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NIVEA: MANAGING A MULTI-CATEGORY BRAND 1

NIVEA: MANAGING A MULTI-CATEGORY BRAND 1
NIVEA: MANAGING A MULTI-CATEGORY BRAND 1 NIVEA, one of the oldest and biggest cosmetic brands in

NIVEA, one of the oldest and biggest cosmetic brands in the world has successfully transformed itself from a single skin care brand to a trustworthy and contemporary personal care brand for all family types. The brand stretched itself by sub-branding to many new segments, always nursing the core mother brand NIVEA and its “Gestalt”.

[Company Background] Background

As 2005 drew to a close, executives at Beiersdorf’s (BDF) Cosmed division
As
2005
drew
to
a
close,
executives
at
Beiersdorf’s
(BDF)
Cosmed
division

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 Central Ameri- ca, Eastern Europe, and Asia. NIVEA had created a number of new sub-brands that

and Asia. NIVEA had created a number of new sub-brands that primarily driven by NIVEA, grew

primarily driven by NIVEA, grew from €1.4 billion in 1995 to €3.8 billion in 2005.

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—

range of products—NIVEA Crème, Milk, Soap, and Sun— product lines had established their own identities as

product lines had established their own identities as ‘sub-brands’, independent of and yet still connected to the NIVEA Crème core brand.

Executives at NIVEA believed that growth would continue to come from product innovation. In 2004, Beiersdorf spent €38 million on its new and improved research and development center in Germany, making it the largest and most modern skin research center in the country employing over 650 scientists.

[Brand Roots] Start of the NIVEA brand

over 650 scientists. [Brand Roots] Start of the NIVEA brand industrialisation led to the emergence of

industrialisation led to the emergence of mass markets and branded articles. Society—women in particular—began to appreciate to a greater degree physical appearance and look for products to both care for and beautify the skin. NIVEA

for products to both care for and beautify the skin. NIVEA protection at a reasonable price.

protection at a reasonable price. The NIVEA name came from the Latin word, nives,

price. The NIVEA name came from the Latin word, nives, 1 This case was made possible

1 This case was made possible through the cooperation of Dr. Rolf Kunisch and Cosmed Division management, including Norbert Krapp, Franziska Schmiedebach, and Inken Hollmann-Peters for Beiersdorf AG in Hamburg, Germany. Leslie Kimerling and Keith Richey prepared this case under the supervision of Professor Kevin Lane Keller as the basis for class discussion.

by the entire family. NIVEA Crème was introduced throughout Europe in 1912; in the United States in 1922; and in South America and other parts of the world in 1926 2 .

Throughout this period, NIVEA Crème remained the company’s primary product and the carrier of the NIVEA brand name. The famous NIVEA Crème blue tin with white lettering, standardised in 1925, was a familiar sight in millions of households world- wide. In addition to NIVEA Crème, the brand’s other primary products included body soap and powder and two sun care products—tanning lotion and oil.

[Brand DNA] Understanding the NIVEA Brand By the early 1990s, it was clear that BDF had succeeded in extending the NIVEA brand from skin crème to a skin care and personal care brand.

BDF’s success in establishing NIVEA as a broad skin care and personal care brand now presented the company with a new set of issues and challenges. In the process of establishing sub-brands, there was concern that the NIVEA brand image—in particular, the NIVEA Crème image—had been weakened through all the product introductions.

Kunisch, former CEO of Cosmed, believed that in preparing to develop a new NIVEA communications strategy, a formalised brand philosophy was necessary. Kunisch ex- plained: “NIVEA is the most fascinating brand in the world, second only to Coca-Cola. The company had done a tremendous job over the last 50 years to keep the NIVEA

a tremendous job over the last 50 years to keep the NIVEA was a lack of

was a lack of conscientiousness of what it meant to be a brand. In the good old days, BDF had a brand relationship that was highly personalised. Only three people knew how it had all been done—one retired, one left the company and one died. In ad- dition, there were three advertising agencies that did not talk with one another. I began with the basics and asked: What is NIVEA? The data was all there, the feeling was there, but no one had put it on a piece of paper.”

[Brand Values] NIVEA Crème Brand Identity and Values Over the years, NIVEA—primarily through NIVEA Crème—had acquired a unique, widely-understood brand identity as a ‘caretaker’ of skin. Throughout Europe, most

as a ‘caretaker’ of skin. Throughout Europe, most was a product that could be used by

was a product that could be used by the entire family to satisfy all kinds of needs.

