Nivea - Managing an Umbrella Brand

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Case Details:

Case Code : MKTG087
Case Length : 13 Pages
Period : 1987-2003
Pub Date : 2003
Teaching Note : Available
Organization : Nivea
Industry : Cosmetics
Countries : Germany

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"In many countries, consumers are convinced that Nivea is a local brand, a mistake which Beiersdorf, the German makers, take as a compliment."

- As quoted on leading brand consultancy Wolff-Olins' website, www.wolff-olins.com.

"The concept is one that spans a great many categories. Coca-Cola as a brand does not have a lot of extendability. Whereas Coke means Coca-Cola, Nivea is not Beiersdorf."

- Jane Perrin, Managing Director, leading marketing information firm A C Nielsen's Global Services Division, commenting on Nivea's brand extension successes, in April 2003¹.

An Ode to Nivea's Success

In May 2003, a survey of 'Global Mega Brand Franchises' revealed that the Nivea cosmetics brand had a presence in the maximum number of product categories and countries. The survey, conducted by the US-based AC Nielsen, aimed at identifying those brands which had 'successfully evolved beyond their original product categories.' A key parameter was the presence of these brands in multiple product categories as well as countries.² Nivea's performance in this study prompted a yahoo.com news article to name it the 'Queen of Mega Brands.' This title was appropriate since the brand was present in over 14 product categories and was available in more than 150 countries.

Nivea was the market leader in skin creams and lotions in 28 countries, in facial cleansing in 23 countries, in facial skin care in 18 countries, and in suntan products in 15 countries.

In many of these countries, Nivea was reportedly believed to be a brand of local origin - having been present in them for many decades. This fact went a long way in helping the brand attain the leadership status in many categories and countries (Refer Table I).

In its home country Germany too, many of Nivea's products were the market leaders in their segments. This market leadership status translated into superior financial performance. Between 1991 and 2001, Nivea posted double-digit growth rates every year. For 2001, the brand generated revenues of € 2.5 billion³, amounting to 55% of the parent company's (Beiersdorf) total revenue for the year.

Nivea - Managing an Umbrella Brand - Next Page>>

1] As mentioned in the article 'Nivea and Nestle Extend the Bounds in Mega Brand Survey,' in uk.news.yahoo.com, dated April 01, 2003.

2] The study covered 200 consumer packaged goods brands from over 50 global manufacturers. The brands had to be available in at least 15 of the countries studied; the same brand name had to be used in at least three product categories and meet brand franchise criteria in at least three of the five geographical regions.

3] July 2003 exchange rate: $ 1.1279 = 1 €.