The market position of Nivea for men in UK - Essay Example

? Nivea for Men – Marketing Plan in UK Introduction The given casestudy examines the market position of ‘Nivea for men’ in UK as well as throws some light on the Men’s grooming products industry. Upon reading the casestudy and applying the various marketing concepts taught to us in the class, we conceptualized the following marketing plan that Nivea should follow to create a formidable position in the market. The study aims how the company can respond to changes in customer expectations, external influences and business aims to achieve those objectives. The write-up is categorized as per Wilson & Gilligan’s model of the stages of marketing strategy formulation (Wilson, 2003). Where are we now? (Market Audit) This section describes the Situation analysis or Market Audit for Nivea in the men’s grooming market in UK considering both External and Internal perspectives. Nivea currently holds the #2 spot in men’s grooming category for the UK market. Based on different Internal and External analysis, we would define what the strengths and opportunities for Nivea. External Analysis PESTEL Analysis (Macro) Porter’s 5 Forces (Micro) Political factors have limited influence on FMCG products as Nivea for men (T.C. Melewar, 2008). Economical factors: such as the recent economic crisis, diminished GDP growth and unemployment has reduced the consumer spending power (Beiersdorf AG , 2010). Social factors: Ageing of population in UK and more beauty awareness amongst men are factors that are favorable to Nivea’s sales. (Coupland, 2007) Technological factors: R&D and consistent innovation is a huge component of growth for Beiersdorf’s (Nivea’s holding company) sustainability. (MarketingWeek, 2011) Environmental factors: have limited impact on Nivea’s brand value and revenues. (Beiersdorf AG , 2010) Legal factors: Consumer laws especially related to health and safety can affect the reputation of the brand (Chernev, 2007). Barriers to entry (High): Despite the fact that the ?858 million men-grooming market has over 15 players, it can be seen a consolidated industry with high barriers of entry (Euromonitor, 2010). The top two players control over 50% of the market shares. Competition (High): Nivea faces stiff competition from other brands such as Lynx (Axe) and Gillette who have bigger control in market than Nivea does. (Euromonitor, 2010) Bargaining power of suppliers (Low): Nivea has a high bargaining power with respect to its suppliers because of its diverse portfolio and generating economies of scale (Beiersdorf AG , 2010). Bargaining power of buyers (High): Customers of men grooming products have high bargaining powers due to low switching costs, price sensitivity to grooming products etc (Kay, 2006). Threat of Substitutes (Medium): Nivea for men has a high threat of substitutes from general grooming products, natural products such as olive oil etc. (Heijden, 2005) SWOT Analysis for Nivea For Men In order to fully understand the competitive advantages and vulnerabilities of Nivea, (Beiersdorf AG, 2011)we conduct the following SWOT analysis for Nivea for men: The Boston Group Matrix The overall market growth of the men’s grooming market is 3% (2009-2014 CAGR) (Euromonitor, 2010) and the relative market share of Beiersdorf (Nivea for Men) is low. Market share of Beiersdorf AG is 5.3% (2011) as compared to 32% of P&G (Euromonitor, 2010). With a low market growth and low market share, Nivea for Men falls into the Dogs enterprise position, which indicates that Business is a cash trap (BRS Inc). The best thing that Nivea for Men can do is to focus on short term, avoid risky investments and look into niche segments. Where do we want to be? (Strategy Formulation) This stage of marketing strategies planning describes the objectives and aims of Nivea’s marketing plans, the strategy formulation for its brands’ growth and identification of “the business we’re in”. Before defining the objectives of Nivea’s marketing strategies, we must recollect the competitive advantages that Nivea for men possesses, revealed from the SWOT analyses. The competitive advantages of Nivea are: Nivea’s leadership in the skin-care segment across the world (Superior product benefit) Obtaining economies of scale from its vast production (Scale advantages) Global Operations help create a homogenious brand equity Diversified product range offer superior product benefit to the consumer Developing Objectives: The objective setting can be done in one of the following four ways: Market penetration, new products, new markets and a combination of new products and new markets. Looking at the growth of market in UK, we notice that the Men’s skin care segment is growing at a cumulative annual growth rate of 17%, which is the highesamongst all segments. This is clearly a growing opportunity for Nivea considering skin care as Nivea’s strong suit. (Fiona Sturrock, 1998) Hence, the objective of Nivea should be Market Penetration from the Ansoff Matrix i.e.: 1. Increasing total market size by 5% 2. Increasing market share by 10% in the next 3 years. (New users or same segment, competition’s customers, acquisition) 3. Increasing Usage (increasing frequency, new uses) amongst old consumers. How might we get there? (Strategy) The next stage in marketing strategic planning is developing the strategic choices for your brand. These are done through segmenting your customers, targeting the most optimum segments with respect to your products and then position your products to the customers. We will achieve the above objectives by looking at the following Marketing Mix: 1. Product: Differentiate Nivea’s for men products by segmenting customers, finding the right target segment and customizing product to that particular segment. 2. Price: Price the products for appropriate segments providing them value for money. 3. Place : Place the product using the right distribution channels. 