This case study describes the effors of Beiersdorf AG, a German-based company that produces skin care products under brands such as NIVEA, Eucerin, and La Prairie, in relaunching marketing plan for one of its leading products the NIVEA for Men.
Data that NIVEA used when preparing its marketing plan to relaunch NIVEA FOR MEN.
The two pieces of data that NIVEA used are (1) what its male customers want and (2) what competitor products exist.
(1) The first data meant that NIVEA identified what people who buy NIVEA want from them or the market, which could be skincare products that protected the face after shaving as they wanted before. They could also want new products to protect the skin. This will help NIVEA in their marketing plan by focusing on these specific desires hence attracting the customers’ attention with marketing strategies.
(2) The other piece of data refers to other brands and companies that also sell the same products as NIVEA, targeting the same market as NIVEA. This means the other men facial skincare brands in the market. They compete for market share with NIVEA and will likely use similar marketing strategies as NIVEA so it is important for them to differentiate themselves from their competitors in terms of marketing to attract the customers’ attention more.
NIVEA used football sponsorship to help increase its sales of NIVEA FOR MEN products.
One reason is that NIVEA wanted (1) to build a ‘positive male image associated with skincare’ by relating its products to sports. Sports is one field that men know well and have high esteem for, as most men watch or play a certain sport. They associate sports with toughness and that it defines masculinity. Furthermore, UK is known to be a football nation. NIVEA, a facial skincare product that risks being seen as feminine, will have a tougher and more acceptable image to men if they sponsor football games and have their logos seen in the background of football games. With a tough, men-oriented image, it’ll help make men more unlikely to resist and more open to buying their products. It might even make NIVEA appeal to them more as they now associate NIVEA with the spirit of sport that they play or watch. This then increases sales.
Another reason is that (2) NIVEA used football sponsorship is to reach out to its customers, especially since men are not as receptive and easily influenced as women when it comes to buying products. Football is one universal link that NIVEA can use to ‘build a positive relationship with men’. This is because men everywhere, regardless of their age, income or nationality, can relate to football, even the other countries in Europe so this can generate interest of NIVEA overseas as well. Boys in high school also play football, hence they are able to reach out to a wider audience and break age, cultural and social barriers. This increases brand affinity, where the men identify well and can relate to NIVEA as a product they will use daily in their life. This is one way for NIVEA to convey the message and benefits of their products to the largest number of men possible and convince them to buy their products.
One other reason is that football sponsorship will (3) allow NIVEA to have their logos and images placed in the backdrop during football games, press conferences and events. They will also be mentioned in newspaper articles reporting about the games or the players themselves might wear shirts with their logo on it. This will give them a wider press coverage and strengthened their brand, creating brand awareness among potential customers this way and establishing brand loyalty among existing customers. This helps with brand recognition, where NIVEA’s logo appears many times and is more easily recognizable by the public now. This is a more convenient way to gain publicity, by riding on the publicity of the football games, which will be widespread as it is. They will also get the fans and supporters of football teams to show support for NIVEA. This wide coverage opens up a lot of opportunities for NIVEA, maybe even an endorsement by football players.
A SWOT Analysis of NIVEA’s position just before the relaunch of NIVEA FOR MEN
NIVEA FOR MEN used The SWOT Analysis to help it assess the market. This takes a detailed look at the internal strengths and weaknesses of the business, as well as external opportunities and threats in the marketplace.
Strengths
(1) One strength of NIVEA is that as UK market leading male facial skincare brand, it has a strong brand recognition. For a big and well-known company like NIVEA, they can easily establish their brand on a global scale and at home. Its logo, name and colors are easily recognizable by the public and even very familiar with most people. This identification with the brand will lead to interest in the products. This allows them to market their products to a lot of people and boost sales. This also gives them a competitive advantage over the other skincare brands.
(2) Another strength is their continuous high income which provides them a sound financial base. They can then obtain the resources, like market researchers and market analysts, to put together a strong marketing campaign. This then leads to more effective marketing which will almost guarantee positive returns.
Weakness
(1) One weakness of NIVEA is that for a company that has been around since 1911, their product could be outdated and obsolete. Their shaving aftercare could probably only provide basic uses while other shaving aftercare in the market were already providing additional benefits that raised the standards for a good product. This makes their products more inferior in the eyes of the customers and they may choose to not buy NIVEA anymore. This reduces brand loyalty and could lead to bad publicity for NIVEA. Their products could then go into the saturation and decline stages and the company will register a loss.
(2) Another weakness is that they might not have the right sales and distribution outlets. Their stores might be located in out-of-town areas where transport is hard to reach to, or they might not have enough stores located to make it convenient for people to get their products. They should be opening stores in malls, cities, areas of bustling activities and near grooming centers. Their products could also not be available in department stores and pharmacies. This could just make consumers turn to other products, which are available almost everywhere.
