This case answer contains an analysis of the marketing mix in the product launch of Nivea Visage Young. The marketing mix is the combination of elements used by an organization to market their product and to meet the customers’ needs. We can also refer to the marketing mix as the four P’s: Product, Place, Price and Promotion, which in the right balance to each other work together to attain the aims and objectives of the organization.
In order analysis this case properly, we have looked at how Nivea balance the four P’s trying to determine the strengths and weaknesses of this combination and consider potential threats. Finally, we have tried to come up with ways or possible solutions to strengthen the Nivea Visage Young brand, better satisfy the consumers and deal with competitors. Firstly we will start by understanding the origin of the Nivea Visage Brand, then analyzing the 4’Ps in the marketing mix and finally present some solutions for possible problems in the case and conclude it.
Introducing the origin of the Nivea Visage Young brand
Beiersdorf is a German company founded in 1882 with headquarters situated in Hamburg. It is manufacturing and selling international consumer goods worldwide and specializes in the evolution of personal health and beauty care.
Nivea is the core brand of Beiersdorf and in 2008 the Nivea products contributed to approximately 86% of Beiersdorf Group’s total sales. It is one of the leading skin beauty care brands on the international market.The brand was launched in 1911 and was given the name NIVEA, that evolved from the Latin word “niveum or niveus” meaning snow, his imagination in association to the cream’s pure-white appearance.
Nivea Visage Young is the most recent edition to the series of Facial care by Nivea. It includes several separate products making up a specialized skincare regime for young girls aged from 13-19 years old. The Nivea Visage Young range is mild and gentle and its objective is to leave the skin clean, fresh and without a shiny look.
A product is anything that can be offered to the market to satisfy needs and wants. Product is the first and most important element of the marketing mix. Here, the name of the product is “Nivea Visage Young”. This has been re-launched in 2007 as Nivea visage Young and this product, aims to stimulate their target market to develop a proper skin care routine. This will help to keep their skin look healthy and beautiful since their early age. It is the most competitive advantage over competitors because is no other product in the market for this purpose.
This products target market is not only the above teenage girls, but also mums who buy for their daughter. It is very essential to make a product that meets its target consumers needs and desires if not the product will be a failure. Consequently, the company may be at a greater risk and loose considerable amount of money in the investment, leading to a bad reputation for their brand.
Beiersdorf used few approaches to ensure its Nivea Visage Young meet the expectations of their target segment of the market. It kept the parent brand as NIVEA, and used brand extending strategy to this new improved product range which is called “Nivea Visage Young”. Besides it had an advantage over competitors, as all the competitors were producing only medical products rather than beauty care products. They used market research to find a gap in the market, and then developed a product to fill it. It is very essential to take this type of market oriented approach in order to satisfy its target consumers need and desires. Besides it’s better to focus the product on the customers than offering customers a produce. It is important to have certain characteristics in the product to ensure that it meets the expectations of the target consumer group.
Nivea Visage Young showed its concern about the consumer friendliness of this product by removing alcohol in some of the products and using natural ingredients such as sea shells and minerals. Furthermore, it has created a product in a social responsible way, by not testing it on animals. They show its concern about their target market and environment by changing some of the product elements such as reducing packaging and waste by using larger pack sizes and also recyclable plastic containers. All these ensure that Nivea Visage Young is in line with their corporate social responsibility.
Pack design is a very important part in the product, because appearance is where customers get their first impression of a product, it is capable of turning the buyers wish to buy on or off. Nivea Visage Young has focus on this by introducing new modern pack design with flowers pattern and softer feminine colors to appeal their target market. It indicates that they are more focused on its market segment, who loves style and fashion. This product provides a unique bridge between teenage and adult market. We will introduce some possible solutions to use that advantage in order to optimize even more Nivea Visage Young brands name in the teenager market segment. Those recommendations can be found in a topic specifically elaborated for this matter, after further analyzing the 4 P’s.
The Place in the product mix is known as distribution channels or sales points and can be defined as being an organized network of agencies and institution that together and of course through a business deal. It executes all the functions necessary to link the manufacturers to the final users in order to carry on their marketing strategies. Distribution in marketing also means make the product or service available to the customer in the most convenient form it can be acquired. The desired product, with a just price, must be accessible to the customer, it means, in a place where the customer can buy it at the desired moment.
The company’s decision about the distributions channels directly affect other decisions in the company and also involve commitments in the long run. This would seem to indicate that choosing the right distributions channels can result in a greater differentiated advantage against the competitors, in its present and future situation in the market. Beiersdof is successfully achieving their goal to have its products as close as possible to consumers. It is happening due to their present decision in choosing the biggest retailers on the high street market. In addition they are also being cost effective, when they choose not to sell directly to smaller accounts, instead the wholesaler who buys their products in bulk is providing these services.
