CASE 11

Nivea – Managing the Legacy Brand

Sunil Gadgil, Director Marketing at Nivea India, was addressing his marketing team at an offsite strategy meet. It was raining heavily and Lonavala looked beautiful from the hills of Northpoint. The team was ecstatic and was eager to contribute in the Nivea journey. Sunil remarked that the market size of India’s beauty, cosmetic, and grooming market will reach $ 20 billion by 2025 from the $ 6.5 billion, with the rise in disposable income of the middle class and growing aspirations of people to live a good life and look good.¹ This was surely a huge opportunity for Nivea brand in India.

Nivea had completed 100 years of its existence in 2011. The parent company Beiersdorf AG, Germany was a Rs. 37,600 Crores (Euro 5,750 Million) beauty and skin care MNC. It had affiliates in more than 169 countries, enjoyed market shares of up to 30% and had more than two hundred No. 1 positions in cosmetics categories all over the world.² Though Nivea was present in India for over three decades, Nivea India formally started its operations in India in 2006 as a 100% affiliate of global cosmetic company, Beiersdorf AC. Though it had fierce competition from biggies like HUL, Nivea India was finally showing the signs of growth. The deodorant category looked promising and Nivea had the equity of its legacy brand, Nivea Cre’me, to leverage on. Sunil and his team were trying to find solution to the big question—“What should be the next orbit for Nivea to leverage market opportunity but face the competitive cluttered skin care market?”

BACKGROUND

In 1911, pharmacist and entrepreneur Dr. Oscar Troplowitz and dermatologist Dr. Paul Gerson Unna created the first stable skin cream based on a water-in-oil emulsion. This was named Nivea from the Latin word Nivius meaning “Snow White”. When Nivea Crème was first introduced in 1911, it was perceived as a luxury that added to women’s limited dress-up routine comprising mere soap and water. and talcum powder.

In 1922, Nivea recognized the skincare needs of men and introduced its first product for male consumers, the shaving soap. In 1936, Nivea promoted sun protection. In 1958, Nivea’s Sun Spray was launched; the brand developed Ultra Oil Spray. In 1963, Nivea revolutionized cosmetics with its emulsion concept for Nivea Milk. When weekly baths were replaced by daily showers, Nivea launched its very first shower product in 1978. In 1980s, the cosmetics market was booming and most people had more than one jar of cream in their bathroom cabinet. Thus, in 1982, Nivea Visage united the international brand family by launching a line of face care products. In 1991, Nivea came out with its dual action deodorant to cater to consumers who were beginning to demand high-performance products. The brand’s alcohol-free deodorant range matched these expectations by uniting the brand propositions of both protection and care. In 1994, Nivea Soft was launched because young women desired products that carried the proposition of “naturalness” and “lightness”. They had a vision to be the number one in skin care. They put together the vision document called “Blue Agenda” in 2012 which defined the path to face the future brand challenges and meet the brand goals.³ Sunil thought that to get everyone in the team on the same platform, it may be useful to tell the Nivea brand story—right from birth till now—when the brand was mature, had its own aura, and both assets and the baggage!

NIVEA BRAND VALUES

Globally, Nivea was known for trust, reliability, and accessibility. The brand positioned itself on “Gentle Care” and “Wellness”. The brand was based on four values:

• Care: acting responsibly towards colleagues, consumers, brands, society, and environment.
• Simplicity: striving for clarity and consistency, make decisions quickly, pragmatically, and focus on what iss essential.
• Courage: committing to bold objectives, taking initiative, learning from mistakes, and seeing change as an opportunity.
• Trust: keeping promises and treating others with respect.⁴

THE TARGET MARKET

Nivea was an aspirational brand and its core target was 18–35 years, modern, socially-developed men and women, belonging to higher socio- economic classes. It was primarily a brand for urban India. Positioning of a mass premium (brands which is aspirational yet is targeting masses) brand made it accessible yet premium in imagery.

CORE BRAND IDENTITY

Nivea was a fuddy-duddy brand meant for family with the iconic crème at the heart which drove the skin-care category. The brand was positioned as complete caretaker of the skin which ensured universal unisex acceptance.

