Brand Marketing of the Nivea - Assignment Example

1. a. What is the brand image and sources of equity for the Nivea brand? Lee, Lee, and Wu (2009), define brand image as a brand’s perception as reflected by brand association embedded in the consumer’s memory. These associations refer to any brand feature within the user’s memory. Basically, brand image depicts the consumer’s feelings and thoughts towards the brand. In other words, brand image is the general mental image that consumers have regarding a particular brand. Incidentally, it refers to how unique a product is in comparison to other products in the same line. It can thus be deduced that Nivea’s brand image is that it is a cosmetic product referred to as “Nivea.” The brand image is more often than not determined by several factors which entail; a stereotype of the generalised consumers or the typical consumers of the brand. Similarities among consumers therefore, can be identified as a key factor that attracts customers to a company or to a brand (Karaosmanoglu, Bas, & Zhang, 2010). Sources of equity for Nivea’s brand image can be ascertained through the common brand equity assets which are; brand awareness, brand loyalty, brand association, perceived quality, and other proprietary brand assets. Since brand equity is a multidimensional theory, past studies have various suggestions for measuring its dimensions. Some entail brand association and brand equity. There is also brand knowledge that entails brand image and brand awareness. Among the five assets of brand equity, it is extremely difficult in an experiment to manipulate a consumer’s perception. Along the same line, other proprietary brand assets such as assets cannot be measured easily. Studies therefore use brand association, brand loyalty, and perceived quality as the measurements of brand equity (Lee, Lee & Wu, 2009). To this end, the sources of equity of the Nivea brand image are drawn from the assets of brand equity highlighted above. That is; brand association, brand loyalty, and perceived quality. First there is the element of brand association. Brand association can be classified into three major categories. These include attributes such as price; benefits, that is, what consumers think of the product; and attitudes, that is, the consumer’s overall analysis of the brand (Lee, Lee, & Wu, 2009).A strong brand association can assist to strengthen brand and equity. Brand loyalty can also be deemed as another source of equity for the Nivea brand. This is based on the fact that a brand’s loyalty can be converted into profit. That is, brand loyalty amplifies a repetitive purchase trend from the consumers and discourages them from changing to other brands. Then there is the element of perceived quality, which refers to the consumer’s perception on a product’s overall quality (Lee, Lee, & Wu, 2009). This is apparent basing on the fact that Nivea is an established brand which implies that consumers perceive it as a high quality product. b. does it vary across product classes? Brand image reflects the personal symbolism that consumers relate with the brand. It is worth noting that a brand’s image entails a consumer’s beliefs and knowledge regarding the diverse products and non attribute product of a brand. Nivea bears an indifferent brand image on all its diverse products. It embodies these products through two key values, that is, “love and care.” The diverse products offered by Nivea are categorized under different classes but are sold under variant of the brand Nivea and a descriptor of the target or function. For instance; Nivea body, Nivea Visage, Nivea Hands and so on (Kapferer, 2008). c. How would you characterize their brand hierarchy? Nivea’s Brand hierarchy can be characterized as master brand. Here the parent brand is referred to as the mistress. It offers not just a name, but a structure of reference within which everything ought to align. It is a typical example of what is referred to as a branded house. As highlighted above, Nivea is active in several large categories including deodorants, moisturizing creams, shampoos, beauty products, sunscreens and male up. All these are offered under the variant of the brand “Nivea.” Master branding integrates a broad range of products under highly differentiated common values (Kapferer, 2008). This is exactly how the Nivea brand hierarchy can be characterised. 2. a. What are the pros and cons of the sub-brand strategy? Some of the advantages of the sub brand strategy entail: Sub brand strategy derive strength and effectiveness from the master brand. Incidentally it also creates fresh potential connections to consumer groups not already reached. The sub brand strategy also benefits the master brand because they widen consumer choices and add breadth on the master brand’s image (Davis, 2010). There is also the issue of economies of scale. If the sub brand strategy is properly organised and executed, it can create humongous economies of scale in manufacturing in distribution (Fifield, 2007). Some of the disadvantages of the sub brand strategy are: In the event that the master brand suffers a set back it impacts negatively on the sub brand with regards to sales, profit and image. Sub brands can use up a lot of resources especially at launch and during phases of rapid growth. Poor performance of the sub brand can also negatively impact on the master brand’s image (Davis, 2010). Then there is the issue of high costs. That is, it can be costly depending on how different the needs of the segments are and the amount of adaptation required (Fifield, 2007). b. Should Nivea run a corporate brand or umbrella ad for their entire product? In corporate branding, the company promotes its name through its entire product brands. If for instance, the product brands attributed to a company are diversified, then, this type of brand strategy naming is referred to as umbrella branding. That is, a company using umbrella branding insists on a monolithic brand for various products (Capon, 2008). In this case therefore, it would be appropriate that Nivea uses umbrella branding for their entire products considering the diversification aspect of the same. The application of the umbrella branding strategy would blend in well with Nivea considering that it intends to introduce new diversified products in the market. There are several attributes linked to umbrella branding in this regard. One such significant positive attribute of this strategy is that umbrella branding may reduce uncertainties that revolve around a new product. This not only adds value if the customers are risk averse but also does not affect the brand equity (Cabral, 2001). Corporate brand on the other hand would not clearly depict the diversified aspect of the new products. It would more or less bring out an indifferent