Opportunities
(1) There has been an increase in sales of men facial skincare products, meaning that there is a higher demand in the market for it now. NIVEA could then expand their ranges or improve their existing lines to tap into this growing market and attract new customers. They will also be able to increase brand awareness with this larger number of facial skincare users. If NIVEA can prove that they are the right brand for the customers looking for a product to use daily, they’ll be able to generate more sales.
(2) There is also opportunity in the changing social attitudes towards men facial wash. Once used to be thought feminine and unacceptable, now men are willing to spend a lot of money on skincare because of the importance placed on personal image. So, NIVEA can tailor their marketing plans to this need and maybe even develop product lines to meet this growing need of men. Men will also now be more receptive to their advertising and promotions, since that they’re more open to it. NIVEA can now market their products more effectively in a way that they could not have in the past due to the resistance of men.
Threats
(1) One threat is consumers are becoming more knowledgeable and price-conscious. They will expect sales promotion such as discounts and offers. They know how much they are willing to pay for mid-range products. If NIVEA is unable to offer them adequate benefits in return for the money they spent, they will move on to the next skincare company. These discounts and offers will harm NIVEA’s profits in the long run because of the high costs to research formulas and develop a high-quality skincare product. Customers’ expectation of NIVEA will increase and change often, so NIVEA will have to be prepared to forecast, identify and meet those needs to not lose customers.
(2) Another threat lies in the risk of competition entering the market now that the market has expanded and it is deemed lucrative. There will always be newer companies competing for a piece of the market share, selling the same products and targeting the same audience as NIVEA. They want as much profits as NIVEA is earning. NIVEA will have to be more innovative and try to differentiate their products from the competitors and still maintain brand loyalty among its existing customers, as well as establish brand awareness among new ones.
How effective you think the marketing plan for NIVEA FOR MEN has been?
Marketing involves identifying, anticipating and satisfying customer needs. A marketing plan takes the stated aims and objectives and then puts in place a series of marketing activities to ensure those objectives are achieved. Marketing plans can cover any time period, but normally set out activities for the next one to five years at either a business or brand level.
ADVANTAGE 1: One reason the marketing plan has been effective is that (1) its brand image has improved, earning them the FHM Grooming Award 2008. Their marketing plan was focused a lot on brand affinity and building a positive male image, from sponsoring football games. This was to establish themselves as a brand that can be identified widely and positively with its male customers and the fact that consumers voted for them for the award shows that their marketing plan has been effective. There was also focus on brand awareness where promotions by distributing free samples and experiential marketing were used to attract and engage new customers. This helped further strengthen their brand in the market, making them more popular and recognized by the public. It has also helped place them above their competitors by winning the award for the fifth time, showing they have also succeeded in establishing brand loyalty among existing customers. Overall, this shows that the market plan has succeeded in its aims to build a connection between the brand and consumers.
ADVANTAGE 2: Another reason for the effectiveness of the plan is (2) the product innovation aspect where the NIVEA FOR MEN range has been expanded and existing formulations improved. This shows that the way NIVEA differentiates itself from its competitors, that is by focusing on product development with emphasis on consumer’s needs is effective. NIVEA has strategies of improving the formulas of their skincare and they have over 650 researchers to do so. They have identified, researched and analyzed what their customers and the market want and they proceed to develop their products towards those specifications. They then launch higher quality products and new products, which results in a wider range of skincare products as well as improvements on the existing lines. This is probably responsible for the 20% increase in sales internationally as NIVEA Is able to identify what they consumers want and give it to them, leading to an increase in sales. This also sets them apart from their competitors and makes customers choose them over other skincare brands.
DISADVANTAGE 1: One reason the marketing plan has not been effective is that (1) the high cost for planning, marketing, promotion and sponsorship might cancel out the gains in profits made. Market analysis, consumer research and the actual research and development of the skincare product are very costly procedures. There is also a high chance of failure which the company will still have to pay for. Sponsorship for football games also mean giving them money in exchange for the publicity and this could reach a very high amount, especially given the popularity in football. Giving out free samples also incur high costs with low rates of returns as some people do not use those free samples. This leads to a lot of wastage of resources. Advertisements in print and broadcast media also require a lot of money, especially for a well-known brand like NIVEA. All these will decrease the profit margin and so the marketing would have been ineffective to increase profit of company.
DISADVANTAGE 2: Another reason is that (2) they have failed to achieve their aims of targeting the women as well, whom they regarded as important to their sales. Women are often the people buying skincare products for their partners and they are the ones who possess high buying power. This marketing plan fails to acknowledge this potential by marketing towards women such as advertising in their magazines or giving them the free samples, which could have earned them more sales. They also failed to research the women’s point of view when buying men skincare products, which is important because women also affect men’s purchasing decisions. In fact, they are the ones introducing men to skincare products. If they had targeted women as well in their marketing plans, they could have generated more profit which would cover back the high marketing costs.
Overall, their marketing plan is more effective because they have managed to achieve all their goals. (1) Their sales have increased, (2) they are still the market leader and (3) they have a strong brand image rating, even winning an award for the fifth time. (4) They are still popular among people and (5) attracting new customers, especially in the growing skincare market.