NIVEA SPF REFRESH

Joey Nocom, Ap Sanchez, Jonathan Wong

ATENEO DE MANILA UNIVERSITY

Elise Lim, Gelo Mendoza,

Mkt101 SY0910

Beiersdorf -
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

Nivea 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).
>
 NIVEA SPF REFRESH

TABLE OF SY0910

Mkt101

CONTENTS
Table of Contents.............................................................................................2

Marketing Background.....................................................................................3

Competitive Analysis......................................................................................15

Company Background....................................................................................24

Iv. Identified market opportunity....................................................................46

Proposed Target Market.................................................................................53

marketing objectives......................................................................................63

Identified MARKET OPPORTUNITY...................................................................65

OVERALL MARKETING STRATEGY...................................................................71

VIII. The Marketing Mix...................................................................................72

Product........................................................................................................... 73

Pricing............................................................................................................ 82

Place...............................................................................................................85

Promotions.....................................................................................................91

3 Year Financial Forecasts............................................................................103

Detailed marketing budget and timeline......................................................107

I.3 YEAR MEDIA SCHEDULE...........................................................................110

II.3 Year Pro Forma Income Statement.........................................................113

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MARKETING BACKGROUND SY0910

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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 SY0910

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70

60

50
Percentage Increase

40
Figure 1: Table based on Euromonitor International Reports

Value Sales (in

Interva Value Growth
Year millions)
30 l Percentage
2003 157
2003 to
2004 161.3 2005 0.065605096
20
2005 167.3 2006 to
2008 0.113623516
2006 176.9
10 Figure 2: Table based on
2007 187.9
Euromonitor International
Records
2008 197

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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 SY0910
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% Mkt101

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).

Projected Value Sales (in

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

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1. Market Trends (Past 3-5 years)

SY0910

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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
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

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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 SY0910
below.
Mkt101

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Self-tanning Sales Remain Negligible

Self-tanning, a sub sector of sun care, is still insignificant in the SY0910

Philippines, as having fair skin is the dominant ideology of beauty in
Mkt101
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

SY0910
Ps million 200 200 200 200 200 2008
3 4 5 6 7 Mkt101

Sun 143. 147. 152. 161. 172. 180.9

protection 0 0 6 8 3

Aftersun 14.0 14.2 14.7 15.1 15.6 16.1

Self-tanning - - - - - -

Sun care 157. 161. 167. 176. 187. 197.0

0 3 3 9 9

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

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SY0910

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B. Environmental Analysis
1. 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
found its way into makeup, now being incorporated into the mineral
makeup, a growing field in the cosmetic industry.

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A couple of years back, Neutrogena introduced their mineral

makeup line, “Mineral Sheers,” which contains an SPF of 20. Because
SY0910

of these products, people now tend to forego the fourth step in the skin Mkt101
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
(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

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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 SY0910
are potentially profitable. One such target presented by Euromonitor is
children, which would focus on parental instincts to protect their Mkt101

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 SY0910
attributed to five main factors. These namely, are the tropical
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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 SY0910

more knowledgeable of the damage that overexposure to the sun’s
Mkt101
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 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

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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 SY0910
corporations have grown immensely over the years, gradually moving
up to the positions they hold now. Mkt101

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

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

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technological level, Coppertone also hosts a website in any case that

one is interested with their present products and upcoming products.

Hawaiian Tropic
SY0910

Mkt101

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

Beach Hut

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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 SY0910
Classic, and Beach Hut One touch SPF
20 which are all clear and invisible Mkt101

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

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.

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PRICE- Banana Boat sun care products

range to P350-P550. Examples of which SY0910
are kid sun block sprays for P345, after
sun sprays for P438, SPF 50 sun block Mkt101

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-Peel
PRODUCT- 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.

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.