BRAND DESIGN

When introduced in 1911, the dainty art design of Nivea tin was yellow, decorated with fancy green art nouveau tendrils (Exhibit 1). Nivea adopted “Blue and White” color as its brand element in year 1925. These colors represented responsibility, trust, and purity, thus translating intangible brand values into brand design. The blue Nivea color was Ivocart Nivea Blue B 65711. Blue denoted sympathy, harmony, friendship, and loyalty. White represented inner purity and external cleanliness.⁵

The logo was kept simple. Nivea wanted the visual language to offer stronger and clearer expression of the brand values so they based the design and graphic language on the heritage tin and its classic white Bauhaus-era lettering.⁵

In India, Nivea was synonymous with skin cream. Every Indian had memories of having the blue Nivea tin at home mostly bought abroad or gifted by relatives/friends settled abroad. Nivea cream was perceived as a winter cream because of its thickness and oily consistency. Globally, Nivea had been able to do away with this narrow perception, but in India, these perceptions were still strong. In 2006, Nivea has a market share of 19% in the Rs 108 crore skin cream market, which was dominated by Ponds.⁶

BRAND PORTFOLIO AND ARCHITECTURE

Nivea had a systematic, synergetic, and a well-balanced portfolio. It consisted of offerings in skin care, personal care, hygiene, and beauty. The core-essence and decision to expand the portfolio lay in the core brand identity and a question—“Will the extension ensures care and wellness of the skin?”.

The lifespan and growth of Nivea brand could be explained through two key factors: the modernization of its flagship product, Nivea cream, and well-managed brand extension using umbrella (sub) brand strategy. But the core driver was still the parent brand, Nivea, which had high-brand equity, and hence, legitimacy to extend its name to other offerings in the skin care category. The architecture was clearly a “sun and planets model” where Nivea Crème occupied the core and other extensions were placed based on their similarity to this core. Exhibit 2 shows that skin care was the heart of the brand followed by the personal care products.

The little round box of Nivea crème embodied the brand values. It was the first product to be introduced in every country. Next came the extensions, in a pre-established order (Exhibit 3): first were skin care products (Nivea Visage, Nivea Hand, Body etc.), followed by hygiene (Nivea Deo, bath care brands), hair care products, and lastly make-up. The sub-brands expanded these categories, with their specialization based on age (Nivea Baby), purpose (Nivea Sun), gender (Nivea for Men) etc. Nivea had understood its customers well and knew that women were the prime influencers and decision makers regarding skin care and wellness products. Therefore, Nivea launched women’s care products before the men’s range in every country. Though there was a clear roadmap for extensions, Nivea gave every country organization the freedom to launch/not launch a sub-brand, depending on the market potential.

Each sub-brand was named descriptively and represented a statement of brand’s values. Though every extension ensued “Niveaness”, there were little differences that made the brand open, living, and non-monolithic. Furthermore, every packaging style reflected a personality and values specific to the sub-brand (Exhibit 5). The aim of each extension was not only to provide for deepening of the core competence (loving care for the skin) and greater penetration in the category, but also promote specific components of the overall image. The farthest extension from the core was Nivea Beauty. This category was away from simplicity and harmony of the Nivea brand. However, in highly developed, sophisticated countries this extension was necessary as it brought young girls to Nivea who grew up to become loyal Nivea customers. This extension added a touch of modernity and “fashion” to the brand.

Nivea managed its portfolio and architecture ensuring coherency and scale. Extensions brought variety to the customers but with any new launch there was a risk of cannibalization. Hence, the key challenge was to ensure perceived distinctiveness from the existing brands. The association with brand Nivea brought its own intangibles and image equities, but they were not enough on their own as physical basis for differentiation was needed.⁷ Being the legacy brand with years of communication and experience, customers already formed strong associations with the brand. Exhibit 4 gives the Nivea brand associations before 2013. As Sunil’s presentation deck unfolded the Nivea legacy, people present in the room were thinking of their own Nivea moment and interaction with the brand as kids and parents. Everyone remembered the blue Nivea tin with cream used for dry winters and how moms used to dab a finger fun on nose.