2 While NIVEA Skin and Personal Care products are sold in over 140 countries worldwide, this case study focuses primarily on NIVEA’s European market position and brand strategy.

over 140 countries worldwide, this case study focuses primarily on NIVEA’s European market position and brand

Because of consumers’ own personal history with the brand and the company’s

advertising, NIVEA had become strongly associated with shared family experiences

and had a rich set of other brand associations such as ‘care’, ‘mildness’, ‘reliability’,

‘gentleness’, ‘protection’, ‘high quality’, ‘feeling good’, and ‘reasonably priced’. Over

time, the NIVEA name became synonymous with protection and care for the skin.

became synonymous with protection and care for the skin. water-in-oil emulsion available in the world. Original

water-in-oil emulsion available in the world. Original NIVEA Crème tins were pale

yellow with“NIVEA Crème”in blue print in the centre and a red and blue Art Nouveau

border, but were changed in 1926 to the now-familiar blue and white design. The tin

in 1926 to the now-familiar blue and white design. The tin simplicity and caring embodied by

simplicity and caring embodied by the brand.

[Brand Strategy]

and caring embodied by the brand. [Brand Strategy] steadily. By 1970, NIVEA held over 35 percent

steadily. By 1970, NIVEA held over 35 percent of the multi-purpose crème market in

Germany and a majority market share in Europe. In the late 1960s and early 1970s,

market share in Europe. In the late 1960s and early 1970s, competition in 60 years. Concerned

competition in 60 years.

Concerned with new competition, BDF performed a study of the NIVEA brand image

in the German market. The study found that the NIVEA brand enjoyed a high degree

of goodwill and represented reliability, quality, and honesty. Yet, the brand had an

‘older’ image and was not viewed as young, dynamic, and modern, as was the case

with many of the recently introduced competitive brands.

ticular product class associations to reinforce and elaborate on the image of NIVEA

as a skin care specialist. Because facial skin care represented 75 percent of the Eu-

ropean skin care market and was very closely related to NIVEA’s strong association

of ‘general skin care’ from NIVEA Crème, NIVEA Visage was considered the primary

sub-brand to upgrade NIVEA’s image into the 1990s.

[Brand Extensions]

Extending the NIVEA Brand

In addition to strengthening the brand image of NIVEA Crème, BDF’s second objec-

tive was to use the recognition and reputation of the NIVEA brand name to introduce

new products—both in categories where NIVEA products were sold currently as well

as in related categories.

The company’s long-term objective was to evolve NIVEA from a skin crème brand

into a skin care brand by providing a range of new products that would both

complement NIVEA Crème and broaden the meaning of the NIVEA brand name.

To clarify the new brand extensions, the company established a set of guidelines that

any possible new products had to satisfy:

1.

2.

3.

4.

5.

6.

Meet a basic need: clean and/or protect

1. 2. 3. 4. 5. 6. Meet a basic need: clean and/or protect Be simple and

Be simple and uncomplicated

basic need: clean and/or protect Be simple and uncomplicated Maintain a leading position in terms of

Maintain a leading position in terms of quality

Maintain a leading position in terms of quality 7. By 2005, the NIVEA brand portfolio had

7.

By 2005, the NIVEA brand portfolio had grown from six product groups in 1993 to

brand portfolio had grown from six product groups in 1993 to Í Skin Care—NIVEA Body, NIVEA

Í Skin Care—NIVEA Body, NIVEA Visage, NIVEA for Men, NIVEA Sun, NIVEA Baby,

NIVEA Crème, NIVEA Vital, NIVEA Soft, NIVEA Hand, and NIVEA Lip.

Í Personal Care—NIVEA Deo, NIVEA Beauty, NIVEA Hair Care, NIVEA Bath Care,

and NIVEA Intimate Care.

[Branding Strategy]

Marketing Guidelines

In the mid-1990s, NIVEA began standardising its advertising formats to establish a

consistent look among its sub-brands.

Cosmed worked with agencies FCB and TBWA to develop the marketing concepts

and ad executions. In each market, they implemented ‘perfect local execution’ with

market, they implemented ‘perfect local execution’ with NIVEA brand appears local but the content remains

NIVEA brand appears local but the content remains consistent. As Norbert Krapp,

NIVEA’s Vice President of skin care, stated: “Pictures travel, words don’t”.

The company also printed a booklet for internal use detailing its brand philosophy,

called the ‘Blue Bible’. This Blue Bible contained basic information about NIVEA’s

brand identity, vision, mission, success factors, and the role of its sub-brands. The

Blue Bible also provided guidelines for products, packaging, communication,

promotion, public relations, direct marketing, and pricing. Norbert Krapp referred to

the Blue Bible as “the best [branding step] we did in recent years”, calling it the “key

anchor” for all brand decisions 3 .

