Marketing Management Assignment help on : NIVEA SUN

INTRODUCTION

Evaluation of marketing performance has become an essential part of marketing plan of every organization today. This evaluation is important for each element of the marketing mix i.e. product, price, place and promotion. Indicators play an important role in measuring and controlling the performance of marketing efforts. These key indicators of the performance must be described in details in the marketing plan. Apart from above another important part of marketing plan is the personnel planning and organizational structure. Each individual in the marketing should be aware of his or her responsibilities so that the entire marketing team can achieve the marketing objectives of the brand as well as of the firm. Here in this report we would be analyzing all the above mentioned aspects of the marketing plan for a brand called Nivea Sun. Each element of the marketing mix will be discussed for Nivea Sun further in this report.

MONITOR MARKETING PERFORMANCE

Nivea is a brand which deals in body care and skin care products. Nivea is owned by company named Beiersdorf AG. This company was founded in 1882 and currently have Nivea brand in world’s many countries including Africa and Middle East, Asia and Oceania, Europe, North America and South America. Nivea was developed by Oskar Troplowitz in 1900. Nivea is a Latin word which means ‘Snow White.’ Evaluation of the overall performance of the Nivea Sun is described below:

Overall Measures of Brand Performance

U.S. based marketing research company named A.C. Nielson conducted a survey and found that Nivea is the brand which is present in the maximum number of countries as well as in product categories. This survey is called ‘Global Mega Brand Franchise.’ The key parameter which was used in the measurement of the performance of the brand was number of product categories and countries in which the brand is available. Also the performance of Nivea was called as ‘Queen of Mega Brands’ in an article published on yahoo.com. The brand was called Queen of Mega Brands because it is present in more than 150 countries of the world as well as in 14 product categories. Nivea is a market leader in 28 countries for skin care and lotions products, in 23 nations for its products of facial cleansing, in facial skin care in 18 nations and in 15 countries for its suntan products. Since Nivea is present in these countries for many decade consumers of the brand take the brand as a local brand. This fact helped Nivea in achieving the global leadership position in skin care and beauty products industry. In its home country Germany also Nivea is a market leader in many product categories. With the help of its leader’s position in the market Nivea became able to manage a double digit growth rate for the decade of 1991 to 2000. The brand generated revenue of € 2.5 billion which was 55 % of the total revenue of the company. If we look at the factors which enhanced the revenue of the company by 4.4 % we find that Nivea was the single largest factor. It enhanced the profit of the organization as well for the year 2002 by 10.7 %. The key performance indicators are nothing but measures of accomplishment. Key performance indicators are the measurable objectives of the organization. These objectives are predefined and play an important role in the success of the organization. The key performance indicators for the Nivea’s performance analysis are its market share, its revenue growth, the number of products categories of Nivea and number of locations where Nivea sales its products. The key performance indicators and sources of measurements for each element of marketing mix of Nivea are described further in the report. The overall performance of the brand is given through the table which also includes key performance indicators of the brand:

Product Performance

Nivea owns many products in Australia just like in other parts of the world. The range of products of Nivea in Australia mainly includes products from the category of bath care, deodorants, body care, lip care, face care, men’s care, sun care, Nivea soft and Nivea cream. Main products which enhanced the market share of Nivea are Nivea pure & natural body lotion, Nivea Daily essential refreshing cleansing mousse, Soft Rose, Sensitive protect aerosol. Nivea has reformulated many of its products for making them more effective e.g. better products in the moisturizing category (Nivea 2012).

Key performance indicators here are obviously the number of products categories in which Nivea is available. Since Nivea is available in all the product categories, it has highest market share as well. Aim of Nivea is to provide innovative products to the consumers and hence innovation becomes another key performance indicator of the brand.

Pricing Performance

Pricing performance of Nivea is also excellent. It has generally premium priced products which reflect the good quality of the product and better value provided to the customers. There are many pricing strategies which a company can use e.g. cost based pricing, price skimming or penetration pricing. Nivea re launched it new product Nivea Visage and the price of the newly launched Visage was a slight higher than the previous one which reflects that the new products have additional features in it. The main focus of Nivea is on the value for money which it is providing to its target audience. Nivea uses simple cost plus pricing strategy and allows its retailers to use other pricing strategies (The Times 100 n.d.).

