Strategic Brand Management

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Word Count: 2500

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Table of Contents
Introduction................................................................................................................................3

Question 1: Beiersdorf AG’s Brand Architecture Strategies.....................................................4

A: Characteristics of Beiersdorf brand portfolio using the brand-product matrix.................4

B: Beiersdorf’s brand architecture strategies based on Aaker and Joachimsthaler’s brand

relationship spectrum.............................................................................................................6

Question 2: Evaluation of the Nivea brand using the ten parameters outlined by Keller (2000)
in his brand report card article...................................................................................................8

Question 3: The role of Nivea as an umbrella brand...............................................................11

Identification of the critical factors that Beiersdorf utilized to successfully extend the Nivea
brand.....................................................................................................................................11

The challenges in extending the Nivea brand, concerning Keller and Sood's (2003) article
on brand equity dilution.......................................................................................................13

Conclusion................................................................................................................................15

References................................................................................................................................16

Figure 1: Nivea logo..................................................................................................................3

Figure 2: Revenue......................................................................................................................5
Figure 3: Umbrella Branding..................................................................................................12

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Introduction
This assessment will discuss Beiersdorf AG’s brand architecture strategies which will include
an explanation of the brand-product matrix, as well as it will focus on the characteristics of
Beiersdorf’s brand portfolio (Choi and An, 2021). The brand which is the main target of this
assessment is Nivea. Furthermore, it will discuss the brand relationship spectrum and some
parameters outlined by Keller in his brand report card article. Lastly, it will explain the role
of Nivea as an umbrella brand.

Figure 1: Nivea logo

(Source: Indianretailer, 2022)

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Question 1: Beiersdorf AG’s Brand Architecture Strategies
A: Characteristics of Beiersdorf brand portfolio using the brand-product matrix
As per the Beiersdorf Brand-Product Matrix, the brand image diversified portfolio consists of
some brand names: Labello, Nivea, Eucerin, Hansaplast/Elastoplast, and Florena. Of these
brand names, the most famous one is the Nivea name, which the company utilizes as an
umbrella brand for all skin beauty and personal care goods. The bulk of companies has sub-
brands. There have been no sub-brands for the other trademarks (Kunkel and Biscaia, 2020).
At the first glance, one will see that several sub-brands are comparable. Nivea-like items are
available in Eucerin, but also in smaller amounts. Selling similar products under many sub-
brands helps the company to broaden its potential clients and route all the partners to achieve
the maximum base of consumers.
The features of Beiersdorf's Brand Portfolio will just be described more as being hugely
useful to the business. In actuality, the hazards are minimized because, as earlier stated,
the business tries to increase time consumers by working throughout one broad market
spectrum, consequently, there is much less chance of brand duplication. Additionally, sub-
brands benefit first from the main brand's decent image, such as Nivea. Therefore, when one
of the trademarks or sub-brands suffered losses of identity, other brands or sub-brands will
not feel the consequences. This is owing to the firm's commitment to increasing brand
reputation and achieving customer retention of its goods. Impressive property for Beiersdorf
is the major economy.
The establishment of an umbrella brand enables the business will save a good amount of
money on manufacturing, R&D, market analysis, and sales (Choi and An, 2021).
Furthermore, while in a massive market with numerous companies, some of which provide
related commodities which is a fantastic way to build up segmentation technique and
establish the brand image of the business as a market leader, in which the goods now are
perceived as leading companies by consumers. Strong brands have given substantial benefits
to the company, notably improved brand image, consumer perception, and efficiencies in
manufacturing and marketing the brands and products. Lastly, by having such a big portfolio
of brands, the company will provide a larger variety of merchandise to its consumers and
therefore they have a better potential to satisfy their requirements.

