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Strategic Brand Managment of Nivea

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    The legacy skincare brand Nivea can be easily found in 150 countries around the world. Approaching its 100th birthday, ” Nivea” derives from the Latin word ” nivius, meaning snow-white. ” The first brand to bring skincare products from the privileged elite to the mass market, its initial product offering, Nivea Creme, was created by a team of dermatologists who claimed it was ” the world’s first long-lasting skin cream” (Manning-Schaffel, V. 2005). NIVEA Creme was created in 1911 by the German company Beiersdorf. At that time it was a breakthrough in science.

    It was the first stable oil in water cream in the world and was therefore considered to be the beginning of modern cosmetics. The discovery of an emulsifier called “Eucerit” meant that oil and water could be combined to give a stable base for ointments. Due to its stable consistency, this cream had a pure white appearance. By 1924, Nivea initiated the use of its blue and white tins, still in use today. A brand born of dermatological expertise, consumers continue to associate Nivea with trust, reliability and accessibility.

    Owned by Beiersdorf AG, an international branded goods company in Germany, Nivea has grown from one signature product to over 300, encompassing fourteen product categories, which include a vast expanse of sub-brands such as Body, Visage, Beaute, Sun, For Men, Hair Care, and Baby. Through the years, Nivea has found success with new product rollouts by maintaining a rock solid consistency in its brand messaging, both visually and verbally.

    Brand and/or organizational values Over the years, NIVEA – primarily through NIVEA Creme – has acquired a unique, universal brand identity as a caretaker of skin. NIVEA is synonymous with protection and caring for the skin. “Mildness,” “reliability,” “gentleness,” “protection,” “high quality,” and “value for money” are all strongly associated with the NIVEA name. Throughout Europe, most users were first introduced to Nivea creme during their childhood learning that it was a product that could be used by the entire family to satisfy all kinds of needs. Because of consumers’ own personal history with the brand and the company’s advertising, NIVEA had become strongly associated with shared family experiences and had a rich set of other brand associations.

    Security, trust, closeness, and credibility are the brand’s core values. ‘NIVEA stands for skin care, trust, quality, ease of use and value for money. These are the values that our consumers all over the world appreciate. We have to ensure that our brand identity reflects these values, one aspect of which is our product design,’ explained Ralph Gusko, executive board member for brands at Beiersdorf. “Around two-thirds of all purchase decisions are made at the shelf. The new NIVEA design’s high recognition value will make it easier for consumers around the world to find the NIVEA products they are looking for.

    The consistent design language across all channels – from product packaging, through point of sale to advertising – also increases consumer identification with the brand and encourages them to additionally use products in other categories,” continued Gusko. Security, trust, closeness, and credibility are the brand’s core values. Some of basic core values of NIVEA company are:  They were not using animal fats in their product. Their products are made of natural ingredients. Nivea has a strong brand personality which is emotionally involving, based on trust, childhood and love. Nivea products meet consumer needs. Nivea is a mass market brand which offers the largest skincare assortment. Nivea is always concern of keeping its brand young, attractive, energetic and sympathetic. The Nivea brand has always been closely linked with its consumers. Nivea is truly a global brand, and its products are the same everywhere.

    The umbrella brand The Nivea brand is one of the most famous examples of a superior brand personality developing from a unique product idea. With its special quality and skincare expertise, Nivea was bound to become a successful worldwide brand name.

    Beiersdorf supported the progress of this great brand through the power of product innovation and by successfully building up and expanding the brand personality via new sub-brand launches and line extensions under the Nivea name. Each Nivea sub-brand fulfils a specific skincare need and contributes to the Nivea brand values. Each sub-brand plays a unique role which differentiates it from other Nivea sub-brands and contributes to the brand’s image as a skincare specialist. Nivea is the mass-market brand which already today offers the largest skincare assortment.

    The further development of current and new sub-brands will build upon the Nivea brand identity. Why does Nivea need new sub-brands? The Nivea brand has always been closely linked to people. The Nivea brand has always adapted to current consumer needs and its success is based on forward-looking development. Brand/company heritage If there is any one single characteristic and attribute of a brand that provides sustainable competitive advantage, it is heritage. Heritage speaks of status, character, social class, and a history.

