Case approach crasher: Market entry

strategy for Nivea Face Cream

Case

Competitive landscape

Bargaining power of
consumers: Moderate

Bargaining power of
Suppliers: Moderate

-Large market and less

players

-Less number of players

on the market

-Options for quality

products is less

-Suppliers will have to

choose amongst players;
pressure from other
players not to supply.

-Products with more

functional features are
yet to be released

Rivalry in the
category:
High
Threat of substitutes: High
-Can be replaced with
sandal, turmeric,
ayurvedic creams etc
-Products with more
functional benefits >
potential threat as they
have a natural
composition

Threat of new entrants:

High

-Nascent market; just 9%

of the entire personal
care category
-Huge potential to
expand the pie and get
market shares irrespective
of the existing players

Men skin care category size in Rs millions

4500
4000
3500
3000
2500
2000
1500
1000
500
0

4200
3230
2500

2008-13
CAGR:
36.8%

1860
887.5
2008

1182

2009

2010

2011

-Fair and handsome is the market

leader
-All establish brands like HUL,
Emami, Eyeryuth, Zydus Cadila etc
are present
-Huge investments in Research
and Development
-Companies trying to differentiate
the products

2012

2013

Nascent category
with sales of around
4200 million in an
overall mens
grooming category
of 45000 million

Source:
http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx

Competitive landscape
Agencies
Suppliers
Distributors
Partnerships

Case

Competitor analysis: Emami Fair and Handsome

Positioning: Worlds number 1 fairness cream for men
Strengths
-Created the
category: first movers
advantage
-Celebrity
endorsement
-Available in various
SKUs

Weakness

-Men's fairness
category itself forms
45% of the brand
sales; Emami as a
brand is small when
compared to global
giants like HUL & PG.

-Distribution is good
and visibility is high

Threats
-A lot of competitor
products being
released
-The competitor
products may bank on
their brand global
presence
-Threat from natural
ingredient products

Selling points
5 power fairness cream
Double strength
peptide complex
Sun guard
Stress busters
Anti Bacplus
Herbo cool

70% market
share and a
100 crore
brand

Opportunity
-Largest market share,
can leverage the
position and drive out
competition
-Increasing interest in
men for grooming
products
-Developing country

Brand
endorsement:
Sharukh Khan >
High influence
on men within
age group 1832; An ideal
celebrity
endorsement

Sources:
http://www.business-standard.com/article/companies/fmcgs-give-men-a-facelift-110022300001_1.html

Case

Nivea Mens Grooming

category sales in INR million

Nivea SWOT analysis

1000

Strengths

-Strong brands create

goodwill
-High scope of
expansion
-Strong financial
position

Threats

-Emami fair and

handsome has 70%
market share, more
shelf space
-Men buy products
based on availability,
retailers might not be
willing to give shelf
space to new entrants

800

Weakness

-Sales and distribution

channels in India
-Selection of celebrity
endorsement

600
400

200
0
2009

2010

2011

2012

2013

Sales % of Nivea in overall mens grooming

category has only increased from 1.3 to 1.8 in the
past 5 years
Nivea for men other than deodorant has been
stagnant at 0.9%
Opportunity

-Category growth has

been very high for the
past 6 years
-Changing attitudes
amongst men; men
becoming more
receptive for facial
creams

Sources:
http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx

Nivea for men sales in INR million

500
400
300
200
100
0
2010

2011

2012

2013

Market Research
Observational studies >
Consumer behavior; time
spent on purchase (high
involvement, low
involvement, impulse
purchase?)

In depth interviews and

Focus group discussions
(Qualitative analysis)

Quantitative analysis
(Questionnaire study

Case

Consumer behavior

Social Image
Urban men have
become more conscious
and have started to put
more efforts

Transactional
time is relatively
small

Prominent in
shelves/
availability

Mens Grooming
category
Due to this kind of
change the category
has see a high growth

Hence mass brands

sell more;
Companies should
target for more
shelf space and
should increase the
visibility of the
product

Industry Reaction

The big change: 2013

saw a change in men
preferring men
specific products
including soaps and
shampoos

Increased portfolio
extending to face
cleansers and face
washes

Male population aged 18-32

accounted for the maximum sales
Men face issues with dust sticking to
their faces
Influence of Bollywood actors is high
Men do not worry about they age in
late 30s hence anti ageing creams
might not be an attractive option
Reliance on economical and
affordable products
Men quickly adapt to skin care
products more broadly
Men of age >35 face rough skin issues
Students face problems with excessive
sweat

