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Analyse the reasons for failure of the brand (5) 
Design a revival strategy with respect to the following 
1. SWOT analysis of the company (10) 
2. Brand re-positioning (5) 
3. Customer segmentation (5) 
4. Marketing mix strategy – product, pricing, promotion, distribution (8) 
5. Market expansion / Growth strategy – intensive / integrative / diversification (7) 
. 
Evaluation 
This assignment carries 40 marks 
It should be in the form of a report, TNR 12, 1.5 spacing. 
Time duration is two weeks 
Vicco turmeric and vajradanti 
Reasons for failure of the brand 
Founded in 1952 by late K V Pendharkar, Vicco group had carved its niche as a maker of distinct 
ayurvedic products, with Vicco Vajradanti powder and paste and Vicco Turmeric skin cream. 
Today, the group's annual turnover is estimated at about Rs 400 crore and Vicco products account 
for only 4% of the country's toothpaste market. 
It could not capture new consumers and remained static 
At a point of time were one of the most renowned Ayurvedic product manufacturers over the 
world. Their most famous products included Vicco Turmeric cream and Vicco Vajradanti. The 
flagship product, Vicco Turmeric, was targeted towards the young woman, who was about to get 
married. During the late 80s and early 90s, marriage was the most important and the most 
celebrated occassion of a woman’s life. Vicco appealed to that particular segment of the market, 
with its product, which was also not earmarked as a cosmetic, but as a natural alternative. Most of 
Vicco’s competitors also had taken and exploited the path by ‘marriage aspiration’ route but they 
changed the course with the evolution of the modern woman whereas Vicco stuck to the same and 
lost market share. Vicco did not anticipate the change in the stance of the target audience. Not 
acknowledging the fact the modern woman was becoming self independent and confident, thus
making marriage one of the many other reasons to celebrate, primarily caused its downfall. 
The product was a huge hit among the women consumers who preferred natural treatment in place 
of chemical cosmetics for their skin. The pioneers of the fairness cream were quite successful in 
building the brand image on the minds of consumers as ayurvedic cream. 
By 1990’s the aspirations of Vicco’s target audience was changing. During the later 90’s Indian 
women was transforming to be more independent and self reliable. Vicco’s target group was not 
only celebrating marriage but also many other occasions. Vicco’s competitors, Fair n Lovely and 
Cavin Kare realized the changing value of the customers and started re-positioning their product to 
appeal the new aspirations of their target consumers whereas Vicco stayed where they began. 
Vicco continued with the same packaging and same jingles for their brand. They continued to 
emphasize marriage as the only occasion woman celebrate while the consumers were changing on 
other side. This can be said as a perfect example of Marketing Myopia where Vicco failed to gain 
an insight on the needs of consumers. This approach saw Vicco losing its market share to HUL’s 
Fair n lovely. 
Parent Company 
Vicco 
Category 
Personal care- Skin care 
Sector 
FMCG 
Tagline/ Slogan 
Twacha ki raksha kare vicco turmeric Ayurvedic cream 
USP 
Combined goodness of Turmeric which protects from UV rays and sandalwood oil which provides 
coolness 
STP
Segment 
Herbal skin cream 
Target Group 
Entire middle class family 
Positioning 
Being pure and natural, with all the wonderful attributes of turmeric and sandalwood oil, Vicco 
Turmeric Cream gives the skin a radiance that mere cosmetics can't hold a light to 
SWOT Analysis 
Strength 
1. Strong brand recall- it being amongst the first to advertise, sonic branding has been very 
successful, people still remember it by its jingle 
2. Totally Ayurvedic enriched with natural do-good ingredients 
3. A multipurpose cream that not only protects skin from damage through pimples etc but also 
revitalizes the skin 
4. Good availability and distribution due to strong parent brand 
5. Strong legacy of the brand makes it very popular amongst the consumers 
Weakness 
1. No new advertisements for the product, the effect of old ads have faded away by now 
2. It is comparatively high priced and not many SKUs at different price points are available 
3.The antiseptic proposition is alone not sufficient to compete in mass market skin care category 
Opportunity 
1. Introduce brand extensions to occupy more shelf spaces and increased visibility 
2. Start fresh advertisements with the same jingle to establish its position back into consumer 
minds 
3. Making it available in smaller SKUs and at varied price points will help increasing the
consumer base 
Threats 
1. Intense competition leading to frequent value for money deals & discounts 
2. Distribution problems due to the cluttered segment & scattered market 
3. Spurious look-alike brands 
Vicco Vajradanti Paste 
Parent Company 
Vicco 
Category 
FMCG 
Sector 
Oral care 
Tagline/ Slogan 
Ayurvedic jadibootiyo se bana sampoorna swadeshi 
USP 
Contains the pure extracts of 20 herbs and barks, tested over generations, that have been blended 
into a potent combination that not only cleans teeth, but also protects and strengthens them 
STP
Segment 
Medicated toothpaste 
Target Group 
Lower and middle class in rural areas 
Positioning 
Gives strong gums, which makes the bite mighty, which no cosmetic toothpaste can ever give. 
