A Challenge in Marketing Communications: Nivea Company - Case Study Example

Celebrity Endorsement: A Challenge in Marketing Communications al Affiliation: Celebrity Endorsement: A Challenge in Marketing Communications Historical background of Nivea Company Nivea Company has been in operation for over a hundred years. They operation in the market has been a success story, and they have developed the most popular skin care brands. They are among the first companies that ventured into the manufacture of skin oil. The company began after a laboratory research done in 1890 by Dr Oscar and Paul. They developed the world’s oil and cream for skin care and named it Nivea. Their research and laboratory test have formed the basis of manufacturing all the products that the company manufactures to date. The Nivea products have been labeled the “the mother of all creams” and have undergone significant changes to suit the demand of the market. They have risen against the forces of competition and have remained to be the most popular manufacturer of skin oils. Despite venturing into the manufacture of many new products, they have maintained their brand identity and blue color, which makes the product very distinct. The company started with the manufacture of only one cream but in the process of growth, they started manufacturing many other products. They produce products such shaving creams, skin oil and even shampoo. They produce products of different scents and colors and thus are able to satisfy the varying market demands. Their department of advertising has been very influential towards bringing the unlimited success that the company is experiencing. They marketing strategies have made them overcome competition. Unique forms of advertisements have made their brands popular and trusted by the market. Just like any other company, Nivea has experienced challenges such as heavy competition and economic constraints. Their major challenge has been the shortage of raw materials and poor economies especially during the post war years. The company dominated the market in its first years of operation but with time, similar companies were established. By 1890, the market had many competitors but they have remained competitive due to advantages of customer loyalty and large economies of scale. By the year 1990, the company had expanded globally and had managed to retain its name, products and packaging. It was named the largest seller of skin care products due to their wide range of products. In 2011, the company was reached its 100-year anniversary, which was a great achievement. The marketing managers designed a unique way to celebrate the achievement, which later became a controversial issue. Case study: The controversial response of customers following the 100 years celebration Every company desires to have a positive relationship with its customers to maintain their brand identity (Omar, 2003, p.57). Moreover, ensuring that customers have a way of relating or connecting with the company is an important tool in designing advertisements (Omar, 2003, p.58). Perception of the customers about a brand is very influential to the volume of sales that the company has, and it determines the company’s profitability. Therefore, every company aims at creating a good reputation, which consequently builds a good perception. In order to build a strong brand reputation and achieve a good product positioning, the company must consider their image and brand identity. Brand image and brand identity builds up the perception of the customers on a commodity or a company (Omar, 2003, p.58). Research has proved that most customers choose a certain brand because they feel that they have a connection to it (Hunter, 2009, p.121). In 2011, Nivea Company in collaboration with Beiersdorf Company teamed up and designed a global campaign entitled “100 years Skincare for life” (West, 2012, retrieved from Retrieved from http://www.thedrum.com/news/2012/11/20/expensive-mistakes-when-celebrity-endorsement-deals-go-wrong).The advertisement was meant to celebrate the 100 years anniversary as well as advertise the Nivea commodities. After a careful evaluation, the two parties made a decision to use Rihanna, a singing star, to be the voice in their advertisement. This was because she was a hit in the music industry and they believed customers would get more interested. They also selected a song named “California King Bed” to be used in the international campaign and anniversary celebration (Stampler, 2012, retrieved from Retrieved from http://www.businessinsider.com/controversial-celebrity-endorsements-2012-8?op=1). The two companies hoped that that the advertisement would create a selling proposition and that the selected celebrity would creatively execute the intended aim. Selling proposition and creative execution are important in advertisement appeal. The selection of Rihanna and the song to be associated with the Nivea brand drew both positive and negative reactions from people. In the social media, people criticized the issue while others endorsed the selection. The critics from the social media jeopardized the reputable image of the Nivea Company and even threatened to collapse their hard-earned growth (Stampler, 2012, retrieved from Retrieved from http://www.businessinsider.com/controversial-celebrity-endorsements-2012-8?op=1). The company invested one billion dollars in the Campaign, and they expected that the huge expenditure would earn them good returns and draw more customers. The returns were expected to be in the form of customer loyalty, more sales, and popularity of their brand. Rihanna was selected since she was a celebrated musician who was well known by many people. However, the Nivea and the Beiersdorf Company failed to fully evaluate the positive and negative effects of celebrity endorsement. Every form of advertisement has its negative effects especially based on the how it will be perceived by the customers. Their move has been one of the reasons as to why they have experienced a successful spell since 2011. The customers who felt that Rihanna