NIVEA:SOFTENING AND STANDARDIZING GLOBAL MARKETS

Just as healthy skin requires the proper pH balance to flourish, a strong global brand must
find the rightbalance between marketing efforts that build consistency in overall
worldwide positioning and the need toappeal to specific geographic and cultural
markets.Beiersdorf (BDF), the German manufacturer of Niveaskin care products, seems
to have mastered that balancing act with all the skill of an Olympic gymnast.Introduced
in 1912, Nivea Creme was a unique water-in-oil emulsion, a formulation that set it apart
from thefat-only creams available at the time.The brand’s positioning also made it
distinct from other products on themarket:It was a multipurpose cream sold at a price that
made it available to the masses, rather than to onlythe upper-class women who were the
competition’s target market.Over the years, Nivea’s positioningstrategy has remained as
simple and steadfast as the now-familiar blue-and-white package.Despite all
thetechnological developments the company has introduced in skin care products, and all
the markets it has soldin, Nivea’s marketing always focuses on key brand benefits—high
quality, reasonable price, straightforwardapproach, and mild skin care. This commitment
to the mainstream market and focus on multipurposeapplications means that every
product introduced under the Nivea name has to conform to guidelines whichensure that
everyone working on the brand around the world knows what it stands for.Nivea’s
marketingstrategy is well stated by Rolf Kunish, chairman of the Beiersdorf Group:“The
strategy of concentration onexploiting market potentials and regional growth
opportunities is to be continued.The same applies to movesinto new market segments and
to increased investment in research and development.”
Exploiting market potentials means constantly introducing new products that meet
current market needs andthe needs of newly targeted market segments.One example from
the past is Nivea’s emphasis on health andactive lifestyles as more women went to work
in the 1920s.Others include the introduction of sunscreen,skin protection, and tanning
products to match the more active, outdoor lifestyles in vogue from the 1960s totoday;
plus products for every skin type and need.To meet the needs of new market segments,
Niveaexpanded its product lines to include children and men.All these new products were
guided by the Niveastandards:each product must meet a basic need, be simple and
uncomplicated, not offer to solve only onespecific problem, be a quality leader, and be
priced such that consumers perceive a balanced cost-benefitrelationship. BDF’s new
product strategy was honed in the 1970s when competitive challenges prompted
thecompany to take steps to revitalize the brand.It used a two-pronged approach.First, to
counteractperceptions that Nivea had an older, less dynamic image, the company for the
first time described specificproduct benefits in its advertising.Before this, advertising had
focused on the variety of settings in whicheach product could be used.Second, BDF
introduced additional products that would leverage the recognitionand reputation of the
Nivea name in growing segments of the market.These are sub-brands, such as
NiveaShower and Bath, Nivea for Men, Nivea Sun, Nivea Hair Care, Nivea Body, Nivea
Visage, and the recentlyintroduced Nivea Baby.
During the 1980s, new products were supported by separate ad campaigns that helped
build individualpersonalities and associations for each sub-brand, while linking them to
each other and to Nivea Cremethrough the use of the word “care” in all headlines.The
sub-brands helped establish Nivea as a broad skinand personal care brand, but their
success was both pleasing and a problem for BDF.The company worriedthat the
proliferation of products bearing the Nivea name might leave consumers confused about
what thebrand represented, and that the image of Nivea Creme, the heart of the brand,
might be weakened or diluted.After conducting studies, the company embarked on a
marketing strategy that would deliver on the conceptof the “universality” of Nivea
products while reinforcing the image of the brand as a skin care specialist.Allads for the
core brand, Nivea Creme, had to incorporate its underlying values of timelessness and
agelessness,motherhood and a happy family, honesty and trustworthiness, and the
product benefits of mildness andquality.Ads for the sub-brands had to reflect elements of
these values as well as those that were uniquely their own.
In 1990 BDF internationalized its brands by creating a worldwide name for each product
category and
implementing common packaging on a global basis.Moreover, all ads, regardless of the
country in which
they ran, had to evoke a common emotion, use the same typeface, incorporate the same
kinds of people, anduse a uniform Nivea logo.The result is a highly standardized
approach to global marketing.Rather thanfocusing on the individual differences among
peoples around the globe, the firm focuses on the similarities.After all, as one company
official notes, all people have skin and many people have the same needs andideas.This
leads to a direct approach and a high degree of consistency. When a firm operates in as
manymarkets as BDF, consistency,simplicity, and focus on the same benefits not only
create a universal brandimage, they also reduce headaches.Many fewer marketing
decisions have to be made.Standardizedadvertising campaigns need be adapted only
slightly by translation into the local language.Because the costscan be spread around the
globe, it’s much less expensive to run a single global campaign rather than manyseparate
regional ones.And marketing control is much simpler and easier with a standardized
program.Packaging costs are reduced and product recognition is very high when people
encounter the product in othercountries and cultural situations.
The second element of the BDF strategy is exploiting regional growth
opportunities.Doing so, however,may necessitate some adjustments to the standardized