SWOT Analysis 
Strength 
1. A heritage brand with the trust of Vicco associated to it. 
2. Natural ingredients 
3. Strong brand recall- it being amongst the first to advertise, sonic branding has been very 
successful, people still remember it by its jingle 
4. Good availability in the rural and semi-urban areas 
Weakness 
1. Vicco is not advertising and promoting the product aggressively now 
2. Less brand awareness in urban and semi-urban areas, which is also potential target group 
Opportunity 
1. Can target urban population with rising consciousness for natural chemical free products. 
2. Re-enter the consumer mindspace by starting advertisements again keeping the same jingles. 
Threats 
1. Not much awareness in the market regarding the effectiveness of the product. 
2. Lot of competition in the market from regular toothpaste brands.
3. With rising incomes, people have started migrating from inexpensive local brands and prefer 
international brands 
Competition 
Competitors 
1. Dabur Lal Toothpaste 
2. Colgate 
3. Meswak 
Product 
Vicco was in the ‘naturals’ segment of the beauty industry. Vicco Turmeric, the flagship product, is 
still recognized by many in the industry as one of the best products till date. Not only in the 
country, Vicco Turmeric was successfully exported to many countries. Vicco Turmeric contained 
16% turmeric and 0.5%sandalwood. The process of manufacturing was clearly defined on the 
packs which depicted Vicco’s confidence. The product had a strong aroma of sandalwood oil 
which became synonymous with the brand. Though, at the early stages the yellow color of the 
cream was a deterrent (other beauty cream were white), but due to its effectiveness and Word of 
Mouth publicity, Vicco became a rage in the country. 
All in all, at this juncture one can conclude that Vicco Turmeric was an excellent and 
revolutionary product. 
Packaging 
Vicco was one of the first brands to promise ayurvedic beauty care in a tube. At that point, its 
competitors were HUL’s Fair and Lovely, CavinKare’s Fairever and Emami’s various skin 
products. Vicco had an advantage of a superior natural product over them but when it came to 
packaging, it scored very low. All the competitors had evolving packaging to lure their target 
group whereas Vicco stuck to the reddish orange tube. It understood the value of packaging very 
late and hastily brought in two-three variations but that ended up confusing the TG and hurt them 
severely 
The three new introductions were brought out in a very little time. In fact that was the primary 
reason for generating all the confusion. The packaging killed its distinctness and slowly it moved 
towards a packaging which was similar to ‘Fair and Lovely’. The Vicco loyalists had just wanted a 
good packaging which was misinterpreted as ‘similar to competitor packaging’. 
