- What is Nivea’s brand image? Does it vary across product classes?
Nivea is one of the leading skin care brands in the world. The company maintains a reliable brand image to remain globally competitive and provides diverse products, such as quality personal care, skin care, face care, and cosmetic products. Besides, it has brand equity that emanates from the Nivea Crème, a product launched in 1911, which is the firm’s best seller and the source of its highest proportion of revenue. The brand is well-known for various qualities, such as protection, mildness, gentleness, simplicity, reliability, high quality, and purity, while being reasonably priced. As a result, it is the most competitive trademark internationally. The company targets various customer segments due to differences in preferences and purchasing power. For example, customers looking for personal care products can buy Nivea DEO. Therefore, the Nivea brand varies across product classes and appeals to diverse customer segments and categories.
- What brand architecture options seem to be appealing to Beiersdorf management? What are the pros and cons of each option? What is the role of Nivea crème in each option?
Beiersdorf management implemented two major brand architectures in the early 1900s. One of the strategies initiated was the mono-product principle, where the executives introduced one multipurpose product for each market and category. The advantage of this option was that the company concentrated its marketing efforts to the major product instead of splitting resources to disparate ones. However, the strategy had a disadvantage in that the failure of the multipurpose product would affect the entire market segment or category. Furthermore, the management had to use considerable resources to market and create a famous brand image around the product.
Another brand architecture option that Beiersdorf management used includes the sub-brand strategy. The company initiated separate advertising campaigns for different sub-brands, which allowed them to grow independently. The main benefit of this architecture was the ability of the sub-brands to attract new market segments while increasing market share and revenue for the company. In addition, the new products added value to the core brand, such as the Nivea Crème. The strategy would also result in better brand positioning in the global market. However, the option could affect the brand’s reputation, including loss of identity, confusion among customers, and possible internal product cannibalism.
Nivea Crème played an important role in the two options through advertising. The management launched the product in 1911 as a first of its kind in skin care and protection. Although the marketing campaigns started in 1912, it created a famous brand image for the company. Therefore, the executives could use it to promote the mono-product principle and later to market the sub-brands. In addition, they could take advantage of crème’s image when promoting other products. The strategy would effectively transfer brand equity and allow a definition of the unique aspects of emerging product lines.
- Discuss the risks and benefits of Nivea’s brand extension into new product categories and customers. Have they missed opportunities such as perfume or footcare? Why or why not? Are there certain boundaries that Nivea should not cross? Why or why not?
The Nivea brand can potentially extend, but the management should understand the risks and benefits of such a decision. One of the challenges in the process is a lack of clarity regarding the role of the new product in supporting the company’s brand. Notably, the new product line should work efficiently with the previous brands, which is not always possible and can raise issues within the organization. Another risk is ensuring continuity of sub-brands that the firm has marketed since the beginning of the 1900s. The process of brand extension could endanger some products to the point of becoming extinct.
However, the brand extension could have some benefits. One of the advantages entails market extension because the new product line could appeal to new customers. The new product improves the chances of extending reach to a larger population. The company could also increase brand awareness and consumer recognition in the process. Nivea could build a youthful image and support its competitiveness in the skin care industry. Current rivals already understand the potential of existing brands. Thus, they would take time to learn about new products, which would give the company an opportunity to compete effectively. Furthermore, brand extension could provide increased revenues for the firm.
The management tried to achieve brand extension by striving to “evolve Nivea from a skin Creme into a skincare brand by providing new products that complement and broaden the brand name” (“Nivea: Managing a Multicategory Brand,” n.d., p. 58). The firm designed a range of products that would represent a “Nivea Universe.” In addition, they created some guidelines to enhance consistency between sub-brands and brand equity. The management also maintained the company’s mono-product philosophy. Regardless of the efforts initiated, the executives missed the chance to venture into other profitable markets such as footcare. Therefore, such additional brands would complement the skincare products.
However, Nivea should not cross any boundary because the move might affect its consistency in the market. The company is already famous for its skincare product line. Therefore, a different brand such as perfume would divert efforts from the company’s brand philosophy. Furthermore, it would venture into a different market from the one it is well established.
Reference
Nivea: Managing a multicategory brand (n.d). pp. 51-65.
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