Marketing Business Report Nivea Whitening Cream

1 January 2017

Nivea wants their product to deliver message of “mildness,” “reliability,” “gentleness,” “trusted”, “skin friendly,” “protection,” “high quality,” and “value for money” and “skin care leader product. ” It creates branding strategy based on the name of Nivea in terms of Latin which means snow. Most packaging are using blue and white color to show snow characteristic. Nivea uses bolder color in packaging for men but uses softer color packaging for women. The product packaging is usually simple yet elegant along with affordable price which creates sense of Nivea products to be simple, friendly, accessible and gentle like a snow.

Furthermore, in order to make the positioning strong, the marketing mix must be all consistent with the positioning. Product, promotion, price and place are all aligned with the Nivea position as friendly, gentle, trusted, reliable, affordable and accessible skin care leader product. The result of strength in research, development as well as identifying product opportunity in market along with all consistent marketing mix aligned with position has created Nivea Whitening products to be successfully sold in Indonesian market.

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1. Industry The cosmetic industry had growth rapidly during the last decades.

During the 20th century, the popularity of cosmetics increased rapidly. Cosmetics are also increasingly used by girls at young age and today, the industry is not just focusing on women but also for men who are concerned with how they look. In the Asian cosmetic industry, whitening products are very popular because of the perception of Asian culture that associate white with youthful and cleanliness and international cosmetic company began to see this as an opportunity. (Eshun & He, 2004) 2. Company Nivea is a global skin and body care brand that is owned by the German company Beiersdorf.

The company was founded on March 28, 1882 by pharmacist Carl Paul Beiersdorf. The name of Nivea was derived from the Latin word “nix, nivis” which means snow. Nivea offers cosmetic products with mid range price and aims at young female and male target market. “Nivea is made by international cosmetics and toiletry giant Biersdorf and is sold in some 150 countries. Very specific marketing tactics mean that wherever it is sold Nivea is perceived as a ‘local’ brand. It’s a strategy that has paid off. In 2004 Nivea accounted for €2. 7 billion of Biersdorf’s €3. 8 billion sales. (Thomas, 2005) Nivea products are operated in 150 different countries and is active in research and development. During last decade, Nivea was also active in research and development for whitening skin products that is targeted to the Asian consumers. For the purpose of this report, the product which is going to be focused on is Nivea whitening skin products which is targeted to Indonesian market. 3. Macroenvironment Macroenvironment is “The larger societal forces that affect the whole microenvironment – demographic, economic, natural, technological, political and cultural forces. (Kotler, Brown, Burton, Deans & Armstrong, 2010). 4. 1 Demographic environment Demographic is the “study of human populations in terms of size, density, location, age, sex, race, occupations and other statistics” (Kotler et al 2010, p105). Asia has the strongest market for skin whitening products including Indonesia. Indonesia is a highly potential target market as it is the fifth most populous country in the world with 238 million people and the capital city Jakarta is South East Asia’s most populous city with over 20 million people live in greater metropolitan area of Jakarta.

Indonesia has at least 300 different ethnic group and the largest group is Javanese which covers 40. 6% of the population. (Vaswani, 2011). Most of Indonesian people skins are brown, dark brown or yellow. Climate in Indonesia is tropical with dry and wet season and the temperature average is 28 degree so the weather is generally quite hot all year around. Furthermore, recently skin whitening products are not just being targetted to young women but also young men because men usually received many exposure to sun and pollution that can cause darkening skin and dark spots. Skin Inc. , 23) The age group of the target market is between 18 and 35 years old and these ages can be called as generation Y who were born between 1977 and 1994. At these ages they’re critical on how they look and their largest influence came from media, friends or partner (Reischer & Koo, 2004). 4. 2 Economic Environment The economic environment consists of the “factors that affect consumer buying power and spending patterns” (Kotler et al 2010, p113). The factors are level of income and employment level.

There are many Asian countries that experience rapid economic growth recently including Indonesia that experience economic growth of 5-6. 5% per year. In the capital city of Indonesia, Jakarta which is South East Asia’s most populous city and also few other big cities, there is rapid growth of shopping malls. Due to rapid economic growth, there is a rise of middle and upper class family which increase purchasing power and also decrease in unemployment level. With a population of around 238 million people, Indonesia has the largest economy in Southeast Asia and is one of the emerging economies in the world.

Furthermore, it belongs to G20 economy and is the 19th largest economy in the world. (Vaswani, 2011) 3. 3 Natural Environment The natural environment is “natural resources that are needed as inputs by marketers or that are affected by marketing activities. During the 1960s, public concern about damage to the natural environment began to grow. ” (Kotler et al. ,2010, p116). This create the growing demand of cosmetic with natural ingredient because consumers nowadays think that cosmetics that use natural ingredients have better value and safer to be used.