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 Figure 2: Revenue

(Source: Statista, 2022)

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B: Beiersdorf’s brand architecture strategies based on Aaker and Joachimsthaler’s
brand relationship spectrum
The economic landscape has significantly changed the influence of brand top managers. As a
response, companies should now cope with worldwide changes, network complexities, and
competitive dispersion (Wos and Schivinski, 2019). Moreover, building new brands imposes
a lot of pressure on the company brand. As a response to such pressure, brand managers have
chosen to address the problem by maintaining complicated and elaborate companies which
have developed effective and substantial line extensions. This has been termed "brand
architecture," as it is an organizing framework of a portfolio of brands that describes both the
roles and the structure of brand relationships. Moreover, a very well umbrella strategy assists
a company is focusing its efforts on a tiny proportion of product brands and controlling the
expansions with continuity and adaptability, especially in marketing.
Meanwhile, Nivea, a most prominent parent company, has adopted the "Branded House"
strategy. Nivea, in essence, is among the umbrella brand that includes a diverse range of
products that help to sustain.
The relationship between both the personality of the different Nivea additions as well as the
Nivea brand on its own is substantial and deep (Lamorena et al., 2022). The Nivea approach
doesn't foresee the separate personalities of all sub-brands, as the Virgin brand does that by
promoting numerous product groups under the same parent brand, but it does send the idea in
certain instances, Nivea extension including such Nivea Face care, Nivea Beauty, etc.
Beiersdorf has achieved being a globally recognized brand that leverages harmony. In
essence, Nivea Face Care's existence in a particular marketplace has benefited additional sub-
brands including Nivea Body Care and Nivea Men's Care by translating its good connection
to them all and supplying them with an enormous market presence.
As a response, if a Nivea company passes through some kind of performance advancement
procedure, it seems to have a beneficial effect on the brand image and, as just a consequence,
subsequent brand extensions. The "branded house" strategy is particularly useful in many
sectors of the organization.
It helps the firm in releasing new items and brand extensions by decreasing costs, and if a
new model or brand extension is put into the marketplace, marketing spending increases are
significantly cut. The trademarked housing approach may well have significant downsides.
Brand dilution is a concern.

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If the product's expansion becomes too swift, the brand image of the brand Nivea may very
well be diminished. Each divergence from the parental brand's attributes, look, and placement
is likely to erode the overall branded house image (Kunkel and Biscaia, 2020). Additional
potential danger seems to be from the reality that if a brand extension succeeds, it may well
have a bad effect on the umbrella brand with the same brand.

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Question 2: Evaluation of the Nivea brand using the ten
parameters outlined by Keller (2000) in his brand report card
article.
Keller (2000) presents important factors and says that "the world's most powerful brands
share ten attributes" adding that they are profitable whether they are good at identifying and
satisfying the needs of their customers. The very first factor, which says that "the brand
succeeds at offering the things people truly desire" is apparent in the case of the Nivea brand,
which delivers quality and price to people through a huge range of products and brand
extension. Nivea goods have gained market dominance in different countries, suggesting that
clients are extremely satisfied with products on sale.
As a response, Nivea for men had become the dominant player in the Chinese men's face care
sector, having formerly become the market leader in Russia, Slovakia, Saudi Arabia, and
Poland.
Keller (2000) suggests that a brand must stay relevant in the second argument. Most strong
brands possess a brand image that's also linked to the performance of the goods or services.
Considering what has previously been stated about Nivea delivering quality and price to its
customers, it also must be determined that Nivea has a constructive effect on the relevance of
the market.
The study will also examine user identity or even the kind of person who uses the brand, as
an invisible element that assists a brand remains relevant (Kristal et al., 2018). The majority
of Nivea consumers are a source of recognizing and understanding because of their pleasure
with the brand and its developments. Unfortunately, user image may not be the only factor
which is mentioned in the case study. User image, or the context wherein the brand is
utilized, is also very essential. As a response, Nivea is useful in all settings, which has aided
to enhance the brand's core characteristics and maintain its image and reputation of
excellence, competency, and confidence.
Keller (2000) claims in the third parameter that a brand's pricing scheme should be founded
on the consumers on which the prices are based. This is considered that this is challenging to
attain harmony between quality and price because the firm's purpose is to increase revenue
while clients try to limit their costs (Choi and An, 2021). As a response, Beiersdorf's staff is
dedicated to finding out the relationship between item pricing and quality. To make massive
profits and it can be regarded as the amount of one brand by people, there is always a tight