Promotions
Most of the population who are in the 20+ age group distinctly remember the Vicco Turmeric 
Cream and this can be primarily attributed to its super famous jingle’ “Vicco turmeric, nahi 
cosmetic, Vicco turmeric ayurvedic cream…”. Vicco used 3 different advertisements, one of which 
starred famous actress Sangeeta Bijlani and another starring Mrunal Kulkarni. Both of them 
registered and instant connect with the audience which was supported by Vicco’s inherent theme 
of marriage being the biggest occasion in a woman’s life. In the initial years, the brand thus 
captured heavy market share. They also successfully bought TV ad spots during Chitrahaar, 
Rangoli to reach a wider population base. Moreover, Vicco was among the first brands to start the 
mystery buyer program which was eventually not leveraged. 
But the ads were not revived and same ads were relayed year after year though consumer 
preferences were changing. Not using consumer insights for their executional idea and relying 
heavily on their blockbuster product was a costly mistake and they lost all market share. 
Eventually the ads were also faded off. 
Understanding Consumer 
As already discussed above, Vicco serves as a classic example of Marketing Myopia. In the early 
90s, the woman in the country was evolving. She was becoming self confident and independent 
and had started progressing. But the Vicco advertisements emphasized on marriage being the 
single biggest achievement/occasion in her life. This mismatch was due to their lack of customer 
insights. If they had proper access to what their target group actually wanted, they might have 
implemented the insights in the copy strategy. The competition thus started overtaking Vicco, in 
terms of advertising and positioning, and the conservative approach of Vicco saw it lose to HUL 
Fair and Lovely. 
We can conclude by saying that Vicco excelled when it came to the product and promotions(at that 
particular time) but their lack of the understanding of their evolving customer base, continuation 
with the same theme in their ads and highly ordinary packaging cost them their market share 
SWOT : 
Brand experts say Vicco may not command a high valuation as it failed to keep pace with 
consumer trends though it continues to hold brand recall and strong equity. 
Vicco was one of the earliest brands which promised, and advertised, beauty care in a tube. They 
used the medium of cinema extensively and had long-standing appeal. 
Brand Repositioning 
Repositioning refers to the major changes in positioning for the brand/product. To successfully 
reposition a product, the firm has to change the target market’s understanding of the product. 
Firms may consider repositioning a product due to declining performance or due to major shifts in 
the environment. Many firms choose to launch a new product (or brand) instead of repositioning 
because of the effort and cost required to successfully implement the change 
The segments it plays in are majorly driven by the population under 30 years of age, and the brand
fails to connect with this major segment. The brand has stuck to its age-old branding ways and has 
failed to pay sufficient attention to its packaging, branding, advertisements, etc. For a market that 
is getting more and more thinly sliced in terms of product differentiation and the benefits offered 
by the products, Vicco offers highly generalized products with no significant differentiation, 
ending up becoming a simple ‘me-too’ brand that is mostly ignored while making purchase 
decisions. In a market that is promoting separate creams for day use and night use, separate 
fairness creams for different skin types and for different skin problems as well as for different 
seasons and age-groups and sexes; Vicco Turmeric and Vicco Fairness Cream appear as very 
generalized offerings with a one-size-fits-all being declared as suitable for all seasons, all sexes, 
all age groups, all purposes and all needs. At the same time, when toothpastes are being 
differentiated for sensitive teeth, whitening, gum care, family use, fresh breath, youth, etc. Vicco 
Toothpaste is a general offering for whoever wants strong teeth – Indians, foreigners, kids, elders 
all included in one. In the Indian market scenario, where majority of the consumers belong to the 
young, fast-moving and aspirational generation, Vicco does not establish the kind of connect that 
an FMCG brand in its category requires in order to be minimally successful in the market. 
New brands like Shahnaz or Himalaya and even Dabur have been a lot more successful than Vicco 
has been. Over the years, all its competitors changed their outlook, their commercials, re-defined 
their target markets and communication strategies and grew; but Vicco continued to remain where 
it was. In a way, Vicco can be claimed as a classic example of a marketing myopia that often 
plagues successful brands and ends up making them complacent and taking their success for 
granted. The target audience for Vicco has changed its perspectives completely from what it used 
to be when Vicco started, which the brand is taking its own time to understand and realize. 