Despite the Internet nowadays be a very effective method of purchasing a product, especially within the young costumers, Nivea has chosen to sell their products online only trough their retailers’ website in order to cut costs. A really important consideration is, avoiding high distributions costs and also choosing trusted and well established retailers from the high street market, is a very wise choice. A central question is whether it could also mean that, Nivea reliance on having its products only distributed through those big trusted retailers’ brands, could lead Nivea to a threatening situation.
Although it is true that Nivea is a well known brand for its quality skincare products, especially Nivea Visage young leading the teenager marketing, the customers are getting more loyal to the retailers brands than the brands that are sold by them. Also retailers such Boots, Superdrug, Tesco and ASDA have high growing bargain power and are responsible altogether for 100% of Nivea sales in UK.
Kotler highlight in his book that, when switching cost are low and exist potential substitutes for the product in the market and when buyers become more concentrated and organized, business can be under threat. In order to avoid those competitive forces the company must always develop superior offers that stronger buyers cannot refuse. Interestingly enough, the switching cost of a skincare product to another with similar quality such as Nutrics Garnier (L’Oreal Paris) or Clear &Clean (Johnson & Johnson ) is very small because the retailer just need the shelf space to display it to the costumers. Moreover retailers such as Boots and Superdrug’s is increasily competing with its suppliers; creating, developing and promoting its own brands of skincare, toiletry products and offering it with very competitive prices.
A good example of what we are trying to explain is the “Brand issue” between Nivea and Boots published 2 weeks ago by the newspaper Marketing Magazine in UK. Nivea got very angry when they discovered that a Fashion program they are sponsoring on Channel 4, has as one of its task to create a new range of skincare for Boots named Boots “Gorgeous”. They expect to launch the product on Christmas where purchases are very high. It seems fairly clear that Nivea need to have more options of making its products available to their customers, than through the big high street retailers in order to avoid those threatening situation. We will also introduce some ideas about this matter soon, however, now we will keep analyzing the other P’s.
Promotion means various aspects of marketing communication. This is used by an organization in order to inform the customers about their product and persuade them to buy it. There are two types of promotions. Which are described belo.
Above the line are the promotions carried out by companies using mass media, such as TV and newspaper advertisements. These are directly paid for and can reach a large number of potential customers and usually are expensive. In the other hand, below the line promotion focuses on communicating its product message directly to the market, using all the unconventional marketing tools adopted by the firm. This can vary from events, trade fairs, branding, public relations and direct mail. Nivea Visage Young has decided not to use the above the line promotions. In fact, it uses only below the line promotional methods, because it believes that talking directly to its target segment of consumers is more effective than the “one way” communication using TV and press.
It can be further explained when looking at the Nivea Visage Young event promotions around the world, where it tied-up with the affiliated NGO Rock Challenge 2007. This event was to promote awareness of healthier lifestyle choices among students. It was a professional staged event with three hundred and fifty pupils’s aged between 13 to 18 years from five different high schools in Dubi. Rock Challenge is a performing art event incorporating dance, drama and design which provides Dubai school students with an opportunity to express their creativity, talent and art. The challenge is about having fun and making healthy lifestyle choices. This enabled the company to get directly involved in their target teenage segment and work closer to them. Moreover, a company can get information and feedback from its target market while promoting their brand.
This is a win-win situation with two way message communication and is a good example for consumer led promotional method adopted by the Nivea Visage young. They are a consumer-led company, meaning, its promotions are carried out by centralizing the customer. Nivea Visage Young promotional strategies are chosen to “reflect the life style of its audience” and the range of medias available. The market promotions are done in a more interactive and customer friendly manner. It communicates directly with its target teen and mums segment. This method is more market oriented than product oriented. Following are some Nivea Visage Young consumer led promotional routes.
This is its key part of their strategy, give free samples to customers. Thereby customers have the opportunity to try and experience the product without purchasing the product. These samples are available in websites, samples in stores or in goody bags given out at Visage road shows up and down the country.
Nivea Visage Young interactive magazine -“FY1”.
Their brand is promoted across the UK through a campaign based on an interactive online magazine FY1 (.FY1. means fun, young and independent). It focuses on first time experiences relating to Nivea Visage Young being there first skin care routine. It will give useful information for teens such as expert relationship advice, latest music, entertainment news and fashion. All of these will give the girls confidence and support they need to face for the new life experiences in the 21st century. By doing this Bierersdof attempts to develop a deeper connection between Nivea Visage Young and the target teenage girls segment. Once again Nivea takes its opportunity to build the personality of their brand.
In addition Nivea Visage Young also recognizes the power of modern social networks sites for young teenager and also has pages on Myspace, Facebook and Bebo. It has promoted a Hit4UK chat show and the TMF digital TV chat show and the TMF digital TV all connected with their target market. Consequently we can say that consumer led promotion aims to make repeat purchases and keep customer loyal to the company in the long run. A survey carried out by the Readers Digest quotes that NIVEA which has been voted as one of the most trusted brand in 15 countries.
