How NIVEA uses the marketing mix to expand worldwide

TABLE OF CONTENTS

1. MARKETING MIX
1.1 Product
1.1.1 Branding
1.1.2 Product Range
1.1.3 Packaging
1.2 Price
1.3 Place
1.4 Promotion
1.5 Summary

2. INTERNATIONALISATION PROCESS THEORY
2.1 Review of main internationalisation process theories
2.2 Internationalisation process of NIVEA

3. COUNTRY OF ORIGIN
3.1 Different interpretations of country of origin
3.2 Impact of the country-of-origin effect on the perception of NIVEA

REFERENCES

1. MARKETING MIX

“Realistic business practice requires that a company strives for uniformity in its marketing mix whenever and wherever possible, while recognising that cultural differences may demand some accommodation if the product is to be competitive”

(Ghauri and Cateora, 2010, p.355)

NIVEA is a traditional brand with a safely classic appearance used by consumers in more than 170 countries worldwide (Beiersdorf AG, 2011f). In 1980, NIVEA developed a uniform international marketing concept with the goal to become the global market leader in skin care products. In the following sections, this marketing concept will be analysed in terms of the extent to which it is standardised or adapted.

1.1 Product

1.1.1 Branding

In every part of the world, NIVEA products stand for high quality and gentle body care. The brand name is not only associated with trust and security, but also with satisfaction. NIVEA was able to build a strong international position right from the beginning and created a consistent brand image, which is one of the company’s most valuable assets (Beiersdorf AG, 2011a, p.66).

As a truly global brand, NIVEA uses the same brand and product names worldwide. In line with the strategy to streamline and harmonise the product portfolio (Quaas, 2011), consistent product designs were introduced worldwide, allowing the consumer to easily identify products and differentiating them from those of competitors. A distinctive logo (see Figure 1) is used wherever the NIVEA brand appears.

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Figure 1: NIVEA logo

Source: Beiersdorf Image World, n.d.

The typical blue-and-white design, introduced in the 1920s, is internationally recognisable (Beiersdorf AG, 2011a, p.83). While the blue colour symbolises freshness and trust, the white colour is linked to the meaning of the brand name (Latin “nix, nivis” means “snow”) and implies that NIVEA is as white as snow (Beiersdorf AG, 2011a, p.35). Today, NIVEA uses a specific blue as well as a uniform corporate font for the white lettering (Beiersdorf AG, 2011a, p.52-53).

An important asset in European countries is the cream’s distinctive smell, which triggers positive emotions going back to childhood. However, NIVEA does not have this asset in every part of the world, particularly in some of the Asian countries (Hosea, 2006).

1.1.2 Product Range

“After all, everybody’s skin is different, which means that everybody needs different things from the skincare products they use” (Beiersdorf AG, 2011a, p.59)

NIVEA develops a different market entry strategy for each region. Generally, products that help to build the brand’s heritage, such as the traditional cream, are introduced first. Afterwards, explicit concepts are launched and a customised product line is created according to specific consumer needs (Beiersdorf AG, 2011b). In the UK and Kenya, for example, NIVEA decided not to sell its Hair Care range.

Before a product goes on sale, NIVEA extensively researches skin differences determined by factors including skin type, race, gender, age and culture (Beiersdorf AG, 2011a, p.61-62). While the product line is adapted to each country and sometimes even new products are created, products are generally standardised regarding content and overall appearance.

An example of the creation of new products according to needs of particular regions is the introduction of special whitening products in Asia, because people there consider white skin as especially beautiful. Another example is NIVEA’s Glacier Creme, which was marketed in Austria and Switzerland as skincare for high-altitude regions (Beiersdorf AG, 2011a, p.80).

1.1.3 Packaging

NIVEA products worldwide do not only share the same logo and English product name, they also have an identical physical appearance, the same design and generally also provide the same information on the packaging (Beiersdorf AG, 2011c). The only difference is that country specific language and lettering are used for specific product information. Figure 2 illustrates the mentioned features.

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Figure 2: Comparison of NIVEA Pure & Natural Hand Cream

Sources: NIVEA Middle East, 2011; NIVEA UK, 2011b; NIVEA Germany, 2011

Only recently, NIVEA decided to take a further step towards standardising its packaging by printing product information in several languages wherever appropriate (Quaas, 2006). After comparing a choice of NIVEA products in stores in the UK and Germany, it became prominent that the use of several languages on packaging is very common in Germany –usually German, Dutch and French – but in the UK, English remains the only language.

NIVEA’s most distinctive product is the blue and white tin of ‘Creme’ which is available in almost every country (Hosea, 2006). Until 1959, the product name included the German lettering “zur Hautpflege” (“for skin care“) which was removed in order to increase international comprehensibility (Lüke, n.d.). There is, however, one exception to the distinctive look of the NIVEA Creme. Since British people associate aluminium tins with shoe polish, the blue tin was replaced with plastic packaging in the UK as visualised in Figure 3 (Beiersdorf AG, 2011a, p.20).

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Figure 3: NIVEA Creme

Sources: Beiersdorf Image World, n.d.; NIVEA UK, 2011c

1.2 Price

All of NIVEA’s products stand for good quality at reasonable prices. From the start, it was NIVEA’s main focus to make its products accessible and affordable for everyone (Beiersdorf AG, 2011a, p.89 and p.133). In the early days of NIVEA, dealers were not even allowed to offer discounts, because NIVEA Creme was to be available “anywhere, for the same price, and at the same level of quantity” (Beiersdorf AG, 2011a, p.39).

Based on this information it could be assumed that NIVEA uses a value based pricing strategy, and is therefore setting selling prices primarily according to perceived product values (Mohammed, 2005). Due to difficulties in finding precise information on NIVEA’s global pricing strategy, a choice of products was compared in stores in the UK and Germany in terms of their prices. The results are shown in the Table 1.

Table 1: Product prices in the UK and Germany

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1ROSSMANN branch in Oranienburg, Germany; 9 November 2011

2Boots branch in Cambridge, United Kingdom; 15 November 2011

*prices converted at www.xe.com/ucc/; 17 November 2011 exchange rate: 1 EUR = 0.855630 GBP

The findings show that even though prices in the UK are slightly higher than in Germany, they are still quite similar thus presenting a consistent image across the two markets. The slight price difference might be explained by fluctuating exchange rates. After comparing NIVEA’s product prices with those of competitors in both countries, the conclusion was drawn that products are positioned in the medium to upper price segment (ROSSMANN, 2011; Boots Company PLC, 2011)

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