Here if we look at the key performance indicators of the company we find that pricing is done to reflect the quality of the brand, premium pricing and sales of the product is the KPI for pricing performance of the company as well as revenue generated by the products of the company will demonstrate the pricing performance of the company. Revenue and sales figures are given in the chart below. The methods and sources of measurement are very clear by the diagram given below.(Source: Brand Directory 2011)

Place and distribution performance

Place and distribution performance of the company can be described as the number of locations where Nivea is present. As we already described that Nivea is present in more than 150 countries which includes countries of North and South America, Asia and Oceania, Europe and South Africa. It covers approximately all the world. Strategy of Nivea in local region is to find as many outlets as possible so that it can enhance its sales. The best example of place and distribution is market development technique of Nivea in UK. Nivea deodorant is number one brand in Europe and has a high growth potential. The deodorant market of UK is of worth euro 300 million annually. Market of UK is highly competitive and dominated by Unilever which accounts for the 60 % of the market share. Currently Nivea has 5 million consumers in the deodorant market of UK. With the help of its consumer base Nivea aims to become the number one brand in UK in deodorant segment. Deodorant segment accounts for the 20 % market share of the entire beauty and skin care industry (The Times 100 n.d.).

While studying the above mentioned facts we are able to identify that the key performance indicators of the place and distribution performance of Nivea are market share of the brand, number of outlets or places within a country as well as number of countries in the world where Nivea is present. Consumer base is another KPI for the company.

Promotion performance

Promotion of Nivea can be described by the fact that in many countries Nivea is considered as a local brand. The promotional strategy of the company will come under umbrella branding as the company uses Nivea name with all its brands. For Nivea promotion is to find more and more effective way of reaching the target audience. KPI in promotional performance of the company are the effectiveness of the promotional events of the company, awareness among the target audience about the product as well as increase in the sales of products.

ORGANIZATIONAL STRUCTURE, OBJECTIVES AND KPI’s

An organizational structure is made up of many departments of the organization. It mainly includes marketing department, finance department, human resource department, customer relationship management department, public relations department etc. All these departments have their executives which are generally in hierarchical manner, i.e. managers, executives, subordinates etc. Every department of the organization has their own responsibilities and strategic objectives to achieve. There are also many types of organizational structure available in the literature for example pre – bureaucratic structure, bureaucratic structure, post – bureaucratic structure, divisional structure, functional structure and matrix structure. Here in this report we would be further analyzing the organizational structure of NIVEA Australia (Edraw 2012).

Overall organizational structure

The current organizational structure of NIVEA can be described by the figure given below:

The company will have Australia in the Asia Pacific region. And Organizational structure of the Australia can be given with the help of the diagram given below:

President of the organization will head all the business activities of NIVEA Australia and will be responsible for the overall business development of the company. Vice president will be available in the case of absenteeism of the president and will support the president in decision making. After vice president there would be legal advisers and managers who will be reporting to the vice president. And at the end all the departments will come. These departments will mainly include marketing department, human resource department, accounts department and entry level department. All these departments will have their own responsibilities according to the KPI’s (Edraw 2012).(Source: Edraw 2012)

Responsibilities of NIVEA Australia

The very first responsibility of NIVEA Australia could be to enhance its brand image and capture the maximum Australian market. NIVEA could be the number one skin care brand in Australia as well by competing its rivals e.g. Unilever and others. Other objectives of the company are to increase its consumer base and increase its market share. Also NIVEA Australia should try to get and sustain double digit growth rate and enhance its revenue so that it can contribute in the overall development of the organization.

Marketing Department Structure

Structure of marketing department of the company can be described by the diagram given below:

(Source: SEVIN ROSEN 2002)

Vice president of the marketing department will be responsible for all the marketing activities of the organization. His main objectives would be to make strategies for the marketing of the NIVEA brand. He will be taking decisions for the marketing strategy application and marketing activities of the company. Below vice president there could be product marketing director and marketing communication director. Product marketing director would be responsible for the marketing of all the products of NIVEA in Australia and he will decide which product to market at what time. Similarly marketing communication director will take the decisions related to marketing communication strategy. He will decide which communication medium would be beneficial for the organization (Lorette, K 2012).

Director of product marketing will have product managers under him and product manager will be responsible for the sales support of the brand, positioning of the brand as well as for new product development. Similarly, there would be another department of research which would analyze the condition of the brand in the market as well as will do the competitors analysis. In short we can say that he will keep the market updates. On the other hand there could be corporate, creative services and programs departments under the director of the marketing communication. These departments will take care of the public relations, advertising, brand identity, shows and events organized by the company at different locations in Australia.

Hence in short we can say that the key responsibilities of the marketing department of the company are to make its consumers aware about its existing as well as new products and increase its customer base. Not only customer should be the focus of the marketing department but supply chain management should also be fluent which the responsibility of production manager is. Marketing department must understand that it is allocating the marketing budget at the right marketing activities and helping in the revenue generation of the company (Lorette, K 2012).

The Key Performance Indicators which we have found till now are:

• Brand Value
• Enterprise Value
• Rating of the Brand
• Revenue generation
• Market Growth
• Enhancement in the consumer base
• Awareness among the consumers
• Sales increase
• Growth of the company
• Proper allocation and utilization of resources etc.