However by not using above the line channels such as TV, Nivea may face a threat from its competitors. For example L’Oreal caters to their audience by advertising through TV commercials famous and influent celebrities. Despite Nivea Visage young has a differentiated product than their competitors, consumers tend to remember their competitors such as (L’Oreal), rather than Nivea because they advertise heavily in mass media. Further, this will affect the brand image of Nivea Visage Young. Furthermore Nivea also target mums who purchase the product for their daughters. Using only below the line promotions it’s slows down the process of gaining marketing share. In order to cater the mass audience and to generate sales & profit they should consider in above the line promotions as well.
It is important not only to identify the right promotional method but also to communicate it correctly to customer .If the firm gives wrong product information, then this would result in creating its own graveyard. This happened to the Nivea Visages anti aging cream. Advertising standard authority criticized and banned the advertisement for Nivea DNage Cell Renewal Day Cream because it was misleading.
Nevertheless one of Nivea Visages sister brand, Nivea Visage Essentials began screening an advertising campaign on cinema screens countrywide for a six week period recently. Nivea Visage Young could also follow this promotional method as teenagers are more interested in cinema than adults. This will help to bring the brand across in fun and youthful way.
Price is the amount of money, goods or service that should be given for a product or service in order to obtain it, when consumers buy a product they pay a price and expect to receive the benefits of it. The price is the only component of the marketing mix that generates revenue and is one of the key elements in determining the market share of a company and its profitability. Factors such as the cost of production, target market, company’s objective should be taken in to account when determining the price.
Establishing the price of a product or service is not always a simple task. One must consider that, when properly placed, the price of a product can be a key factor to successful a marketing plan. Nivea Visage young probably had to look at many important considerations when decided the pricing strategy of this brand. The price suppose to be higher enough to provide profit to them, but also suppose not be so high in order to not discourage the purchase unless that the product was connected with status. Moreover it could not be too low to not generating in the costumer a felling that is something wrong with the product and depreciate the brands image. Nivea visage young target marketing purchase their products from high street shops or supermarkets while doing their groceries shopping. Consequently, we can say that charging a high price would mean loose marketing share to the competitor.
Nivea Visage Young is the price leader in the segment of skincare beautifying needs for young age. A reason for this is that they were the ones that identified the lack of beautifying products for teens and created a product for it. This led the competitors to follow their prices or sometimes even lower it trying to gain marketing share. In order to Nivea maintain their share of marketing they need to adopt a flexible pricing strategy. A skimming price strategy was used in the last launch of “Nivea Visage Young”, when the price was slightly higher than the first launch in 2005. However, to not lose their market share to competitors that enter in the market at the “market growth” it means a launch of new competitor’s products, Nivea need a constant review of their price strategy.
Interestingly enough to the retailers are given the freedom to use their own sales promotions such as loss leader where they will sell a product bellow the cost, just to gain market share from its competitors. In addition they give discounts and special offer for example. This would seem to indicate that customers would became being more loyal to the retailer, rather than to the Nivea Visage young and also if they keep lowering the price very often it could depreciate the brand image.
Possible solutions to improve Nivea Visage Young brand and business.
All the product characteristics mentioned that Beiersdorf that Nivea Visage young product met the expectations of its targeted teenage. However, by using its continuous market research, they should consider the necessary changes needed for the product, if teenage needs trends and demands changes often. Additionally, in order to grow Nivea Visage Young brand, it can consider entering to a new segment such as same age group teenage boys segment as they have not entered so far.
The reliance of Beiersdorf on the high street shops and big retailers with high bargain power can also be a big treat to their business, to avoid it they should try also sell his products to low bargain power buyers such us beauty centers. Despite in a short term view it would mean increase of costs, in a long term view it would benefit both sides buyer and manufacturer. In one hand it would optimize even more Nivea brand in the skin care product market. Because the opinion of people specialized in skincare recommending the Nivea products would increase the loyalty to the brand. As a matter of fact most of the Nivea Visage Young purchase is made by the mothers when doing groceries shop, however those same mothers also go to beauty center and trust in the opinion of the professionals working there. Moreover that small account would also benefit of having a worldwide trusted skincare brand and Beiersdorf would have more power of bargain in the prices.
The decision of Nivea Visage Young of going only in below-the-line promotion is a potential treat and we would suggest using young trusted celebrities in the actual media or even advertising in cinemas that is a common interest place between the young people and so Beiersdorf Nivea image brand would be thoroughly spread to their target market .
A fifth P of People should also be added as a extra topping in the market mix cake given that all people that are directly or indirectly involved in the consumption of a service are important part of the marketing mix knowledge ,workers , employees, management and consumers often add a significant value to the total product .
On the whole we can say that balance is essential when trying to apply marketing mix to the launch of a product, if the company focus more and some P’s than others holes will start to show up in the business doesn’t matter how well they are doing at the present moment. Moreover they need to think outside of the box, because sometimes one more variable is need to balance and give the desired harmony to their aims and objective adding value to the firm in a long term perspective. We have learned that some decisions such as cutting costs, that may seem to be the best for the company interests at that present moment and also seeing as an opportunity for the management view, can become a future threat.