Executive summary
UAE being one of the nations in the globe with the highest number of visiting tourists throughout the year offered a better opportunity for the Nivea growth because they are also very heavy Nivea consumers and this boosts sales significantly. In addition, there is a high health awareness campaign about the risks of skin diseases and the effects of sun exposure and the benefits of using Nivea products for correction boosted the demand further.
Facial care is the largest segment of the world skin care in the market and thus accounts for 64.1% of the entire market total value. The world skincare market, segmented with three main players’ accounts for approximately 28.55 of the market value. Skincare world market volume grew by 4.1% in the year 2010 reaching a volume of 11,016.8 million units (De Mooij, 2013).
Introduction
Nivea is a world body and the company Beiersdorf owns a skin care brand and it. Nivea cream contains glycerin, fragile oil, water, citric acid and lily of the valley named after its white color, Nivea meaning snow white. The company developed in the year 1911 when Beiersdorf produced the water in oil emulsifier as a skin cream with eucerit. It is one among the leading companies in the world for skin care.
The company enjoys the universal trust from Nivea product as one of the globe’s largest brand for skin care. The company has more than 25 years of experience in skin care hence stands for high quality and innovative cosmetic products. Nivea has a range of more than 14 products from deodorant to shower products, facial and sun care moisturizer. The company launched a product, Nivea for men in 1980 internationally, which achieved huge volume of sales, as it contains no alcohol that irritates the skin.
History
The history of the Nivea product started when Hamburg based Pharmacist Dr Troplowitz mixed oils and water on a constant cream. This procedure was successful with an emulsifier he termed Eucerit. He introduced the name Nivea in the same year from the Latin Niveus meaning snow-white.
Dr Troplowitz of the Beiersdorf of Company employed the use of Eucerit meant for the medical field as the foundation for a new kind of ornamental cream called Nivea Cream. The Nivea product had a shortfall in attractiveness in 1920 has and later underwent an immense re-launch. Currently, the product is popular and widespread across the globe as the noble face cream in the world. Now, the Nivea brand holds 203 top positions across its country market.
Market Description
There is a huge demand for skin care lotion. Segmentation: Nivea product has segmented its potential customers based on gender, occupation and age. Basing on gender, the company specializes in the production of products for both genders. We have Nivea for men and those meant for women. The range contains male and female products including deodorants, moisturizer and shower gel. On age segmentation, the Nivea products targets both men and women from the age of 18-25, 25-35 and 35.40(De Mooij, 2013).
Income-All the Nivea products for men and women are not highly priced as it has its target customer in mind. Some products like rechargeable shavers are in the premium segment and targeted 25-40, working professionals.
Target market for brand: Nivea products targeted customers are working professionals. On segmentation basis, the product targets current consumers and those who have been using the products. Secondly, we will try to capture new consumers using the product substitutes on basis of effective prices and value of Nivea (De Mooij, 2013).
Brand positioning: For instance, Nivea for men revitalizing Q10 range meant for skin care to look revitalized, bright and healthy. The Nivea products are able to generate distinctive positions in the market with competitive prices as compared to competitors. The Q10 is exclusive and contains no alcohol giving it an upper advantage over competitive products in the market.
Marketing opportunities
Nivea products promoted the new launches of its products through a mixture of below the line and above the line promotion. The employment and use of sport was the core element here where for instance, Nivea for men supported football events at a grass root level through the Company’s joint venture with power league to build a constructive affiliation with men. This was a boost to Nivea as it created a strong Nivea for men brand affinity among the men hence increasing the sales volume. The above the line promotions included cinema adverts, television therefore reaching a wide range of audience who are potential consumers. With the usage of sport link, Nivea for men aimed at building a strong and positive male image, which related with male facial skin care.
With the use of SWORT analysis, we evaluate the marketing opportunities available to the Nivea Company. The Nivea strengths among others include; a brand name and good reputation, marketing staff who are skilled to aid in promoting the Nivea products effective and Nivea being a world brand and the ability to perform locally. Main weaknesses for the Nivea are: marketing and sales techniques employed by Nivea for men was not clearly defined and lastly, product range and target customer relevance was yet to be establish.
Opportunities available for Nivea include; new products could be produced as men started using and appreciating skin care products, the product line could easily be expanded to procure extra market share and Nivea products saw an increase in the market share thus an opportunity the expand the market share. Lastly, threats: lack of men innovative products, improved R&D have, to a large extend raised the cost of the products and competitors risks with exact substitute products (Bilgram et al, 2011).
Application of Marketing Mix
The marketing mix right combination that is price, product, promotion and place can provide Nivea brand the finest strategy to aim its customers. Basing on revitalizing Q10 range, the product is in the instigate stage of lifecycle thus features and product boundaries must be defined clearly. To know what customer demand most in the market, Nivea Company conducts several researches through product testing with consumers in diverse markets, focus group who listens directly to customers and through the company’s website (Cariers, 2002).
