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Nivea is a global skin- and body-care brand, owned by the German company Beiersdorf. The company began in 1911 when Beiersdorf developed a water-in-oil emulsifier as a skin cream with Eucerit, the first stable emulsion of its kind. The company's owner, Oskar Troplowitz, named it Nivea, from the Latin word niveus/nivea/niveum (meaning snow-white).

Beiersdorf - Nivea <>

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TABLE OF CONTENTSI. Marketing background.......................3

II. Competitive analysis........................15

III........................... Company background24

IV. Identified market opportunity..........47

V. Proposed target market....................54

VI Marketing objectives........................65

VII. Overall marketing strategy..............72

VIII. The marketing mix..........................74

IX. 3 year financial forecasts..............105

X. Appendices / attachments …….…..120

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I. MARKETING BACKGROUND

A. Overview of the Industry

i. Market Size (Volume/Value)

Euromonitor International, the top business intelligence source is

a website which offers vast amounts of information about the past,

present, and future of almost every industry and the companies and

brands that fall under them. Among which, is the Cosmetics and

Toiletries manufacturing industry, under which the focus of this project,

the Sun Care sub-sector falls.

Loking back at the progress made by the different sub-sectors of

the cosmetics and toiletries industry from the year 2003 to 2008, Sun

Care would appear to be a minor sector as opposed to other sub-

sectors like Depilatories and Skin Care. Experiencing a mere 25.5%

growth increase in monetary amount, Sun Care lags behind ten other

sub-sectors in terms of progress made within the five-year interval.

Closer inspection however, specifically from the year 2006 to

2008, shows a very different view of this underrated sub-sector.

According to Euromonitor Inernational records, Sun Care has been one

of the most rapidly growing sub-sectors of the toiletries and cosmetics

industry within the more recent years. Whereas the sub-sector only

experienced a 6.5% increase from the years 2003 to 2005, the years

that followed, 2006 to 2008, proved to be a very different case. Here,

the sub-sector underwent a much larger, 11.3% growth in terms of

value sales, which is almost twice that which was generated over the

three years that came before.

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Cosmetics and Toiletries: Market Size Growth in Terms of Value (2003-2008)

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Figure 1: Table based on Euromonitor International Reports

Figure 2: Table based on Euromonitor International Records

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YearValue Sales (in

millions)

2003 157

2004 161.3

2005 167.3

2006 176.9

2007 187.9

2008 197

Interval

Value Growth Percentage

2003 to 2005 0.065605096

2006 to 2008 0.113623516

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Euromonitor International, the top business intelligence source, headlines that in the year 2008, the Sun Care sub-sector of the cosmetics and toiletries industry in the Philippines experienced a growth in value of 5%, with sun protection as its most rapidly growing sub sector, dominating sales with above 87% of volume sales and 92% of value sales. During this time, to push more frequent consumption of sun care products, increases in the unit price of these said commodities were regulated. Market developments and growth are predicted at a compound annual growth rate of 2% in the next five years (2008-2013).

YearProjected Value Sales (in

millions)

2008 197

2009 195.8

2010 197.5

2011 201.2

2012 207

2013 213.5

Figure 3: Table based on Euromonitor International Records

In terms of value-based market size, the entire cosmetics and toiletries industry as of the year 2008, is valued at PHP105,211.4

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million. On the other hand, the Sun Care sub-sector, which would be the focus of our study, is currently valued at PHP197million.

1. Market Trends (Past 3-5 years)

Global Recession and Poor Summer Weather

Due to the global recession which began in the United States of America in the year 2008, tourism- both incoming and domestic was gravely affected. According to Euromonitor reports that together with economic factors, unpredictable weather conditions during the summer caused by climate change, and the early 2008 inflation, sun care, which was regarded as inessential, was purchased less, with only a 3% increase in volume growth vis-à-vis the 4% volume growth in the previous year, 2007.

Avoiding Price Hikes

In the same account, it is mentioned that sun care sales still continue to be powered by sun protection, with more than 87% of sales in terms of volume and 92% in terms of value reported in 2008. In the Philippines however, sun protection is not viewed as a necessity by many. In order to place it as one, companies avoided hiking up product prices.

Lotions Most Popular Formulation

To the Philippine market, lotions are the most time-honored formulation of sun protection. However, spray variants have been gaining popularity, specifically among athletes and outdoor sports enthusiasts due to their application ease and convenience. Because of the fact that the lotion format is more recognized by Filipinos, and is priced lower than their spray counterparts, it remains more popular

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among consumers, according to the report. The UAI survey conducted by the group supplements these findings as indeed, a considerable portion of the total number of survey participants, approximately 46%, indicated lotions as their preferred formulation, only second to the 50% that indicated sprays/mists as their preferred formulation. This shows that there is increasing awareness of the availability of alternative formulations to the traditional lotion type of sun block. The chart showing the survey results for the preferred formulation is found below.

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Self-tanning Sales Remain Negligible

Self-tanning, a sub sector of sun care, is still insignificant in the Philippines, as having fair skin is the dominant ideology of beauty in Philippine society. Therefore, self-tanning sales figures remain negligible. Regardless, self-tanning products such as Coppertone Sun Tan and Hawaiian Tropic Dark Tanning, have been made available, targeted at the niche of a Filipino minority as well as expatriates.

Market Profile (General purchase and usage habits)

Awareness and Purchasing

A 2008 report by Euromonitor states that approximately 66% of sun care sales are acquired from developed markets such as those in Western Europe and North America. This may be attributed to education being essential to the growth of the industry. On the other hand, it is worth mentioning that awareness in other markets is increasing, with the Asia Pacific sun care market multiplying twofold within the last five years.

Seasonal Purchasing

In another report by Euromonitor, it was stated that the reduced growth in sun care sales was attributed to the poor summer weather. From this, it may be deduced that most sun care product purchases are usually made during the summer season. As shown in the Euromonitor International Estimates table below, more than 90% of sun care sales are produced by the sun protection subsector.

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Table 1 Sales of Sun Care by Subsector: Value 2003-2008

Ps million 2003

2004

2005

2006

2007

2008

Sun protection 

143.0

147.0

152.6

161.8

172.3

180.9

Aftersun  14.0 14.2 14.7 15.1 15.6 16.1

Self-tanning  - - - - - -

Sun care  157.0

161.3

167.3

176.9

187.9

197.0

Table 4

2003-2008 Sun Care Sales

Most Frequented Venues

Department stores and supermarkets or hypermarkets yield the greatest number of sun care product sales, according to Euromonitor, and approximately 59% of the total product sales in the year 2008 were held by these two avenues jointly. It is evident however, that health, beauty, and personal care specialist stores such as Watsons and PCX (Personal Care Exchange) are becoming increasingly popular, and are therefore gaining stature in terms of sales as well. These claims of popularity are supported by the UAI survey findings, with Watsons as the leading venue for purchase of sun protection products.

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The detailed chart presenting the survey findings for venues of purchase is shown below.

B. Environmental Analysis1. Analysis of Opportunities and Threats

Beauty and Protection

The sun care industry faces external threats in the form of cheaper and better technologies. Science and technological innovation has paved the way for the creation of products with the focus of making people look good. Many cosmetic products today come with multiple promises, and one of them is sun protection. SPF has even

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found its way into makeup, now being incorporated into the mineral makeup, a growing field in the cosmetic industry.

A couple of years back, Neutrogena introduced their mineral makeup line, “Mineral Sheers,” which contains an SPF of 20. Because of these products, people now tend to forego the fourth step in the skin care routine, where sun protection comes in. This is reaffirmed by a Euromonitor report which states that sun care is predictions are bullish, with an expected volume compound annual growth rate of 2% in years 2008 through 2013 against the previous review period’s 3% CAGR.

Higher SPF Levels

Another major threat to sun care sales reported by Euromonitor is the introduction of skin care products which deliver higher SPF levels, claiming that brands targeted at the higher income brackets will especially affect sales, such as Anew (Alternative Intensive Whitening Day Cream SPF25) and Elizabeth Arden (Ceramide Plump Perfect Moisture Cream SPF30). The introduction of these products may be attributed to the fact that exposure to ultraviolet radiation is directly linked to harmful effects such as premature skin aging. This is yet another product focused on the integration of aesthetic purpose and protective purpose.

Full of Promise

Despite the threats put forward by advancing technologies and increasing competitive pressures, sun care is still full of opportunities. Euromonitor predicts that globally, the sun care market will continue to develop strongly all throughout the forecast period

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(ending in 2013). The Philippines, as an area with a preference of fair skin over tanned skin, is a good prospect for long term growth. On the other hand, Euromonitor poses that the difficulty remains: while “necessity of sun care is the primary driver of demand,” many consumers view sun care products as unnecessary, and this will require companies to launch awareness campaigns to more effectively promote their products. There is a presence of certain focus areas that are potentially profitable. One such target presented by Euromonitor is children, which would focus on parental instincts to protect their children.

Numerous Opportunities

While appreciation for sun care, more specifically, sun protection increases, opportunities for profit present themselves through product improvement, through zeroing in on an unmet need. Some of these needs may be in nature, geared towards vanity, offering benefits such as whitening, firming, cellulite reducing, mattifying, tinting (to use in place of foundation), toning, and improving elasticity. One other opportunity would be to zero in on sun protection to make people feel good as opposed to just making them look good. Some companies may address health concerns offering benefits such as antioxidants for skin nutrition, while some companies may offer more convenient formulations and packaging compatible with the Filipino consumer. Innovation may also be geared towards special needs of people with skin conditions such as skin asthma, chronic dryness, and eczema. Overall, the sun care market in the Philippines has not yet matured, and is bursting with opportunities, making the industry an attractive and bright one.

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2. Key Success Factors

The rapid growth of the Sun Care market could mostly be attributed to five main factors. These namely, are the tropical environment, knowledge, compatibility with Filipino culture, innovation, and flexibility.

Tropical Environment

Being found just along the equator, the Philippines is a country which tends to experience a lot of sunny weather. As such, it should not come as a surprise that the sun care manufacturing business is doing exceptionally well here. With the prominence of various outdoor sports as well as the abundance of beaches in the country, companies such as Beiersdorf, Schering-Plough, and Splash have capitalized on the huge consumer market that our country has for sun protection-related products.

Knowledge

Another key factor which has boosted the Sun Care industry’s market size significantly and in such a short period of time is the development and dispersion of knowledge about the effects of the sun’s rays in the past few years. Such is a very important factor in the growth of the Philippine market since this has been one of the strongest reasons for the industry’s progression in the global setting. With the improvement of numerous information technologies in the country, the speed at which education with regard to this matter is disseminated in society has increased exponentially. With the aid of these said technologies, sun care product manufacturers have managed to create a need for sun protection within the Filipino market quickly and easily. As a result, people have been made more concerned about their beauty as well as their health, increasing their inclination to purchase sun care products. This brings about the third important success factor – consumer vanity.

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Filipino Culture/Vanity

As mentioned, sun care product consumers are gradually becoming more knowledgeable of the damage that overexposure to the sun’s rays could cause their skin. One of the most prominent concerns, not only for Filipinos but for the global consumers, according to Euromonitor International, is that of the UVA rays. These rays are invisible to the naked eye, but bare a strong impact when it comes to skin damage and ageing. They are known to cause pigmentation, darkening of the skin, and/or the appearance of wrinkles. Knowledge of matters such as this, coupled with the common Filipino preference for fair skin has been consistently driving sales.

Flexibility

Another concern similar to the one previously mentioned, has to do with the oil content of most sun protection products. Since these products require the users’ direct application to their skin, many complaints have been made about them and how the oil blocks pores and causes pimples to appear. In response to this, the concerned companies came up with oil-free products which give practically the same amount of protection but do not have the unwanted oil content, which causes problems for their consumers. This flexibility in terms of the companies’ products has also aided in their success. Having been able to cater to the needs of their customers as problems arose, they have maintained a loyal consumer market.

Technological Innovation

Companies affiliated with the sun care market, however do not simply improve their products based on the complaints of their customers. With the help of thorough research and development, these companies have managed to take a proactive stance at improving their products, pushing innovation to its fullest in order to serve their customers better. An example stated by Euromonitor International is a

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light-weight tanning lotion manufactured by Chanel, which not only protects its users from the harmful rays of the sun but moisturizes their skin at the same time, thanks to white lily extracts. Continuous innovation such as this has aided the concerned companies greatly in their generation of a continuous flow of income. As a result, these corporations have grown immensely over the years, gradually moving up to the positions they hold now.

II. COMPETITIVE ANALYSIS

A. Competitive Positioning

Coppertone

PRODUCT- Coppertone offers sun care products that cater to different markets. Their product line ranges from everyday, outdoors, sport, to children. Coppertone has both continuous clear sprays and quick cover lotion sprays. Aside from that, they also offer sun care products which promote natural skin repair. They have tanning and sunless tanning products, as well as oil free simple sun protection lotions.

PRICE- Coppertone products range from prices of PHP300 to PHP600. Examples of which are the Coppertone Sun block continuous spray which costs PHP584.75, Tanning lotion for PHP309.85, and Sun block moisturizer for PHP459.75

PLACE- Coppertone products are found mostly under the cosmetics aisle of various department stores like SM, Landmark and Rustans. Aside from that, Coppertone sun care products are available in drugstores such as Mercurcy Drug and Watsons.

PROMOTION- In terms of promotions, there are a few product

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launches and advertising campaigns here and there. Also, a number of Coppertone ads can be found in selected sections of cosmetics areas at department stores. A brochure-like advertisement could be found attached to some shelves of these cosmetic areas. Finally, on a more technological level, Coppertone also hosts a website in any case that one is interested with their present products and upcoming products.

Hawaiian Tropic

PRODUCT- The Hawaiian Tropic sun care product line includes tanning oils, indoor

tanning lotions, sunless tanning, sun care lotion and sprays. Aside from that, Hawaiian Tropic also offers skin care products such as after sun moisturizers, every day protection and lip balms.

PRICE- Hawaiian Tropic sun care product prices range from PHP300 to PHP600. Hawaiian tropic’s facial sun block costs PHP495, sun screen lotions for PHP339, tanning lotions for PHP329, high SPF sun block for PHP489, sun block for kids for PHP359 and PHP590 for sun block sprays.

PLACE- Hawaiian Tropic sun care products can mostly be found in all cosmetic areas of department stores such as SM, Landmark and Rustans. Also, these products are available at local drug stores such as Watsons and Mercury Drug.

PROMOTION- As per promotions, Hawaiian Tropic gave away sun bathing mats last year 2008 for every Hawaiian Tropic product that

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you bought. Hawaiian Tropic also has a home website wherein they showcase many of their products.

Beach Hut

PRODUCT- Beach Hut focuses only on sun care products. Their Beach Hut Sun block has a number of variants. They have Beach Hut 75 SPF, Beach Hut for Hair and Scalp, Beach Hut Classic, and Beach Hut One touch SPF 20 which are all clear and invisible sprays.

