Nivea GTM.pdf

Case approach crasher: Market entry

strategy for Nivea Face Cream

Competitive landscape

887.51182

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0

500

1000

1500

2000

2500

3000

3500

4000

4500

2008 2009 2010 2011 2012 2013

Men skin care category size in Rs millions

2008-13

CAGR:

36.8%

Bargaining power of consumers: Moderate

-Large market and less players

-Options for quality products is less

-Products with more functional features are yet to be released

Bargaining power of Suppliers: Moderate

-Less number of players on the market

-Suppliers will have to choose amongst players; pressure from other players not to supply.

Threat of substitutes: High

-Can be replaced with sandal, turmeric, ayurvedic creams etc

-Products with more functional benefits > potential threat as they have a natural composition

Threat of new entrants: High

-Nascent market; just 9% of the entire personal care category

-Huge potential to expand the pie and get market shares irrespective of the existing players

Rivalry in the category:

High-Fair and handsome is the market

leader

-All establish brands like HUL,

Emami, Eyeryuth, Zydus Cadila etc

are present

-Huge investments in Research

and Development

-Companies trying to differentiate

the products

Nascent category

with sales of around

4200 million in an

overall men’s

grooming category

of 45000 million

Source:http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx

Case

http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx

Competitive landscape

Agencies

Suppliers

Distributors

Partnerships

Competitor analysis: Emami Fair and Handsome

Brand

endorsement:

Sharukh Khan >

High influence

on men within

age group 18-

32; An ideal

celebrity

endorsement

Selling points

5 power fairness cream

Double strength

peptide complex

Sun guard

Stress busters

Anti Bacplus

Herbo cool

70% market

share and a

100 crore

brand

Strengths

-Created the category: first movers advantage

-Celebrity endorsement

-Available in various SKUs

-Distribution is good and visibility is high

Weakness

-Men's fairness category itself forms 45% of the brand sales; Emami as a brand is small when compared to global giants like HUL & PG.

Threats

-A lot of competitor products being released

-The competitor products may bank on their brand global presence

-Threat from natural ingredient products

Opportunity

-Largest market share, can leverage the position and drive out competition

-Increasing interest in men for grooming products

-Developing country

Positioning: World’s number 1 fairness cream for men

Sources:

http://www.business-standard.com/article/companies/fmcgs-give-men-a-facelift-110022300001_1.html

Case

http://www.business-standard.com/article/companies/fmcgs-give-men-a-facelift-110022300001_1.html

Nivea SWOT analysis

Strengths

-Strong brands create goodwill

-High scope of expansion

-Strong financial position

Weakness

-Sales and distribution channels in India

-Selection of celebrity endorsement

Threats

-Emami fair and handsome has 70% market share, more shelf space

-Men buy products based on availability, retailers might not be willing to give shelf space to new entrants

Opportunity

-Category growth has been very high for the past 6 years

-Changing attitudes amongst men; men becoming more receptive for facial creams

Sources:


0

200

400

600

800

1000

2009 2010 2011 2012 2013

Nivea Men’s Grooming

category sales in INR million

Sales % of Nivea in overall men’s grooming

category has only increased from 1.3 to 1.8 in the

past 5 years

Nivea for men other than deodorant has been

stagnant at 0.9%

0

100

200

300

400

500

2010 2011 2012 2013

Nivea for men sales in INR million

Case

Market Research

Observational studies > Consumer behavior; time spent on purchase (high involvement, low involvement, impulse purchase?)

In depth interviews and Focus group discussions (Qualitative analysis)

Quantitative analysis (Questionnaire study

Consumer behavior

Social Image

• Urban men have become more conscious and have started to put more efforts

Men’s Grooming category

• Due to this kind of change the category has see a high growth

Industry Reaction

• Increased portfolio extending to face cleansers and face washes

The big change: 2013

saw a change in men

preferring men

specific products

including soaps and

shampoos

Transactional time is relatively

small

Prominent in shelves/

availability

Hence mass brands sell more;

