Nivea (1911) is a worldwide body-skin care well known brand. A German company named Beiersdorf, which is founded on 1882, owns it. Nivea is a Latin word (niveus/nivea/niveum), which means “Snow White” .
The most important aims of Beiersdorf is to have its products as close as possible to its consumers and understand them in its many different markets and satisfy them with skin-body beauty care advanced products . In return, Beiersdorf is gaining the trust and appeal from its customers.
Case synopsis: Beiersdorf is one of the companies that seeks continuous and regular market development. Market can be developed by finding the gap (need) in the market and trying to fill the gap by developing a new product (satisfying the need through market-oriented approach), or through product-oriented approach by creating good quality product and introduce it to the market. Beiersdorf market research have identified a market gap which led to NIVEA VISAGE young (product) introduction in 2005 to the market in order to fill the this gap (market-oriented approach).
After developing a balanced and effective marketing mix the company re-introduced the NIVEA VISAGE young range in 2007 where the product had new formula, new design, new packaging, and new name. Statement of the problem: Beiersdorf market research have identified a market gap which led to NIVEA VISAGE young (product) introduction to the market in order to fill this gap (market-oriented approach) . The company needed to develop a balanced and effective marketing mix (product, price, place, promotion) in order to well suit the product, target market, and to meet its own objectives.
Causes of the problem: Beiersdorf wanted to develop a balanced marketing mix (product, price, place, promotion) specifically for further optimizing of the company position in the market. Each marketing mix variable have been addressed carefully to achieve the company goals and targets. Case analysis: Beiersdorf did a market research in order to understand the market and to build effective marketing mix by identifying the target market segments.
The research plan was to gather information using different research approaches and instruments such as listening directly to the consumers through focus groups, and experimental product testing. Findings were impressive and led to significant changes into the product, product price, place, and promotions. Findings of the research regarding the product showed the company the way to satisfy a significant segment. The research showed that younger costumers (age group of 13 – 19 years old) desires more dedicated face care product that offers a ‘beautifying’ benefit, instead of a solution to skin problems .
Competitors available product at that time mostly concentrates on skin problems solution rather than normal face care products. Using experimental research approach, the final product improved and changes included: * The product made far more effective and consumer friendly * The formula used for some products has been changed and natural substances have been employed * New products introduced to the market * Attractive product pack design targeting young women group used * Larger pack size introduced with new product description.
Each of these product improvements has its own purpose weather to attract the young women segment, Show the company commitment toward the environment, or strengthen the product range, to better meet the needs of the market. Pricing of the any new product has to provide value for money in the market and to be attractive for the targeted segment customers to buy. Several pricing strategies firms can use such as cost based pricing (the price cover the cost or include some profit), Penetration price (initial low price ), and price skimming ( premium price ‘first to buy’ customers).
NIVEA VISAGE young re-introduced with a higher price than the previous edition of the product. However, this illustrated value for money were new natural formulation has been used, packaging and extended product range . Nivea also took into consideration when pricing the product the targeted segment were young girls are targeted the product is bought by their mums. Which explains the reasonable and balanced pricing between the features the product offers, benefits of the product, and how much do is it cost.
Nivea was the price leader effectively of this market segment were it sets the price level that competitors will follow or undercut by ensuring competitive price. Beiersdorf didn’t forget study regarding the place element of the marketing mix. Place often refers to distribution strategy, place where the product will be sold. One of the important aims of Beiersdorf is reaching to their targeted customers regardless of their locations.
As a result, the company used different channels to reach their customers such as retail outlets where 65% of the product selling from the targeted customers occurs, and large grocery chains where the other 35% sales comes from . Smaller retailers can be reached through a wholesalers and online selling of the product through a retailer where the costs of producing small orders will be high for the company. The promotion key of the marketing mix was so important to communicate with the targeted segment customer about the product availability and persuading them to buy the product .
Two main types of promotions are there, above-the-line (TV and newspaper advertisements) and below-the-line (events, Direct mails, PR, branding, and sales promotions). Nivea was a consumer-led in the NIVEA VISAGE young promotion where the strategy reflected the lifestyle of the targeted segment audiences and the range of the available media. Nivea used below-the-line strategy in their promotion campaign. The main part of the promotion was letting the customers to experience and test the products through distribution of the product samples.
In addition, Interactive online magazine was launched and named FUN, YOUNG, & INDEPENDENT (FYI) to give the targeted customers of the young girls the confidence to become young women act independently. Also, social networks haven’t been forgotten, where NIVEA VISAGE young pages were available on MySpace and Facebook to reach as much as possible targeted audiences. Alternative recommendations: Based on the research of the market carried out by the Beiersdorf, set of recommendations might be useful suggested: * Differentiate the product specifications and names according to the age group. 3 years old girls would love to have a product named on her favorite cartoon character, which will attract her to ask about the product or buy it. * Providing a completing set of tools with product or at least one tool such as a mirror as a promotion * Sending people to houses to introduce the product * Using above-the-line promotions such as TV and yellow pages ads. * Provide a seasonal product where in summer provide a product edition with a lime or mint fleshing smell.