Case StudyCase of a Brand Called NIVEA Strategic Opportunity Matrix (Ansoff’s Growth Model) Present Product Present Market New Product Market Penetration Market Development Product Development New Market Diversification ATRIXO.Growing a business by developing products and markets • Introduction • A business that grows is often better placed to meet its customers' needs. Growth can also help a business to stay ahead of its competitors. Beiersdorf is the skincare company behind leading brands NIVEA. . ELASTOPLAST. Over the past 10 years the company has grown consistently and rapidly through a carefully controlled and well managed expansion of its portfolio of products. In 1911 it developed NIVEA Crème. Currently. . an estimated one billion people worldwide use NIVEA Crème.• This Case Study looks at how the company has experienced consistent growth by developing new products and markets. a German pharmacist. to illustrate ways in which a company can plan its growth successfully. Soon afterwards. so familiar today. with real Beiersdorf cases. It uses Igor Ansoff's business matrix. now the world's largest skincare brand. • The Beiersdorf company began with the work of Paul C Beiersdorf. the first modern cosmetic skincare product and the beginning of NIVEA. it marketed NIVEA Crème in the blue and white tin. which entered the UK market in 1998. • Other Beiersdorf brands currently available in the UK include ATRIXO. In the 1980s. Beiersdorf continues to pursue a policy of extending its product range. ELASTOPLAST and EUCERIN. the company launched: • NIVEA Deodorant worldwide • Revolutionary new Anti-Age products • the first mass market male skincare brand . its new products included sun protection. soap. . shower and bath products. Between 1991 and 1993.NIVEA FOR MEN. aftershave balm. for example.• The company has regularly extended its product portfolio in line with changing consumer demand. • • • • • • • Growing a business can involve increasing: turnover (the value of sales) profits size and share of the market number and range of products company's geographical spread number of employees. . A business can also grow externally by taking over other successful businesses. This is not surprising. A company can grow internally by ploughing back profits into the business and building on its successful areas. It concentrates. This is organic growth.• When a company grows it will expand into areas that offer new opportunities. however. It will also cut back in areas that are not performing as well or are in permanent decline. on organic growth. The NIVEA brand is so well known worldwide that it makes sense for the company to build organically on an established success story. . Beiersdorf engages in both types of activity. It has done this by: • 1. Moving into new countries. Today. Developing new product categories.g. Beiersdorf has expanded into many Eastern European economies. it has a growing presence in China. . NIVEA has continuously expanded its share of the Lip care market over a number of years. Expanding market share in established markets. a rapidly expanding market. NIVEA FOR MEN. e. Since the 1980s. despite the fact that previously this market was quite a mature and established one. • 3.• Beiersdorf's recent developments illustrate three main ways in which firms can achieve organic growth. • 2. Beiersdorf's development illustrates all four. Current Products New Products Current Markets New Markets Market Product Penetration Development Market Development Ansoff’s Product – Market Expansion Grid Diversification . He identified four key approaches to growing a business.• The business analyst Igor Ansoff outlined some important strategies for business growth. including product improvement. Several approaches help to achieve this. New product development: developing new products for existing markets. updating and building/improving existing products. . • ii. Market penetration: Increasing market share for a firm's products in its existing markets.• i. . it may switch resources from some of its existing markets that it believes to be in permanent decline. To do so. A firm will pursue this strategy where new markets are highly attractive. It also helps if the product life cycle is similar in the different markets that the business serves. Diversification: developing new product markets outside the existing business. This is most suitable when existing products require only minor modifications to be suitable for new. This will not always be the case. • iv. overseas markets.• iii. Market development: finding and developing new markets for current product lines. samples on beauty magazines.finding more effective ways of reaching the target market. . better at moisturizing.• i.reformulating products to make them more effective e. • Promotion . • NIVEA increases its sales by adjusting the marketing mix: • Product . e. • Place .g.g. Market penetration • Selling more products involves either growing the market as a whole or taking market share from competitors. • Price .reflecting good value but at a premium to retailers' own or private labels to represent quality.finding new outlets through which to sell the products. By Christmas 2003.• NIVEA Lip Care is a good example of the way in which NIVEA is building an existing product in an existing market. NIVEA has extended the product range also. Pearl & Shine had become the market's best selling product. has been very successful. .e. 'Repair'. • The launch of new products. i. is well recognized by the consumers. The core products of this range are 'Essential'. Despite the seasonal nature of demand for lip care products and their relatively low selling price. NIVEA lip care has developed the brand through monitoring trends in the market and matching these with its existing core competencies in skin care. market penetration. whilst the new launches reinforce and reflect known standards. However. which combine cosmetic trends with NIVEA's traditional skincare expertise. The brand which has around 90% brand awareness. 'Rose' and 'Sun'. Beiersdorf continually strives to strengthen this position through research in products and markets.• ii. . It is the No. 1 skincare brand worldwide. 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. convenient.• A further example of new product development was the launch of NIVEA Visage Soft Facial Cleansing Wipes in 1999.1 brand. face care routine. whilst only 27% has a face care regime (cleanse. tone. moisturize). Women were looking for an easy. NIVEA rapidly became the No. . Not surprisingly. Market research at the time showed only 66% of UK women used a facial cleanser. This is the basis of the product's success. NIVEA's Soft Facial Cleansing Wipes remove eye make-up and cleanse and tone in one simple step thus meeting customers' known requirements. • iii. Recognizing Unilever's dominance of the market. . Market development Launching the product in the UK required careful product and market research. high quality. suitability. pleasant fragrance. NIVEA identified a strong match between traditional NIVEA brand values and those required in a skin caring deodorant : protection. through pre-launch research. skin friendly. with which the NIVEA brand image had fewer synergies. and to control this area. Given the size of the UK deodorant market. high-performance focused brands.• This allowed NIVEA to enter the market in the more specialist skin caring deodorant segment. This market segment gives greater scope for expansion than the entire deodorant market. . which accounts for nearly 20% of the market. rather than to control the market as a whole. can be as rewarding as being the leading brand in a smaller market. dominating the skin caring segment. away from the bigger. NIVEA aims to become the number 1 skin caring deodorant in the market. This is well illustrated by the development of the NIVEA FOR MEN range. It has always been prepared to develop new products for new markets.g. • This development results from several trends. e. Diversification • Beiersdorf has a history of being an innovative company. the revolution in men's magazines provide direct contact with men through advertising. .• iv. These include: • The softening and blurring of "male" and "female" gender roles • Increased spending on lifestyles with more people attending gyms and caring about their appearance • New media developments. . NIVEA has diversified into the male sector of the market. It targets men who value their appearance and who see it as a key contributor to selfconfidence i. the product range included: • shaving foam.• NIVEA was the first mass-market brand to set out to develop male facial care/ moisturizing. The NIVEA FOR MEN range provides straightforward practical solutions to men's skincare needs.e. shaving gel. aftershave balm. At its launch in the late 1990s. sensitive aftershave. • The emphasis was on encouraging men to consider using face care products as a route to building a good self image and self confidence. moisturizing lotion. intensive cream. • The NIVEA FOR MEN range built on the NIVEA brand heritage. . It continually seeks to grow through developing its products and its markets.• Conclusion : Beiersdorf is Europe's leading skincare company. The company continues to build a successful business by developing new and existing products and markets as well as diversifying into new markets with new products. Beiersdorf UK's development of the NIVEA brands fits in well with Igor Ansoff's ideas.