was the best celebrity for the brand appreciated the move and continued to purchase the brand. The company had continually rebounded and has attracted eye-catching executions. However, the moved posed a great risk to the brand considering that Rihanna is a pop star while the Nivea is a sober image product with nothing to do with music. Most Nivea products are for family use and therefore associating it with a pop start did not create the best image to the customers. Most of them thought that the brand had changed its focus from being a family care product to being a brand for musicians and stars product (West, 2012, retrieved from fhttp://www.thedrum.com/news/2012/11/20/expensive-mistakes-when-celebrity-endorsement-deals-go-wrong). The brand had been previously known for being a caring product that valued family status. The brand had used motherly advertisement before and hence the customers had a different perception for the brand. Pop stars are associated will ill manners and immorality and therefore using Rihanna for the celebration was highly unwelcomed by the customers (West, 2012, retrieved from fhttp://www.thedrum.com/news/2012/11/20/expensive-mistakes-when-celebrity-endorsement-deals-go-wrong). It betrayed the use of Nivea products for family care since it created an impression that the product was for such people like pop stars and morally bent people. Nicolas Maurer, the head of Beiersdorf marketing company argued that the use of Rihanna was because the modern generation appreciates music. He reasoned out hat using music would help connect the modern generation with the Nivea products. His argument was partially correct since any form of advertisement should focus on the interests of the larger percentage of the target market. He also argued that Rihanna being a superstar had maintained her skin well. This would be a strong point towards showing the effectiveness of Nivea products on caring for the skin. The choice of Rihanna was strategic in showing the effects of the products on the skins and Maurer hoped that people would envy to be like her ad use the products more. At that time, Rihanna used to do many concerts and the majority of her audience was young girls and mothers. Women and girls were the major target customers for Nivea and hence using Rihanna would reach them easily. Her statistics on Facebook and twitter showed that she had many followers and fan which depicted her acceptance in the society. Her videos on YouTube had many views and hence the company was certain that she was the best image for the occasion. These facts gave a go ahead to Nivea Company and their advertising partner, and they were positive it would yield good results. However, their strategy did not provide the kind of results that they were hoping for. The expected positive effect turned out into negative effects since most customers did not appreciate the use of Rihanna. They had been recognized as the nest skin care and Cosmetics Company, and they hoped to expound their growth further through the anniversary event. They hoped that the use of Rihanna would match the changing needs of the customers and would connect the love of music with the loyalty to the brand (West, 2012, retrieved from http://www.thedrum.com/news/2012/11/20/expensive-mistakes-when-celebrity-endorsement-deals-go-wrong). However, it failed to bring out the brands originality of being a family care product. The company’s trust and reliability for family use was covered by the negative image of Rihanna as a pop star. The disappointment of the customers was shown by the numerous critics posted on social media and the unexpected reduction on the volume of sales. The intended emotional connection of Nivea users with music did not actualize (Stampler, 2012, retrieved fromhttp://www.businessinsider.com/controversial-celebrity-endorsements-2012-8?op=1). Rihanna endorsement raised many questions on whether Nivea was losing its originality as a family care product. Rihanna was a perfect image in terms of advertising the effects of the Nivea products on the skin. However, her career as a pop musician did not match with the brands originality. The match between a brand identity and the form of advertisement used is crucial towards attainment of the expected outcome. Her appearance was a good mobilizing tool, but her career was the correct one for the brand. Nivea and the advertising company failed to consider if the celebrity and the brand matched and it is the main reason that led to situation that befell Nivea in 2011. Due to the response of the public, the company dropped Rihanna in order to salvage existence of the company (West, 2012, retrieved from http://www.thedrum.com/news/2012/11/20/expensive-mistakes-when-celebrity-endorsement-deals-go-wrong). The move planted back Nivea Company to its roots. The company resumed to its normal sales and the critics cooled off. However, they suffered a loss since the heavy capital invested for the 100-year celebration did not yield the expected result. From the Nivea case, it is evident that celebrity endorsement in a challenge in marketing communication. Mistakes made in choice of advertisement tool can lead to collapse of an organization. Careful considerations should be made in determining which celebrity to use so that celebrity endorsement can be predicted correctly. Such consideration and evaluation ensures that the best celebrity is chosen and the brand image is not compromised. Every company requires expertise in marketing communication to accurately predict the expected result in any form of advertisement. Advantages and disadvantages of using celebrity endorsement with reference to the Nivea case Celebrity endorsement can be both a working strategy and can form a pitfall for the company. It is, therefore, necessary to evaluate many factors before making a decision on which celebrity to endorse. The negative impact of celebrity endorsement that Nivea experienced was caused by failure of the company to evaluate some crucial factors. Celebrity endorsement leads to the creation of new markets for the