IMPROVING THE GLOBAL COMPETITIVENESS OF BEIERSDORF GLOBAL AG WITH BRAND PORTFOLIO MANAGEMENT: A CASE STUDY.

• Author: Rogers, Chloe

BACKGROUND

Nivea is considered one of the best skin care brands in the world. It is also a top cosmetics brand with its foundation in Germany but has since expanded into markets all over the world. Nivea is a skin care and personal care brand consisting of distinct sub-brands under Nivea, which include various product extensions such as Nivea Sun, Nivea for Men, and Nivea Hair Care (Alberti et al., 2019). Nivea's brand image has expanded since the introduction of Nivea Creme in the early 20th century, as Nivea transitioned from exclusively a skin creme brand to a skin care brand consisting of various sub-categories (Alberti et al., 2019).

Nivea's consumer-based brand equity is derived from the marketing effects uniquely attributable to the brand (Keller, 1993). Operationalizing this brand equity as the premium paid by consumers for Nivea over the price paid for a generic brand of skin cream, Nivea Creme has certainly earned a great deal of brand equity for Nivea. A 6.8-ounce container of Nivea Creme was recently sold for $6.58 at WalMart, with a $0.81 cost per ounce. WalMart's generic house brand Equate, on the other hand, recently offered a 6.5-ounce skin cream for $2.98. For just about the same ounces of cream, people are willing to pay 2.21 times more for the Nivea brand, generating strong brand equity for Nivea (Alberti et al., 2019).

Nivea's products have generated brand associations including care, mildness, reliability, gentleness, protection, quality, good feeling, and reasonable price (Alberti et al., 2019). These association vary slightly for differing categories and sub-brands, such as the Nivea Beaute line, which focused more on reliability, quality, and good feelings than other sub-brands such as Nivea for Men, which has associations with popularity and coolness more than other, more established skin care and beauty brands (Alberti et al., 2019). Overall, the brand image and equity of the Nivea brand is largely based on its historical trust and customer loyalty.

Initially, the Nivea brand and its equity were rooted in the idea of simplicity and nature for a long period of time. This was an association grown from one of the original products itself, Nivea Creme. The simplicity illustrated through the original Creme product was a direct reflection of Nivea's shallow product depth. Because Nivea had a relatively small number of products to offer, the simplistic brand image was more easily attained at the time. However, with the introduction of new products as time went on, it grew harder and harder to achieve such an image. The marketplaces grew more complicated and required the brand to meet different needs other than simplicity.

ANTECEDENTS AND MODERATORS OF BRAND DELETION PROPENSITY

Building on the work of Alberti, et al. (2019), the forthcoming analysis of Nivea's brand portfolio utilizes Varadarajan, DeFanti, and Busch's (2006) conceptual model of the drivers and moderators of brand deletion propensity. In order to better unify the Nivea brand name across all categories and to more strongly associate Nivea with skin care, Beiersdorf should consider deleting the Nivea Hair Care sub-brand. This sub-brand offers products including shampoos and in-shower conditioners, as well as styling products such as gels, hair sprays, mousses, and moisturizers. Given that Nivea makes up most of the the company's revenue, for Nivea to remain profitable and enhance its brand equity, Nivea should consider deleting Nivea Hair Care from its portfolio to put the money towards its more profitable products. In addition, Nivea should consider deleting its Q10 Skin Firming Cellulite Gel Cream since the entire product category has received mixed reviews in terms of its efficacy, is known only to offer temporary results lasting for a few hours (Nguyen, 2017) and conflicts with Nivea's overall brand image.

Brand Characteristics

Modifiability. Nivea Hair Care and Nivea Q10 Skin Firming Cellulite Gel Cream are both limited in their modifiability (Alberti et al., 2019; Varadarajan et al., 2006; Avlonitis, 1985, 1986; Avlonitis et al., 2000; Harness et al., 1998; Kotler, 1965) beyond basic hair cleaning, care and conditioning products and cellulite reduction creams, respectively. Although the existing Nivea Hair Care product lines could be modified somewhat to better fit differing male and female product lines and could also be optimized for baby care; however, preexisting Nivea sub-brands already exist which are designed to target these specific consumer groups (Alberti et al., 2019). Nivea Q10 Skin Firming Cellulite Gel Cream, on the other hand, has a specific purpose and is even more limited in terms of its modifiability. Therefore, the overall lack of modifiability makes Nivea Hair Care and Nivea Q10 Skin Firming Cellulite Gel Cream supports their candidacy for deletion.

Strategic role. The Nivea Hair Care sub-brand and Nivea Q10 Skin Firming Cellulite Gel Cream do not play a strategic role (Alberti et al., 2019; Varadarajan et al., 2006; Aaker, 1991; Aaker, 2004; Aaker & Joachimsthaler, 2000; Keller, 2003) in the larger hair care market and the cellulite gel cream market, respectively. They also do not serve as a protective flanker against competitor brands, and hold low market share, likely leading to minimal commitment to the brand by retailers and other channel members (Alberti et al., 2019). In essence, the total deletion of the Nivea Hair Care sub-brand and Nivea Q10 Skin Firming Cellulite Gel Cream would not alter the hair care industry or cellulite gel cream market in any major way and would not hurt Nivea in its other sub-categories.

Likely adverse impact of deletion on other brands in the portfolio. Nivea Hair Care would have little impact on the other portfolio brands (Alberti et al., 2019; Varadarajan et al., 2006) if deleted because it exists in a separate segment of the personal care market from the remainder of the portfolio. If Nivea Hair Care is to be deleted, the negative impact on other Nivea skin care brands would be nonexistent, as the perceived quality and benefits of the other sub-brands would hold on to their own merit, and do not rely upon on hair care products. Although it is arguably a supplement of other skin care products, the deletion of Nivea Q10 Skin Firming Cellulite Gel does not reduce the efficacy of the other skin care products. Hence, the high likelihood of no adverse impact of deletion on other brands makes Nivea Hair Care and Nivea Q10 Skin Firming Cellulite Gel more likely to be deleted.

Age. Compared to Nivea Creme, which was launched in 1911, and Nivea Sun Care, which was launched in the 1930s, Nivea Hair Care and x are two of the youngest brands in the Nivea portfolio. The first hair care product, Nivea shampoo plus conditioner was introduced in 1991. Nivea Q10 Skin Firming Cellulite Gel was introduced even more recently than Nivea Care in...