PRESENTATION AND

CASE STUDY ON

NIVEA

MADE BYRISHAB GOENKA

ROLL NO.26AND

SONA SHYAMSUKHAROLL NO.32

NIVEANivea is a global skin- and body-care brand, owned by the German company Beiersdorf. The company began in 1911 when Beiersdorf developed a water-in-oil emulsifier as a skin cream with Eucerit, the first stable emulsion of its kind. The company's owner, Oskar Troplowitz, named it Nivea, from the Latin word

niveus/nivea/niveum (meaning snow-white).During the 1930s, Beiersdorf began producing products such as tanning oils, shaving creams, shampoo and facial toners. The trademark "Nivea" was expropriated in many countries following World War II. Beiersdorf completed buying back the confiscated trademark rights in 1997.Internationalisation during the 1980s propelled the Nivea brand to a wider global market

NIVEA NEW PRODUCTS LAUNCHED

SHOWER GEL

NIVEA ROLL ON

ENERGY SAVER SPRAY

CHILDREN SUN SPRAY

LIGHTNESS SUN CREAM

NIVEA FOR MEN

The innovative light, fast absorbing formula with Coenzyme Q10 & soothing Chamomile: Soothes the skin after shaving Supplies whole face with 24h moisture and energy

Revitalising Cream Supplies the skin cells with long lasting energy Strengthens the skin’s resilience against daily stresses Revives the skin’s natural regenerative process Absorbs quickly with no greasy residue The new improved formula contains double the concentration of skin’s own Coenzyme Q10 which supplies the cells with long lasting energy. While Vitamin E, Provitamin B5 and special UVA / UVB filters strengthen and protect the skin.Skin Compatibility Dermatologically Approved

NIVEA NEW RANGE

Revives tired eyes with a cooling effect Reduces dark circles, puffiness and fine lines Absorbs quickly with no greasy residue The cooling roller ball dispenser makes it quick and easy to apply the serum directly onto the skin.The light fast absorbing formula contains skin’s own Coenzyme Q10 which supplies the skin cells with energy.Suitable for those who wear contact lenses and glasses Compatibility Ophthamologically Approved

REVITALISING EYE ROLL ON

Revitalising Energy GelSupplies the skin cells with long lasting energy Cools the skin and wakes up the senses Revives the skin’s natural regenerative process Absorbs instantly with no greasy residue The light gel formula contains skin’s own Coenzyme Q10 which supplies the cells with long lasting energy and Mint Extracts to cool the skin and wake up the senses.Skin Compatibility Dermatologically Approved

SHAVING GEL

The high performance gel is formulated with skin’s own Coenzyme Q10• Close and comfortable shave • Energises skin while shaving

Effectively removes dirt and excess oils without drying out the skin

Stimulates the skin and wakes up the senses

Softens the beard hair to improve shaving results

FACE WASH

The Beginnings

Right from its beginnings in 1911, the NIVEA brand was fueled by a positive mixture of research, creativity, and business know-how. In 1890, Dr. Oscar Troplowitz had purchased Hamburg-based company Beiersdorf from its founder, Paul C. Beiersdorf. Troplowitz’s scientific adviser, Prof. Paul Gerson Unna, who would go on to become one of the most prominent dermatologists in Germany, had an eye for innovations. He brought Troplowitz’s attention to a completely new kind of emulsifying agent called Eucerit (lit. “beautiful wax”). Using this, it was possible to develop the world’s first stable – and therefore industrially producible – oil-and-water-based cream: NIVEA.

BRAND HISTORY

The name NIVEA alluded to the creme’s pure white appearance, derived from the Latin word “nix, nivis” meaning snow. Apart from Eucerit to bind the oils with water, it also contained glycerin, a little citric acid and, to lend it a delicate scent, oil of rose and lily of the valley. Even though NIVEA Creme has been continually updated in line with the latest scientific developments, the essence of the recipe has changed little in almost 100 years.

The Blue TinHowever, NIVEA Creme's image underwent a change only 14 years after its market launch. The "Golden Twenties" were a period of social change that led to a new spirit of the times. After their drastic wartime experiences, people had a zest for life, "youth" and "leisure" were popular concepts, and technical innovations increased the pace of living. NIVEA responded to this feeling of a new lease on life – and adapted its brand profile to fit.The dainty art nouveau design of the original NIVEA tin was replaced by a much simpler look: The blue tin with the word NIVEA in white celebrated its debut in 1925. The NIVEA range was expanded substantially in the 1930s. Products such as shaving cream, shampoo, and skin oil were added and NIVEA also became a real sales hit at an international level.