CREATING BRAND EXPERIENCE AND INNOVATIONS TO MANAGE PERCEPTIONS

The old Nivea videos broke the nostalgia in the room. Nivea India aired their first commercial on television in 2006. It focused on the blue Nivea creme tin and communicated the benefit of soft innocent skin. The integrated campaign was planned by TBWA India and sales of Nivea crème increased by 143.2%. Total Nivea sales grew by 121.8%.⁸ Nivea celebrated its 100th birthday in 2011. It rolled out a global campaign, “100 Years better skincare for life”, centered around the values that were associated with the brand for generations, namely trust, honesty, reliability, quality, and family. In India, the brand enjoyed nostalgia and credibility besides strong emotional connect. It was remembered as a crème used and recommended by mothers. Nivea followed a “glocal” brand experience strategy. Though the tone and style of brand was kept consistent across geographies, necessary changes were made in the host country for launch.

Nivea roped in Anushka Sharma as its brand ambassador. She embodied what the brand stood for “trust, honesty, international appeal with core Indian values, and high family orientation.⁹ She played a central role in the 100-year celebrations and also spearheaded the “Go Sleeveless” campaign which pushed Nivea deo sales. Nivea won 8.7% share of the urban market in 2016 (deodorant category) vs. HUL’s 7.7%.¹⁰

While the company played in all segments, they focused on positions of strength—bodycare, deodorant, and lip care. According to Rakshit Hargave, SVP for Beiersdorf India and Sub-Saharan Africa, since 2011, Nivea India had been the fastest growing affiliate within Beiersdorf’s operations and had grown from being an insignificant brand into one of the top three brands in the category. Nivea was regarded to be very strong in the modern trade segment, wresting skin-care business from HUL and Procter & Gamble. The success of Nivea lay in innovation and staying relevant to the consumers.

Nivea entered the men’s grooming market with the brand “Nivea for men” in 2007. The men’s range was promoted with the tagline “ What men want “. In 2013, the brand rebranded its men’s range as “Nivea Men”. The typical brand user was profiled as the one who tackled things on their own. Nivea till then in India was known more as a female brand. This extension was an attempt to make Nivea a family brand. Nivea commissioned the research which revealed that

• Men were not satisfied with the efficacy of the existing skincare products (which were targeted at women).
• Men were also not interested in visiting products displayed in the women’s aisles in the stores.
• While grooming was the end objective for women, men viewed grooming as a tool to get what they want in life.
• 84% of men used products borrowed from the women of their life.
• Most of the men’s grooming issues arose out of excessive oily skin and hyper-pigmentation.¹¹

Nivea knew that they had to be connect with their male audience and so announced repositioning of its male grooming range with the new tagline, “It starts with you”. The new tagline was designed as a call of action that aimed to help men fulfil their everyday potential. Bollywood actor Arjun Rampal was chosen as the face of the brand who lend gravitas and masculine personality to the brand. The brand spoke through all possible touch points and collaborated with IPL Chennai Super Kings to reach out to men in India. For Nivea Men, the key task was to establish the company as a one-stop-shop for end-to-end grooming for men.¹⁰ Nivea Men enjoyed a 28% market share globally and hoped to increase its existing 6–7% market share in India within the moisturizer and facewash category through this repositioning initiative. The men’s grooming category in India was primarily defined by deodorant with the largest market share. Skin care was a Rs. 800 crore market and was growing at around 25%.¹²

Globally Nivea was marketing its women products under the strapline, “Feel Closer”. Nivea said the Feel Closer line, devised by DraftFCB London, aimed to emphasize the positive impact Nivea had on female relationships by helping them to “feel good in their own skin”.