Companies should target for more shelf space and

should increase the visibility of the

product

Male population aged 18-32

accounted for the maximum sales

Men face issues with dust sticking to

their faces

Influence of Bollywood actors is high

Men do not worry about they age in

late 30’s hence anti ageing creams

might not be an attractive option

Reliance on economical and

affordable products

Men quickly adapt to skin care

products more broadly

Men of age >35 face rough skin issues

Students face problems with excessive

sweatSources:


http://www.livemint.com/Industry/3GiSPeViRTFQQsSs6q7zbN/Male-grooming-emerges-as-fast-growing-segment.html

Case


http://www.livemint.com/Industry/3GiSPeViRTFQQsSs6q7zbN/Male-grooming-emerges-as-fast-growing-segment.html

Segmentation

Segmentation Targeting Positioning Product Place Price Promotion Packaging

Segmentation


Age

•12-18 years

•18-24 years

•24-35 years

•35-45 years

•>45 years

Education

•<10th standard

•12th Standard

•Graduate

•Post graduate

Family Income

•<3,00,000

•>3,00,000

Psychographic

Lifestyles

Opinions

Behavioral

Benefits sought

Usage status

Descriptors for

behavioral

and

psychographic

segmentation:

Segment name High self image

buyer

Benefit buyer Price conscious

buyer

Lazy buyer Intelligent buyer

Personality Highly social Goal seeking Self oriented Lazy Analytical

Lifestyle Image centric Energetic Value centric Hedonistic Saving

Behavior Premium brands Brand loyal Test and use Heavy user Quality

searcher

Benefits sought Brand image Attributes Price Not specific Functional

Case

Targeting


18-35 yrs

12th

standard & Graduate

Family income< 300000

Price conscious

buyer

High Self image

buyer/Benefit

Buyer

18-35 yrs

Graduate & Post graduate

Family income> 300000

35-45 yrs

Graduate & Post graduate

Family income> 300000

Benefit buyer/

Intelligent buyer

Different lines can be made

to meet the requirement of

each target segment.

Case

Positioning


Price conscious buyer

Prevents dust, keeps your face clean and

shining; sun protection

In the budget limit

Effective for any kind of skin

High Self image buyer/Benefit Buyer



Extra whitening, anti per spirant


Benefit buyer/ Intelligent buyer



Smoothening agent, keeps your skin soft

After shave face cream


The main positioning would be

that the cream prevents dust

and keeps your skin clean and


The creams shall have variants

for dry and oily skin and

hence shall be effective for all

kinds of skin

How do we want to position Nivea face cream in the consumer’s mind?

Case

Product


Product A: Dust

protection

•Dust & sun protection

•Skin cleansing agent

•Skin shining agent

•Number of variants: 2 (for oily skin and dry skin)

Product B: Dust

protection, extra

whitening & anti

perspirant




•Extra whitening

•Anti perspirant

•Number of variants:2 (for oily skin and dry skin)

Product C: Dust

protection with

smoothening agent




•Smoothening agent

Product attributesThe product will be for

the price conscious

segment and hence only

basic need of dust

protection and clean &

shining skin are covered .

Consumer insight

considered: Men face

issues with dust

The product is made for

the people who can

spend an extra amount

for certain additional

attributes like anti

perspirant. Consumer

insight considered:

School and college

students face sweat

issues

The product is made for

the people who want to

smoothen their skin.

Consumer insight

considered: Men of age

>35 face rough skin issues

Case

Packaging


NIVEA being an established company globally,

the shape of the product should reflect its

premium nature and brand image

Packaging for product A can be in the normal

tube type packaging

Pricing of 60 g SKU is done in a manner to

elevate the sales of the 120 gm SKU (Decoy

effect)

Packaging for product B and C should not be

the typical tube type like all other brands; the

packaging for these products need to be

differentiated; sample shape is shown beside:

SKU’s

30 gm 60 gm 120 gm

Product B &C >

Premium packaging

Product A > Normal

packaging

Small packages of 5 gm can be

made for testing purpose in the

market. These packages can be used

in the promotional activities at various

point of sales

Case

Pricing <-> Packaging


Product (SKU in gm) Competitor price (INR) NIVEA Launch price bracket (INR) Rationale

Product A (15) 25 30-35 Nivea has a premium brand image and the

pricing should be relatively higher than the

competitor product.

