Advertising and Nivea

NIVEA: MANAGING A MULTI-CATEGORY BRAND1 BACKGROUND As 2005 drew to a close, executives at Beiersdorf’s (BDF) Cosmed division reflected on the growth of their Nivea brand over the last decade and a half. Nivea, the largest cosmetics brand in the world, had successfully defended its position during intense competition in its major European markets. Additionally, the company had expanded into many new markets in South and Latin America, Eastern Europe, and Asia. Nivea had created a number of new sub-brands that broadened the company’s product offerings, including the 1997 launch of a decorative cosmetics line, Nivea Beauté, and the aggressive expansion of Nivea for Men. Nivea also introduced a major scientific breakthrough—an anti-aging coenzyme called Q10—that became an unqualified success and was included in a number of sub-brand products. Nivea’s growth during this time was reflected by its net sales. Sales in Beiersdorf’s Cosmed division, primarily driven by Nivea, grew from €1.4 million billion in 1995 to €3.8 billion in 2005 (see Exhibit 1). In addition, Beiersdorf’s share price grew from €25.69 in 1995 to €85.6 in 2004 after peaking at €127.50 in 2001. As Nivea’s product portfolio expanded, the company faced a new challenge: maintaining growth while preserving the established brand equity. During the 1970s and 1980s, BDF’s Cosmed Division had successfully extended the Nivea brand from a limited range of products—Nivea Crème, Milk, Soap, and Sun—to a full range of skin care and personal care products. Over time, these different product lines had established their own identities as “sub-brands,” independent of and yet still connected to the Nivea Crème core brand. Given the breadth of products sold under the Nivea name, however, there had been debates in the 1990s as to how to achieve the proper synergy between the Nivea Crème core brand and the sub-brands from other product classes. In planning new product developments, Cosmed management sought to ensure that