PRICE- Beach Hut products range from PHP200 to PHP620. Examples of which are a bottle of sun block spray which costs PHP389 and their one touch clear spray sold for PHP619.

PLACE- Beach Hut products are available in many stores such as Stoked. Inc, RipCurl, Personal Care Exchange, SM, Shopwise Rustans, Robinson Malls, Mercury Drug stores, Skin Sample Watsons, Chocolate Clothing Company and Toby's Sports.

PROMOTION- Beach Hut products are found in many water sports related stores. They are usually displayed on creative boxes, as opposed to the usual shelves used by competing brands. Aside from Beach Hut having a home website, they also have a Facebook account where people can find information on sun care and Beach Hut products.

Banana Boat

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PRODUCT-Banana Boat Offers a variety of sun care products to general sun protection to more specific niches such as to a sports market and for baby and kids. Their sun care products come in continuous clear sprays, lotion, sun screen/tanning, after sun, sun screen sticks, sun screen lip balms.

PRICE- Banana Boat sun care products range to P350-P550. Examples of which are kid sun block sprays for P345, after sun sprays for P438, SPF 50 sun block lotions for P419, SPF 30 sun block lotions for P349, sun screen lotions for P399.75 and P350 for kid sun block sprays.

PLACE- Banana Boat sun care products are found in cosmetic areas of various department stores such as SM,

Landmark and Rustans. Aside from that, local drug stores like Watsons and Mercury Drug have their products.

PROMOTION- Like other sun care companies, Banana Boat also had minimal activity in product launching and advertising campaigns. Banana Boat has a very catering home website where customers can find detailed information about their various sun care products.

Competitors with minor sun care products

Maxi-PeelPRODUCT- Maxi-Peel offers a variety of skin products. Among them are sun care products. They have sun block creams and concealers with sun protection. Among their skin products are facial cleansers, moisturizers, neck and body lotions and soaps.

Artistry

PRODUCT- Artistry focuses on skin care cosmetic products. They have a large product line of these such as soothing crèmes, anti-aging, skin whiteners and also sun care protection lotions.

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Avon

PRODUCT- Although Avon focuses its product line on personal skin care cosmetics such as make up, they also have products that cater to everyday sun protection. Such a product would be their moisturizer with low SPF.

Market Positioning

Outdoor Use Everyday Protection

High End Coppertone/H.Tropic

Nivea

Beach Hut Banana Boat

Artistry

Low End Avon

Maxi-Peel

Market Shares

According to Euromonitor International’s Country Sector Briefing for

Sun Care, up until 2005, it was Schering-Plough's Coppertone that was

recognized to be on top of the sun care business. Coppertone had 47%

value share at that time, leading ahead of Beiersdorf's Nivea sun which

only had a share of 18%. With Nivea Sun's strong promotion and wide

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availability, their products spread fast and became better known. By

2008, Nivea Sun managed to reverse its shares with that of

Coppertone. From a 2005 share of 18%, they were able to grab 62%

value share by 2008. Nivea Sun promoted and positioned itself as an

everyday use sun protection product unlike Coppertone which was

known as a product to use when swimming. As of today, there are

numerous companies that control the field of sun care products. Some

of these companies are Nivea Sun, Coppertone, Hawaiian Tropic and

Banana boat.

Sales/Profit Trends

Due to the rise of dual-purpose skin care products which also offer sun

protection, sun care is expected to acquire a smaller volume in the

coming years, from 2008-2013. The introduction of this product will

become a major threat to the growth of sales of sun care. At the same

time, a temporary solution for manufacturers is to give more discounts

to increase sales. There is also a need to create awareness to the

consumers about the importance of sun care products. Aside from that,

companies might want to try to focus their products on specific targets

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such as children. This way, companies can now create awareness to

the parents of the fact that with the use of their products; they can

keep their children away from harm. And as these companies create

this image of the need for these products, manufacturers then would

be challenged to further improve them. Such an improvement could be

having more variants of these skin care products.

Table 5 Sun Care Brand Shares by Retail Value 2005-2008

% retail value rsp

Company 2005 2006 2007 2008

Nivea Sun Beiersdorf AG 17.9 32.6 49.0 61.7

Coppertone Schering-Plough Corp (Philippines) 46.5 33.8 22.5 12.4

Maxi-Peel Splash Corp 10.6 11.5 11.0 11.0

Hawaiian Tropic

Tanning Research Laboratories Inc 10.2 10.5 8.9 7.9

Banana Boat Sun Pharmaceuticals Corp 4.1 3.7 2.8 1.8

Lander Ascendia Brands Inc - 1.4 1.0 0.7

Extraderm Splash Corp 1.0 0.8 0.5 0.5

Artistry Amway Philippines LLC 0.2 0.4 0.5 0.5

Avon Sun Avon Cosmetics Inc 0.3 0.3 0.3 0.2

Lander Lander Co Inc 1.4 - - -

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Others Others 7.8 5.0 3.6 3.5

Total Total 100.0 100.0 100.0 100.0

Strengths and Weaknesses

Many of the direct sun care competitors share the same strengths of

their various products. Nivea, Coppertone, Beach Hut, Banana Boat

and Hawaiian Tropic have very similar product lines. They have sun

care products for niches like children and active persons. They are also

alike in product developments, such as coming out with product

variants. Examples of variants are clear, continuous sprays and non-

sticky/non-greasy types. These variants are very important as it could

be a big weakness not to be able to keep up with the latest product

innovations. These product variants become major opportunities for

sun care companies as product attributes is a big factor in capturing

target markets. Therefore, variants become both strengths and

weaknesses at the same time because while a company can take

advantage of it, other companies lose their shares when they fail to

improve their products. However, Beach Hut might have a

disadvantage since their product line only focuses on outdoor

activities, unlike other brands that also offer products meant for

everyday protection. There are also notable differences in terms of

packaging. For example, Nivea and Coppertone sun care products

come in simple, streamlined containers, while Beach Hut and Banana

Boat have vibrant containers. However, they are also similar in some

packaging aspects, particularly when it comes to children's products.

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All the containers are designed to appeal to kids, with their cartoony

fonts and kid-friendly containers. Prices range from P200-P600,

depending on the size and level of Sun Protection Factor (SPF). It is

apparent that the aforementioned brands try to fall under this price

range. It is also important to note that, even if some brands may be

cheaper than others, the price difference is never too big. Thus, it may

be difficult for a customer to be swayed into switching to another

brand. An example would be Coppertone's continuous spray costing

P584.75 as opposed to Hawaiian Tropic’s P590-continuous spray.

Although Beach Hut might have limited products, they have the

advantage in terms of product placement. Beach Hut can be found in

many water sports related stores such as Quicksilver. But other than

that, sun block products are usually found on one shelf under the

cosmetic areas. In terms of promotion, all brands have neither a

significant product launching nor such advertising campaigns as of yet.

Although, Beach Hut might have more exposure because of more

placements, many of its direct competitors have existed longer and

have made their marks in customers' minds. As we all know, sun care

products are more in demand when the season calls for it. It is a wrong

notion to say that it is a big weakness for sun care produces because

they are seasonal products. In fact, it is actually a major strength.

Because of its seasonal demand, sun care products can optimized their

sales by creating the awareness and need for their products. They

have more time to prepare. Take for example come summer time,

there will be a more aggressive advertising campaign for these brands.

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III. COMPANY BACKGROUND

A. Company Profile

Nivea is a global skin- and body-care brand, owned Beiersdorf AG (FWB: BEI) which is a multinational corporation based in Hamburg, Germany, manufacturing personal care products. The company was formed in 1911 when the company developed a water-in-oil emulsifier as a skin cream with Eucerit, the first stable emulsion of its kind. Oskar Troplowitz, the owner, named it Nivea, from the Latin word niveus/nivea/niveum (meaning snow-white).

In the 1930s, the company began producing other products such as tanning oils, shaving creams, shampoo and facial toners. The trademark "Nivea" was expropriated in many countries following World War II. Beiersdorf completed buying back the confiscated trademark rights in 1997 and internationalisation during the 1980s propelled the Nivea brand to a wider global market.

Beiersdorf may not itself be a household name, but its lead brand certainly is. Nivea claims to be the world's #1 personal care brand, sold in more than 200 countries and encompassing a vast range of products ranging from skin creams to deodorants, and from shampoo to cosmetics. It has a dominant position in its home country of Germany and a strong following throughout most of the rest of Europe as well as in other important global markets. Beiersdorf's other leading brands include the Eucerin and La Prairie skincare ranges, as well as Labello lip balm, Atrix handcream, Hansaplast medical dressings, and Tesa adhesive tape. After several years as a potential takeover target, the Herz family of Germany, also owners of Tchibo, agreed to take

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control of the business in 2003, buying out majority shareholder Allianz. Advertising Age estimated global measured advertising expenditure for Beiersdorf and Tchibo of $1.1bn in 2007, making it the world's #28 advertiser.

The strength of its core Nivea brand has allowed Beiersdorf to hold onto its independence at a time when many other medium-sized personal care marketers have been snapped up by the likes of P&G and L'Oreal. Assuming Beiersdorf's sales continue on their current growth path, there should be no need for the company to sell up, and it is protected from hostile takeover by its family-dominated shareholder structure. But the market is tough and likely to get tougher. Beiersdorf still relies on Europe in general and Germany in particular to provide the engine of its business, and it needs to broaden its profile, especially in the US and China. It may need to do this through acquisition, but the group has comparatively little past experience integrating anything other than very small purchases.

Although Beiersdorf, through its many established brands such as Nivea, has made a notable presence within the market system in the Philippines, it would be important to point out that they do not have their own manufacturing plant here. Rather, the company brings in and disperses their products throughout the country by the means of a local distribution company known as Mckenzie.

Having only one entry point, Beiersdorf’s relationship with Mckenzie Distributors has proven to play a vital role in the success of their operations within the Philippines. Mackenzie, therefore, is responsible for getting the products down to the lower channel levels – the drug stores, department stores, groceries, and supermarkets in the country. Upon arrival at the said establishments, it is then their responsibility to put the products up on the selected shelves and set them up for purchasing by the consumers

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B. Current Position of the company / brand in the market

According to EuroMonitor, Up until 2005, Schering-Plough’s Coppertone held the top spot in sun care, with a 47% value share in that year. It had a huge lead over second placed Beiersdorf’s Nivea Sun, which had a share of 18%. However, since its introduction in 2004, Nivea Sun has increased in popularity very rapidly, largely thanks to its wide availability and strong promotion. By 2008 it held a 62% value share, while the share of Coppertone had plummeted to only 12%.

In the same site, the market of Sun care is expected to see a slower volume CAGR between 2008 and 2013 though, of 2%, compared with the review period CAGR of 3%. This will largely be attributable to the rising popularity of dual-purpose skin care products, offering sun protection. In 2008, body lotions and other facial skin care products began to include sun protection properties, and for everyday use, this appears enough for most consumers.

In constant value terms, sun care products are predicted to grow at a CAGR of 2% over the forecast period, compared with an annual average decline of 1% between 2003 and 2008, as sun care products are expected to become more specialised for situations of greater need, such as sports and other outdoor activities.

The major threat to growth in sales of sun care during the forecast period will be skin care products offering higher SPFs, especially those that are marketed towards the higher income segment, such as Anew Alternative Intensive Whitening Day Cream SPF25 and Elizabeth Arden Ceramide Plump Perfect Moisture Cream SPF30.

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Filipinos are highly complexion conscious, and do not favour tanned skin, hence, sun protection will continue to lead sales by a considerable distance. Mass sun protection brands will continue to dominate.

In the short term, discounting by manufacturers might help to increase sales, albeit only temporarily. However, the sector will continue to face the fundamental problem that consumers in the Philippines do not appreciate the need to use sun protection products. As such, there is a need for awareness campaigns from manufacturers in the forecast period. They may well choose to focus on products targeted at children, appealing to parents’ desire to keep their offspring safe from harm.

Ultimately, as awareness of sun care grows, one way for manufacturers to push would be to offer innovative variants with benefits such as anti-ageing, nourishing, and the like. However, given the current immaturity of the sector, this is unlikely to happen until the latter part of the forecast period, at the earliest.

C.Company Strengths and Weaknesses Analysis

Strengths

The company’s Consumer Business Strategy focuses on consumers and on their individual skin and beauty care needs. By combining quality consumer orientation, and brand personality, they strengthen the appeal of ther brands. In doing so, they occupy a firm place in their consumers’ everyday lives as a result.

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They have personal contact with consumers and thus gain insight into their wishes and needs. Thanks to “Consumer Insights” they launch outstanding products and innovations. Due to this, they enjoy appeal and trust worldwide allowing them to grow substantially faster than the market in recent years. It is voted as the most trusted skin care brand by Reader’s digest for the eight consecutive year in 2009.

They make their brands an experience. NIVEA houses generate caring values which can be heartfelt. Following huge success of the NIVEA Haus in Hambung, they have transferred the basic idea of “Being close to consumers” in other areas. The 2nd one being in Dubai Mall.. the world’s largest shopping center. Their strategy of letting consumers feel care when they use the products is a thumbs up for customers.

Nivea displays their products using high-profile, promising concepts that are realized by working together with trade partners around the world. And since most purchasing decisions are made spontaneously in front of the shelves, the company Sets great store by optimal shelf placement, generating competitive advantages right next to competitor’s products.

The company boasts of a leading position in Research and development internationally. They invented the first water-in-oil emulsion but other successes include discovering effectiveness of ingredients and combining them for providing the best in skin care.

They are number one in the men’s cosmetics market, not only because they were the pioneers in the sector, but also because they are the world leader in men’s face care with compelling products that are clearly made and tailored for men’s needs.

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They have re-organized business in the USA, which is a very important market for Beiersdorf, on the basis of the local strategy, and are concentrating on core competencies in skin care with NIVEA BODY among many others. This has laid the foundation for them to win over consumers in the land of opportunities and the world’s most important skin and beauty care market.

Other strengths are focus on strong brands and regions with above-average growth potential. Generating strong growth in these areas, Nivea holds numerous leading positions in many categories.

Weaknesses

Nivea the market leader in sun care research and development still has weaknesses aside from all its strengths. No company is perfect, Nivea is no exception. Although many might say Nivea is has no weaknesses, they would be wrong. Sure Nivea has many valued strengths on their side but still they have other issues to work on for example although their products have very good quality and are what the consumers need, as stated in Nivea’s commitment of consumer based strategy, the product may sometimes be over priced. With this strategy of price skimming, Nivea does not up hold its commitment to being consumer based for if it were purely consumer based it would lessen prices and lessen profits as well. Nivea, like all other companies still boil down to one main point, profit. With this, all companies are unaware that although there main goal is to please the consumer,

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companies still try to reap profit from the satisfaction of the consumer which means consumers are not really getting the best value out of their money since a percentage of what they pay still goes to the company. In this sense, the so-called commitment of Nivea for consumer based strategy contradicts with what Nivea is really doing.