To save Vicco, the company first needs to re-brand itself. Launching new contemporary 
communications on a large scale aggressively would be required as soon as possible. Bringing 
some contemporary endorsers on board would indeed be helpful. It would have differentiated its 
products clearly, as to what particular ingredient they wish to encash upon, and what particular 
positioning they desire in their target audience minds. Defining the target audience clearly would 
also be required. An introspection of what is desired and what is being done would help a lot. 
Strategy – 
you will need to create a flexible strategy that can respond to changes in customer perceptions and 
demand. It may also help you identify whole new markets that you can successfully target. 
The purpose of your marketing strategy should be to identify and then communicate the benefits 
of your business offering to your target market. 
Once you have created and implemented your strategy, monitor its effectiveness and make any 
adjustments required to maintain its success. 
One of the key elements of a successful marketing strategy is the acknowledgement that your 
existing and potential customers will fall into particular groups or segments, characterized by their 
"needs". Identifying these groups and their needs through market research, and then addressing 
them more successfully than your competitors, should be the focus of your strategy. 
You can then create a marketing strategy that makes the most of your strengths and matches them
to the needs of the customers you want to target. For example, if a particular group of customers is 
looking for quality first and foremost, then any marketing activity aimed at them should draw 
attention to the high quality service you can provide. 
Once this has been completed, decide on the best marketing activity that will ensure your target 
market know about the products or services you offer, and why they meet their needs. 
This could be achieved through various forms of advertising, exhibitions, public relations 
initiatives, Internet activity and by creating an effective "point of sale" strategy if you rely on 
others to actually sell your products. Limit your activities to those methods you think will work 
best, avoiding spreading your budget too thinly. 
A key element often overlooked is that of monitoring and evaluating how effective your strategy 
has been. This control element not only helps you see how the strategy is performing in practice, it 
can also help inform your future marketing strategy. A simple device is to ask each new customer 
how they heard about your business. 
Once you have decided on your marketing strategy, draw up a marketing plan to set out how you 
plan to execute and evaluate the success of that strategy. The plan should be constantly reviewed 
so it can respond quickly to changes in customer needs and attitudes in your industry, and in the 
broader economic climate. 
Strengths could include: 
· personal and flexible customer service 
· special features or benefits that your product offers 
· specialist knowledge or skills 
Weaknesses could include: 
· limited financial resources 
· lack of an established reputation 
· inefficient accounting systems 
Opportunities could include: 
· increased demand from a particular market sector 
· using the Internet to reach new markets 
· new technologies that allow you to improve product quality 
Threats could include: 
· the emergence of a new competitor 
· more sophisticated, attractive or cheaper versions of your product or service 
· new legislation increasing your costs 
· a downturn in the economy, reducing overall demand 
Questions to ask when developing your strategy 
1. What changes are taking place in our business environment? Are these opportunities or 
threats? 
2. What are our strengths and weaknesses? 
3. What do I want to achieve? Set clear, realistic objectives. 
4. What are customers looking for? What are their needs? 
5. Which customers are the most profitable? 
6. How will I target the right potential customers? Are there groups that I can target effectively? 
7. What's the best way of communicating with them?
8. Could I improve my customer service? This can be a low-cost way of gaining a competitive 
advantage over rivals, keeping customers, boosting sales and building a good reputation. 
9. Could changing my products or services increase sales and profitability? Most products need 
to be continuously updated to maintain competitiveness. 
10. Could extending my product list or service provision meet existing customers' needs more 
effectively? Remember that selling to existing customers is generally more cost effective than 
continually trying to find new ones. 
11. How will I price my product or service? Although prices need to be competitive, most 
businesses find that trying to compete on price alone is a poor strategy. What else are my 
customers interested in? Quality? Reliability? Efficiency? Value for money? 
12. What is the best way of distributing and selling my products? 
13. How can I best promote my products? Options might include advertising, direct marketing, 
exhibiting at trade fairs, PR or marketing on the web. 
14. How can I tell if my marketing is effective? Check how your customers find out about your 
business. A small-scale trial can be a good way of testing a marketing strategy without committing 
to excessive costs. 