NIVEA also built a NIVEA Club in Austria in 1995. For an annual membership fee

BDF introduced larger sized units, altered its distribution strategy by shifting from

of about $10, members received a quarterly magazine, between four and six new

special-line outlets to food outlets, and increased its level of promotional activities

[Brand Portfolio]

product samples, and a birthday gift. Similar to the NIVEA Club, NIVEA opened the

with the trade and within stores. The primary means to revitalise NIVEA Crème’s

NIVEA for Men

with the trade and within stores. The primary means to revitalise NIVEA Crème’s NIVEA for Men

brand image, however, was the introduction of a very aggressive ad campaign aimed

brand image, however, was the introduction of a very aggressive ad campaign aimed in Hamburg, Germany

in Hamburg, Germany in 2006.

directly at the competition.

market—an after-shave balsam. The product embodied the NIVEA brand extension

[Brand Health]

[Brand Health]

The brand philosophy centered on maintaining the association of ‘universality’ for

product to provide both an alcohol cleanser and a moisturizer to care for the face.

Overall Brand Health

NIVEA products. Now that the NIVEA brand represented comprehensive skin care

From the beginning, the NIVEA for Men ads emphasised the mildness and caring of

At the beginning of the 1990s, NIVEA was already a global brand with a wide range

and personal care, the company wanted to develop a marketing strategy that would

company wanted to develop a marketing strategy that would of products catering to the full spectrum

of products catering to the full spectrum of consumer segments. The company

continue to nurture core NIVEA associations while widening their applicability and

balm carried the tag line, ‘Less alcohol, more care’.

had a widely recognised and respected brand, which it leveraged across a range of

enhancing their meaning via sub-brands. Kunisch explained, “We want to build on the

sub-brands. Throughout the decade, NIVEA nurtured its existing sub-brands and

image of the blue tin where we are number one almost everywhere in Europe.”

moved into additional market segments by adding new sub-brands. The company’s

market segments by adding new sub-brands. The company’s personal care needs of their target market segments

personal care needs of their target market segments and contribute back their par-

sub-brand strategy yielded remarkable results: between 1990 and 2000, every NIVEA

3 Norbert Krapp. Personal Interview

sub-brand experienced sales growth and gained market share. By 2005, NIVEA was a leading international skin care company and voted the most trusted brand in

Germany by Reader’s Digest from 2001–2004.

- NIVEA Crème.
-
NIVEA Crème.

Looking to the future, NIVEA executives pondered how best to manage the NIVEA

hierarchy and from where the next surge of growth would come.There were many op-

portunities geographically, through product innovation and new target consumers.

NIVEA strategic brand management models:

[NIVEA CBBE Pyramid] Resonance Attachment Community Judgment Feelings Credibility Warmth Superiority Fun
[NIVEA CBBE Pyramid]
Resonance
Attachment
Community
Judgment
Feelings
Credibility
Warmth
Superiority
Fun
Performance
Imagery
Quality
Heritage
Mild & Gentle
For family
Caring & protective Pure
Universal applications
Salient - Multi-forms and purposes
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NIVEA CASE by Kevin Lane Keller

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[Hypothetical nivea mental map]

Scent/Feel

Care
Care
[Hypothetical nivea mental map] Scent/Feel Care Good Value Blue/ White Protection Heritage Mildness For Family Gentleness
[Hypothetical nivea mental map] Scent/Feel Care Good Value Blue/ White Protection Heritage Mildness For Family Gentleness

Good Value

Blue/ White

Protection

Heritage

Mildness

For Family

Gentleness

Multipurpose/ Universal

Trustworthy/ Reliable

Simple

Pure

Kevin Lane Keller is the E. B. Osborn Professor of Marketing at the Tuck School of Business at Dartmouth College. Keller’s academic resume includes degrees from

Cornell, Duke, and Carnegie-Mellon universities, award-winning research, and facul-

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keters for some of the world’s most successful brands, including accenture, American Express, Disney, Ford, Intel, Procter & Gamble and Starbucks. His textbook, Strategic Brand Management, (see models above) has been adopted at top business schools

(see models above) has been adopted at top business schools with Philip Kotler of the all-time

with Philip Kotler of the all-time best selling introductory marketing textbook, Mar- keting Management.

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NIVEA CASE by Kevin Lane Keller

the all-time best selling introductory marketing textbook, Mar- keting Management. 98 NIVEA CASE by Kevin Lane
the all-time best selling introductory marketing textbook, Mar- keting Management. 98 NIVEA CASE by Kevin Lane
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