Another weakness is that since Nivea is in almost every niche consumers will think that Nivea is monopolizing them creating anti-customers to there brand. This may not be usual but this happens when people realize that they are using a single brand over and over again, they tend to want to try new things. When this happens they will not or they may never go back to Nivea.

Buying Patterns

Frequency of purchase in a year Summer Quarterly Monthly Other

43% 22% 16% 19%Once Four times twelve times When needed

Usage habits

When at the beach 30.3%Everytime going out 15.152%When playing sports 27.273%

Rarely 27.273%

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D. Segmentation, Targeting, and Positioning

Nivea, a brand of Beiersdorf International, is a broad brand in itself. It ranges from General Purpose Creams and Lotions, Shower Soaps and Talc, Body Care, Deodorant, Hand Care, Lip Care, Men’s Facial Care, Female Facial Care, and lastly Sun Care. With the broadness of Nivea, we as a group decided to especially look into the Sun Care division of Nivea and Nivea Visage Young. Nivea Sun, the Sun Care division of Nivea involves many market segments in which Nivea Sun tries to target some strategic consumer groups in order to cater to the needs of these consumers by making the best products for their satisfaction. Nivea Visage Young on the other hand is a very good example for a balanced market mix. Nivea has grown to become the market leader in the sun care category worldwide. Nivea Sun is the world’s leading Sun Care research and development. In fact, in the United Kingdom Nivea Sun has a purchase penetration of 33% and is number one in value market shares reaching 17.5% of the entire market.

Under all these branches of Nivea, Nivea Sun also has its own sub-categories to go with it. Nivea Sun is comprised of three main segments in which effectively dominate the needs of its costumers. The first segment is what is called protection. This segment has the most number of products in its line as seen in the table above. It is the essence of sun care which is protection from the sun. Protection is especially designed for protecting the skin of its user from the sun’s harmful effects. This category gives its consumers a sense of security when it comes to being under the sun even for long hours of time. Nivea Sun also encourages its customers to wear other forms of protection against the sun since no sunscreen fully negates the effects of the sun on one’s skin. This means Nivea Sun cannot fully protect users although it deflects harmful effects as much as possible. Nivea Sun’s Protection segment is the largest segment it has and is the market value leader in the United Kingdom when it comes to sun protection. The next segment is After Sun, this segment’s primary concern is with the re-moisturizing and regenerating of the skin after

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staying under the sun. After Sun of Nivea is also the market leader in its category in the United Kingdom. After Sun products have steadily been increasing in popularity over the past few years all around the world. Lastly the Self-Tan segment caters to users who want a perfect tan meaning Self-Tan is mostly concerned with cosmetics than regeneration or protection.

Now that we have fully understood the categories and sub-categories of Nivea it is time to step outside the company and analyze the market and segment it according to what is useful to the company. The Nivea brand realizes that there are different kinds of consumers that buy their products. With this knowledge, Nivea Sun is able to pick out those consumers which they think can be benefited mostly upon. This simply means they look for consumers who buy their products the most because of certain attributes that they have.

Taken from “THE TIMES 100 NIVEA CASE STUDY”

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This Demographics chart show most if not all consumers of Nivea Sun. As seen in the chart at the top is Attitudes which is the most important segmentation variable since it is the basis for almost all the other branches in the Demographics chart. Usage Occasion and Benefit Sought are the two main attitudinal reasons for buying the Nivea Sun products. Usage Occasion is the buying of the product because of a special occasion such as a holiday on the beach while Benefit Sought on the other hand is the buying of the product because of its benefits. Nivea Sun wants consumers to be inclined to the Benefit Sought side rather than the Usage Occasion. Next on the chart are the Key Consumer Segments which are Self Tan, Primary Sun Care Users, and Secondary Sun Care Users. Self Tan segment is mostly concerned with the cosmetic side of the product. This segment is focused since they only have one purpose and that is to look good. Beside the Self Tan are the Primary Sun Care Users, which are composed of three sub-categories. Conscientious Sun Lovers these are the users who know about sun care enough to buy good brands that are effective to their skin. The Naive Beauty Conscious user is more concerned about beauty than the actual protection of the skin. Although this sub-category is more inclined to beauty, users still would like to have assess to sun protection products however they are not well informed about the factors involved in the use of such products. Lastly among the Primary Sun Care Users are the Concerned Consumers. These users do not care about beauty and look for the best protective features of the products. To move on in the chart would be to reach the Secondary Sun Care Users which are divided into to groups, Sun Avoiders and Careless Tanners. Sun Avoiders do not like the sun and therefore avoid it and in so doing have no reason to buy sun care products. However his group has potential with the proper education they would be more agreeable with a protective product that is easy to use making them a primary user. Lastly the Careless Tanners are those who tan and love the sun but do not use sun care products for protection.

With all these market segments, the targeting of specific groups of individuals will be key in order for a product to be successful. Luckily, Nivea has products for all these segments. Nivea has targeted

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almost all these segments of the market. This however can only be done because Nivea is the market leader and has the resources to spend the expansion of their products. Although Nivea has targeted most of the segments, it does not mean that their products have deteriorated in quality. In fact since Nivea is the world’s leading sun care research and development brand, it is like they are niching each and every one of the segments. The products are so focused on the consumers needs that they seem like all around nichers and at the same time market leaders. All around nichers meaning all their products seem to cater to specific niches in the market at the same time it covers the entire market.

Nivea Sun has its own set of objectives aside from the one’s being implemented by Beiersdorf. With this new set of objectives, market segmentation and market targeting are needed in order to identify and give focus to what type of market they are dealing. Not only this, Market segmentation is crucial to all companies consequently because it is important to know one’s consumers intimately so that they will be about to especially pinpoint what the consumers need in order for the company to create the perfect product for the right kind of customer. Since Nivea understands the importance of segmentation, it has been able to maintain the top spot in sun protection and after sun in the United Kingdom and make itself known worldwide. Nivea Sun’s market targeting is also very spot-on enabling the company to fully realize the needs of the targeted consumers. This is also possible because the company has grown so much that expansion seems to be a simple thing to do. Target marketing is also crucial and should be researched side by side with market segmentation since although the knowledge gained from market segmentation is very crucial to select the right consumer groups to enter in is equally as important because knowledge is nothing unless acted upon. An example being the case of Sun Avoiders, since they are not inclined to say out in the hot sun, they have no reason to be part of the market however if educated about the harmful effects of the sun even for short periods in time then they may become a big market segment in the future.

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2. Market mix (4 P’s)

In any company the proper market mix is essential to produce a

product that will become successful in the market. Market mix is series

of factors controlled by a company that contribute to attaining the

customer’s satisfaction. In more common terms, market mix is the

balance between product, price, place, and promotion so that the

product will be able to gain profit. Another definition for the market

mix is the recipe for success because that is what it is. The market mix

as I mentioned before is the balance of four main elements namely

product, price, place, and promotion. We will try to breakdown these

four elements so that a proper balance will be achieved. A good

example would be a case study on Nivea Visage Young. This product

was created in 2005 and was later revived in 2007 it was intended for

young women aged 13 to 19 to promote proper skin care routines.

With this case study we can see first hand how a well balanced market

mix is put into application of a real product line.

Product

Nivea Sun Care has three categories for their products namely

Protection, After-sun, and Self-tan. These categories are the three main

product lines of Nivea’s Sun Care division. These three categories tell a

lot about what Nivea really focuses on. First of Protection, this is

basically the regular feature of sun care products. The products in this

category vary in their SPF depending on what the customer prefers.

This product line shows Nivea’s concern for the essential sun care

characteristic of protection. Next category is After-sun; this is for

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customers who use products after being exposed to the sun as

suggested by the category name. This product line focuses on

revitalizing, restoring, and moisturising the skin of the user. Nivea

pinpoints consumers who really take care of their skin to the fullest.

This category is not for careless users who after placing sun screen

once before being exposed to the Sun think that that is all there is to it.

This product line emphasizes Nivea’s dedication towards keeping skin

healthy and strong. Lastly, the Self-tan category of Nivea is directed to

consumers who are more concerned with beauty. Nivea highlights the

importance of beauty and at the same time health. This product line

highlights the consumers need to feel beautiful through the use of the

Sun. Products in this line include sprays for the body and face that will

darken or make skin fairer. This product line is directed to white pale

skinned consumers who want to add more color to their complexion.

One thing that remains constant in all products of Nivea is the

packaging. Nivea uses roughly the same colors and sizes for most of

their products. For the color they use blue and while mainly while for

the sizes, they range from 100ml to 500ml. Nivea’s packaging screams

Nivea brand meaning a customer can tell even from a single glance of

the packaging that the product is a Nivea product. This is encouraged

by Nivea’s popularity in the market.

Price

Nivea is known for its value based costing rather than having

cheap prices. Nivea’s products are usually one of the best quality

products you can find in the market today. The value of the product

towards the customers is what really sets the prices for Nivea’s

products.

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Product NameSPF Level

Price (pesos)

Net Wt. (ml)

Pesos/ml.

Hawaiian Tropic Sun Junk 45 499 237 2.11

Neutrogena Ultra Sheer 50 509 88 5.78

Banana Boat Kids Ultra Mist 50 454 177 2.56

Nivea Fresh Moisture Sun Spray 30 487.75 150 3.25

Nivea Children’s Sun Lotion 50 450.75 125 3.61

Nivea Whitening Immediate Sun Protection 50 495.75 125 3.97

As seen in the table, Nivea’s products are in the middle of the

price bracket not too cheap or too expensive. This tells us that Nivea is

not going against other products like Hawaiian Tropic’s sun junk

because although Nivea is able to lessen the price it is about the

product placing. Nivea does not what its products to be cheap because

it wants the consumer to know that even with the price like that it is

still the best choice.

A lot of factors surround the setting of the end price of a product an

example would be cost of productions, business agreements/mergers,

and maximization of profit and sales. With all these factors some of us

may wonder who is it that they really decide what the end price is

going to be. Actually there are pricing strategies that companies like

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Nivea use in order to start up a product such strategies are cost based

pricing, penetration pricing, and price skimming. Cost based pricing is

the regular way of pricing, calculating the cost of production and add a

little profit. Penetration pricing and price skimming on the other hand

have a bit more marketing technique to it. Penetration pricing means

low prices at the start to make people what to buy then later on

increase the prices forcing those who are hooked to the product to

buy. Price skimming is when the initial price is high waiting for the

customers who want to buy and are very interested in the product then

lowering the prices so that others who see the first customer and say “I

want one too!” With these strategies companies like Nivea have a full

set of arsenals at their disposal anytime they want to bring in

something new however not all companies are this lucky, only market

leaders and maybe some market challengers can try these strategies.

When Nivea Visage was re-launched in 2007 the price was

slightly higher meaning Nivea used the price skimming strategy

however, since most customers do not buy from Nivea directly they

have to buy it at retail store, the price will be increased even higher.

Nivea realizing that their target market was teens and mothers buying

for teens made prices high but not too high that it would be too

expensive for a teen product.

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According to “THE TIMES 100 NIVEA CASE STUDY”

As what can be seen since the price at the start was higher than

other brands which medicinal treatments for teens, the sales was

rather low at the start but then when Nivea cut down the price, people

started wanting to buy more and more of the product. The peak was

actually later in its life. Maturity was rather late as well but even if the

product did not boom the market right away it was still a very effective

campaign.

Place

The main concern for this element of market mix is distribution.

Where would the product sell the most and how is it going to get there

are the primary questions to be asked when confronted with this

element. The place where the product is being sold is one of the

influencing factors for a customer to buy it. Example of this would be if

the product is at the top of the shelf or at the bottom where no one can

see it.

Nivea Visage Young was aiming for teens and with this in mind

what Nivea wanted was to get the widest range of distribution since it

did not matter where a teen aged girl would see the product as long as

she saw the product, the product would work for itself. Nivea’s

research said that 20% of the teen girls buy for themselves at high end

stores when they go out with their friends while mothers buy for their

daughters in department stores or groceries. When they found this out

they focus on these places more and true enough their product sold

more. The volume at which Nivea was willing to sell was high so

retailers did not get their supply from the original source. Retailers had

to get them from wholesalers while wholesalers would get from Nivea.

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This system of buy and sell was an advantage for Nivea because to sell

in small quantities would mean more delivery charges.

Nivea is a famous brand, one of many Beiersdorf brands known

worldwide. Here in the Philippines however, Nivea’s products are

distributed McKenzie Distribution Company Inc. They cover the whole

Philippines making sure that Nivea products are available in most

drugstores, supermarkets, sports stores, and even convenient stores.

Since Nivea is a very well known brand it is safe to assume that it has a

very wide scope when it comes to distribution since a lot of customers

are very loyal to Nivea and are very particular to buying only Nivea

products. Another reason why Nivea is sold nationwide is that it is very

lucrative in the market. Because Nivea sun has at least 60% of the sun

care market in the Philippines, it has to be available to the consumers

in a wide variety of locations not just in the major areas but also in

smaller establishments.

Promotion

Promos are a marketing strategy with the main purpose of

promoting their products so that more people will buy it. It is the job of

promotions to make the product look even better than it already is.

Even normal products can be made great products just by good

promotions. There are too kinds of promotions which Nivea does. First

is the above the line promotions which is directly paying for the

advertisement such as print adds and radio broadcasts. The other kind

of promotions is the below the line promotions which deal with the

other business methods such as conferences, inter-company meetings,

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occasional business gatherings, trade fairs, direct mailing, and

sponsorships.

Nivea Visage Young had a great promotional strategy which was

consumer based. It mainly revolved around giving away samples to

many different teens. This is very influential to teens because they are

not familiar with other brands or Nivea products as well. They are new

to these kinds of things so a hands-on approach was the best way to

go for Nivea. To let the teens experience their product first rather than

second or last giving the teens a lasting impression.

Nivea is the market leader in sun care here in the Philippines

therefore it has the ability to broadcast itself in most media without

being hassled buy costs and timeslots. Nivea broadcasts its products

via television, radio, internet, billboards, and other print ads. Nivea

uses the television since it is the most commonly used media today,

internet because there is a growing demand for online shopping,

billboards to hit people while they least expect it, and other print ads

basically to inform customers what they will get if they buy from Nivea.

It also uses endorsers to encourage people to buy their products. Nivea

highlights its products features mainly its core benefits. They try to

show how effective their products are and why people should buy the

said products. The most prominent media used would have to be the

television since it has the widest coverage among all media today.

Nivea wants a wide range of audience because they are able to cater

to them all.

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3. Competitive Strategies Employed

Nivea has many competitive strategies especially since they are

the market leaders of sun care development and research. Being the

market leader Nivea has the resources to dictate the flow of the

market. Aside from this the market leader is able to control whatever it

wants to do. It can be a nicher, a follower, a challenger. With this in

mind the market leader would have all the competitive strategies

available to all positions of the market.