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connection between sales and product grade, and the data supplied concerning Nivea
demonstrates that such a correlation is carefully balanced in its situation.
The fourth parameter is that a brand has to be well in the industry. Another well brand has
become very attractive to customers, and when confronted with an intense rivalry, it can still
establish or keep up with the competition by external ones of similarity and unique selling
points. Nivea's item integrity has allowed brand building and competitiveness in a worldwide
context, to the expense of its rival.
In the other terms of the fifth parameter, a brand has to be continuous, which is the
consequence of a nice equilibrium between continuity in brand awareness and the
modifications necessary either by the brand to stay successful in the industry (Gul et al.,
2021). The strong brand does not want to transform in any way, however, the brand should be
mindful of delivering values that are consistent with its strategy, notably in marketing. For a
reason, Nivea's commercials and marketing team were always uniform, peaceful, and clear of
conflicts.
The sixth parameter indicates that the portfolio of brands and organizations is adequate.
Nivea, on the other side, makes absolute sense. Nivea is a brand umbrella with different
brand extensions. Such brand extensions are sub-brands and, in just about all instances, target
different market groups and, through being branded under another identity as the brand name,
they achieve maximum market presence and further it will improve the brand's equity.
The seventh parameter is an emphasis in which it has been claimed that now to stay relevant
and develop ownership, each brand image should properly utilize all communications and
marketing activities. Brand elements are extremely relevant in this case (Jongprasitkul et al,
2022). To contend, Nivea has carefully created an appropriate brand name, symbol, slogan,
package, and many more to fight for leadership.
Keller (2000) proposes in parameters eight and nine that brand leaders know what the brand
stands to people and also that brand equity is efficient and effective. As a consequence, each
successful brand is recommended to perform a basic study to discover consumers' needs and
wishes, provide customers with both the best creative and quantitative skills, and cultivate the
corporation's financial characteristics. Up to this point, this was Nivea's strategy. Beiersdorf
has tripled its earnings with Nivea, and this will surely reinvest that revenue in Market
players to keep giving value and pleasure to its satisfied customers while bringing in new
customers. Furthermore, significant equity returns will surface in the coming decades.
The tenth parameter tracks the dimensions of brand equity. Beiersdorf's success is overly
dependent on the Nivea brand and its additions; consequently, audits are conducted to detect
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the growth of equity as well as the wellness of the brand (Tu et al., 2022). To conclude, the
Nivea brand perfectly matches all ten of the described earlier points, which have been the
grounds for its worldwide presence.

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Question 3: The role of Nivea as an umbrella brand
Identification of the critical factors that Beiersdorf utilized to successfully extend
the Nivea brand
The essential duty of Nivea as an umbrella brand is to give benefits to a product that falls
under there. So, it helps to the introduction of quality to different products brought to market
and running than under the Nivea umbrella brand. It is achieved either by the development of
connections that lead to full of items, the provision of legitimacy, the exchange of existence,
as well as the period of communication is based. In this sense, the Nivea brand helps in the
implementation of new goods.
When presenting a new product in the market, the Beiersdorf Organization continuously
examines the desires of its users (Thiedig et al., 2019). To develop a new product, the
business engages much more in consumer research, technical progress, and deployment.
This would be the main justification for the Nivea brand which mainly focuses on improving
and related to consumer pleasure. Nivea goods are adapted to the needs of the client. This is
the major cause of its rise. The Nivea brand is well-known and constantly persuades
consumers. Nivea has long held the largest market share directly related to the quality and
excellence of its items. In comparison to its competitors from everyone else, it has helped the
business. Beiersdorf Company hires extremely attractive packing for Nivea products. This
simplifies the company and decreases the probability of branding distress.
Beiersdorf Company has made large investments in brand expansion (Strauß et al., 2021).
The company market dominates its Nivea brand and participates in a variety of marketing
materials to improve the recognition of its umbrella brand. As a response, sales have grown.
This ultimately causes development. Throughout the time, the business has valued solid and
clear marketing techniques.
Some other method for brand expansion is the Nivea brand's considerable profit earned. The
Nivea brand's entire input communicates excellence and competency. People are currently
searching for standards to get as much out of the purchasing. Nivea product prices are typical
when examining the quality of products. Consumers must always feel this is quite
inexpensive in using Nivea goods.
Beiersdorf Company's current team having competency is crucial to the Nivea brand's
development (Wagner, 2018). Brand experts have always been mindful of and genuinely
appreciate the brand's value to the customer. It thus places clients in a nice situation to be
happy with Nivea goods. The Nivea brand has kept up high performance and affordability.