There had been many cases in which certain chemical ingredients such as mercury and steroids in skin whitening product can harm skin or health in the long term. This has created consumer to be more cautious and prefer cosmetics with emphasize on natural ingredients. (Fuller, 14) Government in Indonesia has also started quality-control initiative which takes aim at illegal whitening creams and other potentially dangerous make-up. (Pitman, 15) 3. 4 Cultural Environment The cultural environment is “made up of institutions and other forces that affect society’s basic values, perceptions, preferences and behaviours. (Kotler et al. , 2010). Having white skin is considered an important element in constructing female beauty in Asian cultures including Indonesia. A dramatic growth of skin whitening and lightening products has occurred in Indonesian markets. They are influenced by Western ideologies as well as traditional Asian values and beliefs that people with white skin has more superior value. Furthermore, media also like to highlight the superiority of people having white skin. The example would be Hollywood celebrities or Asian celebrities who have white skin.

Furthermore, most of the population in Indonesia has yellow, brown or dark brown skin. Thus, the whitening product in Indonesian market is in trend nowadays. Indonesia consumer insight also showed that women associated white skin with cleanliness. They also felt that it gave them an edge in their career as having white skin made them look ‘more rich. ’ (Lee, 26) Furthermore, most Indonesians tend to appreciate and trust western brand more than local brand because their perception is that Western countries are the pioneer in producing quality products and this give Nivea an advantage in selling their products. Foreign brands and retailers are attracted to the Indonesian market for its genuine appetite for imported goods, with strong growth prospects underlined by hefty retail sales and rapid modernisation of the retail sector. ” (Hong Kong Trade Development Council, 2011). 4. Microenvironment 4. 1 Customer It is important for the company to study its customer closely so that they can understand customer needs and wants. The customers for the product is consumer markets which are individuals and households that buy goods and services for personal or household use. (Kotler et al. , 2010).

Most customers are female and male between age 18 and 35 who came from middle or upper class family. Nivea offers various whitening product for various needs of customers while still focusing on Asian customers. The Nivea whitening products are divided to several categories such as whitening facial wash, whitening body lotion, whitening day and night treatment cream white toner and Nivea Men. Products are being produced in more specific because of different buyer’s demand and needs. Nivea is active in research and development of product to satisfy and retain its customers and to attract new customers.

Nivea is quite successful in satisfying and retaining old customers. Nivea had developed trust between many of its customers and Nivea is known as a product that has reinvented itself over and over again for around 100 years. (Bilgram, Bartl & Biel, 2011) 4. 2 Competitors There are many competitors in Indonesian whitening product industry. Some are local cosmetic brand and some are international cosmetic brand. The Marketing concept stated that to be successful, organization must provide greater customer value and satisfaction than its competitors.

To be successful, company must be able to gain strategic advantage by positioning their market offering against their competitor’s marketing strategy. Local female cosmetic brand such as Mustika Ratu, Sari Ayu Martha Tilaar and Citra tend to have good customer value in which they sell in quite affordable price and they’re focusing on natural ingredients such as white turnip which is an Indonesian traditional ingredient for skin whitening that had been used for hundreds of years and these products tend to attract consumers that are aware of natural ingredients and affordable price.

Another Nivea’s competitors are international cosmetic brand such as Clarins, Clinique, Body Shop, Elizabeth Arden and others but these competitors tend to offer quite high price that can be bought for millions of rupiah per product and their target market is usually upper class people and for older women. An advantage of Nivea over its competitor is price that made it available for masses rather than to only the upper-class people and also a good world-wide known international brand image. Nivea was established in 1882 in Germany, for more than 100 years it has run the cosmetic industry and able to satisfy customers. Keller, 2003) There are many Indonesian people who trust and willing to buy International western brand products more because Western countries are known for producing quality products. In terms of image, target market, price and quality, Nivea products always appear competitive with brands such as Dove, Vaseline, Johnson & Johnson or Labortoire Garnier and often being situated next to them in the shops (Bilgram, Bartl & Biel, 2011). 5. Target Market 5. 1 Demographic The products are mainly being targetted to young women and men in Indonesia between age 18 and 35.

At this age they’re cautious of their appearance and their largest influence came from media, friends or partner. Most of these target market are still in university or just started working. Some of their income are still dependant on their parents and for those who are already working their average salary are not that high so they’re aiming for affordable price products as well trusted as trusted international cosmetic brand product. Moreover, most of the target customer are not yet married. 5. 2 Psychographic The target market is cautious with their color of skin.