One strategy the Nivea is currently using is niching where

although other companies can niche as well, market leaders have the

best adaptability among all positions. With this adaptability it is

possible for the market leader to research and enter almost every

market segment and niche in the entire market. This is only possible

through their research and development which they are leaders in.

With the research that most competitors don’t have they are one step

ahead of the competition. They do not need to worry about the

challengers catching up to them if they continue their strategy of

continual market research.

Another strategy is their commitment to being consumer based.

Most companies tend to over look the fact that plain market strategies

like being product oriented is not good enough to survive against the

market leaders they must have the intimate relationship that Nivea

has with their customers. This relationship that Nivea has created is

one of their most important assets. Without this they would not be

market leaders nor would they survive in the market.

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The company’s Consumer Business Strategy focuses on

consumers and on their individual skin and beauty care needs. By

combining quality consumer orientation, and brand personality, they

strengthen the appeal of their brands. Furthermore, they have

personal contact with consumers and thus gain insight into their

wishes and needs. Nivea also makes their brands an experience. Their

strategy of letting consumers feel care when they use the products is a

thumbs up for customers.

Also, Nivea displays their products using high-profile, promising

concepts that are realized by working together with trade partners

around the world.

Other strategies include focus on strong brands and regions with

above-average growth potential. Generating strong growth in these

areas, Nivea holds numerous leading positions in many categories.

Last strategy that they use is their brand name. Nivea and of

course Beiersdorf are well known companies. They use these brands to

create new products so whatever product they come up with, they are

sure to have consumers because they have many loyal consumers

already.

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Complete History of NIVEA

1882: Pharmacist Carl Paul Beiersdorf establishes the company on March 28. The company Nivea originated from Poland and was bought by German investors. The date of the patent document for the manufacture of medical plasters is taken as the date of the company’s formation.

Carl Paul Beiersdorf produces gutta-percha plasters in his laboratory on the basis of his patent, laying the foundations for modern plaster technology.

1890: Pharmacist Dr. Oskar Troplowitz takes over the company.

1892: The first international cooperation agreement is concluded with US trading company Lehn & Fink for the USA.

1900: Patent application for Eucerit, an emulsifying agent. Eucerit is the basis for Eucerin and, later on, for NIVEA Creme.

1906: The first overseas branch is established in London.

1909: Labello is launched on the market. It is the first lip care product in sliding tube packaging. The term Labello is derived from the Latin for "beautiful lip" (labeo = lip; bello = beautiful).

1911: NIVEA Creme – the first stable water-in-oil emulsifier – is introduced. The emulsifying agent Eucerit is made from lanolin, found in sheep's wool, and is the key to NIVEA Creme's unique properties.

It is said that the main ingredient of Helena Rubinstein (HR) product also comprises sheep's wool in Australia.

1918: The deaths of Oskar Troplowitz and his partner Otto Hanns Mankiewicz result in the formation of a stock corporation (limited company) on June 1, 1922.

1922: Willy Jacobsohn takes over as Chairman of the Executive Board of the newly formed stock corporation. The first self-adhesive plaster is introduced under the name Hansaplast.

In 1924, Nivea remodelled its cream in a blue tin with a white logo.

1925: NIVEA is relaunched in blue packaging. The new design and communication lead to the crucial breakthrough for the NIVEA brand. The distinctive blue and white tin starts its successful history.

1929: Beiersdorf shares are listed on the Hamburg stock exchange for the first time. Over 20 production sites worldwide are already in operation.

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1933: Under the pressure of National Socialist propaganda, the Jewish members of the Executive Board step down. Willy Jacobsohn, the former Chairman of the Executive Board, heads the foreign affiliates from Amsterdam until 1938.

By adopting a policy of "honorable tactics", the Beiersdorf Executive Board, under the leadership of Carl Claussen, succeeds in steering the company through the Nazi period despite a large number of malicious campaigns by competitors. Although Beiersdorf retains its own business culture, it must still cooperate with the regime.

1936: Tesa is introduced as the umbrella brand for self-adhesive technology. The first innovative product is its transparent adhesive film, later known worldwide under the name tesafilm.

1945: At the end of the Second World War, a majority of the Hamburg production plants and administrative buildings have been destroyed.

1945-1949: Most of the affiliates and the international trademarks in almost all countries, in particular in the USA, UK and the Commonwealth, and France, are lost. The company Beiersdorf has to start again virtually from scratch.

During World War II, the marketing manager Elly Heuss-Knapp distanced the brand from Nazi ideology. In 1949 she became the First Lady of Germany as wife to Theodor Heuss.

1950: ph5 Eucerin is launched on the market. This innovative ointment focuses on the importance of the skin’s own natural protective acid barrier in maintaining good skin health.

1951: The first deodorizing soap is introduced under the name of 8x4. The brand is extended into a product family during the 1950s and 1960s.

1955: Beiersdorf launches a protective hand cream on the market under the name of atrix.

In 1956, a customer claimed that using a Nivea product had dissolved his/her hair and caused it to fall out. The claims were dismissed within weeks.

1963: NIVEA milk – liquid NIVEA Creme in the form of a water-in-oil emulsion – is introduced "for all-over body care".

1973: The images in the "Only Me" NIVEA advertising campaign illustrate how NIVEA Creme optimally bundles all aspects of skincare into a single product. The campaign defines the look of NIVEA Creme advertising in the 1970s and 1980s.

1974: Beiersdorf diversifies its business and introduces a divisional structure. At this time, the divisions are cosmed, medical, pharma and tesa.

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1982: Start of steady expansion of NIVEA as a brand for skin and body care through a large number of subbrands with an international focus. Introduction of NIVEA Gesicht (face) in Germany, Austria and Switzerland.

1989: Change of strategy: Start of the implementation of a strategic reorientation process focusing on the core competencies of skin care, wound care and adhesive technology.

1990: Acquisition of the JUVENA brand, developed by the Divapharma pharmaceutical laboratory, founded in 1945 in Zurich.

1991: Acquisition of the la prairie brand. The company originated in the famous La Prairie clinic in Montreux, Switzerland.

1992: Launch of NIVEA's BLUE HARMONY advertising campaign, which is still running today. It adapts to the current spirit of the times with emotionality.

1995: Acquisition of the FUTURO brand. The company was founded in Ohio, USA in 1917 by Georg Jung, a German, and produced bandages right from the start. The "Futuro" brand with its black and yellow packaging was born in 1936.

1999: The Company's strategy is streamlined further to focus on a small number of strong consumer brands. Professional wound care and self-adhesive technology are given the opportunity to introduce their own organizational structures

2001: The new strategy enables tesa to become an independent affiliate. tesa AG is formed as a wholly owned affiliate of Beiersdorf, enabling it to react more flexibly to consumers and industrial customers.

Professional wound care is spun off in line with the new strategy and contributed to a joint venture between Beiersdorf and Smith & Nephew. BSN medical, domiciled in Hamburg, is founded.

2002: Florena becomes a wholly owned Beiersdorf subsidiary. The cooperation dates back to 1989, and was intensified following the reunification of Germany.

2003: A new functional group organization focusing on the areas of brands, supply chain management, finance and human resources replaces the previous divisional organization

2004: The new skin research center opens in Hamburg, underscoring the innovative strength of the globally successful Beiersdorf group.

2009: It is rumoured that Nivea are set to launch their latest and most revolutionary advertising campaign in mid-2009. A spokesperson for the company has allegedly stated that movie star Robert Pattinson will be the new face of Nivea.

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IV. IDENTIFIED MARKET OPPORTUNITY

A. Size of Market

As of the year 2008, Euromonitor International has recorded the value-based market size of the Sun Care sub-sector of the Cosmetics and Toiletries industry at approximately PHP197million. Having experienced an astounding 11.3% growth within the three years prior alone, it is very evident how this once neglected sub-sector has rapidly gained acceptance by the market (see Table 4.1).

Table 4.1 Value Growth from

2003 to 2008

On the other hand, Euromonitor International

Indicates, that this PHP197million is set to grow even further in the next four years to an estimated PHP213million (see Table 1.3, Overview of the Industry). With this progress in mind, we could say that entrance into this market could be quite promising. Considering the extent to which the market would expand over the coming years, manufacturers would in turn, be given more opportunities to sell Sun Care-oriented products (i.e. SPF Refresh).

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IntervalValue Growth Percentage

2003 to 2005 0.065605096

2006 to 2008 0.113623516

YearValue Sales (in

millions)

2003 157

2004 161.3

2005 167.3

2006 176.9

2007 187.9

2008 197

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B. Opportunities from Market Trends

Global Warming

Global warming is a naturally occurring process which in the past couple of years has been sped up to a great extent by humankind’s excessive release of greenhouse gasses. Through this process, a large amount of the sun’s UV rays, which are harmful to human skin, is trapped within our atmosphere. Although this would generally be considered bad news, to companies such as Nivea, this could spell a significant amount of profit. With the excessive amount of harmful UV rays trapped in our planet, Sun Care product manufacturers could seize this opportunity to sell their products, focusing of course, on their ability to protect their consumers and their families from these UV rays.

Technology

With knowledge regarding matters such as this spreading like wildfire, selling Sun Care-related products is made much easier and quicker. With the development of various information technologies that aid greatly in the broadcasting of information, the Filipino consumer is immediately made aware of the latest breakthroughs of product manufacturers which address their needs. With several forms of media such as radio, television, and the internet, spurring across even the poorest of barangays, these manufacturers are given the chance to create needs within society that would come in their favor (i.e. the need for UV protection). If they successfully tap into these resources that have rapidly been evolving within our country, marketing their products would be made exponentially more efficient as well as effective.

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Also, along the lines of technology are the advancements that have arisen which have allowed various companies to develop their products versus their consumers needs. With these technologies, companies have managed to augment their products down to the molecular level, forming compounds that give their consumers what they desire. A few examples of these would be oil-free, moisturizing, and higher level SPF sun protection products. These, as well, have given companies a bit more flexibility in coming up with new offers that would allow them to capture value from their consumers. All of this considered, entrance into the sun protection market would prove to be even more promising.

Filipino Culture

The Filipino people, who are the primary focus of this marketing campaign, have as previously mentioned, developed a certain attitude towards fair skin over the years. With their preference leaning towards this trait, it would be a good opportunity for Nivea to cater to their need for such. Since UVA/UVB protection promotes fairer skin, Nivea could gear its advertising campaigns towards this property of SPF Refresh, and generate a good amount of income from this partiality of our countrymen towards fairer skin.

Seasons (Dry and Wet only)

In the tropical country of the Philippines, there are only two seasons which cover the entire archipelago year-round – Wet and Dry. Because of this, product sales for SPF Refresh would not be limited to merely the summer season, when the heat in the Philippines is at its peak. Rather, SPF Refresh would still be able to sell itself to the consumers through its cooling properties, as long as the dry season is around. Whereas other sun protection products would experience a

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great decrease in their sales when it is not the summer season, the sales of SPF Refresh would not have to suffer the same fate.

C. Weaknesses of Competition

Although there are already numerous brands competing for a good share of the Sun Care market, none of these, at the moment offer an experience like that which SPF Refresh provides. Indeed, there are some which have already increased their SPF level to answer the consumer’s calls for better protection. Yes, there are even some which have responded to the complaints with regards to the oil content which has been very troublesome for the acne-fearing teen. However, none of these brands have been able to offer both maximum protection and oil-free solutions, coupled with a revitalizing sensation to shield the consumer from the often-unbearable Philippine heat. This is what SPF Refresh has to offer – the wonders of protection united with invigoration. In the end, this is what will enable SPF Refresh to standout from the crowd of Sun Care product brands.

D. Strengths of the Company that Could be Leveraged on

Brand

One of the key strengths that the success of SPF Refresh could rely on is the fact that Nivea is already a well-established brand in the field of Sun Care. Known world-wide for delivering top-quality products, it has won the preference of many consumers over competing brands throughout the recent years. This of course, is evidenced by Euromonitor International’s brand share records from the years 2005 to 2008 as shown in table 4.2.

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Table 4.2: Brand Shares from 2005 to 2008

From holding a mere 17.9% of the total Sun Care market back in 2005, Nivea quickly made its way to the top in a span of only three years, eventually capturing a staggering 61.7% of all shares. Taking this into consideration, Nivea should have no trouble introducing this new product to the market. With the company’s brand holding such a dominant position over its competitors in terms of market share, the only thing they would have to worry about is sustaining the quality of the product such that it would maintain if not boost its market share even more.

Quality Consumer Orientation

Apart from their exemplary brand reputation, Beiersdorf, under which Nivea operates, is also known to be a very consumer-oriented corporation. The said company did not move up the ranks without any hard work. Rather, they are known to constantly invest vast amounts of money into research and development, making certain that they are

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kept up to date with their consumers’ wants and needs. This, of course, is evidenced by Beiersdorf’s annual reports. In the year 2008 alone, Beiersdorf recorded their research and development expenses at a total of €149 million, roughly €17 million more than the year prior, which in turn was also €9 million more than the one which came before. As previously mentioned, such constant investment into R&D has proven to play a key role in the corporation’s success.

Table 4.3: Date taken from Beiersdorf’s Annual Reports

That being said, SPF Refresh could gain from this in how further development of the said product could be made possible by the funding provided by the main corporation. It is important to point out how they understand the value of their customers because otherwise, they would hold back on shelling out money for further improvements of their products.

Strong Trade Relations

Over the years, Beiersdorf has been able to build up on their brands’ reputations through the aid of various trade partners overseas. Such brands include Nivea, Eucerin, La Prairie, and many more. Through the company’s well-maintained relationships with their retailers and distributors, they manage to gain advantageous shelf

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placement for their products as opposed to those of competing brands. With the help of such relationships, it would be easier for Beiersdorf to do the same with SPF Refresh, capitalizing on optimal shelf placement and boosting sales as with their other Nivea products.

E. Opportunity to Satisfy a Distinct Unmet Need of a Distinct Target Market

Nivea SPF Refresh is a product which is mainly aimed towards athletes and outdoor enthusiasts whose ages range from 16 to 22 years. They are those who spend most of their leisure time basked under the sun, engaging in their favorite activities. As mentioned above, what this product could provide the said market is an experience which binds optimal protection with soothing comfort. With other brands failing to recognize the need to bring the element of invigoration to the field of Sun Care, SPF Refresh stands a good chance of capturing a huge chunk of the market. Considering the high temperatures that Filipino athletes and outdoor enthusiasts go through for the majority of the year, SPF Refresh would give them a chance to stay cool and beat the heat unlike any other sun protection product could. With the revitalizing effect this product provides alongside optimum sun protection, its users could push their performance to the utmost, not having to worry about the temperature.

