BUILDING BRANDS, BUILDING BUSINESS
An unforgettable quote from George Orwell’s "Animal Farm" informed us that "All animals are equal but some are more equal than others". One could be forgiven for thinking that in recent times a similar quote could be applied to stakeholders in business organisations.This might read "All stakeholders are equal but some, consumers, are more equal than others". Even if it were true few would complain about it. The majority of modern business philosophies like TQM and World Class Manufacturing are without doubt consumer oriented. But there are few areas as consumer driven as marketing.This holds true from the multi-billion trans-national operations down to a threeemployee indigenous firm. When a company ‘thinks global and act local’, it makes its marketing strategy customer-driven. When the consumer becomes your main focus, rewards will follow.
The Nivea Experience
Over the last number of years Beiersdorf has pursued a strategy of investing in a small number of strong consumer brands.The success of this policy has seen one of its stalwart brands, NIVEA, reach worldwide sales of over 2 billion in 2000, four times its 1990 level. In Europe there has been a continuous rise in consumer spending. NIVEA has been active in tapping into this and seeking ways of increasing its market share. NIVEA could be regarded as market leader in terms of its marketing policy. This means it continuously and proactively attempts to anticipate and satisfy the needs of the consumer before its competitors. To do this NIVEA must concentrate on every aspect of the product life cycle (PLC). It must invest in research and be ready to exploit gaps in the market with new and innovative solutions. NIVEA has expanded its position as the world’s greatest skincare brand mainly through organic growth. It is not surprising therefore that NIVEA pays special attention to the Irish market particularly as it remains the fastest growing economy in Europe. NIVEA has been in Ireland since 1922. During that time NIVEA products have enjoyed substantial consumer acceptance. So much so that NIVEA is the number 1 skincare brand in the Republic of Ireland with 21.7% market share (Source: AC Nielsen, April/May 2002). Through its many and varied market research techniques, NIVEA identified Ireland as a mature and fast moving market with strong growth fuelled by increasing demand for skin friendly products with clear consumer benefits.
suitable for introduction to other markets, with perhaps modifications to suit local markets.
One company that have benefited enormously from having adopted such a consumer driven marketing strategy is Beiersdorf. The year 2000 was its most successful in its 120-year history. German in origin, the company’s products are sold in nearly every country in the world with over 70% of sales outside Germany.The Group now has sales in excess of 4.2 billion. The Beiersdorf Group policy has been to "open up new countries and new product categories". This is key to Beiersdorf’s expansion strategy strengthening its position through synergistic acquisitions or inorganic growth. An example of this type of this synergistic expansion was Beiersdorf’s acquisition of the plaster brand Elastoplast, the market leader in the majority of countries including the United Kingdom and Ireland. This resulted in synergies, along with the business know-how of the acquired company, positioning Beiersdorf as a global leader in this market. However it is Beiersdorf’s achievement of continuously high sales growth and the organic growth of their brands that will be the main focus of this study. In particular it will chart the introduction of two products from its NIVEA brand on the Irish market and the marketing strategy behind their launch.
2. Product Screening
Not all the ideas suggested will be suitable for launch. It may be that the time is not yet right or simply that the product is...