Case approach crasher: Market entry

strategy for Nivea Face Cream

Case
Competitive landscape
Bargaining power of Bargaining power of Men skin care category size in Rs millions
consumers: Moderate Suppliers: Moderate
4500
-Large market and less -Less number of players 4000
4200
players on the market 3500
-Options for quality -Suppliers will have to 3230
3000
products is less choose amongst players; 2500 2500
-Products with more pressure from other 2000
players not to supply. 1860 2008-13
functional features are 1500
CAGR:
yet to be released 1000 1182
887.5 36.8%
500
0
Rivalry in the 2008 2009 2010 2011 2012 2013
category:
High
-Fair and handsome is the market
leader
-All establish brands like HUL,
Threat of substitutes: High Threat of new entrants:
Emami, Eyeryuth, Zydus Cadila etc  Nascent category
-Can be replaced with High
are present with sales of around
sandal, turmeric, -Nascent market; just 9% -Huge investments in Research
ayurvedic creams etc of the entire personal 4200 million in an
and Development overall men’s
-Products with more care category -Companies trying to differentiate grooming category
functional benefits > -Huge potential to the products of 45000 million
potential threat as they expand the pie and get
have a natural market shares irrespective
composition of the existing players Source:
http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx
Competitive landscape
Agencies
Suppliers
Distributors
Partnerships
Case Competitor analysis: Emami Fair and Handsome
Positioning: World’s number 1 fairness cream for men

Strengths Weakness
-Created the -Men's fairness Selling points
category: first movers category itself forms  5 power fairness cream 70% market
advantage 45% of the brand  Double strength share and a
-Celebrity sales; Emami as a peptide complex 100 crore
endorsement brand is small when  Sun guard brand
compared to global  Stress busters
-Available in various giants like HUL & PG.
SKUs  Anti Bacplus
 Herbo cool
-Distribution is good
and visibility is high

Threats
Opportunity
-A lot of competitor Brand
-Largest market share,
products being endorsement:
can leverage the
released Sharukh Khan >
position and drive out
-The competitor competition High influence
products may bank on on men within
-Increasing interest in
their brand global age group 18-
men for grooming
presence 32; An ideal
products
-Threat from natural celebrity
-Developing country
ingredient products endorsement
Sources:
http://www.business-standard.com/article/companies/fmcgs-give-men-a-facelift-110022300001_1.html
 Nivea Men’s Grooming
Case Nivea SWOT analysis category sales in INR million

1000
800
Strengths
Weakness 600
-Strong brands create
-Sales and distribution 400
goodwill
channels in India 200
-High scope of
-Selection of celebrity
expansion 0
endorsement 2009 2010 2011 2012 2013
-Strong financial
position  Sales % of Nivea in overall men’s grooming
category has only increased from 1.3 to 1.8 in the
past 5 years
 Nivea for men other than deodorant has been
stagnant at 0.9%
Threats
Opportunity Nivea for men sales in INR million
-Emami fair and
-Category growth has
handsome has 70%
been very high for the 500
market share, more
past 6 years
shelf space
-Changing attitudes 400
-Men buy products
amongst men; men
based on availability, 300
becoming more
retailers might not be
receptive for facial 200
willing to give shelf
creams
space to new entrants
100

0
Sources:
2010 2011 2012 2013
http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx
Market Research

Observational studies >

Consumer behavior; time
spent on purchase (high
involvement, low
involvement, impulse
purchase?)

In depth interviews and

Focus group discussions
(Qualitative analysis)

Quantitative analysis
(Questionnaire study
Case The big change: 2013
Consumer behavior saw a change in men
preferring men
specific products
including soaps and
Social Image Men’s Grooming Industry Reaction shampoos
• Urban men have category • Increased portfolio
become more conscious • Due to this kind of extending to face
and have started to put change the category cleansers and face
more efforts has see a high growth washes

Transactional  Male population aged 18-32

time is relatively accounted for the maximum sales
small  Men face issues with dust sticking to
Hence mass brands their faces
sell more;  Influence of Bollywood actors is high
Companies should
target for more  Men do not worry about they age in
shelf space and late 30’s hence anti ageing creams
should increase the might not be an attractive option
visibility of the  Reliance on economical and
product affordable products
Prominent in  Men quickly adapt to skin care
shelves/
products more broadly
availability
 Men of age >35 face rough skin issues
 Students face problems with excessive
sweat
Sources:
http://www.portal.euromonitor.com/Portal/Pages/Search/SearchResultsList.aspx
http://www.livemint.com/Industry/3GiSPeViRTFQQsSs6q7zbN/Male-grooming-emerges-as-fast-growing-segment.html
Segmentation Targeting Positioning Product Place Price Promotion Packaging