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IV. PROPOSED TARGET MARKET

TARGET Market Profile

Outdoor Athlete (College)

You’re an 18 year old first year college student residing in the Philippines. You’re fresh out of high school and are working to get a degree in the field of business. You belong to a family of six, with three brothers who unfortunately, do not share the same passion for athletics that you posses. You have always been a big sports aficionado and even played soccer full-time for your previous school’s varsity team. Unfortunately however, the course you have chosen for yourself, does not give you the luxury of free time and forbids you from joining the college team. Nevertheless, being the active individual that you are, you still frequently crave for your fix of some game time. You get the weekends off, and make it a point to get together with your college friends for a few hours of soccer. After a long week of quizzes, projects, and oral exams, you just cannot postpone that satisfaction of scoring a goal any longer just because it’s scorching hot outside! What do you do? You whip out your handy-dandy SPF Refresh! A few mists and you’re all set! No more wasting valuable time, waiting for the air to cool down a bit. You get a good, long-deserved, kick with the guys for as long as you want. You’re well protected from any UV rays and even better, you don’t have to worry about the heat! You’re kept safe and invigorated throughout your game and what’s better is that after all this, you’ll even have some spare time to finish up on school work for the coming week. When time is of the essence, all you need is SPF Refresh!

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Outdoor Athlete (High School)

You’re 16 years old. You currently attend high school and much like most fellow male, Filipino teenagers, you are full of life and enjoy a good amount of athletic activity. You belong to a family of four, with an older brother who is already in college and is almost always caught up in school work. In order to satisfy your hunger for sports and competition, you tried out for your school’s baseball team. With good fortune and talent on your side, you make it. You are immediately informed of the equipment you’ll need and the amount of time the team would demand of you for training sessions and meets. All training sessions are set to start at approximately three in the afternoon, as soon as the last bell rings, and coincidentally when the sun is still at its peak. Yes, there should not really be any issues with regard to this schedule. You’re 16, and are more than fit to take on any heat the sun could throw at you. However, at the back of your mind, you hear your overprotective mother’s voice on continuous loop. She has always gone on and on about the importance of sun protection and your family’s high vulnerability towards skin cancer. You would not normally have a problem putting on sun screen if it weren’t so oily, sticky, and downright distracting for your game. So what do you do now? The answer is simple! You strike a compromise! With Nivea’s new SPF Refresh, you get optimal sun protection that your mom would be more than proud of, and at the same time, you experience an invigorating sensation as you play, rather than that unpleasant feeling you used to get with your old sun screen! Playing the sport you love never felt so good! You get good game and along with it, a clean conscience!

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A. Demographics

Age and Life Cycle Stage

Nivea SPF Refresh is targeted towards teenagers and young adults, ages 16-22 years old. This age group is typically composed of students in high school or college. Therefore, they are more likely to enjoy summer vacations outdoors or at the beach as opposed to the

older, busier individuals at the office.

Gender

This item is designed for the use of both males and females, as sun protection is not gender-sensitive. Athletes and outdoor enthusiasts need the same level of protection regardless of gender, and both would benefit from the cooling sensation that will go along with it.

Income

For faster product recognition and acceptance, it is targeted at individuals belonging to the middle to upper classes, the market which Nivea is currently targeting.

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Image 4: Photographed by Mark Ordoñez

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Race/ Nationality

The product is intended for the use of Filipinos and Filipino-Chinese, sharing a common ideology that fair-skin is a very important measure for beauty. Because of this standpoint, they will be an easier market to cater to as opposed to Caucasians who favor a more tanned and exotic look.

Generation

It is targeted at generation Y consumers not only is this the generation in which the target age group falls under, but also because members belonging to this generation are more accustomed to new media technologies such as social networking websites and weblogs. This is an opportunity for product promotion to be quick and relatively low-cost.

B. Psychographics

Active Lifestyle

Nivea SPF Refresh is designed to fit the lifestyles of athletes such as tennis and soccer players, and outdoor enthusiasts such as nature lovers and beach-goers. In order to counter long hours under the scorching sun in the humid tropical climate of the Philippines, they need protection as well as invigoration. In order to achieve refreshment, athletes and outdoor enthusiasts use various

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Image 5: Taken from Glutamax Website

Image 6: From official Ateneo de Manila University website

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mechanisms to cool down such as downing cold beverages like Gatorade, using contraptions such as the misting fan which gives off a mist of cold water while it creates a light breeze, or simply pouring on ice-cold water over their selves. The lifestyle of such an individual is one that requires practicality- they are on the go, convenience- they do not have a minute to spare, and reliability- they need a product they can count on; and Nivea SPF caters to their unique needs.

C. Behavioral

Occasions

Nivea SPF Refresh targets customers that purchase sun protection products during the summer season, when the temperature is at its peak. These products are not yet considered a necessity in the Philippines, and actual purchases are usually made during this season, according to Euromonitor International.

Benefits Sought

Active individuals seek benefits such as a high level of protection, sweat-proof, light, non-sticky, and oil free. All these benefits are currently being offered by competing companies such as Coppertone, Hawaiian tropic, and Banana Boat, although usually, not all benefits are found within one product. None of these companies have addressed the unique need of Filipinos for refreshment and invigoration. However, there is one benefit which these companies have failed to recognize. Often seen are individuals toting misting fans, caps with built in mini fans, and other cooling contraptions- all used to fulfill their need for refreshment. Nivea SPF seeks to incorporate this unmet need with the benefits sought above.

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Image 7: From shopaservice.com

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Loyalty Status

With quite a number of sun protection products currently being offered in the market today, there is a need to use every opportunity available, and one of these opportunities is brand loyalty. Nivea SPF Refresh targets the loyal customers of Nivea in order to achieve a stronger customer base with less effort, as the brand has a great advantage in terms of market share (holding approximately 60%) against many other competitors.

D. Geographic

Special attention in terms of geographic segmentation would be paid to urbanized cities in Metro Manila and Cebu in particular due to the fact that these are highly commercialized areas and are therefore able to harbor imported goods as Nivea products are not manufactured locally. Also, aside from being highly commercialized, Cebu is also home to several outdoor tourist spots and resorts such as Moalboal and Santander.1

Image 8: Taken from Official Suroy Suroy Sugbo WebsiteV.2 Market Description

1 http://suroysuroy.cebu.gov.ph/suroytour.asp?scatid=1

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V.2 Market Description

Profile 1: The Mestizo Outdoor Sports Enthusiast

You’re an 18 year old first year

college student residing in the

Philippines. You’re fresh out of high

school and are working to get a

degree in the field of business. You

belong to a family of six, with three

brothers who unfortunately, do not

share the same passion for

athletics that you posses. You have

always been a big sports aficionado and even played soccer full-time

for your previous school’s varsity team. Unfortunately however, the

course you have chosen for yourself, does not give you the luxury of

free time and forbids you from joining the college team. Nevertheless,

being the active individual that you are, you still frequently crave for

your fix of some game time. You get the weekends off, and make it a

point to get together with your college friends for a few hours of

soccer. After a long week of quizzes, projects, and oral exams, you just

cannot postpone that satisfaction of scoring a goal any longer just

because it’s scorching hot outside! What do you do? You whip out your

handy-dandy SPF Refresh! A few mists and you’re all set! No more

wasting valuable time, waiting for the air to cool down a bit. You get a

good, long-deserved, kick with the guys for as long as you want. You’re

well protected from any UV rays and even better, you don’t have to

worry about the heat! You’re kept safe and invigorated throughout

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Image 6: Photographed by Elise Lim

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your game and what’s better is that after all this, you’ll even have

some spare time to finish up on school work for the coming week.

When time is of the essence, all you need is SPF Refresh!

Profile 2: The Filipino Baseball Varsity Player

You’re 16 years old, currently in high school

and much like most fellow male, Filipino

teenagers, you are full of life and enjoy a good

amount of athletic activity. You belong to a

family of four, with an older brother who is

already in college and is almost always caught

up in school work. In order to satisfy your hunger

for sports and competition, you tried out for your school’s baseball

team. With good fortune and talent on your side, you made it. You are

immediately informed of the equipment you’ll

need and the amount of time the team would demand of you for

training sessions and meets. All training sessions are set to start at

approximately three in the afternoon, as soon as the last bell rings,

and coincidentally when the sun is still at its peak. Yes, there should

not really be any issues with regard to this schedule. You’re 16, and

are more than fit to take on any heat the sun could throw at you.

However, at the back of your mind, you hear your overprotective

mother’s voice on continuous loop. She has always gone on and on

about the importance of sun protection and your family’s high

vulnerability towards skin cancer. You would not normally have a

problem putting on sun screen if it weren’t so oily, sticky, and

downright distracting for your game. So what do you do now? The

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Image 7: From ADMU Sports Calendar

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answer is simple! You strike a compromise! With Nivea’s new SPF

Refresh, you get optimal sun protection that your mom would be more

than proud of, and at the same time, you experience an invigorating

sensation as you play, rather than that unpleasant feeling you used to

get with your old sun screen! Playing the sport you love never felt so

good! You get good game and along with it, a clean conscience!

Profile 3: The Chinese-Filipino Tennis Player/Outdoor

Enthusiast

You’re a 22-year old third

generation Ateneo de Manila

University student, taking up BS

Management. A daughter of a

wealthy businessman and eldest

child in a semi-traditional

Chinese-Filipino family, it seems

as though you have your career

planned out for you. You live

comfortably you’re your parents and three siblings in a posh village.

You spend your Saturday mornings at the tennis court, where you work

up a sweat. Sundays are spent driving up to Tagaytay Highlands with

the family to bond over a good game of golf. When you’re not busy

with all the school work a SOM course brings, you like to hit the mall do

some retail therapy. It’s almost finals week, which means that summer

is just around the corner. Being rather obsessive compulsive, you’ve

prepared a study schedule just like always, and all your books and

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Image 8: From TennisServer.com

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readings are laid out in order. Another thing you have planned out is

your upcoming summer vacation to Boracay with your high school

friends. This annual beach trip has been a barkada tradition since you

turned 18 and were allowed to travel alone. Come packing time, you

know exactly what to bring- your bikini, a volleyball, and of course,

sunscreen to protect your delicate fair skin and provide you with

refreshment. You reach out for your bottle of Nivea SPF Refresh, and

you’re good to go!

Profile 4: The Filipino Mountaineer

You’re 20 years old and in your third

year of college. You have been

active in your school’s

mountaineering organization since

your freshman year of college, and are now running for org president.

Always having been fond of the outdoors, you spend countless hours

out in the sun; be it having lunch with your girl friend, jamming with

your barkada, or even studying for your next oral exam, you prefer to

do it out in the open. You could well be described as a well-rounded kid

any mom would love to have as her son. You’ve got your academics,

extra-curricular activities, and social life in balance. Your friends

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Image 9: Taken from pinoymountaineer.com

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always ask you, how do you manage to do it all? “I barely sleep a

wink,” you joke around, being the class clown. But in reality, the

reason why you manage to tackle every task efficiently is because

you’re a no-frills kind of guy. Know what’s essential. Your prioritizing

skills enables you can to your duffle bag in less than five minutes. The

first thing on your list would be Nivea SPF Refresh. It’s your essential

buddy, delivering the high level of protection you need along with the

refreshment your body craves after a long day out in the great

outdoors.

Image 9: Taken from Official Suroy Suroy Sugbo Website

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V. MARKETING OBJECTIVES

Over-all Objectives

AWARENESS Inform target audience about features and benefits of our

product and its competitive advantage, leading to at least 5 percent increase in sales in the first year.

Increase product awareness among the target audience by 30 percent in 6 months, capturing the target market in 15 months. (16-2, Athletes etc.)

DESIRE To create a “NEED” for the product beyond target market.

Remove and decrease all possible reasons for customers' resistance to buying our product, leading to a 15 percent increase in sales that are closed in six months or less.

Establish product as the next generation SPF product (containing cooling factors), leading to a 5 percent increase in sales.

ACTION Increase Nivea’s market share under the Sun Care category to

66% by 2010 from 62% and at least 70% by 2012

Distribution of products to Metropolitan cities(Manila, Cebu, Davao) by first year and extension to the whole Philippines by the 3rd year.

To sell products in specific locations where target market usually is to capitalize on target market usage.

BRAND LOYALTY

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To have athletes and beach goers use it all the time before going to their games or to the beach, respectively.

To be the Official Sun Care product in Outdoor & Sporting events.

IDENTIFIED MARKET OPPORTUNITY

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Specific Objectives and Target

A. Market Shares

As mentioned in an earlier part in the paper, Euromonitor

International, the top business intelligence source, headlines that in

the year 2008, the Sun Care sub-sector of the cosmetics and toiletries

industry in the Philippines experienced a growth in value of 5%, with

sun protection as its most rapidly growing sub sector, dominating sales

with above 87% of volume sales and 92% of value sales. During this

time, to push more frequent consumption of sun care products,

increases in the unit price of these said commodities were regulated.

Market developments and growth are predicted at a compound annual

growth rate of 2% in the next 4 years (2009-2013).

Sun Care market share will grow steadily and there is a projected

growth in the upcoming three years; From PHP197 Million by 2010 to

PHP207 Million by 2012. As for Nivea itself, we are targeting a share

growth to 66% by 2010 to at least 70% by 2012. This market growth

can be assumed based on predictions of growth in the sun care

market. Furthermore, only a conservative percentage of the growth in

the market share and growth in tourists visiting the Philippines have

been taken.

(Computations of volume of market and sales can be found on page 105.)

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B. Sales

Nivea expects to generate profits in the next three years, along with

the rapid growth of the Sun Care subsector. The company is in the

investment phase ever since it broke off the joint venture with

distribution partner JL Morison in December 2007 and became a 100

percent subsidiary of Germany-based Beiersdorf. It is to triple its

turnovers and hopefully in 3 years will gain at least 85% of the market

share.

Nivea is present in hundreds of stores across the country. It’s the

number-two deodorants brand with a market share of 12 percent

following Unilever’s Axe. One of its offerings, Nivea for Men, an

advanced whitening cream, has a market share of 50 percent in big

markets.

Nivea as a brand has presence in 2.5 lakh retail outlets, according

to AC Nielsen retail measurement services. The market share for all its

brands is below 5 percent in each category, except for Nivea for Men,

which has a 14.6 percent share.

It sources 70 percent of its products from Germany and other Asian

locations and 30 percent from contract manufacturing. It is now

evaluating whether to set up its own manufacturing facility or to

increase production through third-party manufacturers.

Nivea’s latest addition to its portfolio is an oil control variant of its

whitening cream for men. This addition was based on a finding that 40

percent of male consumers of whitening cream were dissatisfied

because they had oily skin. It will be spending 35 percent of its

projected sales for 2008 on advertising its products through two

agencies – Media Edge and TBWA.

The company’s parent, Beiersdorf, registered an extreme worldwide

sales in 2007 and a growth of 9.1 percent. About 85 percent of its sales

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were contributed by its flagship brand Nivea. Its other major products

include Eucerin and La Prairie and a services retail venture Nivea

House. The company plans to consistently evaluate products from its

global stable to be introduced here. The company has not identified

Philippines, in contrast with Brazil, Russia, India and China, as a growth

markets though.