Consider whether you can sell more to your existing customers or look at ways of improving the 
retention of key customers. 
Focus on the market 
Your marketing strategy document should: 
· analyse the different needs of different groups of customers 
· focus on a market niche where you can be the best 
· aim to put most of your efforts into the 20 per cent of customers who provide 80 per cent of 
profits 
Don't forget the follow-up 
· Approach a third party for feedback about your strategy - they may be able to spot any gaps 
or weaknesses that you can't see. 
· Put your marketing strategy into effect with a marketing plan that sets out the aims, actions, 
dates, costs, resources and effective selling programmes. 
· Measure the effectiveness of what you do. Be prepared to change things that aren't working. 
Pitfalls to avoid 
· Making assumptions about what customers want. 
· Ignoring the competition. 
· Trying to compete on price alone. 
· Relying on too few customers. 
· Trying to grow too quickly. 
· Becoming complacent about what you offer and failing to innovate. 
Market Segmentation: 
Personal care and beauty are growing markets as affluence increases, as populations age, and 
as the desire to conform to a particular image becomes an important issue. Consumers are 
becoming increasingly demanding, with a need for premium products and an increasing 
expectation of dramatic benefits from products at all levels.
This is further complicated in globalised markets, where definitions of beauty can be very 
different in different regions. 
As every customer has unique needs and expectations towards certain products, the ultimate goal 
of market segmentation is to organize customers into groups which allows targeting of customers 
with similar needs of and response to the products. The key is to minimize differentiation within 
each segment and maximize variation across segments. 
Generally, skin care products can be segmented based on four main categories: geographic, 
demographic, psychographic and behaviour. To begin with, geographic is an important factor in 
separating the skin care markets. People in various countries and continents basically shape their 
difference in needs of skin care products. Women in different climatic conditions and with 
different skin colours will have completely different skin concerns. For example, women in inland 
area with a dry climate will demand skin care products with higher moisture content compared to 
those in the coastal regions. Asian women are more inclined to whitening function than black and 
white women. In contrast, white women are more likely to have brown spots than yellow and 
black women. Demographic segmentation separates customers according to their ages, genders, 
income levels,. 
Within the market there are several distinct channels of distribution/price point classifications. 
They are: 
· Prestige--department and specialty stores (Macy's, Neiman-Marcus, Fred Segal and 
Sephora) 
· Broad--mass merchandisers, cosmetic discounters, drug stores, food stores and wholesale 
clubs (Costco, Sam's Club, etc.) 
· Alternate--direct sales (Avon, Mary Kay) 
· Specialty--(Body Shop, Bath and Body Works), Spas and Salons 
In addition there has been a democratization of luxury. The upper-class family group is massive. 
More than eight million households have incomes above $100,000. Luxury spending is growing 
four times faster than overall spending. Working women of all ages have more money and they are 
spending it on personal luxuries. This is a reaction to the chaos of 24/7 consumerism. She'll buy, 
but she wants more than just another product. She is not seeking empowerment--she is 
empowered. She is choosing to take better care of herself and others. She is looking for peace, 
solutions and fulfillment. Purchasing has moved beyond price. The Price:Value ratio has become 
more meaningful. She is seeking a "value added" experience or product. Our strategy of combined 
channels of distribution allows us to fit into her schedule while our product philosophy provides 
her with the benefits she is seeking. 
Our target customers (vs. end user) for wholesale distribution will be resellers who recognize the 
needs of this consumer and who she identifies with. We have used the term resellers because they 
will not be limited to retailers. We will reach the consumer through four distinct reseller channels.
1. Spas and Health Clubs: 
Most high-quality day spas and health clubs (and many upscale spas at resort properties) 
use generic products. (Much like the hair salon industry before Aveda.) Our goal will be 
to develop affiliations with select spas in urban areas and vacation destinations. Our 
manufacturing partnerships will allow us to offer these customers bulk product at 
favorable prices to them while allowing us excellent margins. 