Segmentation
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case
•12-18 years
Segmentation Age
•18-24 years
•24-35 years
•35-45 years
•>45 years Behavioral

Psychographic
•<10th standard
Educati •12th Standard
on •Graduate
•Post graduate Benefits sought
Lifestyles

Family •<3,00,000
Income •>3,00,000
Opinions
Usage status

Segment name High self image Benefit buyer Price conscious Lazy buyer Intelligent buyer
Descriptors for buyer buyer
behavioral Personality Highly social Goal seeking Self oriented Lazy Analytical
and
psychographic Lifestyle Image centric Energetic Value centric Hedonistic Saving
segmentation:
Behavior Premium brands Brand loyal Test and use Heavy user Quality
searcher
Benefits sought Brand image Attributes Price Not specific Functional
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case

Targeting
Family Price conscious
income< buyer
300000

12th
standard & High Self image
Graduate Family
income> buyer/Benefit
18-35 yrs 300000 Buyer

Graduate
& Post
graduate Family Benefit buyer/
income> Intelligent buyer
18-35 yrs
300000

Graduate
& Post
graduate
35-45 yrs Different lines can be made
to meet the requirement of
each target segment.
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case
Positioning

High Self image Benefit buyer/ Intelligent

Price conscious buyer
buyer/Benefit Buyer buyer

Prevents dust, keeps

Prevents dust, keeps Prevents dust, keeps your face clean and How do we want to position
your face clean and your face clean and shining; sun
shining; sun shining; sun
Nivea face cream in the
protection consumer’s mind?
protection protection

In the budget limit
Effective for any kind
of skin
Extra whitening, anti
per spirant
Effective for any kind
of skin
Smoothening agent,
keeps your skin soft  The main positioning would be
that the cream prevents dust
and keeps your skin clean and
After shave face shining; sun protection
cream  The creams shall have variants
for dry and oily skin and
hence shall be effective for all
kinds of skin
Effective for any kind
of skin
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case
Product Product attributes
The product will be for
the price conscious
segment and hence only
•Dust & sun protection basic need of dust
protection and clean &
Product A: •Skin cleansing agent
shining skin are covered .
Dust •Skin shining agent
protection Consumer insight
•Number of variants: 2 (for considered: Men face
oily skin and dry skin)
issues with dust

The product is made for

•Dust & sun protection the people who can
Product B: spend an extra amount
Dust •Skin cleansing agent
for certain additional
protection, •Skin shining agent
attributes like anti
extra •Extra whitening
perspirant. Consumer
whitening & •Anti perspirant
anti insight considered:
•Number of variants:2 (for School and college
perspirant oily skin and dry skin) students face sweat
issues

Product C: The product is made for

Dust •Dust & sun protection the people who want to
protection •Skin cleansing agent smoothen their skin.
with •Skin shining agent Consumer insight
smoothenin •Smoothening agent considered: Men of age
g agent >35 face rough skin issues
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case

Packaging
SKU’s
 NIVEA being an established company globally,
the shape of the product should reflect its
premium nature and brand image
 Packaging for product A can be in the normal 30 gm 60 gm 120 gm
tube type packaging
 Pricing of 60 g SKU is done in a manner to
elevate the sales of the 120 gm SKU (Decoy
effect)
 Packaging for product B and C should not be
the typical tube type like all other brands; the
packaging for these products need to be
differentiated; sample shape is shown beside:

Small packages of 5 gm can be

made for testing purpose in the
market. These packages can be used
in the promotional activities at various
point of sales
Product A > Normal Product B &C >
packaging Premium packaging
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case

Pricing <-> Packaging

Product (SKU in gm) Competitor price (INR) NIVEA Launch price bracket (INR) Rationale

Product A (15) 25 30-35 Nivea has a premium brand image and the
pricing should be relatively higher than the
competitor product.
Product A is for the price conscious segment,
Product A (30) 60 80-90
hence it is priced at 20% higher than emami
F&H; Pushing the 60 gm tube sales by Decoy
effect (marginal increase in price/quantity is
Product A (60) 110 130-140 very less from 30-60 gm)

Product B - 20% higher than Product A The product is for the high self image
buyer/benefit buyer who is looking for a
premium product
Product C - 10% higher than product A The product is for an intelligent buyer who is
looking for functional benefits and is willing to
pay more than the price conscious buyer.