C. Profit

Putting into consideration that our product is under Nivea, it can be

safe to say that profit is of no concern. Since Nivea is a worldwide

brand and is also well-known in the Philippines, it can be justifiable that

the product will definitely earn the company profit due to the

company’s reputation alone. However, during the first year of

production, the product will not be as profitable as the other existing

products of Nivea since it is still undergoing its introduction phase

towards the audience.

It would take the product roughly 15 months to gain the attention of its

target market meaning during the first year, profit will only be 4/5 of

what it should be since the target market hasn’t fully been drawn into

the picture.

An estimate of the profit for the first year would be around 10

million. This would be a close estimation due to the fact that Nivea has

estimated market shares of 66% of the total market. 10 million is

actually low profit for a Nivea product. We expect low profit for the first

year because our product is some what expensive and although it has

a niche, the price will take some getting use to.

As for the second and third years, we expect to have similar

profit outputs because during these times, the target market is well

aware of our product and therefore our product is at its full potential.

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We expect similar profit figures however we also predict that the

second year will have a slightly lesser profit than that of the third year.

An estimated value for the second year would have to be around 15 to

17 million while that of the third year would have to be around 18 to 20

million.

With regards to the value our estimated profit would be around 15 to

20 million after the first year assuming the target market is fully

harnessed.

D. Distribution

A main ingredient in the proper introduction of a product is the

place where the product is sold. This is very important because these

places should be researched on because they should be linked to the

products target market.

The first year of distribution should be focused on areas that are

very accessible to the public so that the widest coverage can be

achieved. These locations should not be focused on the target market

but more on the general public since the target market is also under

this category. The first year locations should also be frequently visited

by many people.

With these characteristics in mind, the product should first be

introduced in supermarkets. Although this is not really the intended

location it will generate the most talk amongst the people. Word of

mouth can be very effective at the early stages of a product. Although

the product is introduced via supermarkets, we still want to have the

Nivea feel to it meaning we want the products to be sold in large

supermarkets not the smaller ones intended for the lower classes since

our target classes are those in mid to high class or (B to A). Included in

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this category is Watsons because Watsons is known for its high end

products and it can be found in many different places.

After the first wave of the product during the first year, the next

wave will be towards the intended locations where the target market

can be found. The next wave of the distribution would still be in the

span of the first year but during the later half of the year. These

intended locations are those areas where the target market spends

most of their time and money.

These places are high-end beach resorts, sports clubs, and the

like. Since the distribution of the product for the first year are locations

in metropolitan cities such as Manila, Cebu, and Davao, it is safe to say

that there are a lot of these intended places in those cities mentioned

since those cities are the more progressive ones.

As the product progresses into the second year, the distribution also

broadens its horizons. The locations become more general than the

previous year so that the target market will have more access to the

product. Distribution will be broadened meaning most commercial

beaches will be host to our product as well as other gyms and sports

locations.

When the target market is taken care of distribution wise, the

product distribution should look for other customers to get to try out

our product. With this, our product will be available not only for the

target market but also other customers. Our product will be available

to our target market in most places they visit. This is one of the main

objectives in distribution. The third year, distribution will be in full

blast. Most membership clubs in the Philippines will be targeted. Aside

for clubs, big malls will be targeted so product should be in malls since

this is very frequently visited.

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OVERALL MARKETING STRATEGY

Product's Unique Selling Proposition

Nivea SPF Refresh "Making any day under the sun safe, cool and refreshing".

Nivea SPF Refresh will be the first sun care product with cooling properties. It's an easy pick me up product that can easily fit in any kind of handbag. With its long-lasting, non-greasy and quick-drying properties, Nivea SPF Refresh can be used and applied anytime of the day, anywhere.

Positioning Statement

"To young, outgoing outdoor enthusiast who enjoy basking under the sun, Nivea SPF Refresh is a sunblock that gives you the sun care protection you need, complemented by invigorating freshness. With Nivea SPF Refresh, you can stay confident under the sun, even if the heat and the rays make it difficult to do so."

Nivea SPF Refresh is ideal for people belonging to the 16-22 age bracket. These young consumers enjoy engaging in outdoor activities with friends and families, and are constantly exposed to the harsh sun. Thus, they need as much protection as they possible, as well as a little extra boost to keep going. Nivea SPF Refresh is the perfect sun care product for them. Not only do will they obtain maximum sun protection, but they will also benefit from the product's freshness factor.

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Market Mix 4P's (Product, Price, Place, and Promotion)

ProductNivea SPF Refresh is the first ever sun block to contain aloe vera that will give it cooling properties. It is in liquid form, and will be used as a spray. It is gentle enough to be sprayed on all parts of the body, even on the face. Nivea SPF Refresh is long-lasting, non-greasy and quick-drying. It will come in different SPF levels, ranging from 20 to 45, making the product more flexible to users' daily activities.

PriceNivea SPF Refresh's price range will be from P400-P500. According to a survey done, 53% are willing to pay in that range.

PlaceNivea SPF Refresh will be available at drug stores such as Watsons and Mercury Drug, as well as in the cosmetics sections of different department stores like Landmark, Rustan's and SM. It can also be purchased in selected stores affiliated with active lifestyles and water sports, such as Quicksilver, Roxy and Nothing But Water. Aside from that, it will also be available in outdoor shops such as North Face.

PromotionNivea SPF Refresh will be advertised through print, particularly in magazines, and television media. Nivea SPF Rerfresh will utilize a push and pull strategy. There will be different stages for the promotion. First will be the awareness stage to meet the objective of awareness it needs to meet. It will be printed in magazines such as Men’s Health, Women’s Health, Candy, Meg, Preview, Mega, and LifestyleAsia Travel, This stage is set as a teaser for the product lunching. Second stage will be the knowledge stage. This is in response to the curiosity created by the first stage. The purpose of this stage is to help the targeted market to get to know more of the product. Last stage will be the liking stage where in promotions will focus on TV advertisements.

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VIII. THE MARKETING MIX

I. PRODUCT

1. Product Strategy/ Positioning

SPF Refresh is a product under one of the leading cosmetics and toiletries brands, Nivea, of the multinational corporation, Beiersdorf. As such, it is set to compete in one of the most rapidly growing industries of today, with Nivea’s exemplary brand equity to back it up. It would be sold under their sun care line, more specifically, within the sun protection category; which has been the category leader in sales growth in recent years. In addition to this, it will also be sold as sun block, rather than sun screen, since it will actually provide the users with a physical block that would give them a comparatively higher level of protection.

In choosing a brand name for this sun protection product, a few things were considered. First and foremost, with such a wide range of sun care products to choose from today, a name that is simple, easy to pronounce, recognize, as well as remember was needed. Second and just as important, the name had to clearly state what the product is and what it can offer. Since the product is an integration of protection and invigoration, ‘SPF Refresh’ seemed most suitable. However, the value of Nivea’s brand name in itself was an asset which was too good to pass up on. Hence, ‘Nivea SPF Refresh’ was born.

It is a product which has been designed especially for 16 to 22 year old Filipinos and Filipino-Chinese individuals based in the Philippines, who often share a preference for fair skin. This age bracket

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is typically composed of high school and college students who have an active lifestyle, are usually on the go, and do not have the luxury of time in their hands. Economically speaking, this group of individuals would range from the middle class to the upper class. They would also have a fair amount of knowledge about health matters regarding their skin’s heavy exposure to the sun’s ultraviolet rays.

Living in a tropical country such as the Philippines, what this market needs is a product that can provide them with the best protection from these rays, alongside its portability and user-friendliness. They need a product that they could easily bring around in their bags or purses as they go about their busy day; one they could rely on whenever and wherever the need or want for such protection arises. At the same time, these people need a product that would keep them cool, refreshed, and at the top of their game. This unique combination of protection and invigoration is precisely what other sun protection brands have lacked in the past and consequently, what SPF Refresh would bring to the table in the future.

2. Product Description

Unique Selling Point

What mainly sets SPF Refresh apart from the sea of sun protection products that currently floods the Philippine market is the invigorating sensation it provides those who use it. Coupled with optimum sun protection, this break-through product would not only safeguard them from the sun’s harmful rays, but would keep them cool and focused on the task at hand at the same time. SPF Refresh is where sport-level protection meets invigoration and revitalization.

Aloe Vera

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It contains aloe vera extracts, a fully organic, nature-friendly

ingredient which would give off a cooling sensation upon application to

one’s skin. At the same time, this key ingredient is also known to have

a number of health benefits. Only a few of which are relief from itching

and swelling of irritated skin; faster healing of wounds, burns, and

other injuries; moisturizing and softening of skin; and even killing of

fungus and other bacteria. Also, aloe vera extracts are known to

amplify the effects of sun protection products, since they contain

natural agents which are both anti-inflammatory and anti-microbial.

The use of aloe vera as a key ingredient would also prove

beneficial from an economic standpoint. Since it grows in abundance

within various countries such as Singapore and Australia, where

Nivea’s nearest manufacturing plants to the Philippines are located,

the company could cut down on transportation as well as processing

costs in going with this option.

Sport-level Protection

SPF Refresh provides an SPF Level of 50, which is ideal for a sun

block with sport-level protection. Considering that it would also be

sweat and water proof, SPF Refresh should provide UVA protection to

the consumer for more or less 8.3 hours (SPF Level * 10 = number of

minutes worth of protection).

Convenience

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Noting that the main target market of this product would be

people who have an active lifestyle, convenience in storage as well as

application would prove necessary for SPF Refresh’ success. When

applied, it would be non-greasy and quick drying, due to its, one-tap

twist-spray nozzle, which easily and efficiently disperses the solution

around a given area. According to the results of a UAI survey regarding

the target market’s preferences and dislikes when it comes to sun

protection products, the leading source of frustration that they have

stems from the oiliness, stickiness, and heaviness of the solution once

applied. Going with this solution in terms of mode of application would

also ensure maximum coverage of protection as well as minimum time

consumption upon application.

SPF Refresh has been designed to eliminate the hassle of spreading

the sun block on one’s skin and waiting several minutes for it to dry up.

No more of that heavy, sticky feeling that everyone dreads about sun

block either. With SPF Refresh, it’s like all that is wrapped around you

is a light, cooling breeze. All it takes is a few mists here and there, and

you are all set, well-protected and refreshed.

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3. Packaging

a.) Design

The Nivea SPF Refresh product design will cater to the unique needs of the target market. Consisting of active, young individuals aged 16–22; the target market has a unique lifestyle that requires a product that delivers, in a simple, portable/ travel-friendly, easy-to-use package.

Easy One-Tap Twist-Spray Nozzle

Conventional sun protection formulations use a squeezing mechanism which dispenses the product through a hole. This can cause difficulty in squeezing the product out, and too much of the product to be squirted out at once which can be extremely messy. Pumps on the other hand, provide the user more control with respect to product dispensing, but these protrusions from the bottle can make the product difficult to carry around. With the newer formulations such as pump-sprays, lost caps are a regular occurrence. These frustrations will be a thing of the past because with the Nivea SPF Refresh easy one-tap twist-spray nozzle, there is absolutely no cap to lose! Aside from eliminating the possibility of a lost cap, this mechanism provides a superior level of control coupled with ease, allowing the user to cover large areas and even difficult to reach spots such as the back with a single tap.

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Lightweight Metal Alloy Body

A metal alloy will be used for the body. This medium was chosen in order to provide a lightweight but durable container for the product, making it easy to carry on trips or sporting events/activities. Although it will use an aerosol mechanism, this product will not pose as a threat to the ozone layer as the product houses does not contain chlorofluorocarbons.

Double-sided Grip

Ridges on both the left and right sides of the bottle will enable right-handed and left-handed users alike to grip the bottle comfortably. This ensures a no-slip grip, ideal for active people who are always on the go. This feature not only serves a practical purpose, but an aesthetic one as well, as the waves of the grip structure are reminiscent of ocean waves.

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b.) Style

Bright Color Scheme

The packaging of Nivea SPF Refresh is composed of two main colors: bright aquamarine and bright yellow-orange. These two colors were chosen based on the survey results, which illustrates that purchasing most frequently takes place during the summer. Yellow-orange was chosen as an accent to signify the hot summer sun, while a shade of blue was chosen for the body of the product in order to stay true to the Nivea brand colors; and evoke thoughts of ocean waves, as well as a fresh, invigorating sensation. Blue being the more dominant color in the product, signifies the product’s unique selling proposition of overcoming the sun’s rays and imparting a refreshing cooling sensation, helping consumers “Block the sun, beat the heat, with Nivea SPF Refresh.”

Labels

Nivea’s customers are loyal to the brand, as the UAI results present these figures: 23 out of the 60 survey participants indicated Nivea as their last used sun care product brand, 25 indicated Nivea as the sun care product brand they usually use, while 26 indicated Nivea as the sun care product brand they are currently using. Aside from the brand having the most respondents using their products, it also has the most number of respondents that use other Nivea skin care products such as lotions, deodorants, and lip balms.

To capture the brand’s loyal customers, the standard Nivea Sun label is made visible, with its dark blue and yellow tones popping against the new product’s bright aquamarine color. Under the Nivea Sun label is the product name highlighted in a cool ice-blue color, supporting the product’s promise of refreshing protection. Below the

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product name is a short but concise description of the attributes, in order for customers to immediately know the benefits offered by the product. At the bottom of the product is an image of the blazing sun and dew drops, which shows the collision of fire and ice.

Like other Nivea products, the back label of the product will say how much product is inside. It will also contain the list of the ingredients used, allergy warnings, as well as shelf life of the product. It will also contain directions for use to achieve maximum benefits.

d.) Size

Nivea SPF Refresh will be offered in one product size, a bottle with a circumference of 15 centimeters and a height of 8 centimeters (approximately the size of a small water bottle) containing 125 milliliters of sun protection. This is particular size and amount was chosen due to the need for the product to be small enough to grip comfortably as well as fit into the compartments of a bag or car, yet large enough to deliver a sufficient amount of product.

e.) Overall Look

The product’s size, style, and design all contribute to its overall young vibrant look. Its colors are eye-catching, bright, and fresh; all without being too overpowering or straining to the eyes. Its handy size makes it easy to pick up from the store shelves, which contributes to its attractiveness. It’s unique and practical design features define the product with the use of curves which make up its interesting shape. The result is a look that sets the product apart from all the other sun blocks out in the market today.

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II. PRICING

1. Pricing Strategy

Nivea is a brand whose success is deeply rooted in the value that its target market has attached to its name and its products over the years. Since it is a brand that has successfully catered to the middle and upper income classes of society, SPF Refresh would likewise, be sold at a price and quality appropriate for the same level.

Using value-based pricing, Nivea has managed to successfully peg their prices against their customers’ perceived value of their products, therefore obtaining maximum sales. Further more, using value-added pricing, Nivea has chosen to invest more in quality products that justify their high prices, rather than compromising their brand’s credibility and merely lowering their prices to match those of most of their competitors to gain more sales (See “Index vs. Competitors” below). The result of this is an incredible sense of brand loyalty.