2. Lifestyle Retailers: 
Our target retailer will be lifestyle-based rather than the typical soaps and potions or 
natural product retailers. These retailers exist in almost every city. Whether it is Wilkes 
Bashford in San Francisco, Mario's in Seattle, Harold's in several south central cities, 
Fred Segal in Los Angeles, Bergdorf Goodman in New York or Colette in Paris. These 
retailers have developed a loyal and sophisticated customer base. They understand the 
concept of lifestyle. 
3. Cosmetic Specialty Retailers: 
Sephora is the major force in this category. 
4. Boutique Department Stores: 
This category is composed of what was once called "Carriage Trade" retailers. We will 
limit our distribution within this segment to Saks, Niemans and Barneys. 
he Zydus Group flagship is eyeing targets in segments like anti-wrinkle cream, bleaching cream, 
under eye cream as well as hair care 
he skin care market can be segregated into toners, cleansers, sunscreens, anti-wrinkle creams dark 
However, within a period of five-six years, the use of skin care products has increased 
significantly in India. With changing life styles, increase in disposable incomes, greater product 
choice and availability, and influence of satellite television, more 
people are taking interest in personal grooming. The facial skin care market is booming. Products 
are competing with one another to take shelf space in the retail stores. Facial skin care products 
have become an essential part of the beauty market. Like western countries, creams and potions 
are applied in India also, in an effort to remove the pimples and the acne, fight stress and worry 
lines, and to remain young. Since the penetration level is still relatively low, growth is expected to 
be around 25% over the next five years. 
Some of the major players in this segment are Hindustan Lever (Fair & Lovely, Lakme, Ponds)
with a market share of 53%, followed by CavinKare- Fairever with a market share of over12 % 
and Godrej-Fair Glow with a market share of 3.4 %. The other players that have a presence in the 
market are Emami (Gold Turmeric and Naturally Fair), Revlon (Fair & Glow). 
-circle removing creams, astringents, facial creams, moisturizers, fairness creams, day and night 
creams, etc. Out of these, facial creams, moisturizers, fairness creams, day and night creams, etc. 
are the most popular products and account for approximately 60% of the skin care segment. 
Product 
Intoduce new products 
And line extension based on size, flavour color 
he company improved the product to make it more effective and more consumer-friendly. 
Beiersdorf tested the improved products on a sample group from its target 
audience before finalising the range for re-launch. This testing resulted in a number of 
changes to existing products. Improvements included: 
· changing the formula of some products. For example, it removed alcohol from one product and 
used natural sea salts and minerals in others 
· introducing two completely new products 
· a new modern pack design with a flower pattern and softer colours to appeal to younger women 
· changing product descriptions and introducing larger pack sizes. 
Each of these changes helped to strengthen the product range, to better meet the needs 
of the market. 
Price 
· cost based pricing this can either simply cover costs or include an element of profit. It focuses 
on the product and does not take account of consumers 
· penetration price an initial low price to ensure that there is a high volume of purchases and 
market share is quickly won. This strategy encourages consumers to develop a habit of buying 
· price skimming an initial high price for a unique product encouraging those who want to be 
'first to buy' to pay a premium price. This strategy helps a business to gain maximum revenue 
before a competitor” product reaches the market. 
On re-launch the price for NIVEA VISAGE Young was slightly higher than 
previously. This reflected its new formulations, packaging and extended product 
range. However, the company also had to take into account that the target market was 
both teenage girls and mums buying the product for their daughters. This meant that 
the price had to offer value for money or it would be out of reach of its target market. 
As NIVEA VISAGE Young is one of the leading skin care ranges meeting the 
beautifying needs of this market segment, it is effectively the price leader. This means
that it sets the price level that competitors will follow or undercut. NIVEA needs to 
regularly review prices should a competitor enter the market at the 'market growth' 
point of the product life cycle to ensure that its pricing remains competitive. 
