Case approach crasher: Market entry
strategy for Nivea Face Cream
Case
Competitive landscape
Bargaining power of
consumers: Moderate
Bargaining power of
Suppliers: Moderate
-Large market and less
players
-Less number of players
on the market
-Options for quality
products is less
-Suppliers will have to
choose amongst players;
pressure from other
players not to supply.
-Products with more
functional features are
yet to be released
Rivalry in the
category:
High
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
Men skin care category size in Rs millions
4500
4000
3500
3000
2500
2000
1500
1000
500
0
4200
3230
2500
2008-13
CAGR:
36.8%
1860
887.5
2008
1182
2009
2010
2011
-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
2012
2013
Nascent category
with sales of around
4200 million in an
overall mens
grooming category
of 45000 million
Source:
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Competitive landscape
Agencies
Suppliers
Distributors
Partnerships
Case
Competitor analysis: Emami Fair and Handsome
Positioning: Worlds number 1 fairness cream for men
Strengths
-Created the
category: first movers
advantage
-Celebrity
endorsement
-Available in various
SKUs
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.
-Distribution is good
and visibility is high
Threats
-A lot of competitor
products being
released
-The competitor
products may bank on
their brand global
presence
-Threat from natural
ingredient products
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
Opportunity
-Largest market share,
can leverage the
position and drive out
competition
-Increasing interest in
men for grooming
products
-Developing country
Brand
endorsement:
Sharukh Khan >
High influence
on men within
age group 1832; An ideal
celebrity
endorsement
Sources:
http://www.business-standard.com/article/companies/fmcgs-give-men-a-facelift-110022300001_1.html
Case
Nivea Mens Grooming
category sales in INR million
Nivea SWOT analysis
1000
Strengths
-Strong brands create
goodwill
-High scope of
expansion
-Strong financial
position
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
800
Weakness
-Sales and distribution
channels in India
-Selection of celebrity
endorsement
600
400
200
0
2009
2010
2011
2012
2013
Sales % of Nivea in overall mens 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%
Opportunity
-Category growth has
been very high for the
past 6 years
-Changing attitudes
amongst men; men
becoming more
receptive for facial
creams
Sources:
http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx
Nivea for men sales in INR million
500
400
300
200
100
0
2010
2011
2012
2013
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
Case
Consumer behavior
Social Image
Urban men have
become more conscious
and have started to put
more efforts
Transactional
time is relatively
small
Prominent in
shelves/
availability
Mens Grooming
category
Due to this kind of
change the category
has see a high growth
Hence mass brands
sell more;
Companies should
target for more
shelf space and
should increase the
visibility of the
product
Industry Reaction
The big change: 2013
saw a change in men
preferring men
specific products
including soaps and
shampoos
Increased portfolio
extending to face
cleansers and face
washes
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 30s 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
sweat
Sources:
http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx
http://www.livemint.com/Industry/3GiSPeViRTFQQsSs6q7zbN/Male-grooming-emerges-as-fast-growing-segment.html
Segmentation
Targeting
Positioning
Product
Segmentation
Place
Price
Promotion
Packaging
Segmentation
Targeting
Positioning
Product
Place
Case
Segmentation
Price
12-18 years
18-24 years
24-35 years
35-45 years
>45 years
Age
Psychographic
Educati
on
Lifestyles
Family
Income
Opinions
Descriptors for
behavioral
and
psychographic
segmentation:
Promotion
Packaging
Behavioral
<10th standard
12th Standard
Graduate
Post graduate
Benefits sought
<3,00,000
>3,00,000
Usage status
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
Segmentation
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Case
Targeting
Family
income<
300000
12th
standard &
Graduate
Price conscious
buyer
Family
income>
300000
18-35 yrs
Graduate
& Post
graduate
High Self image
buyer/Benefit
Buyer
Family
income>
300000
18-35 yrs
Benefit buyer/
Intelligent buyer
Graduate
& Post
graduate
35-45 yrs
Different lines can be made
to meet the requirement of
each target segment.
Segmentation
Targeting
Case
Positioning
Product
Place
High Self image
buyer/Benefit Buyer
Prevents dust, keeps
your face clean and
shining; sun
protection
Prevents dust, keeps
your face clean and
shining; sun
protection
Packaging
Benefit buyer/ Intelligent
buyer
Prevents dust, keeps
your face clean and
shining; sun
protection
Smoothening agent,
keeps your skin soft
Extra whitening, anti
per spirant
After shave face
cream
Effective for any kind
of skin
Promotion
Positioning
Price conscious buyer
In the budget limit
Price
Effective for any kind
of skin
Effective for any kind
of skin
How do we want to position
Nivea face cream in the
consumers mind?