Their perception is that white skin looks better due to influences from culture, society and media. The target market may be people who received a lot of sun exposure because they’re active in sports or tends to travel a lot which impact their skin to be tanned. Buyers are also usually got influenced by media that told the superiority of people having white skin such as Hollywood celebrities and Asian celebrities who have white skin. “Definition of beauty in the Indonesian society exists where a beautiful woman is a woman with white figure, straight long black hair and slender figure. (Grandiosa, 2008) While for men, who use Nivea products, the consumers are typically young, urban and affluent or aspirational. They are strongly focused on career and social success and generally appreciate a well-groomed and fashionable appearance with a higher status. Most consumers are found to be in westernized big city such as Jakarta and these consumers continued to closely follow Western and Japanese trends in men’s grooming and began to spend more in this area especially with the strong Asian economic growth recently.

Furthermore, consumers also think that international cosmetic brand product such as Nivea which came from Western country are more trustable and can achieve faster whitening results because western products are known to have better technological advances and research. (Vaswani, 2011) 6. Product 6. 1 Core Product Core product is ‘The problem-solving services or core benefits that consumers are really buying when they obtain a product. ’ (Kotler et al. , 2010) Nivea whitening products are beneficial for consumers as it is able to make the skin of its users to look brighter and whiter.

This increases the confidence of its users. Especially, in Asian culture, beauty is associated with white skin and people in Indonesia tend to believe that having white skin is more attractive and feel that it gave them an edge in their career to look ‘more rich’. (Lee, 2006) 6. 2 Actual Product Actual product is ‘Tangible aspects of a product, such as the brand name, design, features, quality level and styling. ’(Kotler et al 2010, p105). For Nivea, the brand name is a well-known international brand that has been existed for more than 100 years and it offers affordable price.

Furthermore, Nivea is active in research and development to ensure that it fulfills different buyer needs and wants to bring maximum customer satisfaction. Nivea whitening products are developed for the needs of Asian skin. Nivea whitening products are divided to several categories such as Nivea sparkling white, whitening facial wash, whitening body lotion, whitening day and night treatment, Nivea Men. Nivea ensure best quality products with affordable price and these quality is what consumers attracted to. Often, in a single product, they have various benefits.

The example is Nivea Men which is 5 in 1 brand which acts as whitening, moisturizing, prevents from premature skin ageing and effective long lasting oil control care helps tighten pores for smoother skin and prevent from skin mature ageing. 6. 3 Augmented Product Augmented is ‘additional consumer services and benefits built around the core and actual products’ (Kotler et al. , 2010) Nivea has its own website with www. nivea. co. id as its address. This website can tell its users about the information about their latest products and existing products so that it creates easier access for consumers. . 4 Branding Strategy The American Marketing Association defines a brand as a “Name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers. ” (Kotler et al. , 2010) Nivea is a global brand and is one which is perceived to reflect the same set of values around the world. “Global brands transcend their origins and create strong enduring relationships with consumers across countries and cultures. ” (Reischer & Koo, 2004) Nivea had tried to adapt the needs and wants of different target market in different countries.

For example, skin whitening is only offered in Asian market because this is the region where there is a high demand for skin whitening product. Nivea is a mass market cosmetics and is known to be having a good brand, image and value. Over the years, Nivea has acquired a unique, universal brand identity as a caretaker of skin. Nivea wants their product to deliver message of “mildness,” “reliability,” “gentleness,” “protection,” “high quality,” and “value for money”. These messages also connects well with Nivea products which usually sell cream.

Nivea has a slogan which is “Touch and be touched. ” These messages create sense of gentleness, accessibility and friendliness towards consumers of the product especially the price is quite affordable and the place of products being sold are accessible to wide range of market. Nivea also often spread advertisement to television, newspaper, brochures and others in order to keep maintaining the product to be well known. Nivea is active in research and development of products so that they can retain the current market’s interest or attract new customers.

Nivea’s latest whitening product is Nivea men, a 5 in 1 product which acts as whitening, nutrients, moisturize, repair and control oil. Nivea also used glocal strategy where Nivea always use the advantage of their long established reputation of the Nivea brand name to introduce new products that is able to meet the demand of local market and in the case in Indonesia, it brought whitening products. 6. 2 Packaging The name of Nivea was derived from the Latin word “nix, nivis” which means snow and Nivea support its name through simple blue and white packaging.

The combination of blue and white packaging creates a sense of mildness, gentleness which also associate with the name of Nivea which means snow. Simple and effective design and logo are attached to emphasized on accessible skin care product. The packaging can be used by marketers to encourage potential buyers to purchase the product. For Nivea whitening products such as sparkling white cleanser, whitening toner and others that has target market for female, the background color packaging is white with few parts being blue.