The pricing strategy for NIVEA is not the same as that of the retailers. It sells 
products to retailers at one price. However, retailers have the freedom to use other 
strategies for salespromotion. These take account of the competitive nature of the high 
street. They may use: 
· loss leader: the retailer sells for less than it cost to attract large volume of sales, for example by 
supermarkets 
· discounting alongside other special offers, such as 'Buy one, get one free' (BOGOF) or 'two for 
one' 
Distribution/Place 
. 
NIVEA VISAGE Young aims to use as many relevant distribution channels as 
possible to ensure the widest reach of its products to its target market. The main 
channels for the product are retail outlets where consumers expect to find skin care 
ranges. Around 65% of NIVEA VISAGE Young sales are through large high street 
shops such as Boots and Superdrug. Superdrug is particularly important for the 
'young-end' market. The other 35% of sales mainly comes from large grocery chains 
that stock beauty products, such as ASDA, Tesco and Sainsbury”s. 
Market research shows that around 20% of this younger target market buys products 
for themselves in the high street stores when shopping with friends. 
Research also shows that the majority of purchasers are actually made by mums, 
buying for teenagers. Mums are more likely to buy the product from supermarkets 
whilst doing their grocery shopping. 
NIVEA distributes through a range of outlets that are cost effective but that also reach 
the highest number of consumers. Its distribution strategies also consider the 
environmental impact of transport. 
· It uses a central distribution point in the UK. Products arrive from European production plants 
using contract vehicles for efficiency for onward delivery to retail stores. 
· Beiersdorf does not sell direct to smaller retailers as the volume of products sold would not be cost 
effective to deliver but it uses wholesalers for these smaller accounts. 
· It does not sell directly through its website as the costs of producing small orders would be too 
high. However, the retailers, like Tesco, feature and sell the NIVEA products in their online stores. 
· Promotion 
· Promotion is how the business tells customers that products are available and persuades them to 
buy. Promotion is either above-the-line or below-the-line. Above-the-line promotion is directly 
paid for, for example TV or newspaper advertising. Below-the-line is where the business uses 
other promotional methods to get the product message across 
Events or trade fairs help to launch a product to a wide audience. Events may be business to 
consumer (B2C) whereas trade fairs are business to business (B2B).
· Direct mail can reach a large number of people but is not easy to target specific consumers cost-effectively. 
· Public relations (PR) includes the different ways a business can communicate with its 
stakeholders, through, for example, newspaper press releases. Other PR activities include 
sponsorship of high profile events like Formula 1 or the World Cup, as well as donations to or 
participation in charity events. 
· Branding a strong and consistent brand identity differentiates the product and helps consumers to 
understand and trust the product. This aims to keep consumers buying the product long-term. 
· Sales promotions, for example competitions or sampling, encourage consumers to buy products in 
the short-term. 
NIVEA chooses promotional strategies that reflect the lifestyle of its audience and the 
range of media available. NIVEA realises that a 'one way' message, using TV or the 
press, is not as effective as talking directly to its target group of consumers. Therefore 
NIVEA does not plan to use any above-the-line promotion for NIVEA VISAGE 
Young. 
Consumer-led promotion 
The promotion of NIVEA VISAGE Young is consumer-led. Using various below-the-line 
routes, NIVEA identifies ways of talking to teenagers (and their mums) directly. 
· A key part of the strategy is the use of product samples. These allow customers to touch, feel, 
smell and try the products. Over a million samples of NIVEA VISAGE Young products will be 
given away during 2008. These samples will be available through the website, samples in stores or 
in 'goody bags' given out at VISAGE roadshows up and down the country. 
· 
· NIVEA VISAGE Young launched an interactive online magazine called FYI (Fun, Young & 
Independent) to raise awareness of the brand. The concept behind the magazine is to give teenage 
girls the confidence to become young women and to enjoy their new-found independence. 
Communication channels are original and engaging to enable teenagers to identify with NIVEA 
VISAGE Young. The magazine focuses on 'first time' experiences relating to NIVEA VISAGE 
Young being their first skincare routine. It is promoted using the Hit40UK chart show and the 
TMF digital TV channel. 