Sources:
http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx
http://www.livemint.com/Industry/3GiSPeViRTFQQsSs6q7zbN/Male-grooming-emerges-as-fast-growing-segment.html

Segmentation

Targeting

Positioning

Product

Segmentation

Place

Price

Promotion

Packaging

Segmentation

Targeting

Positioning

Product

Place

Case

Segmentation

Price
12-18 years
18-24 years
24-35 years
35-45 years
>45 years

Age

Psychographic
Educati
on

Lifestyles
Family
Income

Opinions

Descriptors for
behavioral
and
psychographic
segmentation:

Promotion

Packaging

Behavioral

<10th standard
12th Standard
Graduate
Post graduate

Benefits sought

<3,00,000
>3,00,000
Usage status

Segment name

High self image

buyer

Benefit buyer

Price conscious
buyer

Lazy buyer

Intelligent buyer

Personality

Highly social

Goal seeking

Self oriented

Lazy

Analytical

Lifestyle

Image centric

Energetic

Value centric

Hedonistic

Saving

Behavior

Premium brands

Brand loyal

Test and use

Heavy user

Quality
searcher

Benefits sought

Brand image

Attributes

Price

Not specific

Functional

Segmentation

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Case

Targeting
Family
income<
300000
12th
standard &
Graduate

Price conscious
buyer

Family
income>
300000

18-35 yrs
Graduate
& Post
graduate

High Self image

buyer/Benefit
Buyer

Family
income>
300000

18-35 yrs

Benefit buyer/
Intelligent buyer

Graduate
& Post
graduate
35-45 yrs

Different lines can be made

to meet the requirement of
each target segment.

Segmentation

Targeting

Case

Positioning

Product

Place

High Self image

buyer/Benefit Buyer

Prevents dust, keeps

your face clean and
shining; sun
protection

Prevents dust, keeps

your face clean and
shining; sun
protection

Packaging

Benefit buyer/ Intelligent

buyer

Prevents dust, keeps

your face clean and
shining; sun
protection
Smoothening agent,
keeps your skin soft

Extra whitening, anti

per spirant
After shave face
cream

Effective for any kind

of skin

Promotion

Positioning

Price conscious buyer

In the budget limit

Price

Effective for any kind

of skin

Effective for any kind

of skin

How do we want to position

Nivea face cream in the
consumers mind?
The main positioning would be
that the cream prevents dust
and keeps your skin clean and
shining; sun protection
The creams shall have variants
for dry and oily skin and
hence shall be effective for all
kinds of skin

Segmentation

Case

Targeting

Positioning

Product

Place

Product

Price

Product attributes

Product A:
Dust
protection

Dust & sun protection

Skin cleansing agent
Skin shining agent
Number of variants: 2 (for
oily skin and dry skin)

Product B:
Dust
protection,
extra
whitening &
anti
perspirant

Product C:
Dust
protection
with
smoothenin
g agent

Dust & sun protection

Skin cleansing agent
Skin shining agent
Extra whitening
Anti perspirant
Number of variants:2 (for
oily skin and dry skin)

Dust & sun protection

Skin cleansing agent
Skin shining agent
Smoothening agent

Promotion

Packaging

The product will be for

the price conscious
segment and hence only
basic need of dust
protection and clean &
shining skin are covered .
Consumer insight
considered: Men face
issues with dust

The product is made for

the people who can
spend an extra amount
for certain additional
attributes like anti
perspirant. Consumer
insight considered:
School and college
students face sweat
issues
The product is made for
the people who want to
smoothen their skin.
Consumer insight
considered: Men of age
>35 face rough skin issues

Segmentation

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Case

Packaging
SKUs
NIVEA being an established company globally,
the shape of the product should reflect its
premium nature and brand image
Packaging for product A can be in the normal
tube type packaging
Pricing of 60 g SKU is done in a manner to
elevate the sales of the 120 gm SKU (Decoy
effect)
Packaging for product B and C should not be
the typical tube type like all other brands; the
packaging for these products need to be
differentiated; sample shape is shown beside:

30 gm

60 gm

120 gm

Small packages of 5 gm can be

made for testing purpose in the
market. These packages can be used
in the promotional activities at various
point of sales
Product A > Normal
packaging

Product B &C >

Premium packaging

Segmentation

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Case

Pricing <-> Packaging

Product (SKU in gm)

Competitor price (INR)

NIVEA Launch price bracket (INR)

Rationale

Product A (15)

25

30-35

Product A (30)

60

80-90

Product A (60)

110

130-140

Product B

20% higher than Product A

The product is for the high self image

buyer/benefit buyer who is looking for a
premium product

Product C

10% higher than product A

The product is for an intelligent buyer who is

looking for functional benefits and is willing to
pay more than the price conscious buyer.