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Market Positioning
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Outdoor Use Everyday Protection

High End Co
ppertone/H.Tropic
Artistry

Nivea

Beach Hut Banana

Boat

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
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

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

Banana boat.
SY0910

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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
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 Company 2005 2006 2007 2008

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value rsp

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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
Tanning Research Laboratories Inc 10.2 10.5 8.9 7.9
Tropic

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 - - -

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

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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-
SY0910

sticky/non-greasy types. These variants are very important as it could Mkt101

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.
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

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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.
SY0910

Although, Beach Hut might have more exposure because of more Mkt101

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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SY0910
COMPANY BACKGROUND
Mkt101

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
control of the business in 2003, buying out majority shareholder
Allianz. Advertising Age estimated global measured advertising

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expenditure for Beiersdorf and Tchibo of $1.1bn in 2007, making it the

world's #28 advertiser.
SY0910

Mkt101
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

B. Current Position of the company /

brand in the market

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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 SY0910
a share of 18%. However, since its introduction in 2004, Nivea Sun has
increased in popularity very rapidly, largely thanks to its wide Mkt101

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.

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.

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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 SY0910
Philippines do not appreciate the need to use sun protection products.
As such, there is a need for awareness campaigns from manufacturers Mkt101

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.

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.

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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 SY0910
to consumers” in other areas. The 2nd one being in Dubai Mall.. the
world’s largest shopping center. Their strategy of letting consumers Mkt101

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.

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.

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Mkt101

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,
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.

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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 SY0910
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 Mkt101

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

SY0910

itself. It ranges from General Purpose Creams and Lotions, Shower Mkt101
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
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

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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 SY0910
regeneration or protection.
Mkt101
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”

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

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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 SY0910
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. Mkt101

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
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

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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 SY0910
same time market leaders. All around nichers meaning all their
products seem to cater to specific niches in the market at the same Mkt101

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)

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Mkt101
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
customers who use products after being exposed to the sun as

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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.
SY0910

This category is not for careless users who after placing sun screen Mkt101

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.

Product Name SPF Price Net Pesos/m

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Wt.
Level (pesos) (ml) l.
SY0910

Hawaiian Tropic Sun Junk 45 499 237 2.11 Mkt101

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
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

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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
SY0910

increase the prices forcing those who are hooked to the product to Mkt101

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.

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

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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
SY0910

product did not boom the market right away it was still a very effective Mkt101

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.
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

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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.
SY0910

Since Nivea is a very well known brand it is safe to assume that it has a Mkt101

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,
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

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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.
SY0910

Mkt101
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 SY0910

the market leaders of sun care development and research. Being the Mkt101

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.
The company’s Consumer Business Strategy focuses on
consumers and on their individual skin and beauty care needs. By

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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
SY0910

wishes and needs. Nivea also makes their brands an experience. Their Mkt101

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 SY0910
date of the patent document for the manufacture of medical plasters is taken as the
Mkt101
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.

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.

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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. SY0910

1936: Tesa is introduced as the umbrella brand for self-adhesive technology. The first Mkt101
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.

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.

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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 SY0910
Prairie clinic in Montreux, Switzerland.
Mkt101
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.

IV. IDENTIFIED MARKET OPPORTUNITY

A. Size of Market

As of the year 2008, Euromonitor Value Growth

International has recorded the value- Interval Percentage
based market size of the Sun Care sub-
2003 to
2005 0.065605096
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2006 to
2008 0.113623516
 NIVEA SPF REFRESH

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 SY0910
sub-sector has rapidly gained acceptance by the market (see Table
4.1). Mkt101

Value Sales (in Table 4.1 Value Growth from

Year millions) 2003 to 2008

2003 157
On the other hand,
Euromonitor International
2004 161.3
Indicates, that this PHP197million
is set to grow even further in the
2005 167.3
next four years to an estimated
PHP213million (see Table 1.3,
2006 176.9 Overview of the Industry). With
this progress in mind, we could
2007 187.9 say that entrance into this market
could be quite promising.
2008 197 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).

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

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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 SY0910
ability to protect their consumers and their families from these UV
rays. Mkt101

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.

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

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 NIVEA SPF REFRESH

The Filipino people, who are the primary focus of this marketing
campaign, have as previously mentioned, developed a certain attitude
SY0910

towards fair skin over the years. With their preference leaning towards Mkt101
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
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

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 NIVEA SPF REFRESH

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 SY0910
standout from the crowd of Sun Care product brands.
Mkt101
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.