product. It has been effective in other companies such as Nike, which increased its customers due to the use of Michael Jordan. Memorability of an advert is influenced by the images or voices that the customers get to see. Suing Rihanna in the advertisement proved this factor. The many reactions by many people indicate that the advertisement was eye-catching and memorable. Customers tend to believe that the product has an impact in the life of the celebrity used. To be associated with the celebrity they purchase the product and hence the company enjoys more sales. This was the reasoning behind the Nivea Company using Rihanna but is failed since for it to be achieved, it depends on other factors. Using celebrities makes a commodity stand out from other competitors. Standing out places the company on a better competitive stage that its competitors. Unlike other forms of advertising, celebrity endorsement is not a short-term strategy. Therefore, it has the possibility of influencing attractive advantages or notable disadvantages. The image portrayed by the selected celebrity becomes the new image of the product. This risks the company losing its original image and consequently crumbling its reputation. This was the case with the Nivea Company. People’s reaction indicated that they assumed the image of Rihanna to be the image of the product. Celebrity endorsement may also create a negative image of the celebrity and affect her marketability in his/her career. Rihanna being used in a family care product contradicted her normal image as a pop start and put her at a risk of also losing her fans. Many companies use celebrities, and it poses a risk of associating a product due to the use of a similar celebrity. The challenge of choosing the best celebrity endorsement Advertising plays a critical role in establishing awareness of the commodities or services that an organization offers. Celebrity endorsement is among the most effective advertisement strategies (Keegan & Green, 2005, p.264). Celebrity endorsement has its main advantage as a memorability and influence to the customers. However, it is very challenging for a company to select the best celebrity to use. This is because there are many factors to be considered in order to avoid the negative effects that may come up (Kotler & Armstrong, 2001, p.265). The risks of using the strategy of celebrity endorsement can either successfully forge the relationship between the brand and its customers or can either destroy the relationship and the reputation of a brand. It is also difficult to estimate the expected returns on investment following the investment of using a certain celebrity. To solve the challenge of choosing the best celebrity, the marketer must evaluate two important aspects. The two aspects are parameters of the celebrity and matrix of determining the ROI (Valette-Florence, 2012). A clear understanding of this two aspects demands extensive research, but the results are worthwhile. Parameters in a celebrity endorser The market should evaluate if the brand matches with the celebrity. This entails finding out whether the originality of the celebrity matches the product’s originality (Jones, 2008, p.133). The appearance of the endorser should imply something about the product or service being advertised. A correspondence between the celebrity and the product/service results into a good impact in the market. The credibility of the endorser affects the company too. The perspectives of people towards the celebrity are an important factor to consider. A credible endorser will receive minimal criticism and therefore the investment will be worthwhile (Jones, 2008, p.140). The marketer should also assume the position of the target customers and evaluate the transferred meaning. Using a certain celebrity gives a certain meaning, and it is required that the meaning created is in line with the image of the brand. For example, using Rihanna was appropriate since people will want to have a skin like hers. Determining the ROI of celebrity Endorsements This entails tracking down the financial gain out of the decision and investment to use a certain celebrity. This is measured by evaluating factors such as brand awareness in the market, increase in the volume of sales, changes in stock prices. To evaluate these factors, the marketer can use statistical techniques. However, not all factors are statistically quantifiable and hence it calls for use of methods such as observation (Valette-Florence, 2012, p.39). This can be attained by using social media metrics such as page views, number of likes, follows, and shares. Interviews and observations in the market can be used to evaluate the impact of the celebrity endorsement. Positive results will give a go ahead with the celebrity endorsement while negative results call for a halt I the venture. This was the case in the Nivea Company. References Hunter, E. (2009). Celebrity entrepreneurship and celebrity endorsement: Similarities, differences and the effect of deeper engagement. Jönköping: Jönköping International Business School. Jones, G. (2008). Blonde and blue‐eyed? Globalizing beauty, c. 1945–c. 19801. The Economic History Review, 61(1), 125-154. Keegan, W. J., & Green, M. C. (2005). Global marketing. Upper Saddle River, NJ: Pearson/Prentice Hall. Kotler, P., & Armstrong, G. (2001). Principles of marketing. Upper Saddle River, NJ: Prentice Hall. Omar, O. (2003). International marketing. Houndmills, Basingstoke: Palgrave Macmillan. Stampler, L. (2012, August 9). Controversial Celebrity Endorsements - Business Insider. Retrieved from http://www.businessinsider.com/controversial-celebrity-endorsements-2012-8?op=1 Valette-Florence, R. (2012). Emotional and Relational Proximities as Explanatory Factors for Affective Meaning Transfer between Brands and Print Media Brands. Recherche et Applications en Marketing (English Edition), 27(3), 31-54. West, G. (2012, November 20). Expensive mistakes: When celebrity endorsement deals go fhttp://www.thedrum.com/news/2012/11/20/expensive-mistakes-when-celebrity-endorsement-deals-go-wrong Read More