Assumption: The pricing has been done relative to the main competitor Emami Fair and Handsome and by
considering the brand image of NIVEA. The cost structure of each of these products has not been considered
as the information is difficult to obtain. Hence the profit margins for each of these products are not being
mentioned.
Segmentation Targeting Positioning Product Place Price Promotion Packaging

Retail landscape in India

Organized
RETAIL IN INDIA
 US 500 billion $ industry 9%
Penetration of just 9%
 Contributes to 14-15% of the India’s GDP
 Employment over 40 million people and over 90% of them
employed in General trade
High growth potential
900 B$ for Modern trade; 3
in 2020 year CAGR of 38%
Unorganized
91%
500 B$ in  Per capita organized retail space in India is approximately Fastest growing
2014 around 2 feet retails market in the
 Per capita organized retail space in China is 8 times larger world
than that of India

Indian MT not growing as fast as that of

Vietnam, China & Indonesia though
the penetration of MT is just 9%

More than 3% of people are employed in unorganized retail

and hence people cannot easily shift to Modern trade
Segmentation Targeting Positioning Product Place Price Promotion Packaging

Retail landscape in India

General trade Modern trade

Change in FDI regulations has

Huge population employed in increased the limit to 100% investment
General trade; Penetration is very
in single brand retail and 51% in multi
high 91% brand retail 9%

Margins distributed across distributor Global players to enter the market to

and retailer; hence producer capture the huge potential
margin is low as compared to MT

Unionized retailers => High

coordination amongst the retailers Creation of jobs in India
in any area

Gives the shelf space to different brands

Private Higher margins; 10% more than the other
labels brands
Motivates the consumers to visit the store Cultivates brand loyalty; Walmart has a
lot of loyal customers in foreign countries
Introduces Private labels of its own to earn large margins(10% more than These are cheaper to produce as there
normal); makes the competition price sensitive are no advertising and marketing costs
Motivates the people to buy the Walmart labelled goods and gives very less Marketing budgets are more efficiently
space to other brands used
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case
Distribution
Place network

Non
Conventional
HFS conventional
 Availability of the products in the
stores is very critical especially for
men products availability of
different variants is very important.
High Nivea men’s
 Shelf space is very critical, In the frequency Modern Retail outlets/E-
high frequency stores, there stores commerce
should be availability of all
variants => sales shall be higher for
the product A Modern Retail Non conventional
 Product A can be sold to the  Shelf space is very critical as it influences
 Collaboration with e-commerce
retailer at discount offers; the the purchase decision of men
websites
presence of other variants will  All the products A,B,C have to be
 College students are increasingly
push the sales of product A which available in this channel
purchasing online
is targeted at the price conscious  Special shelf space near the women
 Nivea men outlet in lobby space of
customer cream section to be taken> women
malls
 Visible and most effective shelf shall be inclined to buy product C for
space to be taken from the their husbands (face smoothening)
retailer  Space near the counters (arms length)
has to be taken to help men have a look
at the product while they are at the
cash counter
Segmentation Targeting Positioning Product Place Price Promotion Packaging

Promotion

1. Direct selling; Direct marketing 1. Trade promotions (Retailers)

2. Advertising 2. Consumer sales promotions
3. Publicity (Discounts, Bundling offers etc)
4. PR
Segmentation Targeting Positioning Product Place Price Promotion Packaging

Promotion
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case

Promotion
1. Pre launch campaign

Identify the ideal test Discover the Engaging the

Ensure that the customer and
market where the consumer insights by
stickiness factor is making him a co
products can be observations and by
present. How? creator and a
tested feedback
collaborator

The proposition of Identify the consumer insights and their

Connectors Mavens the products with affinity/aversion towards some attributes
in the product
dust protection,
•Dermatologists: •Gym instructors clean and shining
The safety :They have an face can create a
factors have to influence over stickiness factor Incorporate the feedback and re test the
be explained to the customers products at the same place
the doctors •Grooming
experts: Salons
are another
place where Enhanced brand image as “customer
the testing can centric” and development of brand
be done loyalty
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case
Test Markets