Nivea has a premium brand image and the

pricing should be relatively higher than the
competitor product.
Product A is for the price conscious segment,
hence it is priced at 20% higher than emami
F&H; Pushing the 60 gm tube sales by Decoy
effect (marginal increase in price/quantity is
very less from 30-60 gm)

Assumption: The pricing has been done relative to the main competitor Emami Fair and Handsome and by

considering the brand image of NIVEA. The cost structure of each of these products has not been considered
as the information is difficult to obtain. Hence the profit margins for each of these products are not being
mentioned.

Segmentation

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Retail landscape in India

US 500 billion $ industry

Contributes to 14-15% of the Indias GDP
Employment over 40 million people and over 90% of them
employed in General trade
900 B$
in 2020

500 B$ in
2014

RETAIL IN INDIA

Organized
9%

Unorganized
91%

Per capita organized retail space in India is approximately

around 2 feet
Per capita organized retail space in China is 8 times larger
than that of India

Indian MT not growing as fast as that of

Vietnam, China & Indonesia though
the penetration of MT is just 9%

More than 3% of people are employed in unorganized retail

and hence people cannot easily shift to Modern trade

Penetration of just 9%

High growth potential

for Modern trade; 3
year CAGR of 38%

Fastest growing
retails market in the
world

Segmentation

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Retail landscape in India

General trade
Huge population employed in
General trade; Penetration is very
high

Modern trade

91%

Margins distributed across distributor

and retailer; hence producer
margin is low as compared to MT
Unionized retailers => High
coordination amongst the retailers
in any area

Gives the shelf space to different brands

Motivates the consumers to visit the store

Change in FDI regulations has

increased the limit to 100% investment
in single brand retail and 51% in multi
brand retail

9%

Global players to enter the market to

capture the huge potential

Creation of jobs in India

Private
labels

Higher margins; 10% more than the other

brands

Cultivates brand loyalty; Walmart has a

lot of loyal customers in foreign countries

Introduces Private labels of its own to earn large margins(10% more than
normal); makes the competition price sensitive

These are cheaper to produce as there

are no advertising and marketing costs

Motivates the people to buy the Walmart labelled goods and gives very less
space to other brands

Marketing budgets are more efficiently

used

Segmentation

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Case
Distribution
network

Place
HFS

Availability of the products in the

stores is very critical especially for
men products availability of
different variants is very important.
Shelf space is very critical, In the
high frequency stores, there
should be availability of all
variants => sales shall be higher for
the product A
Product A can be sold to the
retailer at discount offers; the
presence of other variants will
push the sales of product A which
is targeted at the price conscious
customer
Visible and most effective shelf
space to be taken from the
retailer

Conventional

High
frequency
stores

Modern Retail

Modern Retail

Shelf space is very critical as it influences

the purchase decision of men
All the products A,B,C have to be
available in this channel
Special shelf space near the women
cream section to be taken> women
shall be inclined to buy product C for
their husbands (face smoothening)
Space near the counters (arms length)
has to be taken to help men have a look
at the product while they are at the
cash counter

Non
conventional

Nivea mens
outlets/Ecommerce

Non conventional

Collaboration with e-commerce

websites
College students are increasingly
purchasing online
Nivea men outlet in lobby space of
malls

Segmentation

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Promotion

1.
2.
3.
4.

Direct selling; Direct marketing

Advertising
Publicity
PR

1. Trade promotions (Retailers)

2. Consumer sales promotions
(Discounts, Bundling offers etc)

Segmentation

Targeting

Positioning

Promotion

Product

Place

Price

Promotion

Packaging

Segmentation

Case

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Promotion
1. Pre launch campaign
Identify the ideal test
market where the
products can be
tested

Connectors

Mavens

Dermatologists:
The safety
factors have to
be explained to
the doctors

Gym instructors
:They have an
influence over
the customers
Grooming
experts: Salons
are another
place where
the testing can
be done

Ensure that the

stickiness factor is
present. How?