Communication Policy

For achieving the strategic objectives a better understanding of organizational goal is must and better understanding can be developed with the help of effective communication policy. An effective communication policy is required by NIVEA Australia so that its employees can easily understand the KPI’s of the performance and can perform according to that. There are some points which are required to have effective communication within the organization described below:

• First of all communication is nothing but exchange of meaning and it would be effective only if the people of the organization will take the responsibility of communicating effectively. It is highly important for those who manage other employees of the company.
• Secondly, communication in the organization should be open until it is not confidential. And for an open communication credibility and trust of the managers are required.
• Face to face communication could be beneficial for the NIVEA Australia as in this method there is an opportunity to ask the questions and receive the answers. Through this method understanding the KPI’s will become very easy. The members in face to face communication could be team leaders, supervisors, managers etc (Harrison, K 2012).
• Focusing of the local issues will be highly effective for the NIVEA as the employee of the company will become able to understand the local business performance, feedback from the customers, future expectations of the company and so on.
• Another important thing in the communication policy is respect. Employees of the company should respect each individual while communicating to each other.
• And at the last team leaders or managers should involve both the positive and negative news about the organization in the communication (Harrison, K 2012).

FEEDBACK, MENTORING AND COACHING

Feedback is an essential element for achieving the strategic goals of the company. This feedback is required from both the people i.e. inside the organization as well as outside of the organization. People who are outside the organization are customers but inside the organization are employees. Feedback from the customers will depend on the quality of product and services. But employee’s feedback will be according to the capabilities of them in achieving the strategic goals assigned to them. Their capability depends on the processes and policies which an organization applies within the organization. The communication process which NIVEA Australia should apply is internet technology. There should be a link given on the website of the company for the feedback. Employees can easily login to their accounts and provide their feedback for the policies and strategies of the company. In this manner engagement of the employees in the strategy making process of company will increase and they can easily participate as well. It will also consume very less time (Heathfield, S, M 2012).

The policy which NIVEA should use is ‘Open Door Policy’. Open door policy simply means that the doors of all the managers are open for every employee of the organization. This policy encourages the employees of the company to give feedback as well as discuss some other critical factors with the top level of management. In this policy employees don’t hesitate to discuss their issues which would be beneficial for NIVEA. Also if the employee is not able to comply with the required performance level of the company then he can be mentored easily. If he needs a training program, that can also be discussed. Another most important benefit of open door policy is that performance level of the employees and their key performance indicators can be discussed very easily and effectively. The responsibility under open door policy is that if an employee is having problem with his duty or any suggestion or any complaint he should go and discuss it with his manager. In this manner not only employee will be able to solve his issues but also the organization will become able to improve.

CONTINGENCY PLAN AGAINST OVER OR UNDER PERFORMANCE

Contingency planning is an important thing while developing the strategic planning of the company. Contingency simply means having a plan B i.e. if because of some reasons employees are not able to perform as it is required then in this scenario company must be prepared with another plan to run its business further. The situation could be of any type for example the entire sales team can get sick due to food poisoning or suddenly the supplier of the raw material or distributor of the finished goods becomes bankrupt etc. Not only the cases of failure will come in front of the organization but also the success needs a contingency plan for example if company became able to achieve its sales target before time or expenses in the marketing activities of the company were less than the expected etc. In this case company needs a performance appraisal system (Mind Tools 2012). The level of performance at which contingency plans will be required and action will be taken would be either over performance or under performance of the employees. If the employees have performed better than the expectations and achieved the objectives assigned to them before time then new objectives will be made and their performance appraisal will be done to motivate them. And if they are not able to achieve the required objectives within the time limit then they should be trained as well as company will be required to find some new ways to achieve the strategic goals of the organization.

CONCLUSION AND RECOMMENDATION

NIVEA is market leader in many countries including its home country Germany. It has a range of products in approximately all the products category which clearly shows that it has done its international branding very effectively. The branding strategy used by NIVEA is umbrella branding. But there are some countries in the Asia and Oceania region where it has a big scope to achieve more market share and enhance its revenue. Australia is among those countries where NIVEA has these opportunities.

We have discussed the key performance indicators which are required to address by the company which mainly include double digit growth rate, enhance its market share, keep itself updated with the competitors activities, enhance its revenue, increase its sales figures etc. But to achieve all these strategic objectives there are some points on which company needs to get focused:

• NIVEA Australia should always monitor its performance and compare it with the pre decided goals of the company. If the goals are not achieved the company is required to become more aggressive. The performance analysis can be done by the company on a quarterly basis.
• Company is required to have proper organizational structure where each member including top management of the company as well as entry level executives will have their roles and responsibilities clearly defined.
• The key performance indicators should be clearly understood by the officials of the company.
• Company should also have proper process of feedback and communication policies so that if some problems arise in the way of the objective completion of company that can be solved.
• Another most important thing is contingency planning that is NIVEA should be ready for the challenges which will come in its way with an alternate plan.

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