Gymnasiums Salons Malls Skin clinics

Increasing number of There has been an -Women spend more time Test centers outside skin
people these days are increase in the number of shopping than men. This clinics shall also be
enrolling in gymnasiums in people visiting established makes many men move effective if
Urban India because of salons. The products can into the lobby space recommended by the
the increasing be launched here for while their women are doctor
consciousness to be fit testing and for collecting shopping, hence the
and presentable. These consumer insights/ lobby space counters
men are potential users of feedback shall be an effective
the face cream. Hence means for test marketing.
counters inside the -Test centers near the
gymnasiums can be cash counters and near
installed as test counters the women beauty
section (often men wait
with their women at these
places)
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case
Bundling and using the brand image of NIVEA (strength of NIVEA & weakness of EMAMI)

2. Bundling offers 3. NIVEA hampers 4. NIVEA point of purchase

•The bundling offers can be
with women’s face cream
and this will be only for
product C which is targeted
at men of age group 35-45
•The purchaser in this case is in
the women who feels that
her husband’s skin is not soft
•Point of Sale would be giant
apparel retail outlets like
shopper stop, Life style etc.
and normal retail chains.
•NIVEA hampers can be
introduced which contain a
portfolio of products of NIVEA
like the face was, face
cream, moisturizer & shaving
gel.
•These hampers can be given
as goodies to promote the
products and also the mother
brand.
•These hampers can also be
given at discounted price to
attract the customers
promotion
•One of the consumer insight
is that men prefer to buy
those products which have
large variants and occupy
high shelf space.
•NIVEA display stands in the
retail outlet which display the
portfolio products of NIVEA
(EMAMI lacks wide category
range)
•NIVEA point of sale display of
the men’s face cream
variants; men generally pay
the bills in India and they
have considerable time to
look at the products
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case
5. Tactile marketing

Packaging of Product A
•Product A is targeted at a
price conscious segment
•Heavy package shall have a
positive effect on the
customers

•The product is targeted at a brand

conscious segment who are willing to
spend for the quality.
•The product preferable should not
have any outer cover.
Packaging of Product •The product should have a smooth
B/C finish to give a premium feeling to the
customer.
•The shape and the finish of the
product is shown in the package

The consumer will hold the product in his hands before making the decision of buying it. This will
create a sort of intimacy between them. Hence it is important to gain his attention during this short
span. The influence of touch is HUGE, and human being are extremely affected by it.
Segmentation Targeting Positioning Product Place Price Promotion Packaging

5. Celebrity endorsement Whom is NIVEA looking for?

 A person who is in the peak of his
career
 A person who is expected to stay for a
EMAMI fair and considerable amount of time
NIVEA face wash  Great influencer
handsome
 Established credibility
 Who has a screen presence and fan
following almost equal or greater than
“Sharukh khan”

Plausible celebrities:

- Towards the end of -Is an established

his career superstar in the
-Very less fan following industry
-Credibility not -Huge fan following
established -Most effective in
-Not a great influencer medium and low class • His new film “Bang Bang” can • The Mr. Perfect of
segments
be used to promote the Bollywood
product • Has an established
“Not an ideal option
• Has a lot of youth connect credibility
for the new launch”
• Will stay In the industry because • Known for his unique
of established family and and diverse screen
charismatic appearance presence
 Segmentation Targeting Positioning Product Place Price Promotion Packaging
Case
6. TVCs 7. Bill boards

The central idea in the TVC should be dust/sun Location Rationale

protection and a clean shining face.
Outside Gymnasiums Gym going population are
the people who are
conscious about their
appearance and health.
Hence there is a connect
The ad concept can be as follows: with the product’s
A biker travelling under the hot sun and using a proposition
NIVEA face cream will have a better shine and a
Near traffic signals Male drivers are
clean face with no dust or skin tanning.
considerable large in
The TVC can also directly attack the central idea of number and bill boards near
EMAMI of “fairness” which traditionally has been the traffic signals will have
considered as a women’s attribute
more viewing time
Exit gates of mall parking Considerable amount of
spaces time is spent near the
parking ticket collection
counter and the traffic
The TVCs should feature mostly in between sporting
leagues like IPL, Indian Football league, Sports moves really slow in these
channels and News channels; locations, hence a good
place to locate a bill board
Audio copies on Radio shall also be effective as
many men who drive prefer to listen to the Radio
Supply chain and logistics management

Centralized
Vs
De centralized
Order quantity: Trade off between inventory carrying
cost and ordering cost
For any queries contact:
Santosh -9007974513
Priyanka- 8584062265