Nivea and Umbrella Branding *

Abstract:

The case describes the brand management strategies of the German branded goods major Beiersdorf for its Nivea range of products. Nivea's journey from being a one-product brand to a range encompassing fourteen product categories and over 300 products by the beginning of the 21st century is explored. The case examines in detail Beiersdorf's ‘twin-strategy'of brand extension and globalization, which made Nivea the number one skin care brand in the world. It studies Beiersdorf's strong focus on innovation-led product development and customer-focused marketing, and examines the strategies taken by the company to ensure that brand dilution did not hamper the umbrella branding initiatives for Nivea.

Issues: » Management strategies which are aimed at cashing in on the equity of an umbrella brand. » Rationale behind extending a successful brand into other related (and slightly unrelated) product categories.

Questions for Discussion:

1. Discuss the reasons for the success of the Nivea range of products across the world. Why did Beiersdorf decide to extend the brand to different product categories? In the light of Beiersdorf's brand extension of Nivea, critically comment on the pros and cons of adopting an umbrella branding strategy. Compare the use of such a strategy with the use of an independent branding strategy.
2. According to you, what are the core values of the Nivea brand? What type of brand extension framework did Beiersdorf develop to ensure that these core values did not get diluted? Do you think the company was able to protect these core values? Why/Why not?
3. What were the essential components of Beiersdorf's global expansion strategy for Nivea? Under what circumstances would a 'global strategy-local execution' approach be beneficial for a company? When and why should this approach be avoided?

Key words:
Brand management strategies, German, Beiersdorf, Nivea, one-product brand, product categories, 300 products, twin-strategy, brand extension, innovation-led product, customer-focused marketing, brand dilution

*Note : This case is a simplified version of a longer case study, and is intended for learners for whom English is a foreign language. The longer version of this case study (MKTG087) is available at: http://www.icmrindia.org/casestudies/catalogue/Marketing/MKTG087.htm