Product A is for the price conscious segment,

hence it is priced at 20% higher than emami

F&H; Pushing the 60 gm tube sales by Decoy

effect (marginal increase in price/quantity is

very less from 30-60 gm)

Product A (30) 60 80-90

Product A (60) 110 130-140

Product B - 20% higher than Product A The product is for the high self image

buyer/benefit buyer who is looking for a

premium product

Product C - 10% higher than product A The product is for an intelligent buyer who is

looking for functional benefits and is willing to

pay more than the price conscious buyer.

Assumption: The pricing has been done relative to the main competitor Emami Fair and Handsome and by

considering the brand image of NIVEA. The cost structure of each of these products has not been considered

as the information is difficult to obtain. Hence the profit margins for each of these products are not being

mentioned.

Case

Retail landscape in India

Organized

9%

Unorganized

91%

RETAIL IN INDIA

Penetration of just 9%

High growth potential

for Modern trade; 3

year CAGR of 38%

US 500 billion $ industry

Contributes to 14-15% of the India’s GDP

Employment over 40 million people and over 90% of them

employed in General trade

Fastest growing

retails market in the

world

500 B$ in

2014

900 B$

in 2020

Per capita organized retail space in India is approximately

around 2 feet

Per capita organized retail space in China is 8 times larger

than that of India

Indian MT not growing as fast as that of

Vietnam, China & Indonesia though

the penetration of MT is just 9%

More than 3% of people are employed in unorganized retail

and hence people cannot easily shift to Modern trade


General trade Modern trade

91% 9%

Huge population employed in General trade; Penetration is very high

Margins distributed across distributor and retailer; hence producer margin is low as compared to MT

Unionized retailers => High coordination amongst the retailers in any area

Change in FDI regulations has increased the limit to 100% investment in single brand retail and 51% in multi brand retail

Global players to enter the market to capture the huge potential

Creation of jobs in India

Retail landscape in India


Private labels

Higher margins; 10% more than the other brands

Cultivates brand loyalty; Walmart has a lot of loyal customers in foreign countries

These are cheaper to produce as there are no advertising and marketing costs

Marketing budgets are more efficiently used

Gives the shelf space to different brands

Motivates the consumers to visit the store

Introduces Private labels of its own to earn large margins(10% more than normal); makes the competition price sensitive

Motivates the people to buy the Walmart labelled goods and gives very less space to other brands

PlaceDistribution

network

Conventional

High frequency

storesModern Retail

Non conventional

Nivea men’s outlets/E-

commerce

HFS Availability of the products in the

stores is very critical especially for

men products availability of

different variants is very important.

Shelf space is very critical, In the

high frequency stores, there

should be availability of all

variants => sales shall be higher for

the product A

Product A can be sold to the

retailer at discount offers; the

presence of other variants will

push the sales of product A which

is targeted at the price conscious

customer

Visible and most effective shelf

space to be taken from the

retailer

Modern Retail Shelf space is very critical as it influences

the purchase decision of men

All the products A,B,C have to be

available in this channel

Special shelf space near the women

cream section to be taken> women

shall be inclined to buy product C for

their husbands (face smoothening)

Space near the counters (arms length)

has to be taken to help men have a look

at the product while they are at the

cash counter

Non conventional Collaboration with e-commerce

websites

College students are increasingly

purchasing online

Nivea men outlet in lobby space of

malls


Case

Promotion


1. Trade promotions (Retailers)2. Consumer sales promotions

(Discounts, Bundling offers etc)

1. Direct selling; Direct marketing2. Advertising 3. Publicity4. PR

Promotion


Promotion


Identify the ideal test market where the products can be

tested

Ensure that the stickiness factor is

present. How?

Discover the consumer insights by observations and by

feedback

1. Pre launch campaign

Connectors

•Dermatologists: The safety factors have to be explained to the doctors

Mavens

•Gym instructors :They have an influence over the customers

•Grooming experts: Salons are another place where the testing can be done

The proposition of

the products with

dust protection,

clean and shining

face can create a

stickiness factor

Identify the consumer insights and their affinity/aversion towards some attributes

in the product

Incorporate the feedback and re test the products at the same place

Enhanced brand image as “customer centric” and development of brand

loyalty

Engaging the

customer and

making him a co

creator and a

collaborator

Case


Test Markets

Increasing number of people these days are enrolling in gymnasiums in Urban India because of the increasing consciousness to be fit and presentable. These men are potential users of the face cream. Hence counters inside the gymnasiums can be installed as test counters

Gymnasiums

There has been an increase in the number of people visiting established salons. The products can be launched here for testing and for collecting consumer insights/ feedback

Salons

-Women spend more time shopping than men. This makes many men move into the lobby space while their women are shopping, hence the lobby space counters shall be an effective means for test marketing.