approach.Because Nivea Creme is a Europeanproduct, its appeal and marketing approach
can be very similar in many parts of the globe.The UnitedStates, Canada, Latin America,
and South America were all populated by European settlers.This producessome
commonality in cultural background and light skin type, with the result that many
products developedfor the German market can be sold in these markets with little or no
product or marketing adaptation.A focuson healthy, glowing skin will sell cosmetics in
nearly all these markets.Of course, the company might usedarker-haired models with
more olive complexions in the Latin and South American markets.And it mightdevelop
tailored sub-brands and programs for important sub-segments of all these markets.
However, asNivea moves further away from this common European cultural base, its
products may be less well suited tothe market.This is particularly true in African nations,
where a majority of people have much darker skinand may require different sorts of
moisturizers and sunscreen products.In between the European and Africanmarkets are the
Asian markets, which are characterized by yellow and frequently more pale
complexions.Although Nivea sells well in some Asian markets, such as Indonesia and
Thailand, it sells less well in Japan.The difference in sales is attributable to both market
and cultural conditions.
In the past, Japanese markets were strongly protected and there was relatively little
competition from non-domestic manufacturers.Unfortunately for Japanese merchants, the
resulting high prices provided a stronglure to foreign producers.When BDF first entered
the Japanese market, it was highly successful.But asJapanese markets have opened up,
competition has increased, price maintenance has been abolished, andprices have
fallen.As a result, BDF has reduced the number of products sold there, and focused on the
moreprofitable ones. There are cultural differences between markets such as Germany,
the United States, andJapan.Germany and the United States are classified as “low-context
countries,” which means that ads shouldstate explicitly what the product will do.Japan, in
contrast, is a “high-context” country in which productclaims do not need to be stated
explicitly.Rather, because Japanese consumers want to form relationshipswith
companies, the company itself should be prominently featured in advertising.If the
company is worthyof consideration, then the quality of its products is assumed to be
high.Thus, an advertising campaignprepared for Germany requires more than just a little
tweaking in order to promote products successfully inJapan.All these differences argue
for more adaptation of Nivea products and marketing to match culturaland market
differences outside Germany and the European market.However, as economies develop,
theytend to acquire many of the same tastes as developed economies.An example is
Russia, where men—especially younger men—are beginning to spend more on
cosmetics.They are buying many of the samebrands as their Western European
counterparts—Gillette, Nivea for Men, Old Spice, and a few designerbrands such as
Christian Dior, Armani, Boss Lancome, Aramis, Guy Laroche, Gucci, and Paco
Rabanne.Price is not the crucial variable in the purchase decision—men are buying based
on product characteristicssuch as fragrance and brand awareness.For companies such as
Nivea and Gillette, which are willing tospend on advertising, the market seems quite
responsive.The bottom line is the increasing homogenizationthat argues against
customization of products for specific markets.
Speaking of bottom lines, Beiersdorf has done very well with its own.Total sales for
Beiersdorf’s cosmeticsbusiness grew at 5.7 percent in 1996, despite decreased sales of the
company’s higher priced Labella andAtrix lines and lower sales in Japan.The Nivea line
grew by 13.3 percent, far outpacing the more expensivecosmetics and skin care
products.However, growth around the world has been uneven.Although BDF’sbrands
experienced double-digit growth in Eastern Europe, Scandinavia, Southern Europe, and
SouthAmerica, sales growth within Germany and some Northern European countries has
been much lower due tothe difficult economic situation.Nivea held its own in the United
States, but grew by 36.3 percent in Mexico.Despite strong growth in Thailand and
Indonesia, sales in Asia and Australia fell by 10.4 percent, affected bythe downward
trend in Japan and China.Compounding the Japanese losses are unfavorable exchange
ratesbetween the yen and the mark, which reduced earnings even further.Even so,
although the overall globalpicture for Beiersdorf is quite good, it’s still just a little fuzzy
in some parts of the world.
Questions for Discussion
1.
How do economic, legal, and cultural factors affect the worldwide marketing of Nivea
products?
2.
Describe Beiersdorf’s product and promotion strategies for Nivea.Is BDF engaging in
product
adaptation, dual adaptation, or something else?What are the arguments for and against
this strategy?
3.
Would you say that Beiersdorf engages in global rather than international marketing?
Explain your
answer.
4.
Find a Nivea ad and try to adapt it for the Japanese market.
5.
From a marketing viewpoint, is the homogenization of global markets good or bad?From
a national
viewpoint, is this homogenization good or bad?
6.
Should Beiersdorf continue with its fairly rigid standardized marketing strategy?
Sources:“Men’s Lines Grow in Russia,” Cosmetics International, March 25, 1997, p. 2;
“Beiersdorf Beauty Sales Get a
Boost from Nivea,”Womens’ Wear Daily, March 1, 1996, p. 11; “Sales Indicate Global
Direction of Beiersdorf,”
Cosmetics International, July 10, 1997, p. 12; “Beiersdorf Increases Profits as Nivea Sees
Continued Success,”Cosmetics International, June 25, 1996, pp. 12-14; Melissa Drier,
“Beiersdorf’s Growth Bolstered by Nivea,” Women’’Wear Daily, February 28, 1997, pp.
11; and information from the Nivea Web site (nivea.com).

12 NIVEA Intl Mktg Case

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