CORPORATE CLOSE-UP;BEIERSDORF'S NIVEA LINE EXPANDS GLOBAL REACH;NEW PRODUCTS GIVE VETERAN ADDED STRENGTH TO TAKE ON COMPETITION

By Published on .

[Hamburg] Beiersdorf is testing the limits of using a single, venerable brand name as the company extends its tender care for skin platform to a barrage of rapid-fire new product launches, all called Nivea.

Under the leadership of CEO Rolf Kunisch, a Procter & Gamble Co. veteran, Beiersdorf is increasingly taking on-and sometimes beating out-rivals like P&G and L'Oreal in the product categories they know best.

"As a niche player, we have to act fast," said Mr. Kunisch, who left his general manager's job masterminding P&G's first major steps into Eastern Europe in 1990 to run Beiersdorf.

ENTERING NEW AREAS

For 1996, Beiersdorf has two major moves ahead: the launch of Nivea Baby products in June and the expansion of a flourishing German shampoo business into an international haircare range.

"A number of commentators have wondered if Nivea [as a brand] is capable of an almost indefinite extension," said Nina Stimson, associate publisher of European Cosmetic Markets, a monthly U.K.-based trade magazine."It would be difficult for us to envision a Nivea toothpaste, for example."

So far, Mr. Kunisch has taken the distinctive blue-packaged Nivea, invented in 1911 as an all-purpose skin cream, into new areas like Nivea Sun protection and Nivea for Men.

Nivea's biggest move was a leap into facial care with the introduction of Nivea Visage. Mr. Kunisch insisted on the international-sounding Visage name to denote facial care despite opposition from German managers dismayed at the non-Germanic moniker.

Nivea Visage rolled out across Europe in 1995 with ads by TBWA, Hamburg after debuting the previous year in France, Europe's most competitive skincare market. It is now the No. 1 seller in Europe with 17.5% of the market, ahead of L'Oreal's Plentitude, at 12.5%, and P&G's Oil of Olay, 9%.

Nivea Visage also went on sale this year in the U.S., a small market for Beiersdorf with only about $100 million in sales for the whole Nivea brand.

Moving into facial care was a catching-up exercise into a category marketers like P&G, Unilever and L'Oreal have dominated for years.

But Beiersdorf got the jump on rivals with the launch last year of its Nivea Vital wrinkle-prevention facial cream for women over 50, a market that is catered to in the U.S. but had been completely ignored in Europe before Nivea Vital. Ads by TBWA use a closeup of an attractive older woman, but Mr. Kunisch said ad copy can be adapted locally.

Both P&G and L'Oreal closely watched Nivea Vital's 1994 test market in Switzerland-where it now has 10% of the market-and followed its European rollout last summer with their own new products. P&G's Oil of Olay Pro Vital and L'Oreal's Plentitude Revitaliste are now head-to-head with Nivea Vital in targeting the over-50 market in Europe.

"Beiersdorf seems to have got it right so far," Ms. Stimson said. "Its heritage of skincare brand and product innovation have captured the public's imagination. Everything [it launches] is capitalizing on [its] caring image."

RISKY BUSINESS

The German marketer is aware of the risk of jeopardizing brand value by using the Nivea name unwisely.

"Can we really enter this segment, our marketing experts wondered," said a Beiersdorf spokesman citing the 1991 launch of Nivea deodorant. "Could the move hurt the Nivea name? Beiersdorf positioned its deodorant line as an [unscented] care product that's tender to your skin and the launch worked very well."

Sales for the Nivea brand rose by 10% in 1995 to $1.4 billion. In addition to the skincare business, Beiersdorf also includes two other large but lower-profile divisions with sales of close to $1 billion each.

The company's Tesa division competes with 3M in the adhesive tape business, with a 9% market share worldwide compared with more than 20% for 3M. The medical division, which includes major research facilities, markets bandages under brand names such as Hansaplast, Curad and Futuro.

INTERNATIONAL EFFORTS

Outside Europe, Beiersdorf owns 60% of a longtime joint-venture with Japanese consumer products giant Kao Corp. to market Nivea in Japan. The company also controls 70% of a joint-venture set up in 1994 with a state-owned chemical company in Shanghai called Daily Chemical Factory No. 2.

The company's main marketing efforts center on Europe, where Wilkens International, the former Ayer Europe network, is handling the rollout of both the 16-product Nivea Baby skincare line and Nivea Haircare. Nivea is already the No. 2 shampoo in Germany but the company is adding conditioners, styling products and hair repair treatments for the European rollout.

Nivea Baby won't be launched yet in the U.K., where Beiersdorf only regained control over the Nivea brand in 1992 and is still reshaping the U.K. operation.

Beiersdorf's growth as an international marketer now selling in 170 countries was slowed down by the company's loss of its international trademark as part of Germany's reparations payments after World War II.

"Small as Beiersdorf is compared to the multinationals, it always was an international company," Mr. Kunisch said. "My predecessors here made immense efforts and spent considerable amounts of money to regain the Nivea name in Mexico, the U.S. and France."

Contributing: Juliana Koranteng, London

Beiersdorf

Headquarters: Hamburg.

1995 sales: $3.8 billion.

1995 profit: $162 million.

Leadership: Rolf Kunisch, 54, CEO; Uwe Wolfer, chairman of the cosmed division and member of the management board.

Ad agencies: TBWA, Hamburg and Wilkens International, Hamburg.

Worldwide ad spending: $230 million.

Recent successes: 1995 European launch of Nivea Vital facial care for women over 50.

Challenge: To further extend Nivea as an umbrella brand with launch of Nivea Baby and Nivea Haircare lines this year.

Where the name came from: Nivea means "snowy white" in Latin.

In this article:
Most Popular