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As an outcome of this stability, the company has found it very simple to develop the service.
With both the current strong brand identity, it's also quite simple to come up with a product,
because the expenses are significantly decreased.

Figure 3: Umbrella Branding

(Source: Team, 2021)

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The challenges in extending the Nivea brand, concerning Keller and Sood's (2003)
article on brand equity dilution
The challenges in the extension of the Nivea brand are as follows:
Brand developments of the Nivea brand have met a variety of challenges. Whenever a strong
brand fails to perform, it causes serious harm to the umbrella brand. If the enlargement is not
properly supervised, this could lead to huge losses (Bhargav, 2020). As a consequence, brand
extensions present danger of brand image loss. Nivea's continuous growth into sub-brands
damaged the company's good brand image. People like Nivea's sub-brands because of the
umbrella brand's decent image. As the development continued, there was even degradation of
the brand image as a result of the availability of the Nivea brand throughout almost all
divergent goods.
Due to the brand ownership dilution, Beiersdorf Company was cautious about growing Nivea
into emerging markets (Spry et al., 2018). This caused dozens of new trying to maintain a
commitment to the brand's key values. The Nivea growth strategy serves as an example of
contradiction. Certain Nivea products provide consumers with an environment that was
incompatible with the umbrella brand's objectives. This affected customers' views of the
overall brand, leading to equity erosion. For instance, the insertion of synthetic dyes into
Nivea Mane Good care reduced brand recognition. Moreover, Nivea's product strategies,
which have been firmly based on mild skincare, did not grant its use of common chemical
remedies in the solution.
The popularity of Nivea throughout many product lines also was apparent. The two products
that experienced so much from this scenario are NIVEA VISAGE and NIVEA VITAL
VISAGE.
These sub-brands had greater challenges in balancing their respective brand characteristics.
Nivea's good brand image has indeed been essential (Kladou et al., 2020). Its durability needs
for there to be a very profound feeling that is simple and understandable identified in need
because they're to be a recognized brand dilution. Almost all of the bad effects of brand
extension for the Nivea parent or parent product are caused to sensitive engagement which is
often confusing, thus they are overlooked. Diagnostic is yet another factor that has
maintained Beiersdorf Company's brand equity dilution.
The Beiersdorf Company met some difficulties in creating Nivea as broad skincare and
personal attention product (Ali and Senin, 2020). The corporation out on the umbrella brand

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Nivea, revealing it to big threats. Any lack of public confidence in the iconic Nivea brand
will enable the business more exposed since Nivea counted for most of the total business.

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Conclusion
In this assignment, it has been explained about the strategic brand management in which the
case study selected is challenges in nurturing and Umbrella brand and that is Nivea. Initially,
it has been stated about the brand-product matrix and some features of the brand portfolio.
Moreover, it has been focused on the brand relationship spectrum. Apart from this, it has
been explained about the Nivea brand using the ten parameters which are outlined by Keller.
Lastly, it has been stated about the role of Nivea as an Umbrella brand.

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