According to a UAI survey, wherein respondents were asked about what brand of sun care product they currently use, and whether or not they purchase any other items of the same brand, the results turned out in Nivea’s favor. Out of 17 respondents who displayed a sense of brand loyalty, only one was a Beach Hut user, another was a Clinique user, another used Khiel’s, another used VMV, two used coppertone, and a staggering 11 of the 17 loyal consumers were Nivea users. Simply put, what all this means to say is that Nivea has gained a loyal following over the years, one that would choose quality and value over low prices.

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Figure 10: Results of Brand Loyalty Portion

Taking into consideration as well, the results of the same UAI

survey, wherein respondents were asked to rate the importance of sun

care to themselves, as well as the amount they would be willing to pay

for 100ml worth of a Nivea product, sticking to a value-added pricing

scheme seems to make a lot of sense. When asked to rate the

importance of sun care, from a range of one to ten (ten being the

highest), all respondents gave it a rating of at least five. Furthermore,

a majority of around 40 percent gave it a considerably high rating of

eight. Next, when asked how much they would be willing to pay for

100ml worth of a Nivea product, the majority of the respondents (53

percent) agreed to pay up to a range of 400 to 500 pesos.

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Figure 11: Importance Given to Sun Care

Because of this, a suggested retail price of 499 pesos per piece would be most suitable. On one hand, it is well within the range of prices at which Nivea products are sold today. Lowering the SRP of the product too much, the company would run the risk of cheapening the well-established brand name and could possibly give the impression that something might have gone wrong with how they usually manufacture their products. On the other hand, it is also a price found within the range in which consumers would still be willing to buy it (400 to 500 PHP).

150 pesos per unit would cover the overall costs for the manufacturing of the product, while 450 pesos per unit would be the price at which the product would be sold to the retailers. This would allow the retailers to place a sufficient allowance for their own costs and profits while still ensuring that the product would not be sold any lower than the said Nivea price range.

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Detailed Product Costing

Cost to produce one bottle  

Metal Alloy body 45Plastic Nozzle 15Design and Packaging 15Ingredients 110

150

Index vs. Competition

Product NameSPF

LevelPrice

(pesos)Net Wt.

(ml) Pesos/ml.

Hawaiian Tropic Sun Junk 45 499 237 2.105485232

Neutrogena Ultra Sheer 50 509 88 5.784090909

Banana Boat Kids Ultra Mist 50 454 177 2.564971751

Nivea Fresh Moisture Sun Spray 30 487.75 150 3.251666667

Nivea Childrens Sun Lotion 50 450.75 125 3.606

Nivea Whitening Immediate Sun Protection 50 495.75 125 3.966

Nivea SPF Refresh 50 499 125 3.992

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Cost of bottle is based on quotations acquired in $ converted to PHP. Ingredients cost are gained by percentage of certain amount of the product in the market.

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III. PLACE

1. Distribution Strategy

One of the key factors that have led to Nivea’s success as a

brand is its mother corporation, Beiersdorf’s strong trade relations with

various establishments all over the world. Due to such dedication to

maintaining their relationships with their retailers and distributors, the

company has managed to obtain the most strategic shelf placement

for their products in the most celebrated establishments. That being

said, these trade relations would serve as the main instrument that

would drive the distribution strategy of Nivea SPF Refresh within the

country.

Based on a recently conducted UAI survey, which examines the

most frequent venues for sun care product transactions, it has been

found that when in need of such products; consumers primarily

proceed to drug stores and/or personal care stores. By a relatively wide

margin, the data shows that the most common place these customers

run to in such cases is Watson’s. Following drug stores, the second

most popular venue for such transactions would be department stores.

In this category, Rustans is the leading company, followed closely

behind by SM, which happens to be one of the most widespread

establishments in the country. The third most popular venue for

purchasing sun care products are grocery stores and supermarkets

such as S&R and Shopwise.

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Figure 12: Venues for Purchase

Judging from such a conclusion, the most efficient distribution strategy should be to allot a sizeable fraction of the products being distributed to drug stores. Special attention must be paid to Watson’s since it appears to be the “go to” place of the target market for purchasing their sun protection products. At the same time, however, department stores such as Rustans and SM, must not be neglected either. Although they come second to drug stores in terms of transaction venues, they are relatively more widespread across the country. With such an extensive reach across the Philippine market, investing a good number of units into these establishments should also prove beneficial. Third in the list of priorities, as mentioned, would be

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grocery stores and supermarkets. Although not as much of the target market go there to purchase sun protection products, the fact remains that a certain fraction of people still do. As such, it would also be wise to maintain a presence in these establishments by providing a sufficient number of units for sale. In doing so, the company might hope to contribute in spreading news of the arrival of the new product through word-of-mouth.

All throughout the introductory stage of this new product, the trade relations of Beiersdorf, as mentioned, would prove essential. What the data from the survey merely suggests are the key venues for sun care product transactions. It is not enough however, to simply have units ready for sale in these establishments. Such a move would not be taken advantage of to the fullest unless the company is able to push for optimal shelf placement, and really establish a noticeable presence in these venues as they have done so in the past.

Trade Channels

Although Beiersdorf, through its many established brands such as Nivea, has made a notable presence within the market system in the Philippines, it would be important to point out that they do not have their own manufacturing plant here. Rather, the company brings in and disperses their products throughout the country by the means of a local distribution company known as Mckenzie.

Having only one entry point, Beiersdorf’s relationship with Mckenzie Distributors has proven to play a vital role in the success of their operations within the Philippines. Mackenzie, therefore, is responsible for getting the products down to the lower channel levels – the drug stores, department stores, groceries, and supermarkets in the country. Upon arrival at the said establishments, it is then their

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responsibility to put the products up on the selected shelves and set them up for purchasing by the consumers.

Mckenzie, being the primary trade channel of Beiersdorf in the country, holds a large amount of responsibility for the latter’s sake. A lot of trust has to go into the relationship between the two. Decisions have to be communicated clearly and agreed upon by both parties before taking any action.

Since SPF Refresh is a product under Nivea it would naturally have to go through precisely the same channels that the company’s other products have gone through to get to the hands of the consumers. This system, which has proven very effective in the recent years, should play out well for the future of SPF Refresh.

Distribution Scheme

The entire distribution scheme for Nivea SPF Refresh would cover a time span of around 3 years. As the product moves through these periods, it would be immersed deeper and deeper into the environment of the target market, until it eventually becomes a part of their daily rituals, and a necessity in the things they love to take part in – sports and outdoor activities.

Starting off with the primary release of the product into the

market during the first year, the main focus would be, as previously

mentioned, the drug stores and department stores frequented by the

general market. Among the establishments included in these

categories, Watson’s and SM would be given emphasis. This is for the

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reason that the prior has been proven to be the “go to” place for sun

protection products, while the latter has branches spread out across

the country. This would greatly help the product in terms of getting

noticed as well as talked about by the Philippine market.

Towards the latter part of the first year, when news of the

product would have already spread throughout the nation and a

sizeable profit would have already been collected from earlier sales,

distribution would then expand specifically and immensely to the

places where the target market spends most of their time and money.

The product would then find itself on the shelves of the most

commercialized beach resorts, country clubs, and sporting locations,

available for sale. Almost everywhere there are athletes or outdoor

enthusiasts getting together for a game or a hike, so to would Nivea

SPF Refresh be. Heavy distribution would be invested in from this

point on until the end of the second year, creating a buzz with the

athletes and outdoor enthusiasts like no other sun protection product

has before.

Moving on to the third year, when the product would have

already transformed into something of a necessity to the target

market, distribution would then be regulated to cut down on costs. This

would contribute to the market’s demand for the product, allow for a

slight increase in price, and keep manufacturing of the SPF Refresh on-

going for the years to come.

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IV. PROMOTIONS

Overall Promotion Strategy

The overall promotion mix strategy for the product will be a combination of pull and push strategies, with more focus on pull, as Nivea is a business-to-consumer company, and will require more efforts in communicating with its consumers. Promotion for Nivea SPF Refresh will revolve around the product tagline, “Block the sun, beat the heat.” Advertising efforts will show the product delivering the promise of protection and refreshment in a bottle.

Promotion Objectives and Advertising

Awareness Stage

Because the product is at the beginning stage of its life cycle, first and foremost, the objective of awareness needs to be met. At this point in time, although the target market knows quite a few things about sun protection, Nivea SPF Refresh introduces the new feature of integrating a cooling effect into sun block, which potential customers need to be aware of. During the introduction stage, a teaser print advertisement will be released in health, teen, fashion, and travel magazines such as Men’s Health, Women’s Health, Candy, Meg, Preview, Mega, and LifestyleAsia Travel, in order to create curiosity and excitement towards the product. This teaser ad will be simple yet striking enough to capture the interest of the target market, using bold and bright colors and icons.

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Knowledge Stage

Once the company has achieved success in sparking curiosity,

the next objective would be to get the target market to know more

about the product. If the first print advertisement serves as a means of

getting attention, the first stage in the AIDA (attention, interest, desire,

action) model, the next one would be geared towards holding this

interest. To be released a few weeks after the initial advertisement, he

second print ad will reveal a little more about the product, but still

leave potential customers wanting more. The ad will then lead the

reader to the product website where he/she can learn even more about

the product.

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After gaining knowledge about the product through the print advertisements, the next stage and objective would be instill liking (desire), followed by conviction, and finally, to drive customers to purchase the product (action). After the two print advertisements, a television ad will be released. This 30-second commercial will feature the product’s endorsers, Philip Younghusband and James Younghusband; two well known football players who used to play for the team Chelsea in the FA (football association) Premiere League, and are now part for the RP team. The two active, young (James just turned 23 last September 4, while Philip turned 22 last August 4), good-looking (both are models and teenage heartthrobs), and likeable boys were chosen as they best represent the target market.

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Television Advertising

Six weeks after product introduction, the television advertisement will be aired. The ad’s opening scene will depict a scene wherein the two brothers are going for their morning run in the heat of summer. James, running with an umbrella, a mini-fan, and a bottle of cold water, will begin to slow down. Philip then enters the scene holding a bottle of Nivea SPF Refresh, sprays to cool him self down, and starts to run ahead of James. The scene then switches to a black background with the words “Don’t let the sun slow you down” flashed across the screen. In the next scene, James yells out “Hey Phil, wait up!” Philip then tosses the bottle of Nivea SPF Refresh to James who catches it, sprays himself, and starts to run alongside Philip.

This television ad featuring the product’s endorsers will be supplemented by a print ad also featuring one of the brothers, Phil Younghusband, the “effortlessly cool” character featured earlier on in the 30-second commercial.

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To further strengthen the image of the product, another print ad will be released. It will show cool, refreshing shades of blue, associated with both the Nivea name as well as the promise of the new product. This ad in particular will be geared towards the objective of persuading customers to buy the product now; encouraging those who haven’t already experienced the Nivea SPF promise of protection and refreshment in a bottle to “Dive in.”

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Non-Traditional Promotion

In order to bring the target market through the succeeding stages, and finally to purchase the product, non-traditional or below the line forms of promotion will be used aside from the traditional forms. According to the UAI survey results, the type of media most frequently used by the target market is the internet, and they gain knowledge of sun care brands through word of mouth. Therfore, the main non-traditional strategy chosen will be an integration of word-of-mouth promotion and cyber or web promotion. In order to gain exposure and encourage word-of mouth promotion through this channel, goodie baskets will be given to influential Filipino bloggers such as Chuvaness and Little Miss Dress Up. chuvaness.com is a lifestyle/news weblog by Mrs. Cecile Zamora-Van Straten, a fashionable and very influential woman. She updates her blog regularly (usually more than twice a day), and currently has well over 4 million views. Products and brands she features in her blog are known to become popular shortly thereafter. littlemissdressup.com is a fashion weblog run by two young women, Rosana Aranaz (sister of well known bag designer Amina Aranaz-Alunan), and Hannah Choayu. Although their blog is relatively new, they are rapidly gaining viewers and fans.

“Chuvaness Charm” Image taken from Chuvaness.com Image taken from Stylebible.ph

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Image taken from littlemissdressup.com

Consumer and Trade Activities

The consumer promotion tools that will be used in order to encourage purchase are coupons and price packs. During the first few months of releasing the product into the market, discount coupons slashing ten Philippine pesos off another Nivea product will be given with every purchase of Nivea SPF Refresh. Price packs in the form of related products bundled together will also be used as a consumer promotion tool. Nivea SPF refresh will be coupled with other Nivea products commonly used by the target market such as lip balm (a kiss of protection) and lotion (body daily). When bought as a bundle, these products will come out cheaper than if they were bought separately. This will drive consumers to try out the product with the ones they already use.

Because shelf space is becoming increasingly expensive, trade promotion tools are a necessity. Although Nivea has already established a relationship with its retailers, there is still a need for trade activities. This is to ensure not just any shelf space, but a strategic shelf space. Giving Nivea’s retailers added benefits such as discounts off the list price of Nivea SPF Refresh and offering a certain number of free units with

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a particular purchase amount will encourage advertising allowance and increases the gain of special displays which is needed, as the product is new.

Merchandising / Point of Purchase Materials

In-store product promotion will require special booths in order to catch the attention of passers by. Illuminated signage will be used as well.

Publicity/PR/Events

Beach Promotion

Every summer season, promotional events will be held at the beach. This is one of the areas most frequented by individuals in the target market, as presented in the UAI survey results. Upon introduction of the product, nipa hut stations will be spread across the beach. People passing by can get a feel for the product as specially installed misters will be installed in strategic spots of the nipa huts. During the following summers, outdoor sporting events will be held such as beach volleyball tournaments.

Metro Promotion

In the Metro, PR events and fundraisers will be held. Although Nivea does not usually do advocacies, in order to reinforce the brand value and identity as a “caretaker of skin” (the official Nivea website is called “the care site” according to brandchannel.com), SPF Refresh will lead a run for skin cancer. This will be an effort to really show that the brand cares for the overall health and wellness of its consumers. Phil Younghusband, being an endorser of Kenny Roger’s Roasters as well, may enable Nivea to establish ties with the company, and host the

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second installment of the Urbanite Run they held last August. In line with the tagline of Nivea SPF Refresh, “Block the sun, beat the heat,” the run will be entitled “Beat It.” a fundraiser devoting proceeds to the skin cancer cure research institution.