image. That is, corporate branding dos not effectively depict a distinctive feature. c. What is the role of the Nivea Crème advertising? Nivea started standardising its advertising formats in the mid 1990s to develop a consistent image among its sub-brands. Whereas the blue manifesto campaign was specifically designed for the Nivea crème; advertisements for other Nivea sub-brands assumed some of the design features Nivea Crème advertisements. Adoption of the design features of Nivea Crème by the sub-brand was more particular in the application of block and cursive combination in the Nivea symbol lettering. As Nivea’s skin care Vice president Norbert Krapp put it, pictures are more effective compared to words when it comes to advertising. The role of Nivea Crème advertising therefore, is that of giving information to their consumers. This role is stressed on by the fact that Nivea Crème advertising printed booklets which encompassed basic information with regards to its brand identity, mission, vision, and success factors (Kunisch & Cosmed Division management n.d.). d. Should it be changed? It is worth pointing out that brands are created because consumers crave for information. Consumers see a big variety of products that look alike and perform similar functions. Brands therefore act as the distinguishing factor in the sense that consumers are able to distinguish and select their products of choice (Cabral, 2001; Doyle, 2008). Brands play a significant role with regards to information. That is, information with regards to brands is significant in a world where consumers are not certain about the characteristics of a new product. The role being played by Nivea Advertising in this regard should therefore not be changed. 3. a. Discuss the risk and benefits of Nivea’s brand extension into new product categories and customers? There are several benefits attributed to brand extension, these include: Brand extension enabled Nivea to advantage of intangible benefits already catered for. These could take the form of; leveragability equity of its brand name, reputation, and recognition. Cost savings is another positive attribute Nivea could draw from brand extension. That is, with the prohibitive costs of coming up with new brands, brand extensions save the company on the resources that might otherwise been used to develop the same. Another benefit is that consumer awareness and willingness to take up the new brand are quickly drawn as opposed to an unfamiliar product (Oh & Pizam, 2008). Some of the risks attributed to Nivea’s brand extension include: The risk of damaging the image of the master brand. That is, if Nivea launches too many unrelated brand extension it might flop and impact negatively on the master brand. Basically, extensions ought to improve the core brand, however there risk that an extension could provoke a negative attribute association. The worst potential result of brand extension is the opportunity cost to develop new brand equity (Oh & Pizam, 2008). b. How have Nivea’s executives managed this extension? Oh & Pizam, (2008) state that if executives wish to extend a brand, they should do so with great caution. In essence, brand managers ought to ensure that brand extension ought to be founded upon needs of the consumer as opposed to the brand developer’s perspective. Appealing to new consumers is one of the objectives of brand extension; however the executives should be cautious enough to retain existing ones. A properly managed brand not only amplifies profit but also maintains brand image and equity. Nivea executives managed this extension well. This is depicted by the fact that the executives sought to ensure that the Nivea brand met the market requirements while also remaining true to the Nivea heritage; they chose to be uncomplicated and simple; maintain a leading position with regards to quality; ensure a cost-benefit relationship with the consumer through reasonable prices. All these are in line with factors that Oh & Pizam (2008) highlight with regard to a well managed extension. c. Have they missed opportunities such as perfume and foot care It can be said that Nivea missed on opportunities such as perfume and foot care considering that the other products were a success in the market. Incidentally the success of the diversified Nivea products to a large extent attribute to the parent brand. Nivea should have applied the same strategy in launching perfume and foot care products. However, it should also be noted that brand extension is a sensitive area thus should be carried out with caution. As highlighted above, launching too many unrelated brand extension is risky and can impact negatively on the parent brand (Oh & Pizam, 2008). It is therefore important that brand extensions be launched in considerable proportions. d. Are there certain boundaries Nivea should not cross ? Nivea should have their consumers in mind when diversifying and developing new products. They should never at any time overlook the market requirements as well as old consumers as this might adversely affect the business. Another area is how the extended brand fits with the parent brand. It is risky to extend a brand that does not fit with the parent brand (Oh & Pizam, 2008). This is because the core point of the parent brand’s personality might get distorted in the consumer’s minds. Incidentally, it might cannibalise sales of the master brand causing a significant risk of brand equity dilution. References Cabral, L. (2001). Optimal Brand Umbrella Size. New York: New York University. Capon, M. (2008). Managing Marketing in the 21st Century. Wessex Publishing Davis, J, (2009). Competitive Success, How Branding Adds Value. West Sussex, United Kingdom: John Wiley and Sons. Doyle, P. (2008). Value-based marketing: Marketing strategies for corporate growth and shareholder value. New Jersey: John Wiley and Sons. Fifield, P, (2007). Marketing strategy: The difference between marketing and markets. Jordan Hill. Oxford: Butterworth-Heinemann Kapferer, J. (2008). The new strategic brand management: Creating and sustaining brand equity long term. London: Kogan Page Publishers. Karaosmanoglu, E., Bas, A. & Zhang, (2010). “The Role of Other Customer Effect in Corporate Marketing: It’s Impact on Corporate Image and Consumer-Company Identification.” European Journal of Marketing. Special Edition pp 1-37. Kunisch, R. & Cosmed Division Management, n.d. “Nivea: Managing A Multi-Category Brand.” Retrieved 11 July 2011, from http://85.17.192.207/coolbrands/dmdocuments/ecnivea.pdf. Lee, H., Lee, C. & Wu, C. (2009). “Brand image strategy affects brand equity after M & A.” European Journal of Marketing. 45(7/8): 1091-1111. Oh, H., & Pizam, M. (2008). Handbook of Hospitality Marketing Management. Jordan Hill. Oxford: Butterworth-Heinemann Read More