-Test centers near the cash counters and near the women beauty section (often men wait with their women at these places)

Malls

Test centers outside skin clinics shall also be effective if recommended by the doctor

Skin clinics

Case


Bundling and using the brand image of NIVEA (strength of NIVEA & weakness of EMAMI)

2. Bundling offers

•The bundling offers can be with women’s face cream and this will be only for product C which is targeted at men of age group 35-45

•The purchaser in this case is in the women who feels that her husband’s skin is not soft

•Point of Sale would be giant apparel retail outlets like shopper stop, Life style etc. and normal retail chains.

3. NIVEA hampers

•NIVEA hampers can be introduced which contain a portfolio of products of NIVEA like the face was, face cream, moisturizer & shaving gel.

•These hampers can be given as goodies to promote the products and also the mother brand.

•These hampers can also be given at discounted price to attract the customers

4. NIVEA point of purchase promotion

•One of the consumer insight is that men prefer to buy those products which have large variants and occupy high shelf space.

•NIVEA display stands in the retail outlet which display the portfolio products of NIVEA (EMAMI lacks wide category range)

•NIVEA point of sale display of the men’s face cream variants; men generally pay the bills in India and they have considerable time to look at the products

Case

5. Tactile marketing

Packaging of Product A

•Product A is targeted at a price conscious segment

•Heavy package shall have a positive effect on the customers

Packaging of Product B/C

•The product is targeted at a brand conscious segment who are willing to spend for the quality.

•The product preferable should not have any outer cover.

•The product should have a smooth finish to give a premium feeling to the customer.

•The shape and the finish of the product is shown in the package


The consumer will hold the product in his hands before making the decision of buying it. This will

create a sort of intimacy between them. Hence it is important to gain his attention during this short

span. The influence of touch is HUGE, and human being are extremely affected by it.

Case

5. Celebrity endorsement


- Towards the end of his career

-Very less fan following

-Credibility not established

-Not a great influencer

NIVEA face wash

-Is an established superstar in the industry

-Huge fan following

-Most effective in medium and low class segments

EMAMI fair and

handsome

“Not an ideal option

for the new launch”

Whom is NIVEA looking for?

A person who is in the peak of his

career

A person who is expected to stay for a

considerable amount of time

Great influencer

Established credibility

Who has a screen presence and fan

following almost equal or greater than

“Sharukh khan”

Plausible celebrities:

• His new film “Bang Bang” can

be used to promote the

product

• Has a lot of youth connect

• Will stay In the industry because

of established family and

charismatic appearance

• The Mr. Perfect of

Bollywood

• Has an established

credibility

• Known for his unique

and diverse screen

presence


6. TVCs

The central idea in the TVC should be dust/sun protection and a clean shining face.

The ad concept can be as follows:

A biker travelling under the hot sun and using a NIVEA face cream will have a better shine and a clean face with no dust or skin tanning.

The TVC can also directly attack the central idea of EMAMI of “fairness” which traditionally has been considered as a women’s attribute

The TVCs should feature mostly in between sporting leagues like IPL, Indian Football league, Sports channels and News channels;

Audio copies on Radio shall also be effective as many men who drive prefer to listen to the Radio

7. Bill boards

Location Rationale

Outside Gymnasiums Gym going population are

the people who are

conscious about their

appearance and health.

Hence there is a connect

with the product’s

proposition

Near traffic signals Male drivers are

considerable large in

number and bill boards near

the traffic signals will have

more viewing time

Exit gates of mall parking

spaces

Considerable amount of

time is spent near the

parking ticket collection

counter and the traffic

moves really slow in these

locations, hence a good

place to locate a bill board

Case

Supply chain and logistics management

Centralized

Vs

De centralized

Order quantity: Trade off between inventory carrying cost and ordering cost

For any queries contact:Santosh -9007974513Priyanka- 8584062265

Nivea GTM.pdf

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