Positioning: Analyse how the two brands NIVEA and CHANEL have been positioned in their respective markets.

Table of Content

Introduction

The concept of Positioning

Nivea
Product
Price
Place
Promotion

Chanel
Product
Price
Place
Promotion

Conclusion

Bibliography

Introduction

The following essay deals with the concept of positioning. In the following chapter the theory of this concept will be discussed. In the second part the two brands Nivea and Chanel will be analysed in terms of how they have been positioned in their markets. In doing so for each brand a short introduction will be given, then the marketing mix of each brand will be discussed in turn. Here the question will be examined whether or not the two brands have been successful in keeping up a consistent marketing mix and therefore a consistent image. In the conclusion basic findings will be summarised and the positioning of the two brands will be briefly compared.

The concept of Positioning

According to Kotler, positioning is “the way the product is defined by consumers on important attributes – the place the product occupies in consumers’ minds relative to competing products” (Kotler (2002), p. 269). Consumers hold a complex set of perceptions, impressions and feelings for a particular product that compares with competing products. These perceptions, impressions and feelings do not emerge randomly but companies work thoroughly on influencing them in order to differentiate from other companies’ products.

However, before a company is able to position its product, a target audience must be identified. (See Alan Dutka) This is the role of market segmentation. The process of market segmentation involves dividing a large market into smaller groups of potential buyers with similar demographic and psychographic characteristics. After having segmented the market, a target group must be found and differences to competing products must be identified. Once this is done marketers can start working on promoting the identified differences. This is done by managing the way consumers view the company and its products. In doing so it is crucial to achieve a clear and distinct image of the product in the minds of consumers, an image that contrasts with competing products.

Now, how can a sufficient differentiation to competing products be attained? There are four areas in which this can be done: “product, services, personnel and image” (Kotler (2002), p. 360). Each of these will be discussed in turn:

Companies can differentiate the product itself (Product Differentiation), on attributes as “innovation, consistency, durability, reliability or reparability” (Kotler (2002), p. 360).

In addition to product differentiation the company can also differentiate in terms of the service they provide (Service Differentiation). Here they can focus on attributes like delivery (e.g. Domino’s Pizza promising delivery in less than 30 minutes or reduction of the price, (Kotler, p. 360)), installation (IBM is known for its quality installation (ibid)), speed (e.g. Toyota’s promise to deliver cars within two days (ibid)) and many more.

Trough hiring and training better people companies can gain a competitive advantage over their competitors (Personnel Differentiation). They aim at training their staff to be courteous and to react in a friendlier, more patient and more respectful manner towards customers than the personnel of competitors do. They can also focus on only one of these attitudes and establish it really well, e.g. Southwest Airline staff has a reputation for being cheerful and funny.

Brand images are utterly important in the way buyers perceive the product. Companies therefore must work to “establish images that differentiate them from competitors” (Image Differentiation). (Kotler (2002) p. 363) Logos and adverts but also sponsorships and engaging celebrities are the main aids to develop a strong and distinct image in the public’s mind; a task which actually does not appear to be easily accomplished. Chanel has certainly been very successful in this regard. This will be discussed in more depth in the second part of this essay.

Based on the value and price of a certain product there are four alternatives a company can go for in the decision process of positioning a product.

The first option is the “more for more”- positioning (Kotler (2002), p. 365). This strategy involves providing the most upmarket product and offering it for a higher price in order to cover the higher costs. Starbucks and Haagen-Dazs went for this strategy. Companies who offer more value for the same price have chosen a “more for the same” strategy to attack competitors. Amazon often offers the same books as ordinary bookshops but at lower prices choosing the very powerful strategy of “the same for less”. “Less for much less” positioning involves meeting consumers’ lower quality requirements at a much lower price. (Kotler (2002), p. 368) Low-cost airlines have chosen this strategy to position in their markets.

Many companies claim to offer more for less, e.g. Dell Computer “claims to have better products and lower prices” (Kotler (2002), p. 368). However, as Kotler points out, this appears to be a strategy that is very difficult to sustain.

According to Kotler, service and image are the main ways people distinguish between products. (See Kotler (2002), p. 384) For marketers this is actually very important to bear in mind since many mistakes can be made in the positioning process. The image a company is conveying must be in line with customers’ expectations and desires. (See Dibb and Simkin (2001), p. 234) It is also most crucial that the positioning of a product is consistent with the company’s profile. (Kotler (2002), p. 381)

As Dibb and Simkin point out, the whole of the marketing mix is important in developing an effective positioning. (See Dibb and Simkin (2001), p. 234) The marketing mix, “the set of controllable tactical marketing tools” (Kotler (2002)) - product, price place and promotion - must be consistent in order to get the desired response in the target market.

Positioning is therefore all about selecting and choosing the right competitive advantages (by always keeping an eye on competitors) and then taking strong steps to communicate effectively the chosen position to the public (see ibid). In this process of getting the message across the four P’s must appear coherent so that a clear image of the product can settle into the consumers’ minds.

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Nivea

In 1911 the German consumer goods company Beiersdorf brought the now very famous skin cream named Nivea onto the market. Nivea has now grown to be one of the biggest skin care brands in the world, selling products in some 150 countries. The Nivea brand encompasses a wide range of body care products. Its assortment includes baby care, bath care, body care, cosmetics, deodorants, face care, hair care, hair styling, hand care, lip care, mature skin care, men’s care and sun care.

Nivea has clearly been successful in creating strong attributes which people associate with the Nivea product and especially with the blue tin and its white capitals. Nivea has created the image of being genuine, environmentally friendly and offering good quality at a reasonable price. Offering a wide range of products and serving all generations it suggests being an ideal choice for the entire family.

In order to analyse how Nivea has achieved this position in consumers’ minds, this essay will be looking at the marketing mix and how Nivea has dealt with the four P’s.