Brand Share Growth from 2005-2008

(from inner to outter pies)

Nivea
Coppertone
Maxi-peel
Hawaiian Tropic
Banana Boat

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

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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. SY0910

Mkt101

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
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.

Research and Development Expenses in € Million

150

100 2005
Am ount in €
Millions 2006
50
2007

0 2008
Ye ar

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,

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 NIVEA SPF REFRESH

they would hold back on shelling out money for further improvements
of their products.
SY0910

Mkt101
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
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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PROPOSED TARGET MARKET SY0910

Mkt101

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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 NIVEA SPF REFRESH

Outdoor Athlete (High School)

SY0910

You’re 16 years old. You currently attend high school and much Mkt101
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!

54 | P a g e
 NIVEA SPF REFRESH

A. Demographics
SY0910

Age and Life Cycle Stage Mkt101

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
Image 4: Photographed by Mark Ordoñez 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.

Race/ Nationality

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The product is intended for

the use of Filipinos and Filipino-
SY0910

Chinese, sharing a common Mkt101

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
Image 5: Taken from Glutamax Website
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 Image 6: From official Ateneo
de Manila University website
protection as well as invigoration. In order to
achieve refreshment, athletes and outdoor enthusiasts use various
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

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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. SY0910

Mkt101

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 Image 7: From shopaservice.com

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.

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

57 | P a g e
 NIVEA SPF REFRESH

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 SY0910
advantage in terms of market share (holding approximately 60%)
against many other competitors. Mkt101

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

V.2 Market Description

Profile 1: The Mestizo Outdoor Sports Enthusiast

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

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 NIVEA SPF REFRESH

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
SY0910

brothers who unfortunately, do not share the same passion for Mkt101

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
Image 6: Photographed by Elise Lim
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!

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

59 | P a g e

Image 7: From ADMU Sports

 NIVEA SPF REFRESH

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,
SY0910

you tried out for your school’s baseball team. With good fortune and Mkt101

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
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

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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
SY0910

family, it seems as though you have your career planned out for you. Mkt101

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
Image 8: From TennisServer.com
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 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

Image 9: Taken from pinoymountaineer.com

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mountaineering organization since your freshman year of college, and

are now running for org president. Always having been fond of the
SY0910

outdoors, you spend countless hours out in the sun; be it having lunch Mkt101

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 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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MARKETING OBJECTIVES SY0910

Over-all Mkt101
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.

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 To sell products in specific locations where target market usually

is to capitalize on target market usage.
SY0910

BRAND LOYALTY Mkt101

 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.

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IDENTIFIED MARKET OPPORTUNITY

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Mkt101

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Specific Objectives and Target

A. Market Shares SY0910

As mentioned in an earlier part in the paper, Euromonitor Mkt101

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
SY0910

investment phase ever since it broke off the joint venture with Mkt101

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

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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
SY0910

Philippines, in contrast with Brazil, Russia, India and China, as a growth Mkt101

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.
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.

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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.
SY0910

With regards to the value our estimated profit would be around 15 to Mkt101

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
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

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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
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most of their time and money. Mkt101

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

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Mkt101
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)

Product SY0910

Nivea SPF Refresh is the first ever sun block to contain aloe vera that Mkt101
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.

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

Place
Nivea 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.

Promotion
Nivea 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.

VIII. THE MARKETING MIX

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PRODUCT SY0910

Mkt101

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
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

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have a fair amount of knowledge about health matters regarding their

skin’s heavy exposure to the sun’s ultraviolet rays.
SY0910

Mkt101
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

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

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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
SY0910

natural agents which are both anti-inflammatory and anti-microbial. Mkt101

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

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

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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
SY0910

applied. Going with this solution in terms of mode of application would Mkt101

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
SY0910

a.) Design
Mkt101

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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SY0910

Mkt101

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

SY0910

Bright Color Scheme Mkt101

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
product name is a short but concise description of the attributes, in
order for customers to immediately know the benefits offered by the

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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.
SY0910

Mkt101
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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SY0910

Mkt101

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PRICING

SY0910

1. Pricing Strategy Mkt101

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

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Mkt101

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

SY0910

Mkt101

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 SY0910

Cost to produce one bottle Mkt101

Cost of bottle is based on
Metal Alloy body 45 quotations acquired in $
Plastic Nozzle 15 converted to PHP. Ingredients
cost are gained by percentage
Design and Packaging 15 of certain amount of the
Ingredients 110 product in the market.