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IX. 3 YEAR FINANCIAL FORECASTS

3 YEAR SALES PROJECTIONS

 

Market Population  

Nivea's Market Share

 2357131 1555706 0.66

Plus 1.5%2392488 1626892 0.68

Plus 1.9%2437945 1706562 0.70

Table. IX. I. 1

Frequency of purchase      

SummerQuarterly Monthly Other

25.00 13.00 9.00 11.000.43 0.22 0.16 0.191 4 12 1

Table IX. I. 2

Volume Tables

  2010      Volume 670,563 348,693 241,403 295,048x frequency 670,563

1,394,771

2,896,833 295,048

5,257,215

2011      

701,246 364,648 252,449 308,548

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701,2461,458,593

3,029,385 308,548

5,497,772

2012      

735,587 382,505 264,811 323,658

735,5871,530,021

3,177,736 323,658

5,767,001

Table. IX. I. 3

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2010 2011 2012COST PRICE 150

COST X VOLUME 788582240.1896731459

1989615514

SELLING PRICE 450BREAK EVEN VOLUME 1609351 3870880 4060439

Table IX. I. 4

How much consumers are willing to spend:

Range: Number: Percent:400 to 500 31 0.534482759501 to 600 16 0.275862069601 to 700 7 0.120689655701 to 800 1 0.017241379801 to 900 0 0901 to 1000 0 01000+ 3 0.051724138Total: 58 1

Table IX. I. 5.

Cost to produce one bottle  Metal Alloy body 25Plastic Nozzle 5Design and Packaging 10Ingredients 110

150

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Table IX. 1. 6

IngredientsAvobenzoneoctorylene EcamsuleOxybenzoneBenzophenoneDioxybenzophenoneZinc oxide.Menthyl anthranilateAloe Vera aloin

Price determination       500 0 100 50000600 53 47 28200700 81 19 13300800 93 7 5600900 93 7 63001000 93 7 70001100 95 5 5500

TABLE IX. I. 7

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Sales Estimates (PHP)

  

  2010    Projected Sales

328,575,933

683,437,941

1,419,448,032

144,573,411

COGS100,584,469

209,215,696

434,524,908

44,257,167

  2011      Projected Sales 343,610,772 714,710,405 1,484,398,533 151,188,739COGS 105,186,971 218,788,899 454,407,714 46,282,267

  2012      Projected Sales 360,437,593 749,710,194 1,557,090,402 158,592,541COGS 110,338,039 229,503,121 476,660,327 48,548,737

Table IX. 1. 8

I. Detailed marketing budget and timeline

Billboards     6 months    

  Edsa 980,000      

  Cagayan 20,000      

  C5 180,000      

  GenSan 60,000      

 Other provinces 150,000      

 Other locations 300,000      

  Shaw 120,000      

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  Beaches 200,000      

    2,010,00012,060,000.00

12060000.00 12,060,000.00

      12 months    

Magazines FHM 145,000      

  Men's health 88,000      

  Sports 300,000      

  Fashion Mags 300,000      

  Lifestyle 300,000      

  Cosmo 143,000      

  Other Mags 400,000      

    1,676,000 1,676,000 1676000.00 1,676,000.00

      5 per show 4 months  

TV ads Primetime275,000.00      

  wowowee 70,000.00      

 Game ka na Ba? 80,000.00      

  E-Live 80,000.00      

  Tv Patrol150,000.00      

  Telebabad 275,000      

   930,000.00

4,650,000.00

558000000.00

558,000,000.00

   Every Sunday 4 weeks    

Newspaper Phil Star390,000.00      

  Inquirer350,000.00      

   740,000.00

11,840,000.00   11,840,000.00

Endorsement   4 months      

 

P. Younghusband 5,000,000     15,000,000

  J. Younghusban

5,000,000      

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d

  Others 5,000,000      

           598,576,000.00

Table IX. I. 9

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MARKETING TIMETABLE

2010

January to March - Rising number of Ads about product (Teasers)- Signing of endorsers- Release of website and commercials on March- Selling to Retailers in Bulk- Testings and Samples- Release of Product (March)

April-June - Full blast advertising during summer season- Billboards (Endorsers)- Frequent TV commercials old and new- Promotions in shops- Sponsoring events

July- September – Less Ads but continue print ads in mags and online.- Sell again to retailers for re-stock

October to December – Very minimal advertisements.- Give away of products as promos

2011

January to March - Rising number of Ads about product (Teasers)

- Release of website- Release of new commercials on March- Selling to Retailers in bulk- Testings and Samples of new variants- Release of new variants (March)

April-June - Full blast advertising during summer season

- Billboards (plus new Endorsers)- Frequent TV commercials old and new

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- Promotions in shops- Sponsoring events

July- September – Less Ads but continue print ads in mags and online.- Sell again to retailers for re-stock

October to December – Very minimal advertisements.- Give away of products as promos

2012

January to March - Rising number of Ads about product (Teasers)- Update website - Release new commercials on March- Selling to Retailers in Bulk- Testings and Samples of updated line- Release of updated product line (March)

April-June - - Full blast advertising during summer season- Billboards (plus new Endorsers)- Frequent TV commercials old and new- Promotions in shops- Sponsoring events

July- September – Less Ads but continue print ads in mags and online.- Sell again to retailers for re-stock

October to December – Very minimal advertisements.- Give away of products as promos

II. 3 YEAR MEDIA SCHEDULE

For 1st year (refer to table IX.I. 9)

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Possible Media Schedule 2nd year      

3rd year  

     4 months ( April, May, June, July)    

2 months (April, June)

Billboards EDSA 980000     980000  

  Cagayan 20000     0  

  C5 180000     180000  

  GenSan 60000     0  

  Other provinces 150000     150000  

  Other locations 300000     300000  

  Shaw 0     0  

  Beaches 200000     200000  

    1890000 7560000   1810000 3620000

             

             

      8 months     6 months

Magazines FHM 145000     145000  

  Men's health 88000     88000  

  Sports 300000     300000  

  Fashion Mags 300000     300000  

  Lifestyle 300000     300000  

  Cosmo 143000     143000  

  Other mags 400000     400000  

    1676000 13408000   1676000 10056000

             

      3x per show 20 days 4 months  

Television 2nd year Primtime 275000        

  Wowowee 70000        

  Game ka na b? 0        

  E-Live 80000        

  Tv Patrol 150000        

  Telebabad 275000        

    850000 2550000 51000000 204000000  

             

      1x per show 15 days 4 months  

Television 3rd year Primtime 275000        

  Wowowee 70000        

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  Game ka na b? 0        

  E-Live 80000        

  Tv Patrol 150000        

  Telebabad 275000        

    850000 780000 11700000 46800000  

             

   Every Sunday 2 weeks 4 months

Every Sunday 2 weeks

Newspaper Phil Star 390000     390000  

  Inquirer 350000     350000      740000 1480000 5920000 740000 1480000                                2 months     1 mont

EndorsementP. Young Husband 5000000     5000000  

 J Young Husband 5000000     5000000  

  other endorsers 5000000     5000000      15000000 30000000   15000000 15000000

2nd year Total 260888000

3rd year total 75476000

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III. 3 YEAR PRO FORMA INCOME STATEMENT

 

ProForma Income statement  Nivea SPF Refresh  For 2009 through 2012 (all numbers in Millions)             2010 2011 2012   PHP 2,098 PHP 2,194 PHP 2,302Less sales returns and allowances PHP 210 PHP 219 PHP 230  PHP 1,889 PHP 1,975 PHP 2,071                PHP 0 PHP 158 PHP 165Plus goods purchased / manufactured PHP 788 PHP 666 PHP 700  PHP 788 PHP 824 PHP 865Less ending inventory PHP 158 PHP 165 PHP 173  PHP 630 PHP 659 PHP 692         PHP 1,258 PHP 1,316 PHP 1,380                     Salaries and wages PHP 197 PHP 221 PHP 235Commissions PHP 67 PHP 77 PHP 87Advertising PHP 600 PHP 260 PHP 75Depreciation PHP 72 PHP 75 PHP 77Transportation costs PHP 30 PHP 30 PHP 30Other PHP 29 PHP 29 PHP 29  PHP 995 PHP 691 PHP 533              Salaries and wages PHP 67 PHP 77 PHP 87Employee benefits PHP 24 PHP 28 PHP 32Payroll taxes PHP 14 PHP 14 PHP 14Insurance PHP 29 PHP 34 PHP 39

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For Volume refer to Table IX.I.3 “VOLUME TABLES”. Sales is based on market share percentage times volume estimates times price.

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Rent PHP 38 PHP 43 PHP 50Utilities PHP 10 PHP 10 PHP 10Depreciation & amortization PHP 19 PHP 19 PHP 19Office supplies PHP 0 PHP 0 PHP 0Travel & entertainment PHP 14 PHP 20 PHP 20Postage PHP 5 PHP 5 PHP 5Equipment maintenance & rental PHP 0 PHP 0 PHP 0Interest PHP 5 PHP 5 PHP 5Furniture & equipment PHP 30 PHP 8 PHP 12  PHP 256 PHP 263 PHP 293         PHP 1,251 PHP 954 PHP 826                       PHP 8 PHP 362 PHP 554

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Analysis of the charts

The projected Performa Income Statement of the year end and

the next two years was estimated using values drawn out by the cost

of the product along with the variable and fixed costs and the amount

of the product needed to reach the breakeven point (breakeven

volume). Other expenses were estimated by basing cost of expenses

from the distributors in the Philippines (Mckenzie) and the

manufacturer (Beiersdorf). We added more to the present expenses

that these companies already had to allot for the distribution and

manufacturing of the product. A sum of eight million (8m) is expected

to be the profit of the first year. This sum is expected since the cost

has to be recovered before real profit start kicking in. This can be seen

when the profit almost triples in the next years to come.

With regards to the cost of advertising chart, we strongly think

that the cost of advertising should decrease within the span of three

years. On the first year, we estimate the total cost of advertising to be

around six hundred million however our projected estimate for the

following years show a steady decrease in cost of advertising due to

the lessening of advertisements in general since the at the start, the

goal was to raise awareness and after the audience is aware, the

company should lessen its advertising costs.

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Through our survey we have come up with the price that most

people in our target market are willing to pay for our product to get us

the most profit. We found out that that price was four hundred to five

hundred. With this range in mind we have come up with four hundred

ninety nine. This is a marketing strategy to make consumers think that

it is still four hundred yet at the same time it is still in the willingness

price range. Actual cost of the product as estimated by us would only

cost one hundred fifty pesos however even with such a high profit per

product ratio, profits still to not show one the first year. An analogy

would be a fisherman setting up the bait during the first year and at

the second year pulls out the biggest fish.

Approximating the sales during the next three years was not so

hard due to the fact that we already had the cost of the unit and the

price at which people were willing to buy it at. We just simply used an

estimate number of our target market from our research then we

multiplied the frequency of use of the product then finally we

multiplied it again with the price which gives us the sales. Getting the

gross profit would be just a step away. We just needed to accurately

get the difference between the actual retail price and the cost of the

product then we just do the same procedures and we can calculate for

the gross profit.

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WORKS CITED:

1. “Beiersdorf, Inc. Company Profile,” Yahoo.com, Industry Center, Personal

Products, < http://biz.yahoo.com/ic/120/120792.html >.

2. “Nivea History,” <http://www.nivea.com/history>.

3. “Beiersdorf, Nivea (Germany),” AdBrands.net,

<http://www.adbrands.net/de/beiersdorf_de.htm>.

4. “Beiersdorf Company Profile,” Linkedin,

<http://www.linkedin.com/companies/beiersdorf>.

5. Wiseman, Meg, “Nivea Body – Rebranding Proposal,”

<http://www.scribd.com/doc/208575/S-W-O-T>.

6. “Success With Skin and Beauty Care – Annual Report 2008,” Beiersdorf Inc., 2008,

<http://www.annualreport.beiersdorf.com/2008/files/pdf/en/Online_BDF_GB08_E.pdf>.

7. “Category Watch: New Dawn for Sun Care,” Euromonitor International,

<http://www.in-cosmetics.com/page.cfm/link=394/t=m>.

8. “Sun Care – Philippines,” Euromonitor International: Country Sector

Briefing, June 2009, <

<http://www.portal.euromonitor.com/passport/accessPDF.ashx?c=45\PDF\

&f=S-122419-

15864645.pdf&code=jmqzRShXD8p6FHIE5w8BD9VCjt0%3d>.

9. “Trend Watch: The Naturals Trend Ventures Into Sun Care,” Euromonitor

International, May 16, 2008.

10.“Market Plan: Marketing Objectives and Strategies,” Small Business Notes,

<

http://www.smallbusinessnotes.com/planning/marketingplan/marketplano

bjectives.html>.

11.“Category Watch: New Dawn for Sun Care,” Euromonitor International,

<http://www.in-cosmetics.com/page.cfm/link=394/t=m>.

12. “Why Cebu is No.1,” Cebu Province Official Website, 2009, <

http://www.cebu.gov.ph/?

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getid=2&getsubid=6&infolinkids=5&GetBodyName=Why%20Cebu%20is

%20No.%201&rightpdisable=0>.

13.Booras, Charles H., “SPF, UVB and UVA Protection Explained,” 18 May

2008. 13 August 2009 <http://jaxmed.com/articles/wellness/spf.htm>.

14.“Sunblock & Sunscreen Protection Ingredients,” Skin911

<http://www.911skin.com/sunblocks.html>.

15.“Brushed Titanium Bottles.” Pricing,

<http://www.ebottles.com/showbottles.asp?familyid=1418>

16.“Top Tourist Destinations in the Philippines.” Enjoy Philippines

< http://www.enjoyphilippines.com/News/top-tourist-destinations-in-the-

philippines.html>

17.“Philippine Tourism”. Official Website of the Philippine tourism activity.

http://www.philtourism.com/

18.“Beiersdorf Income Statement,” Hoovers.

<http://www.hoovers.com/beiersdorf/--ID__91141,period__A--/free-co-

fin-income.xhtml>

19.“Paper Stickers”. Uprinting.

<http://www.uprinting.com/print/Labels.html>

PICTURES TAKEN FROM:http://www.brandchannel.com/features_webwatch.asp?ww_id=219http://www.superbrands-brands.com/volII/brand_nivea.htmHttp://www.naturalacneremedy.com/acne-blog/wp-content/uploads/2008/06/coppertone-sport-sunscreen-lotion-spf-30-ultra-sweat-proof.jpgHttp://www.shopcrazy.com.ph/wp-content/images/2006/06/beach-hut.jpg Http://s2.thisnext.com/media/230x230/hawaiian-tropic-ozone-sunblock_9b95bb41.jpgHttp://media.rei.com/media/jj/98537069-ce71-4f28-9c4f-2e4bff1d982d.jpgHttp://www.flickr.com/photos/markordonez/2476055388/Http://www.ateneo.edu/ateneo/www/userfiles/71/2007/jan2007/images/fbm_admu_ust_1.jpgHttp://suroysuroy.cebu.gov.ph/suroytour.asp?Scatid=1Http://www.myglutamax.com/events.htmHttp://www.shopaservice.com/articles/category/spa-beauty/Http://www.facebook.com/photo.php?Pid=1626454&id=41791266571Http://www.tennisserver.com/turbo/images/pilotpen05/waite/Zheng2.jpg

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