The proposition of
the products with
dust protection,
clean and shining
face can create a
stickiness factor

Discover the
consumer insights by
observations and by
feedback

Engaging the
customer and
making him a co
creator and a
collaborator

Identify the consumer insights and their

affinity/aversion towards some attributes
in the product

Incorporate the feedback and re test the

products at the same place

Enhanced brand image as customer

centric and development of brand
loyalty

Segmentation

Case

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Test Markets
Gymnasiums

Salons

Malls

Increasing number of
people these days are
enrolling in gymnasiums in
Urban India because of
the increasing
consciousness to be fit
and presentable. These
men are potential users of
the face cream. Hence
counters inside the
gymnasiums can be
installed as test counters

There has been an

increase in the number of
people visiting established
salons. The products can
be launched here for
testing and for collecting
consumer insights/
feedback

-Women spend more time

shopping than men. This
makes many men move
into the lobby space
while their women are
shopping, hence the
lobby space counters
shall be an effective
means for test marketing.
-Test centers near the
cash counters and near
the women beauty
section (often men wait
with their women at these
places)

Skin clinics

Test centers outside skin

clinics shall also be
effective if
recommended by the
doctor

Segmentation

Case

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Bundling and using the brand image of NIVEA (strength of NIVEA & weakness of EMAMI)

2. Bundling offers

3. NIVEA hampers

The bundling offers can be

with womens face cream
and this will be only for
product C which is targeted
at men of age group 35-45
The purchaser in this case is in
the women who feels that
her husbands skin is not soft
Point of Sale would be giant
apparel retail outlets like
shopper stop, Life style etc.
and normal retail chains.

NIVEA hampers can be

introduced which contain a
portfolio of products of NIVEA
like the face was, face
cream, moisturizer & shaving
gel.
These hampers can be given
as goodies to promote the
products and also the mother
brand.
These hampers can also be
given at discounted price to
attract the customers

4. NIVEA point of purchase

promotion
One of the consumer insight
is that men prefer to buy
those products which have
large variants and occupy
high shelf space.
NIVEA display stands in the
retail outlet which display the
portfolio products of NIVEA
(EMAMI lacks wide category
range)
NIVEA point of sale display of
the mens face cream
variants; men generally pay
the bills in India and they
have considerable time to
look at the products

Segmentation

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Case
5. Tactile marketing

Packaging of Product A

Product A is targeted at a
price conscious segment
Heavy package shall have a
positive effect on the
customers

Packaging of Product
B/C

The product is targeted at a brand

conscious segment who are willing to
spend for the quality.
The product preferable should not
have any outer cover.
The product should have a smooth
finish to give a premium feeling to the
customer.
The shape and the finish of the
product is shown in the package

The consumer will hold the product in his hands before making the decision of buying it. This will
create a sort of intimacy between them. Hence it is important to gain his attention during this short
span. The influence of touch is HUGE, and human being are extremely affected by it.

Segmentation

Targeting

Positioning

Product

Place

5. Celebrity endorsement

NIVEA face wash

Price

Promotion

Packaging

Whom is NIVEA looking for?

A person who is in the peak of his
career
A person who is expected to stay for a
considerable amount of time
Great influencer
Established credibility
Who has a screen presence and fan
following almost equal or greater than
Sharukh khan

EMAMI fair and

handsome

Plausible celebrities:

- Towards the end of

his career
-Very less fan following

-Credibility not
established
-Not a great influencer
Not an ideal option
for the new launch

-Is an established
superstar in the
industry
-Huge fan following
-Most effective in
medium and low class
segments

His new film Bang Bang can

be used to promote the
product
Has a lot of youth connect
Will stay In the industry because
of established family and
charismatic appearance

The Mr. Perfect of

Bollywood
Has an established
credibility
Known for his unique
and diverse screen
presence

Segmentation

Targeting

Positioning

Product

Place

Price

Promotion

Packaging

Case
6. TVCs
The central idea in the TVC should be dust/sun
protection and a clean shining face.

7. Bill boards

Location

Outside Gymnasiums

Gym going population are

the people who are
conscious about their
appearance and health.
Hence there is a connect
with the products
proposition

Near traffic signals

Male drivers are

considerable large in
number and bill boards near
the traffic signals will have
more viewing time

Exit gates of mall parking

spaces

Considerable amount of
time is spent near the
parking ticket collection
counter and the traffic
moves really slow in these
locations, hence a good
place to locate a bill board

The ad concept can be as follows:

A biker travelling under the hot sun and using a
NIVEA face cream will have a better shine and a
clean face with no dust or skin tanning.
The TVC can also directly attack the central idea of
EMAMI of fairness which traditionally has been
considered as a womens attribute

The TVCs should feature mostly in between sporting

leagues like IPL, Indian Football league, Sports
channels and News channels;
Audio copies on Radio shall also be effective as
many men who drive prefer to listen to the Radio

Rationale

Supply chain and logistics management

Centralized
Vs
De centralized

Order quantity: Trade off between inventory carrying

cost and ordering cost

For any queries contact:

Santosh -9007974513
Priyanka- 8584062265