Analysis from Market Research
The world skincare market has grown at a significantly strong rate in the year 2006-2010 because of the strong growth in sales in the depilatories group. Overall expansion of the market will slow in the coming five years (Anschutz et al, 2009). The world market generates a total of $ 78.1 billion in the year 2010 thus representing a compound annual growth rate of 4.5% for the year 2006-2010.
Consumption volumes in the market increased with a CAGR of 4.4% between 2006 1nd 2010 to arrive at 11 billion items in 2010. This market volume will rise to ascend to 13.2 billion units by the year 2015, representing a CAGR of 3.75 for the period 2010-2015. The facial cream care sales proved the most profitable for the world skincare market in the year 2010 offering $50.1 billion, which is comparable to 64.1% of the market’s general value. On the other hand, body care sales gave a profit of 13.1 billion in 2010, which are 16.85 of entire market revenues.
The market performance will slow down with an expected CAGR of 3.9% in 2010-2015 leading the market to a value of $94.7 billion at the end of 2015. The world skincare market expanded by 4.1% in 2010, attaining a volume of, 11,016.8 million units. The compound growth rate annually in the period 2006-2010 was 4.4%.
Global Skin Care Market Volume, 2006-2010
YEAR Million Units Percentage Growth
2006 9,280.7 4.7%
2007 9,713.1 4.6%
2008 10,161.9 4.2%
2009 10,584.1 4.1%
2010 11,016.8 4.4
Global Skincare Market Volume
CAGR: Product Market Volume Distribution within Global Skincare
Year: 2006-2010.
Source: Data Monitor
Secondary Research
Data monitor industry profile often depict on wide secondary and primary research, all of which are analyzed, aggregated and presented in an available and steady style. The source include among others: company annual report, government statistics, broker reports, international data and business information libraries.
Primary research
Primary research done from questionnaires, surveys, and focus groups will give us qualitative data. The assessment of in-house data base which was produced using 250,000+interviews at the industry and consumer surveys and further supported by analysis from business experts by the help of forecasting tools and complex modeling.
Conclusion
During the launch of the new Nivea for men, key center would be the approach of core target market. A unique promotional mix along with sales and marketing promotions would be employed for instigate. This will enable Nivea expand its market share affecting the entire sales of Nivea products. With increased demand for skin care products across both men and women products Nivea has come up with a range of new products and get the highest share in the market.
Recommendations
Research have sown that there is an increased demand for men skincare that would help protect their face after the shave hence the need for Nivea to explore this are of opportunity by producing and promoting men’s after shave lotion.
There is the need for the Nivea Company in UAE to increase the use of indirect promotion is directly paid NFM can go for newspaper advertisement and TV advertisement.
Nivea should explore other avenues and events to sponsor in addition to sports, for instance, by joining London Olympics particularly targeting male Olympic Games.
New Marketing Mix Proposal
Place: For the sake of customer’s convenience, it is crucial that the product is customer’s range and is easily approachable. Nivea products must aim at using many relevant channels of distributions keeping its customers in mind like the use of channels of distribution such as B2B strategy, for products to reach the market (Cariers, 2002).
Price: There are ranges of factors such as transportation and cost of production that tend to affect how the product prices are set in the market. Since products were meant for consumers, it ought to provide the right value for money to the consumers in the market while attracting them to buy products. For instance, the price for Nivea for men, which is at the launching stage, must be set low to initially attract customers and capture a huge market share.
Promotion: With extensive promotion, we can inform customers the products we have for them and at the same time convince them to buy those products. For instance, for promotion of Nivea for men, we will employ the use of two types of promotion mix, which are direct and indirect promotion. We can use also free samples distribution, associating our brand with social sites like face book and twitter (Sinclaire & Vogus, 2011).
Product: This will be a solution to customers. The Nivea Company has produced a range of products meant for customers for instance Nivea for men, deodorant and after shave lotions are consumers friendly and effective. Research done to know products consumers want with focus group where you listen directly to consumer directly and testing products with consumers at different markets (Bilgram et al, 2011).
Reference
Anschutz, D. J., Engels, R. C., Becker, E. S., & Van Strien, T. (2009). The effects of TV commercials using less thin models on young women’s mood, body image and actual food intake. Body Image, 6(4), 270-276.
Bilgram, V., Bartl, M., & Biel, S. (2011). Getting closer to the consumer–how Nivea co-creates new products. Marketing Review St. Gallen, 28(1), 34-40.Cariers, C. (2002). Positioning: Analyze how the two brands NIVEA and CHANEL have been positioned in their respective markets.
De Mooij, M. (2013). Global marketing and advertising: Understanding cultural paradoxes. Sage Publications.
Parasuraman, A., Grewal, D., & Krishnan, R. (2006). Marketing research. Cengage Learning.
Sinclaire, J. K., & Vogus, C. E. (2011). Adoption of social networking sites: an exploratory adaptive structuration perspective for global organizations. Information Technology and Management, 12(4), 293-314.