4. Promotion: Promote product to the right audience. Segmentation: As shown in the figure above, the segmentation of men’s grooming market is done based on two key attributes – Age and Shopping Behaviour. Targeting: Targeting is the process of identifying the key market segments that are a fit for your product. In case of Nivea-for-men, the key target segments (based upon the current portfolio of products) are: Adult Adopters: These are consumers in the age group of 25-34 yrs who are regular users of beauty products such as moisturuzers, eye creams etc. Midlife Adopters: These are metrosexual men in the age group of 35-50 who are concerned about their skin and appearance in general. Midlife Experimenters: These are men in the age group of 35-50 who are willing to experiment with a variety of products. These consumers often times use products bought by their wives. (Neier, 2011) Senior Adopters: These are metrosexual men in the age group over the age of 50 who take extra care about their skin and appearance. Positioning: The following diagram illustrates the positioning of the current Nivea for men products with respect to our target segments. The positioning of the product is done based on how skin sensitive the customer is, does he purchase the product depending upon the specifics of his skin or he trades off the particularities with product price. Tactics, Marketing Programs for Nivea for Men: Build a stronger online distribution channels as many men feel shy to buy grooming products in retail stores Price products in the luxury segment to differentiate them from competitors Package products attractively, something like expensive fragnance bottles for men Which way is best? (Competitive Strategies) Beiersdorf’s competitors P&G and Unilever currently drive market share in UK. However, both competitors have their distinctive strengths that are based upon the success of their flagship (and traditionally male) brands such as Gillette and Lynx (Axe) respectively. Both companies even though have lead in shaving and deodrants categories they still are at a competitive disadvantage viz. Beiersdorf in the fast growing skin-care segment. Hence, this is the segment where Novia should have an attacker strategy to increase their market size, penetration and market share. The following table describes a number of actions that Nivea should undertake: How can we ensure arrival? (Implementation & Control) The goal of implementation and control is ensure that your marketign strategies are implemented in the right method and proper monitoring, evaluation and control measures are in place (Janovic, 2007). The marketing implementation plan will have the following milestones: Recruitment or allocation of additional sales force Training of sales force in line with positioning of the marketing plan Recruitment of sales operations support staff Sponsorship plan The following areas will be monitored towards the successful implementation of the marketing plan: Monthly and annual revenues and unit sales Monthly and annual expenses Market share increase in the skin-care segment Growth in market size Number of general practitioners contacted Number of associations contacted Conclusion: The ‘Nivea-for-men’ case-study details the challenges that Nivea for men is having in the men’s grooming market in UK. Upon extensive analysis of the market and competition, it is evident that Nivea-for-men even though is a leading and important brand for both Beiersdorf and overall market, it’s sales still lag behind the flagships products of P&G and Unilever. The growth opportunity that is seen for Nivea for Men is the growing skin care segment with a CAGR (2004-2011) of 17.8%. Owing to the iconic branding of Nivea in skin-care products, Beiersdorf possess a competitive advantage in penetrating and increasing the skin-care market for men. In order to do so, they should segment their consumers on attributes of age and shopping behavior. Target segments identified for Nivea for men are Adult adopters, midlife adopters, senior adopters, and midlife experimenters. The various attack strategies that Nivea for men can use are products bunding, progressive promotions and pricing. The various defence strategies that should be implemented by Beiersdorf are flanking defense and position defence. With proper risk management in place with respect to the implementation and control of marketing plan, it is bound that market share of Nivea for men will increase in the UK market. References: Wilson, C. G. (2003). Strategic Marketing Planning. NY: A Butterworth-Heinemann Title. Beiersdorf AG . (2010). Annual Report 2010 . Beiersdorf AG . Beiersdorf AG. (2011, May 2). Products. Retrieved May 2, 2011, from Nivea For Men: http://www.niveaformen.com/products.html Chernev, A. (2007). Gillette Fusion: Building a $1 Billion Brand . Kellogg Northwestern University. Class Slides - Marketing Strategic Planning. (2011). UK. Coupland, J. (2007). Gendered discourses on the ‘problem’ of ageing: consumerized solutions. DISCOURSE & COMMUNICATION , 1, 37-61. Euromonitor. (2010). Men's Grooming in the United Kingdom. London: Euromonitor International. Fiona Sturrock, E. P. (1998). Making himself attractive: the growing consumption of grooming products. Marketing Intelligence & Planning , 16 (5), 337 - 343. Heijden, H. v. (2005). Personal Care for Men. Janovic, F. (2007). Marketing strategies: Notes on theory and practice. HUMANITIES, SOCIAL SCIENCES AND LAW . Kay, M. J. (2006). Strong brands and corporate brands. European Journal of Marketing , 40. Neier, L. T. (2011). An exploration of men’s brand relationships. Qualitative Market Research , 14 (1), 83-104. MarketingWeek. (2011, April 20). Bulldog readies expansion drive. Retrieved May 3, 2011, from MarketingWeek: http://www.marketingweek.co.uk/sectors/fmcg/bulldog-readies-expansion-drive/3025667.article MarketingWeek. (2010, May 4). Nivea for Men unveils England FC themed ad campaign. Retrieved May 2, 2011, from MarketingWeek: http://www.marketingweek.co.uk/nivea-for-men-unveils-england-fc-themed-ad-campaign/3013014.article Read More