    Nivea’s brand personality represents a universal complex of positive human values woven together. Consumers come to know the brand during childhood. The first skincare experiences are primarily olfactory (smell) and tactile (feel) in nature, but also visual, and they become imprinted in the non-verbal memory. In addition to the smell and tactile feeling, the appearance of the cream plays a significant role in the imprinting of brand loyalty. The white, creamy consistency,white brand name logo on a blue background are all associated with the Nivea brand.

    Nivea brand owner Beiersdorf describes the blue tin as Nivea’s ‘brand face, that consumers around the world associate with trust, closeness and expertise’. The design consistently translates the successful Nivea brand values into a product that consumers can see and feel, thereby making products in all categories immediately recognisable. There are many Nivea brand personality drivers, product-related characteristics, as listed: There are also non-product related brand drivers:  Brand and/or company strengths and weaknesses.

    Strengths Long experience in the industry (over 128 years) producing both skin and beauty products. Good market coverage, covering both premium and mass price ranges  Nivea is the brand that has its presence in around 20 product categories in more than 50 countries.  Good parent name Beiersdorf, servers to the brands beneath it.  Nivea has huge brand recall and equity.  The packs ‘Blue and White’ color as its brand element. Excellent advertising and brand visibility makes it a top-of-the-mind brand. The company has much needed financial stability since 2003 when the coffee producing Tchibo became the major stakeholder in Biersdorf. Nivea recognized its opportunity of emergent markets and thus defines its new strategy of growth in that direction rather than mature markets.

    Weaknesses  Intense competition in skincare segment  Over reliance on its flagship brand – Nivea. Beiersdorf is vulnerable to any loss of consumer confidence in Nivea, which forms the bulk of its sales. This puts Beiersdorf at a disadvantage with companies offering a larger range of brands.  Beiersdorf has only a marginal presence in the North American market which happens to be one of the largest regions for sales in the world after Western Europe and Asia Pacific.

    This denies the company a potential for regular, significant income. Analysis of competition Being in the beauty sector, the competition is very high with the increasing demand for products that meet the ever changing beauty demands of the consumers. The cosmetic market is huge and can be segmented regarding types of brands: luxury ones, mass market brands and dermocosmetic brands. The main competitors are: Procter and Gamble, L’Oreal, Unilever and Avon. Beirsdorf is concerned about expansion of competitors into new sectors.

    Beiersdorf’s competitors, such as Procter & Gamble and and L’Oreal, became bigger and are entering the company’s traditional core areas, body care, sun care, lip care and men’s grooming product. The company is under pressure from more innovative competitors and needs to become more radical in terms of new product development. Faced with so many new and innovative products, consumers tend to choose the one that attracts their attention rather than stay loyal to one brand. Beiersdorf’s strategy seeks to identify gaps in the market were competitors are not present.

    L’Oreal is the cosmetic leader in general as it owns a lot of different cosmetic brands. While leader L’Oreal achieved its position with a variety of brands within the top 30, Beiersdorf’s products are concentrated under the Nivea label. Thanks mainly to its Nivea brand, Beiersdorf consistently remained the second largest global player in skincare behind L’Oreal.

    In the case of eographical expansion, which is the main part of Beiersdorf’s business strategy for the next years, the company will face tough competition, as all major manufacturers have targeted similar areas (Asia-Pacific, Eastern Europe and Latin America) as key to future growth. The World’s Top Beauty Companies (ranked by estimated 2011 revenues from beauty products only)

    The legacy skincare brand Nivea can be easily found in 150 countries around the world. Approaching its 100th birthday, ” Nivea” derives from the Latin word ” nivius, meaning snow-white. ” The first brand to bring skincare products from the privileged elite to the mass market, its initial product offering, Nivea Creme, was created by a team of dermatologists who claimed it was ” the world’s first long-lasting skin cream” (Manning-Schaffel, V. 2005).

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