Heuss-Knapp recognized the positive associative power of the brand colors, blue and white, which she deployed in a masterly fashion in her advertising spots. In the 1950s NIVEA Creme had long since achieved classic brand status and a large number of skin care products were launched under the NIVEA umbrella.

The Umbrella BrandIn the 1980s Beiersdorf recognized the growth potential offered by the NIVEA brand. European studies had revealed that NIVEA enjoyed a high level of trust and that consumers would accept new products under the umbrella of the NIVEA brand. In line with these consumer expectations, NIVEA introduced a large number of products offering its customary high level of quality. This expansion strategy in the 1980s was systematically continued in the 1990s with the launch of subbrands such as NIVEA Hair Care, NIVEA Beauté, and NIVEA Bath Care. As globalization increased, NIVEA's focused brand management allowed it to develop into the largest skin care brand in the world.

  Today, NIVEA Creme is a large brand family with more than 500 different products. The NIVEA umbrella brand successfully unites product lines such as NIVEA Visage (since 1993), NIVEA Vital (1994), NIVEA Beauté (1997), NIVEA Hair Care (1991), NIVEA for Men (1986), NIVEA Sun (1993), NIVEA Hand (1998), NIVEA body (1992), NIVEA Bath Care (1996), and NIVEA Deo (1991).  

Business Strategy

Our Strategy: Passion for Success

Our goals are clearly defined: to continuously increase our market share in all areas through qualitative growth and to further improve our strong earnings situation. We intend to achieve these objectives by continuing to successfully implement our “Passion for Success” Consumer Business Strategy.

Superior Brands: We aim to offer our consumers tailored, high quality products, which is why we work continuously on innovations. Excellent point of sale displays, advertising, and the efficient use of our marketing and sales expenditures strengthen our brands and clearly distinguish them from the competition. Superior Supply Chain: We manage our global activities centrally in our global Consumer Supply Chain, which is tailored to our structure, partners, and markets. This makes us fast, flexible, and cost-effective. We offer our retail partners tailored solutions and deliver products to consumers even faster. 

Clear Geographical Focus: We ensure we stay close to our markets worldwide and assign clear priorities. In addition to Western Europe, our activities focus in particular on regions with above average growth rates. These include Asia, Eastern Europe, and Latin America – and especially the countries of China, India, Russia, and Brazil. Superior Talent In Lean Organization: We demand and encourage performance, innovation, and optimization at all levels of the Company. Our strengths include efficiently aligned, central decision-making and management structures. 

REASON TO INVEST

• A world leading skin & beauty care company • Clear focus on a few strong brands with top market positions• Unique expertise in research & development • Superior marketing and distribution approach: global strategy and

perfect local execution • Outstanding financial and operational track record • Attractive growth opportunities through strong position in growth

categories and huge potential in developing markets

FACTS AND FIGURES

2007 2008Sales 5,507 5,971

Change in % (adjusted for currency translation effects)

9.1 10.6

Change in % (organic) 9.1 7.5

Change in % (nominal) 7.6 8.4

Consumer 4,661 5,125

EBITDA 738 911Operating result (EBIT) 616 797Operating result (EBIT, excluding special factors)

684 696

Profit after tax 442 567Return on sales after tax in % 8.0 9.5 Earnings per share in € 1.93 2.48Total dividend 159 204

Gross cash flow 477 520

Capital expenditure (including non-current investments)

110 161

Research and development expenses

127 149

Employees (as of December 31)

21,101 21,766

2007 2008

Shareholder Structure

Annual Document

In accordance with § 10 of the Wertpapierprospektgesetz (German Securities Prospectus Act, WpPG) listed companies are obliged to provide the general public annually with a document containing or referring to all information published or otherwise made available in the previous twelve months by the company to the general public as per capital market requirements ("Annual Document"). In addition, the "Annual Document" must be filed with the Bundesanstalt für Finanzdienstleistungsaufsicht (German Federal Financial Supervisory Authority). Beiersdorf has decided to publish the "Annual Document" on its website to provide the interested public with easier access to the corresponding financial information

NIVEA Houses

Themed with “moments of well-being in the centers of a bustling metropolis” a strong team of experts offer a little pampering or simply advice to everyone who feels in need of a short burst of uncomplicated relaxation and well-being.