150

Index vs. Competition

SPF Price Net Wt.

Product Name Level (pesos) (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

PLACE

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1. Distribution Strategy

SY0910
One of the key factors that have led to Nivea’s success as a Mkt101
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

SY0910

Mkt101

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
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

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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 SY0910
through word-of-mouth.
Mkt101

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

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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 SY0910
have to be communicated clearly and agreed upon by both parties
before taking any action. Mkt101

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
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.

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Towards the latter part of the first year, when news of the SY0910
product would have already spread throughout the nation and a
Mkt101
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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PROMOTIONS SY0910

Mkt101

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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SY0910

Mkt101

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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SY0910

Mkt101

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

SY0910

Six weeks after product Mkt101

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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SY0910

Mkt101

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SY0910

Mkt101

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SY0910

Mkt101

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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. SY0910
This ad in particular will be geared towards the objective of persuading
customers to buy the product now; encouraging those who haven’t Mkt101

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 SY0910

stages, and finally to purchase the product, non-traditional or below
Mkt101
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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SY0910

Mkt101

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

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Merchandising / Point of Purchase Materials

SY0910

Mkt101
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
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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SY0910

Mkt101

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3 YEAR FINANCIAL FORECASTS SY0910

Mkt101

3 YEAR SALES PROJECTIONS

Market
Populati
on 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
Summer Quarterly Monthly Other
25.00 13.00 9.00 11.00
0.43 0.22 0.16 0.19
1 4 12 1
Table IX. I. 2

Volume Tables
2010
Volume 670,563 348,693 241,403 295,048
x
frequency 670,563 1,394,771 2,896,833 295,048
5,257,215

2011

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

701,246 1,458,593 3,029,385 308,548

5,497,772

2012

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

SY0910
735,587 1,530,021 3,177,736 323,658 Mkt101

5,767,001

Table. IX. I. 3

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2010 2011 2012 SY0910

COST
PRICE 150 Mkt101
COST X VOLUME 788582240. 1896731459 1989615514
SELLING PRICE 450
BREAK EVEN VOLUME 1609351 3870880 4060439

Table IX. I. 4

How much consumers are willing to spend:

Range: Number: Percent:
400 to 500 31 0.534482759
501 to 600 16 0.275862069
601 to 700 7 0.120689655
701 to 800 1 0.017241379
801 to 900 0 0
901 to
1000 0 0
1000+ 3 0.051724138
Total: 58 1
Table IX. I. 5.

Cost to produce one bottle

Metal Alloy body 25
Plastic Nozzle 5
Design and Packaging 10
Ingredients 110
150

Table IX. 1. 6

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Ingredients
Avobenzone SY0910
octorylene Mkt101
Ecamsule
Oxybenzone
Benzophenone
Dioxybenzophenone
Zinc oxide.
Menthyl anthranilate
Aloe Vera aloin

Price determination

10
500 0 0 50000
5
600 3 47 28200
8
700 1 19 13300
9
800 3 7 5600
9
900 3 7 6300
9
1000 3 7 7000
9
1100 5 5 5500
TABLE IX. I. 7

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Sales Estimates (PHP) SY0910

Mkt101

2010
Projected
Sales 328,575,933 683,437,941 1,419,448,032 144,573,411
COGS 100,584,469 209,215,696 434,524,908 44,257,167

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

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

Table IX. 1. 8

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
Beaches 200,000
2,010,000 12,060,000.00 12060000.00 12,060,000.00

12 months

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Magazines FHM 145,000

Men's health 88,000
Sports 300,000 SY0910
Fashion Mags 300,000
Lifestyle 300,000 Mkt101
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 Primetime 275,000.00
wowowee 70,000.00
Game ka na Ba? 80,000.00
E-Live 80,000.00
Tv Patrol 150,000.00
Telebabad 275,000
930,000.00 4,650,000.00 558000000.00 558,000,000.00

