Urban Andreea RISE EN- Year 2

NIVEA

Nivea was founded in 1911 by Beiersdorf, its German parent company that also owns Eucerin.
Nivea was innovated by a discovery of Eucerin, a kind of emulsifying agent, which made it
possible to develop the worlds first stable oil-and-water based cream.

The name Nivea derived from the latin words nix and nivis, which mean snow. Given a
change in consumer lifestyles and supermarket boom, Nivea substantially expanded its skin care
product range in 1930s with a support from its research and development division. Today, Nivea
has launched more than 500 products under its umbrella brand, globally.

MAIN MARKETS

The target market for Nivea is women aged 18-35. They have middle to high income. They are
self-empowered. They take care of their skin well for their own goodness and to boost
confidence. As a result, we rarely see Nivea using celebrity and brand presenter.

FINANCIAL FIGURES

Beiersdorf AG is responsible for business in Germany with branded consumer products for skin
and body care, which are bundled in the Consumer Business Segment. It also provides typical
holding company services to affiliates in the course of its ordinary activities. Beiersdorf AGs
sales increased by 23 milion euros to 1,161 milion (previous year: 1,138 milion)

1. Profit, sales by region (in euro million)

Germany 917

Rest of Europe 133

Americas 47

Africa/Asia/Australia 64

2. Cost of material

The cost of materials of 273 milion euros included the acquisition cost of the goods sold.
 3. Personnel expences (in million euros)

Wages and salaries 210

Social security contrubutions and other benefits 24

Pension expenses 39

4. Other Operation Expences (in million euros)

Marketing expenses 349

Maintenance costs 8

Legal and consulting costs 18

Costs of services invoiced by affiliated companies 91

SWOT ANALYSIS OF THE BRAND

STRENGHTS

Brand colors The brand colors of White and Blue are recognizable in a huge shelf of personal
care products. The colors have stayed constant over the years and are synonymous with the
brand. For this, the Marketing department has received praise time and again along with praise
for using the brand colors across the communication channels of Nivea.

WEAKNESESS

Expansion Many experts criticize Nivea because the brand is present only in 50 countries even
though it has such strong brand image. A problem Nivea faces is that unlike FMCG companies, it
does not have too many products in its brand portfolio. Hence it has to go slow with expansion.
But saturation is a problem with Nivea and expansion is the answer for higher revenues.

OPPORTUNITIES

Innovation with new product lines Nivea has to keep adding products and product lines to its
brand portfolio. This will help the company in having a bulky product line with which it can
establish itself in new markets strongly and break the image of being a cold cream provider.

THREATS
Regular issues in Marketing Nivea has faced several Racial issues in their marketing as well
as huge fines imposed due to wrong marketing claims made. Such wrong marketing issues make
a dent on the brand and will affect the brand if repeated.

COMPETITORS

The main and most known competitor of Nivea is LOreal Paris. As we know, Niveas parent
brand is the german Beiersdorf, who hold only 3 other brands, La Prairie, Eucerin, and Juvena,
but LOreal on the other hand is a conglomerate of other brands, including Maybelline, Garnier,
Lancme, Dermablend, The Body Shop, and many others. There is a lot of marketing, as you
can guess, of a brand to its target audience. Nivea has long been marketed as a "pure" line with
basic ingredients that are good for the skin, no fancy scents; no over the top complicated
formulas. But, if we take a look at LOreal or any of its partner brands ingredients, we will
discover large doses of chemical compounds.

COMPETITION ANALYSIS

L'Oreal is a leading French brand, with 23 global brands in 130 countries having 64,600
employees working for it. Its brands provide a turnover of more than 50 million Euro's. Having a
portfolio of powerful, international brands, L'Oreal enters the 21st century by embracing
diversity in its global growth agenda. Today the global market is signified by a fiercely
competitive environment in which the important target for companies is to capture increasing
returns to scale while minimizing / lowering costs of production with great speed and flexibility.
L'Oreal as an international chain tries to achieve these targets, through its consistent R&D
innovations, in order to create products that are marketable and have a significant turnover
within various segments and sub-segments of the international market.

DESCRIPTION OF THE PRODUCTS

Nivea currently has 6 categories of products under its umbrella branding. Umbrella brands are
brand names that are utilized by a range of different but related products. Sometimes reffered to
as family branding. An umbrella branding strategy, is a marketing practice that involves
marketing many related products under a single brand name. In order to confirm skin
compatibility, all Beiersdorf cosmetic products are subject to testing on human volunteers. These
tests are performed under surveillance of a dermatologist. The claim "dermatologically tested"
means that the skin compatibility of the product was substantiated by the test. People who are
sensitive to a particular ingredient, have the opportunity to check a products composition with
the help of the ingredient list printed of the product label or on the product packaging.
SIMILARITIES APPLIED ON OTHER COMPANIES

Another brand who uses the umbrella branding strategy is Amul. Amul is Indias most successful
dairy product company. It compares the umbrella brand and individual brands to an indian
family. Amuls advertising and marketing spend has never exceeded 1% of its revenues. Despite
a limited budget, Amuls the taste of India campaign has always managed to evoke a larger-than-
life barnd feel. Customers know Amul as a quality provider so they believe all products of Amul
are high quality products.