As a part of their 100-year celebrations, a multilevel campaign was planned in key metros focusing on Nivea’s skin care expertise through the Nivea skin lounges where consumers learnt more about their skin and got tips on having better skin. The consumer activation program offered a platform to “Meet Rihanna Live” at Hamburg through the “My Skin Moment” contest. Lastly, as part of PLAN “We care & connect” INDIA, Nivea India supports the education of children in the state of Uttarakhand by increasing the school enrolment rate and by improving the quality of education in 40 primary schools.¹³

CHALLENGES AND THE ROAD AHEAD

As Sunil was slowly unfolding the Nivea story, there were many consumer stories also being unfolded as almost all team members also had their own “Nivea” moment. Though the extensions were slowly growing and exploiting new opportunities, but the flagship Nivea crème was still stagnant. The value share of Nivea Crème soap was 1.2% in 2016 in bath & shower category when Lifebuoy was at 15.2%, Dove at 4.6% and Lux at 13%. However, in skin care category, Nivea Visage was at 0.6% value share and Dove contributed 0.4%.¹⁴ Sunil pointed out to the Nivea Crème brand manager. Nitika rose and quickly organized her presentation deck. “We all were able to remember our mothers using Nivea or applying Nivea crème from her blue tin on us during winters”, she said. It was remembered as “my mother’s brand”, and hence, there was an opportunity to build the emotional connect with the brand nostalgia and trust of a mother. The brand was using the bond of mother–child relationship to get Nivea crème on dressing tables and to attract young consumers to the brand. Nitika said that their research revealed an insight that “the real strength for mothers to keep going on and keep sacrificing is not something materialistic, but a simple word of gratitude and appreciation or just a silent hug from their kids for all the sacrifices they go through”. Using this insight Nivea rolled out TVCs featuring mothers and their kids. The essence of the commercial was that the mother was constantly concerned about her child’s safety, health, happiness, and much more. And sometimes, she worried even when she need not. The real reason behind all this worrying was because she cared, unconditionally and that is why mothers trust Nivea as a skin care brand for the family. They launched a CSR initiative which supported and celebrated the sacrifices mothers makes to give their children a better tomorrow. Courageous and underprivileged women were supported by Nivea India in fulfilling their children’s dreams.¹⁵.

The integrated campaign was being planned to build the brand around this property. Meanwhile company was constantly looking at product innovation and distribution to increase Nivea market share. The efforts changed the Nivea brand associations (Exhibit 6) but still there was a long way to go!

However, Sunil asked his team “Are current brand associations in line with what we desire? What do we want to add and change and how can we do that?” He wanted a plan to contemporize the brand and make it relevant to today’s times, while sustaining and further strengthening its equity in skin-care. He presented some data on brand value share (Exhibit 7 to 12). It showed that Nivea brands still had a small value share in respective categories. How could Nivea increase the brand equity and influence customer behavior in their favor?

QUESTIONS

1. How can company grow and sustain the brand Nivea?
2. How important is legacy in the Nivea brand story?

EXHIBIT 1

 

Source: https://www.brandingmag.com/2013/01/18/nivea-redesign-yves-behar-fuseproject/

EXHIBIT 2

SUN AND P LANET MODEL FOR BRAND ARCHITECTURE

 

Source: http://www.icmrindia.org/casestudies/catalogue/Simplified%20Case%20Studies/SCMKTG087.htm

EXHIBIT 3

BRAND PORTFOLIO

 

Source: https://uamba.wordpress.com/2012/07/11/umbrella-branding-the-nivea-case/

EXHIBIT 5

PACKAGING – STANDARDIZATION VS CUSTOMIZATION

 

Source: http://www.afaqs.com/news/story/31209_Nivea-Centennial-celebrations-for-the-Cr232me-de-la-Cr232me

EXHIBIT 7

DEODORANT- % COMPANY VALUE SHARE

 

Source: Euromonitor

EXHIBIT 8

NIVEA INDIA % VALUE SHARE

 

Source: Euromonitor

EXHIBIT 9

DEODORANT – % BRAND SHARE BY VALUE

 

Source: Euromonitor

EXHIBIT 10

SKIN CARE – % COMPANY VALUE SHARE

 

Source: Euromonitor

EXHIBIT 11

BATH & SHOWER – % COMPANY VALUE SHARE

 

Source: Euromonitor

EXHIBIT 12

MEN – % COMPANY VALUE SHARE

 

Source: Euromonitor