Nivea:

Managing an umbrella
brand
Table of Contents
Introduction
History
Brand Nivea-evolution
Core values
Marketing strategy
Current scenario
S.W.O.T
Recommendation
Introduction
Presence in maximum product categories and
countries – Queen of Mega Brands
Home country – Germany
Parent Company – Beiersdorf
15% share in global skin product market during the
late 90’s
Maintained double digit growth rate throughout the
90s
One product wonder to multi product categories using
Umbrella Branding
History
120 year old brand based in Germany
The Beginning of Beiersdorf:
Body care products
Adhesive tapes
Bandages
Introduced brand NIVEA which acted as a Game
Changer
Introduction of brand NIVEA
A skin cream based on Eucerit, the first ever water – in
– oil emulsifier
Revolutionary product for cosmetic buyers with
stable, long lasting formula
Product name based on Latin word ‘NIVIUS’ meaning
Snow White
Target audience expanded from Upper strata women
to masses
Revamping

the Brand
First ever extensive revamping exercise in global
corporate world
NIVEA was given new packaging – A blue tin with
NIVEA crème written in white on it
Revamping advertising imagery to expand NIVEA’s
usage from ladies to the whole family
BEIERSDORF in blue
World war – II enveloped Beiersdorf with political
problems of Germany
Expropriation of NIVEA brand by other countries
Assets and trademarks associated with the brand were
forcibly sold off
Next three decades were marked by brand
consolidation
Core Values of the brand
Visual and physical attributes of the product formed a
complex emotional bond between customer and brand
which had strong positive undertones
NIVEA’s blue color denoted sympathy, harmony,
friendship and loyalty.
White color suggested external cleanliness and inner
purity
NIVEA had an aura of an honest brand
Brand Values – Mildness, reliability, gentleness,
protection, high quality and value for money
Umbrella branding
Selling related products under one brand name
Contrast with individual product branding
Advantage: Several products can be efficiently
promoted with a single advertisement or campaign.
Challenge: Greater burden to maintain consistent
quality and brand dilution
Innovations and Product Extension
Began with extensions through 1930’s
NIVEA Visage in 1960’s
Major breakthrough in 1970’s with the launch of
‘NIVEA for men’ aftershave – A runaway success
Along with Umbrella brand approach the product
diversification was also influenced by competitive
pressure.
Research team of 150 researchers
Over 300 products across 14 segments of health and
beauty market
Umbrella Branding strategy for NIVEA
Any new product was evaluated based on two
parameters
 The new product had to be based on the qualities
that the mother brand offered
 The new product had to benefit the consumers in the
same way as the other brand
Product extension and expansion
The Global – Local Strategy
Rapid acceptance all over the world highlighted its
global appeal
However, according to company sources, the brand
retained its strong German heritage
Conscious decision to globalize the appeal of NIVEA
by forming a team of ‘International Experts’ having
‘local expertise’
Adaptation of international advertising campaigns at
the local level to reduce the costs of different product
formulations and packaging
Advertising features
NIVEA advertising was simple, unpretentious and
human.
No use of supermodels for promotion
Predominant colors in all campaigns were blue and
white
Local issues were well kept in mind
Communication strategy was localized
Market Position
Present across 14 product categories
Presence across 150 countries
Leadership position as on May 2003
Market Leader for product Country

Skin creams and lotions 28

Facial cleansing 23

Facial skin care 18

Suntan products 15
Brand NIVEA and what it meant for
its customers
NIVEA more than a skin care product
Associated with good health, graceful ageing and
better living
Sporting, fashion and other lifestyle events gave
NIVEA a long lasting appeal
Pillars of the brand – Innovation, brand extension and
globalization
The BEIERSDORF ownership issue
Insurance major Allianz, the largest shareholder
intended to sell its 44% stake in the company
Prospective buyers included Proctor & Gamble, the
cosmetics major L’Oreal, and the coffee specialty
Tchibo which already had 30% stake in the company.
P&G and Tchibo enter price war to buy out Beiersdorf.
The BEIERSDORF ownership issue
German household products major player Henkel and
US based FMCG major Unilever also entered the fray
for Beiersdorf buy out
Analysts suggest a US based company to be the ideal
buyer for the brand sighting low market share of the
brand in the US market
Declining growth rate (17% in 2001 and 6.9% in 2002)a
cause for worry
S.W.O.T. analysis
Strengths
Presence in maximum product categories in over 150
countries
Market leader in skin care and men's care
Umbrella branding
Global local strategy
Continuous expansion
Emotional bond between customer and brand
Capitalization on strong brand equity
Strengths cont..
Advertising: simple, unpretentious and human
Set of guidelines for marketing mix of any new
product launch
Brand of local origin in many countries which helped
them in becoming the market leader
Mass marketing
Weakness
Presence in US not as strong as in Europe
Lacks size compared to its competitors
Decline in growth rate since this decade
Opportunities
Expansion to US markets
Bring excitement to the brand by interactive
advertisement
Build relationship with retailers to make Nivea
products more visible in retail stores
Threats
If brand is not managed well, there is a threat for its
associate brands
Associate brand may overshadow core brand
Not able to different segments of market due to
umbrella branding
Unable to capitalize on different segments of market
Competitors aggressively undertaking promotions
Recommendations
Should not let intensifying competition and the
ownership imbroglio affect the brand performance
Should position themselves in such a way that they
can influence the big retailers and markets where they
don’t have a large presence.
Being acquired by a U.S. firm beneficial to Nivea
Questions??