one of the largest skin and face care brands in the world, was established in 1912 and introduced to the German markets. Germany has long been a center for skin care and cosmetics, and NIVEA was the leader and has continued to be one of the most recognized products in the market. With its brand image based on its products being clean, fresh, and natural it has become a timeless product recognized by its blue tin and white type face.

Its first introduced NIVEA Creme in 1912, and became the base of their brand and was known as the “caretaker” of skin. For most of the lifep of NIVEA Creme it was essentially the sole competitor in the face cream market, and so the consumers were able to get to know the brand and develop a close relationship to the brand. It did not face competition until 1960 when another German company launched Creme 21. Although it was an identical product to NIVEA’s Creme, Creme 21 was backed by a large amount of advertising aimed at the mass market.

It is through this competition that NIVEA was forced to evaluate their business strategy and brand image. While they were happy that their brand image was recognized and understood by the market, they were shown how their brand had an “older” image and was not viewed as young, dynamic, and modern like the new competitors were. NIVEA’s decades of branding and assimilation into the everyday lives of its consumers had built the equity for them that allowed them to maintain the market advantage for as long as they have.

It is this brand equity they had built over so many decades that had allowed them to adjust their branding strategy. Though sales of NIVEA Creme had become stagnant, the company developed a strategy which was twofold and allowed for stabilizing the market position of NIVEA and expands the strength of NIVEA Creme by transferring its brand equity to other product classes. NIVEA wanted to preserve their reputation for skin care and the market position for NIVEA Creme while it was also differentiating it from the competition.

To do this they realized that while most ads showed NIVEA products being used, they had never directly specified the products benefits. By addressing these product benefits they are negating the competitor’s claims. The second portion of this plan was to introduce new products. They targeted new and growing market segments in which they could extend the NIVEA brand. They wanted to use these to compliment and broaden the meaning of the NIVEA brand name and use the equity already gained by NIVEA Creme.

This theme is carried through the brand hierarchy as well. A set of seven different criteria was set to ensure that all products reflected the desired NIVEA brand image and were consistent with the philosophy of providing high quality skin care products. NIVEA Creme was considered the company’s most important product because it established the brand and its identity. Sub-brands have the advantage of advertising the mother brand, establishing brand loyalty across multiple segments, and monopolize the market from competitors.

The problem with sub-brands is that they can have a negative impact or take away from the sales of the mother brand. “The role of the sub-brands was to continue to cater to specific skin care and personal care needs of their target market segments and contribute back their particular product class associations to reinforce and elaborate on the image of NIVEA as a skin care specialist. ” With this direction NIVEA should operate under an umbrella ad for all of their products.

An umbrella brand essentially covers diverse products which are more or less related to each other, and with NIVEA’s small advertising budget, this would be the best way to maximize their marketing efforts with different product categories all carrying the NIVEA brand name. The umbrella strategy also fits in with the NIVEA Creme advertising because with their values of timeless, ageless, motherhood and happy family; honesty and trustworthiness and the product benefits of mildness and quality they can transfer all of these core brand qualities through the NIVEA name to its sub-brands.

The problem that NIVEA had was that all of their sub-brands were being handled as separate advertising plans, while they all were in line with the core values; they did nothing to incorporate each of their branding strategies together. By using the umbrella branding strategy they can bring all of their products under one name and make a more cohesive branding strategy that will benefit all of their sub-categories.

One thing that I believe is holding the NIVEA brand back is that they are so focused on not losing touch with the original product of NIVEA Creme, when really they want to hold onto the core values which came with it. I believe they need to look at the market strategy and implement the core values that were derived from this original product but also look at the market and see if they are still being successful. If not, then they need to re-evaluate NIVEA Creme’s placement in the market and see whether or not it should be dropped or downgraded in their grand scheme market and advertising strategies.