The “NIVEA Houses” will be offering a whole host of treatments revolving around the brand’s product families, from facials and haircare to manicures, complexion advice, and shiatsu and reflexology massages. It will turn the NIVEA brand into a unique experience.

ANALYSIS OF CASE STUDY AND ANSWERS TO RELEVENT QUESTIONS

CONSUMER LED IN MARKETINGwhat is customer-led marketing?

In a broad sense it’s a guiding philosophy, whereby a ‘known customer’ is placed at the heart of every decision a company takes. The principle of a known customer is crucial, as Chris Lindsay, general manager Broadband, VoIP and Software Services Propositions, BT Business, explains: ‘By this we mean a type of customer you regard as valued. The key to customer-led marketing is deciding who this type of customer is, then focusing all your activity around them.’

The main concern of customer-led marketing is focused around what your valued customer has to say about your company and, more importantly, what your valued customer has to say to potential customers about your company. Dr Paul Marsden, says, ‘It’s a concept that focuses on achieving increased growth by putting the voice of your customer at the centre of business decisions. ‘It’s all about how likely your customer is to recommend you to a friend; that’s the acid test everything has to improve recommendability.’

MARKETING MIX

When marketing their products firms need to create a successful mix of: • the right product• sold at the right price• in the right place• using the most suitable promotion.

To create the right marketing mix, businesses have to meet the following conditions: • The product has to have the right features - for example, it must look

good and work well.• The price must be right. Consumer will need to buy in large numbers to

produce a healthy profit.• The goods must be in the right place at the right time. Making sure that

the goods arrive when and where they are wanted is an important operation.

• The target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output.

The product range and how it is used is a function of the marketing mix. The range may be broadened or a brand may be extended for tactical reasons, such as matching competition or catering for seasonal fluctuations. Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan.

The price

Of all the aspects of the marketing mix, price is the one, which creates sales revenue - all the others are costs. The price of an item is clearly an important determinant of the value of sales made. In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale. Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay. An organisation's pricing policy will vary according to time and circumstances. Crudely speaking, the value of water in the Lake District will be considerably different from the value of water in the desert.

The placeAlthough figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer. 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers.

The promotionPromotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The razzmatazz, pace and creativity of some promotional activities are almost alien to normal business activities.

The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organisation to develop and build up a succession of messages and can be extremely cost-effective.

CORELATION IN THE 4P’S OF MARKETING MIX

For example, the company nivea has developed new nivea cream for teenaged girl “NIVEA VISAGE”- the product element is the new product itself, getting the price right involves examining customer perceptions and rival products as well as costs of manufacture, promotion involves engaging in a range of promotional activities e.g. competitions, product tasting etc, and place involves using the best possible channels of distribution such as leading supermarket chains.The product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not the responsibility of the marketing function. However, it is concerned with what the product means to the customer. Marketing therefore plays a key role in determining such aspects as: the appearance of the product - in line with the requirements of the marketthe function of the product - products must address the needs of customers as identified through market research.

Use the balanced marketing mix for your business

Marketing is all the activities you undertake to promote and sell your products or services. There are four key elements to the marketing mix - product, price, place and promotion (the four Ps). Determining the relative importance of each to you is critical to the success of your business...

What’s in it for you?

Keeping customers happy and making money means you’ve got to come up with a winning formula that works time and time again.

It's not just a matter of having a brilliant product and hoping it will sell itself. And being the cheapest may not be enough either. Even with a world-beating product at just the right price, if people do not know about it and can't get hold of it you'll never be able to turn a healthy profit. Getting your marketing mix right - ensuring that the four main components complement and support one another - is the only proven route to long-term business success.

Begin by looking at your business and deciding which of the four Ps matters most to you:

It’s important to know how your customers tick and what elements influence their buying behaviour. Think about cars, for example. Any make can get you from A to B and they all look pretty much the same: four wheels, engine under the bonnet, windscreen, etc. So why do customers opt for luxury models that often cost so much more than the bottom of the range cars? The answer is that they are buying status as well. Depending on the service or product you are offering and the market that you are operating in, often customers presume that cost is directly proportional to quality, i.e. more expensive means higher quality and vice versa.

Assuming that you do have a good product, you need to think through how much you will charge for it. Remember, though, that your customer has no interest in how much it costs you to make or buy or how much profit you want. They are only concerned with what they think it is worth to them. In other words, what value they put on it.