Product

The Nivea product is generally a product of good quality. However different the range of Nivea products may be they all embody gentle care for all generations. To ensure this certain quality standard research and development becomes an important issue. On their webpage it is indicated that over 150 dermatological and cosmetic researchers, pharmacists and chemists are constantly working to improve established products and come up with new ones. Especially with the product line Q10, which involves anti-skin aging and anti-cellulite products, Nivea strives to proof its dermatological expertise.

Price

On their webpage Nivea claims that their products are of a quality level that some competitors offer for ten times the price. Here we clearly see that Nivea goes for the strategy of positioning their products as being of quality at affordable prices (“More for the same”). This is coherent with the idea of Nivea being the perfect choice of the whole family. Caring mothers and fathers who want to provide their families with good quality products can still afford doing so by buying Nivea skincare. This goes along with the fact that discounts on Nivea products are often found (see Boot’s current offer of buying three Nivea deodorants for the price of two). In terms of price Nivea products always appear competitive with brands, such as Dove, Johnson & Johnson or Labortoire Garnier, which may be situated next to them in the shops. However, among these the brand takes care that it does not appear to charge less so that the image of being a quality brand remains believable for customers.

Place

Nivea products are virtually found everywhere. They are located on the shelves of high-status retailers, like Boots and Lloyd Pharmacy in line with EL’VITAL or Pantene. But they are also found in supermarkets, such as Co-op, or discount pharmacies, such as Schlecker, next to the shop’s own cheap brand.

Through this distribution strategy Nivea appears as a brand that is easily available for all kinds of people and of course all kinds of families who care for good quality, whether they buy at Boots or Schlecker.

Promotion

Nivea adverts are found in all kinds of magazines and newspapers, on television on all channels at regular intervals. It is through these adverts that the image is mainly conveyed. It is an image that suggests favouring family values, standing for health and genuineness and communicating this “close to touch” human togetherness. Smiling faces of genuine looking people of all generations, from babies over teens and young parents to 60 year-olds, help bring this message across.

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Chanel

The founding of Chanel goes back to the year 1910 when Gabrielle “Coco” Chanel opened her first shop under the sign “Chanel Modes” in Paris. Since than it has grown to be one of the world’s most prestigious luxury brands for fashion, fragrances, beauty and skincare and was reported to have an estimated sales figure of nearly $ 2 billion in 1995.

The brand Chanel is profoundly associated with its famous founder and her audacious femininity. World class designer Karl Lagerfeld helps keeping up the haute-couture- image. The brand Chanel is perceived as a brand of luxury, perfection and uniqueness.

This essay will now be looking at Chanel’s marketing mix in order to analyse how the brand has achieved that particular position in the minds of consumers. Taking its brevity into account this essay will be concentrating only on Chanel’s skincare and cosmetic products in doing so.

Product

The Chanel product is differentiated by quality. It is positioned as a top quality product. Chanels’ international network of own research centres called CE.R.I.E.S. (Epidermal and Sensory Research and Investigation Centre) assures customers that the products are based on up-to-date development and knowledge about healthy skin.

Keeping the French touch with all the products appear to be a crucial objective since it is trough the association of Paris’ whole fashion world that Chanel is positioned in consumers’ minds. Thus, most of the Chanel products bear French names, such as Activateur Jeuness for ageing skin care, Bronze Universel for a make-up or Masque Pureté Express for a facial mask.

The product comes in simple and discreet though high- quality packaging giving consumers the impression of a high quality product that contrasts with lower quality brands which are masked with an ornate façade. This minimalist packaging is at the same time consistent with Chanel’s image of stylish simplicity.

Price

It is clear that in order to maintain the image of a top-quality luxurious product Chanel must provide their products at top-scale prices; clearly the strategy of “more for more”. A Chanel product is not likely to be found discounted or available as a special offer as this would not at all be consistent with the image.

Place

To keep up the image of a top-quality product Chanel must distribute through high dealers so that it is made sure that the product comes with superior service. Chanel therefore sells selectively to 420 retailers worldwide, including among others Harrods, Jenners and The Perfume Shop. As it was pointed out before it is of special importance for the image not to loose touch with the French origin and so 30% of the retailers Chanel sell to are based in France.

Promotion

Chanel exclusively advertises in fashion related high quality media, magazines such as Elle and Vogue. Their adverts are quite minimalist and simple, which is again consistent with the image of exclusive simplicity, suggesting at the same time that the minimal lettering and the double C logo stand for themselves. And indeed over the years Chanel has achieved such a strong position that the very name of Chanel is immediately associated with luxury, perfection, art and design and the whole French Haute Couture and Prêt-a-Porter culture.

Conclusion

After having discussed the concept of positioning, this essay has analysed how the two brands Nivea and Chanel have positioned in their markets. It has become clear that these two brands use positioning strategies that are quite distinct from each other. Nivea stands for good quality at reasonable prices. It offers a range of products for the whole family which are available in local shops, whereas Chanel has positioned as a luxury brand of top quality. Its image is closely connected to the international fashion world.

It has been shown that for both brands the concept of branding is a crucial part of their differentiation. Nivea as well as Chanel has been able to be extremely successful because their marketing mixes are consistent with their images and thus they are able to maintain their position through consistent performance and communication.

Bibliography

DIBB, S. and SIMKIN, L. (2001, 2nd edition), The Marketing Casebook – Cases and concepts, London

KOTLER, P. et al. (2002, 3rd European edition), Principles of Marketing, London

DUTKA, Allan, Product Positioning Overview, article on www.marketingpower.com

Web Pages

www.marketingpower.com

www.unibw-muenchen.de/campus/WOW/v1041/hyper/chanel.html

www.nivea.de

www.chanel.com