Every
Sunday 4 weeks
Newspaper Phil Star 390,000.00
Inquirer 350,000.00
740,000.00 11,840,000.00 11,840,000.00

Endorsement 4 months
P.
Younghusband 5,000,000 15,000,000
J.
Younghusband 5,000,000

Others 5,000,000

598,576,000.00

Table IX. I. 9

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MARKETING TIMETABLE

SY0910
2010
Mkt101
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
- Promotions in shops
- Sponsoring events

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July- September – Less Ads but continue print ads in mags and
online.
- Sell again to retailers for re-stock SY0910

Mkt101

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

I. 3 YEAR MEDIA SCHEDULE

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

Possible 3rd
Media SY0910
Schedule 2nd year year
2 months
Mkt101
4 months ( April, (April,
May, June, July) 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 SY0910
Telebabad 275000
850000 780000 11700000 46800000 Mkt101

Every Every
Sunday 2 weeks 4 months Sunday 2 weeks
Newspaper Phil Star 390000 390000
Inquirer 350000 350000
740000 1480000 5920000 740000 1480000

2 months 1 mont
P. Young
Endorsement 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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II. 3 YEAR PRO FORMA INCOME STATEMENT

SY0910

ProForma Income statement Mkt101

For Volume refer to Table

Nivea SPF Refresh IX.I.3 “VOLUME TABLES”.
Sales is based on market
For 2009 through 2012 (all numbers in Millions) share percentage times
volume estimates times
2010 2011 2012
PHP 2,098 PHP 2,194 PHP 2,302
Less sales returns and
allowances PHP 210 PHP 219 PHP 230
PHP 1,889 PHP 1,975 PHP 2,071

PHP 0 PHP 158 PHP 165

Plus goods purchased /
manufactured PHP 788 PHP 666 PHP 700
PHP 788 PHP 824 PHP 865
Less 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 235

Commissions PHP 67 PHP 77 PHP 87
Advertising PHP 600 PHP 260 PHP 75
Depreciation PHP 72 PHP 75 PHP 77
Transportation costs PHP 30 PHP 30 PHP 30
Other PHP 29 PHP 29 PHP 29
PHP 995 PHP 691 PHP 533

Salaries and wages PHP 67 PHP 77 PHP 87

Employee benefits PHP 24 PHP 28 PHP 32
Payroll taxes PHP 14 PHP 14 PHP 14
Insurance PHP 29 PHP 34 PHP 39
Rent PHP 38 PHP 43 PHP 50
Utilities PHP 10 PHP 10 PHP 10

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Depreciation & amortization PHP 19 PHP 19 PHP 19

Office supplies PHP 0 PHP 0 PHP 0
Travel & entertainment PHP 14 PHP 20 PHP 20
Postage PHP 5 PHP 5 PHP 5
SY0910

Equipment maintenance & Mkt101

rental PHP 0 PHP 0 PHP 0
Interest PHP 5 PHP 5 PHP 5
Furniture & 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

SY0910

Mkt101

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.

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

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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
SY0910

it is still four hundred yet at the same time it is still in the willingness Mkt101

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, SY0910

Personal Products, < http://biz.yahoo.com/ic/120/120792.html >. Mkt101

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/?
getid=2&getsubid=6&infolinkids=5&GetBodyName=Why%20Cebu%20is
%20No.%201&rightpdisable=0>.

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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 SY0910

<http://www.911skin.com/sunblocks.html>. Mkt101
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=219
http://www.superbrands-brands.com/volII/brand_nivea.htm
Http://www.naturalacneremedy.com/acne-blog/wp-
content/uploads/2008/06/coppertone-sport-sunscreen-lotion-spf-30-ultra-sweat-
proof.jpg
Http://www.shopcrazy.com.ph/wp-content/images/2006/06/beach-hut.jpg
Http://s2.thisnext.com/media/230x230/hawaiian-tropic-ozone-
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