This can impact the buyer’s perception to trust this product more that it can make their skin look whiter. For Nivea sparkling white, there’s a soft gradient of pink color in the middle of the product with white background. This creates sense of sparkling which associates well with white and brightening. In Nivea men, the packaging uses silver, blue and white as dominant color. It also features different colors coded focal points in the centre of packaging which intended to help consumers distinguish between sub ranges.

The packaging for Nivea products in Indonesia used English language for the name of the product along with few English language sub-heading at the front of the package but at the back of packaging, they will use both Indonesian and English language. This is an attempt of Nivea to connect closer to the consumer and so that the consumer who cannot read in English are able to understand. 6. 3 Labeling The simple logo of Nivea is being attached to products which is a logo with white text and blue background which was created based on the meaning of Nivea in Latin which means snow.

Blue and white color represents the color of snow and the atmosphere of these two colors create sense of harmony, gentleness and simplicity. Furthermore, for labeling they still kept their English language name of products such as Nivea sparkling white or Nivea Men in order to maintain the consumer perception and make the consumer believe that this is a Western brand and might looked like it is being imported from overseas even though it is being created in Indonesia under license of Nivea Company to reduce production costs.

In Nivea Men product, the silver color for “Men” text at the front of the product creates a sense of masculinity, modernity and power. For the packaging in Nivea sparkling white, pink color is used for text in front and for Nivea toner, blue color text is used along with white background. It can be seen that Nivea products which aim for male target market has stronger and bolder color for packaging and labeling to create sense of masculinity while products that are aim for female tend to blend soft colors which create sense of feminity. . Positioning Marketers need to position their brands clearly in target consumer’s minds. Nivea marketers want Nivea product to be known as Nivea wants their product to deliver message of “mildness,” “reliability,” “gentleness,” “trusted”, “skin friendly,” “protection,” “high quality,” and “value for money” and “skin care leader product. ” In order to make the positioning strong, the marketing mix must be all consistent with the positioning. Below is the marketing mixed they used to support their position. 8. The Marketing Mix 8. Product Nivea is active in research and development with over 150 dermatological and cosmetic researchers, pharmacists and chemists that constantly working to improve established products and seeks new invention. Nivea product is generally a product of good quality. The product itself has been around for more than 100 years so it is known as a trusted brand. Furthermore, Nivea kept exploiting market potentials which constantly introducing new products that meet current market needs and the needs of newly targeted market segments.

Therefore, Nivea whitening products are divided to several categories such as whitening facial wash, whitening body lotion, whitening day and night treatment cream white toner and Nivea Men. Products are being produced in more specific to fulfill and increase satisfaction for different buyer’s demand. Most product packaging uses blue and white packaging based on its name Nivea which means snow. Blue and white color defines the color of snow. 8. 2 Price

Nivea products are high quality and a worldwide known brand at affordable price and that some of its international brand cosmetic competitors would charge ten times the price with similar quality. This also supports the idea of Nivea as being accessible and not just exclusively created for upper class people. To keep the cost down in country like Indonesia, Nivea is doing original equipment manufacturer (OEM) which is “manufactures products or components that are purchased by a company and retailed under that purchasing company’s brand name” (Mohan & Marvin, 1986). In Indonesia, Nivea products are produced under PT.

Beiersdorf Indonesia company. This is why Nivea in Indonesia can sell their products between Rp. 10 000 and Rp. 40 000 because they use the workers and some ingredients locally while still use the cosmetic formula from their company research. 8. 3 Promotion Nivea advertisement can be found in all kinds of magazines, newspapers, brochure, television channels and outdoor advertising such as billboard and shopping malls. To attract new customers, sometimes they offer free product samples in shopping mall. They also promote their products in http://www. nivea-international. com/pages/int-country-selection website.

This shows that Nivea is an accessible, modern and up-to-date product. 8. 4 Place Nivea products are accessible to wide audience of market as it has mid-range price. The products are mainly sold in retail stores, supermarkets and pharmacies. Nivea products can be found in either middle class supermarket such as Hero or even upper class supermarket such as Sogo supermarket. 9. Conclusion Nivea has excellent research and development program and was able to find good opportunity in Indonesian market for skin whitening product along with outstanding quality products that able to meet consumer needs at the right time.

Nivea had quite successfully deliver its product to the target market because of the strength and consistency in marketing mix that able to support its position as trusted, skin friendly, reliable, affordable and accessible skin care leader product as well as an attractive and friendly branding strategies which is based on the terms Nivea from latin term which means snow therefore, most of the packaging are in blue and white color to define the characteristic of snow which also links to the product such as ‘gentleness’ of cream.

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