The main positioning would be
that the cream prevents dust
and keeps your skin clean and
shining; sun protection
The creams shall have variants
for dry and oily skin and
hence shall be effective for all
kinds of skin
Segmentation
Case
Targeting
Positioning
Product
Place
Product
Price
Product attributes
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
Product C:
Dust
protection
with
smoothenin
g agent
Dust & sun protection
Skin cleansing agent
Skin shining agent
Extra whitening
Anti perspirant
Number of variants:2 (for
oily skin and dry skin)
Dust & sun protection
Skin cleansing agent
Skin shining agent
Smoothening agent
Promotion
Packaging
The 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
Segmentation
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Case
Packaging
SKUs
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:
30 gm
60 gm
120 gm
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
Product A > Normal
packaging
Product B &C >
Premium packaging
Segmentation
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Case
Pricing <-> Packaging
Product (SKU in gm)
Competitor price (INR)
NIVEA Launch price bracket (INR)
Rationale
Product A (15)
25
30-35
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.
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)
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.
Segmentation
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Retail landscape in India
US 500 billion $ industry
Contributes to 14-15% of the Indias GDP
Employment over 40 million people and over 90% of them
employed in General trade
900 B$
in 2020
500 B$ in
2014
RETAIL IN INDIA
Organized
9%
Unorganized
91%
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
Penetration of just 9%
High growth potential
for Modern trade; 3
year CAGR of 38%
Fastest growing
retails market in the
world
Segmentation
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Retail landscape in India
General trade
Huge population employed in
General trade; Penetration is very
high
Modern trade
91%
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
Gives the shelf space to different brands
Motivates the consumers to visit the store
Change in FDI regulations has
increased the limit to 100% investment
in single brand retail and 51% in multi
brand retail
9%
Global players to enter the market to
capture the huge potential
Creation of jobs 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
Introduces Private labels of its own to earn large margins(10% more than
normal); makes the competition price sensitive
These are cheaper to produce as there
are no advertising and marketing costs
Motivates the people to buy the Walmart labelled goods and gives very less
space to other brands
Marketing budgets are more efficiently
used
Segmentation
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Case
Distribution
network
Place
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
Conventional
High
frequency
stores
Modern Retail
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
Nivea mens
outlets/Ecommerce
Non conventional
Collaboration with e-commerce
websites
College students are increasingly
purchasing online
Nivea men outlet in lobby space of
malls
Segmentation
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Promotion
1.
2.
3.
4.
Direct selling; Direct marketing
Advertising
Publicity
PR
1. Trade promotions (Retailers)
2. Consumer sales promotions
(Discounts, Bundling offers etc)
Segmentation
Targeting
Positioning
Promotion
Product
Place
Price
Promotion
Packaging
Segmentation
Case
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Promotion
1. Pre launch campaign
Identify the ideal test
market where the
products can be
tested
Connectors
Mavens
Dermatologists:
The safety
factors have to
be explained to
the doctors
Gym instructors
:They have an
influence over
the customers
Grooming
experts: Salons
are another
place where
the testing can
be done
Ensure that the
stickiness factor is
present. How?
The proposition of
the products with
dust protection,
clean and shining
face can create a
stickiness factor
Discover the
consumer insights by
observations and by
feedback
Engaging the
customer and
making him a co
creator and a
collaborator
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
Segmentation
Case
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Test Markets
Gymnasiums
Salons
Malls
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
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
-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)
Skin clinics
Test centers outside skin
clinics shall also be
effective if
recommended by the
doctor
Segmentation
Case
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Bundling and using the brand image of NIVEA (strength of NIVEA & weakness of EMAMI)
2. Bundling offers
3. NIVEA hampers
The bundling offers can be
with womens 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 husbands skin is not soft
Point of Sale would be giant
apparel retail outlets like
shopper stop, Life style etc.
and normal retail chains.
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 mens face cream
variants; men generally pay
the bills in India and they
have considerable time to
look at the products
Segmentation
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
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.
Segmentation
Targeting
Positioning
Product
Place
5. Celebrity endorsement
NIVEA face wash
Price
Promotion
Packaging
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
EMAMI fair and
handsome
Plausible celebrities:
- Towards the end of
his career
-Very less fan following
-Credibility not
established
-Not a great influencer
Not an ideal option
for the new launch
-Is an established
superstar in the
industry
-Huge fan following
-Most effective in
medium and low class
segments
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
Segmentation
Targeting
Positioning
Product
Place
Price
Promotion
Packaging
Case
6. TVCs
The central idea in the TVC should be dust/sun
protection and a clean shining face.
7. Bill boards
Location
Outside Gymnasiums
Gym going population are
the people who are
conscious about their
appearance and health.
Hence there is a connect
with the products
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
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 womens 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
Rationale
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 -9007974513
Priyanka- 8584062265