The salient point is that you need to provide access to your customers in a way that suits their habits and choices. In a 24/7 world, customers are no longer prepared to be restricted to your choice of opening hours

ANALYSIS OF MARKETING MIX OF NIVEA VISAGE

When the marketing mix or the 4p’s been analyzed it seems the company has very carefully balanced all the 4p’s that has provided a platform for the company in launching and relaunching the product.For instance the 4p’s of the marketing that are important are PricePlaceProductPromotion

The company started with the first p i.e. productIt carefully carried out it marketing research which included

• using focus groups to listen to consumers directly• gathering data from consumers through a variety of different research techniques• product testing with consumers in different markets.

Beiersdorf’s market research identified that younger consumers wanted more specialised face care aimed at their own age group that offered a ‘beautifying’ benefit, rather than a solution to skin problems. NIVEA VISAGE Young is a skin care range targeted at girls who do not want medicated products but want a regime for their normal skin.

Then moving to the next “p” of marketing mix i.e. price

Though NIVEA VISAGE Young was slightly higher than previously. This reflected its new formulations, packaging and extended product range. However, the company also had to take into account that the target market was both teenage girls and mums buying the product for their daughters. This meant that the price had to offer value for money or it would be out of reach of its target market. As NIVEA VISAGE Young is one of the leading skin care ranges meeting the beautifying

needs of this market segment, it is effectively the price leader. This means that it sets the price level that competitors will follow or undercut. As it is the price leader the higher price can be overlooked.

Next the place strategy refers to were the product is sold

NIVEA VISAGE Young aims to use as many relevant distribution channels as possible to ensure the widest reach of its products to its target market. The main channels for the product are retail outlets where consumers expect to find skin care ranges. Around 65% of NIVEA VISAGEYoung sales are through large high street shops such as Boots and Superdrug. Superdrug is particularly important for the ‘young-end’ market. The other 35% of sales mainly comes from large grocery chains that stock beauty products, such as ASDA, Tesco and Sainsbury’s. Marketresearch shows that around 20% of this younger target market buys products for themselves in the high street stores when shopping with friends.

Next the PROMOTION,how the product is promoted to get the popularity

NIVEA chooses promotional strategies that reflect the lifestyle of its audience and the range ofmedia available. It realises that a ‘one way’ message, using TV or the press, is not aseffective as talking directly to its target group of consumers. Therefore NIVEA does not plan touse any above-the-line promotion for NIVEA VISAGE Young.

The strongest points in the marketing mix followed by NIVEA isProduct mix and promotion mix.

Product mix is the strongest because it is being used in a most effective manner.It has effectively identified the target consumers and their demand which is most imp to create a product and to sell it to the customers with a profit to survive. Before the launch of the product its has tested the product to a group of people and made the specified changes that were required acc. To the demand of the people before launching it on the large scale in the market.

The company improved the product to make it more effective and more consumer-friendly. Beiersdorf tested the improved products on a sample group from its target audience before finalising the range for re-launch. This testing resulted in a number of changes to existingproducts. Improvements included:

Promotion mix is also used in the best possible way. One thing that I liked most is it being consumer led strategy

Using various below-the-line routes, NIVEA identifies ways of talking to teenagers (and their mums) directly.• A key part of the strategy is the use of product samples. These allow customers to touch, feel, smell and try the products. Over a million samples of NIVEA VISAGE Young products will be given away during 2008. These samples will be available through the website,samples in stores or in ‘goody bags’ given out at VISAGE roadshows up and down the country.to enjoy their new-found independence.

• Changing the formula of some products. For example, it removed alcohol from one product and used natural sea salts and minerals in others.• Introducing two completely new products.• A new modern pack design with a flower pattern and softer colours to appeal to younger women.• Changing product descriptions and introducing larger pack sizes.Each of these changes helped to strengthen the product range, to better meet the needs of the market.

Communication channels are original and engaging to enable teenagersto identify with NIVEA VISAGE Young. The magazine focuses on ‘first time’ experiences relating to NIVEA VISAGE Young being their first skincare routine. It is promoted using the Hit40UK chart show and the TMF digital TV channel.• In connection with FYI, NIVEA VISAGE Young has recognised the power of social network sites for this young audience and also has pages on MySpace, Facebook and Bebo. The company is using the power of new media as part of the mix to grow awareness amongst the target audience.

• NIVEA VISAGE Young launched an interactive online magazine called FYI (Fun, Young & Independent) to raise awareness of the brand. The concept behind the magazine is to give teenage girls the confidence to become young women and