Growing a business by developing products and markets
A Beiersdorf case study

Page 4: Beiersdorf's growth strategies

Market penetration

Selling more products involves either growing the market as a whole or taking market share from competitors. NIVEA increases its sales by adjusting the marketing mix:

  • Product - reformulating products to make them more effective e.g. better at moisturising.
  • Price -reflecting good value but at a premium to retailers' own or private labels to represent quality.
  • Place - finding new outlets through which to sell the products.
  • Promotion - finding more effective ways of reaching the target market, e.g. samples on beauty magazines.

NIVEA Lip Care is a good example of the way in which NIVEA is building an existing product in an existing market, i.e. market penetration. Despite the seasonal nature of demand for lip care products and their relatively low selling price. NIVEA lipcare has developed the brand through monitoring trends in the market and matching these with its existing core competencies in skin care. The core products of this range are 'Essential', 'Repair', 'Rose' and 'Sun'. However, NIVEA has extended the product range with:

  • (2000) Strawberry and Cherry
  • (2002) Pearl & Shine
  • (2003) Gold & Shine and CareGloss & Shine.

The launch of new products, which combine cosmetic trends with NIVEA's traditional skincare expertise, has been very successful. The brand which has around 90% brand awareness, is well recognised by the consumers, whilst the new launches reinforce and reflect known standards. By Christmas 2003, Pearl & Shine had become the market's best selling product.

New product development

Beiersdorf's investment across a broad range of existing products illustrates its commitment to new product development. NIVEA is the master brand that drives the success of the whole NIVEA portfolio of sub-brands. It is the No. 1 skincare brand worldwide. Beiersdorf continually strives to strengthen this position through research in products and markets.
A further example of new product development was the launch of NIVEA Visage Soft Facial Cleansing Wipes in 1999. Market research at the time showed only 66% of UK women used a facial cleanser, whilst only 27% has a face care regime (cleanse, tone, moisturise). Women were looking for an easy, convenient, face care routine. NIVEA's Soft Facial Cleansing Wipes remove eye make-up and cleanse and tone in one simple step thus meeting customers' known requirements. This is the basis of the product's success. Not surprisingly, NIVEA rapidly became the No.1 brand.

Beiersdorf | Growing a business by developing products and markets

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