· In connection with FYI, NIVEA VISAGE Young has recognised the power of social network sites 
for this young audience and also has pages on MySpace, Facebook and Bebo. The company is 
using the power of new media as part of the mix to grow awareness amongst the target audience

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Vicco failure - a detailed analysis

  • 1. Analyse the reasons for failure of the brand (5) Design a revival strategy with respect to the following 1. SWOT analysis of the company (10) 2. Brand re-positioning (5) 3. Customer segmentation (5) 4. Marketing mix strategy – product, pricing, promotion, distribution (8) 5. Market expansion / Growth strategy – intensive / integrative / diversification (7) . Evaluation This assignment carries 40 marks It should be in the form of a report, TNR 12, 1.5 spacing. Time duration is two weeks Vicco turmeric and vajradanti Reasons for failure of the brand Founded in 1952 by late K V Pendharkar, Vicco group had carved its niche as a maker of distinct ayurvedic products, with Vicco Vajradanti powder and paste and Vicco Turmeric skin cream. Today, the group's annual turnover is estimated at about Rs 400 crore and Vicco products account for only 4% of the country's toothpaste market. It could not capture new consumers and remained static At a point of time were one of the most renowned Ayurvedic product manufacturers over the world. Their most famous products included Vicco Turmeric cream and Vicco Vajradanti. The flagship product, Vicco Turmeric, was targeted towards the young woman, who was about to get married. During the late 80s and early 90s, marriage was the most important and the most celebrated occassion of a woman’s life. Vicco appealed to that particular segment of the market, with its product, which was also not earmarked as a cosmetic, but as a natural alternative. Most of Vicco’s competitors also had taken and exploited the path by ‘marriage aspiration’ route but they changed the course with the evolution of the modern woman whereas Vicco stuck to the same and lost market share. Vicco did not anticipate the change in the stance of the target audience. Not acknowledging the fact the modern woman was becoming self independent and confident, thus
  • 2. making marriage one of the many other reasons to celebrate, primarily caused its downfall. The product was a huge hit among the women consumers who preferred natural treatment in place of chemical cosmetics for their skin. The pioneers of the fairness cream were quite successful in building the brand image on the minds of consumers as ayurvedic cream. By 1990’s the aspirations of Vicco’s target audience was changing. During the later 90’s Indian women was transforming to be more independent and self reliable. Vicco’s target group was not only celebrating marriage but also many other occasions. Vicco’s competitors, Fair n Lovely and Cavin Kare realized the changing value of the customers and started re-positioning their product to appeal the new aspirations of their target consumers whereas Vicco stayed where they began. Vicco continued with the same packaging and same jingles for their brand. They continued to emphasize marriage as the only occasion woman celebrate while the consumers were changing on other side. This can be said as a perfect example of Marketing Myopia where Vicco failed to gain an insight on the needs of consumers. This approach saw Vicco losing its market share to HUL’s Fair n lovely. Parent Company Vicco Category Personal care- Skin care Sector FMCG Tagline/ Slogan Twacha ki raksha kare vicco turmeric Ayurvedic cream USP Combined goodness of Turmeric which protects from UV rays and sandalwood oil which provides coolness STP
  • 3. Segment Herbal skin cream Target Group Entire middle class family Positioning Being pure and natural, with all the wonderful attributes of turmeric and sandalwood oil, Vicco Turmeric Cream gives the skin a radiance that mere cosmetics can't hold a light to SWOT Analysis Strength 1. Strong brand recall- it being amongst the first to advertise, sonic branding has been very successful, people still remember it by its jingle 2. Totally Ayurvedic enriched with natural do-good ingredients 3. A multipurpose cream that not only protects skin from damage through pimples etc but also revitalizes the skin 4. Good availability and distribution due to strong parent brand 5. Strong legacy of the brand makes it very popular amongst the consumers Weakness 1. No new advertisements for the product, the effect of old ads have faded away by now 2. It is comparatively high priced and not many SKUs at different price points are available 3.The antiseptic proposition is alone not sufficient to compete in mass market skin care category Opportunity 1. Introduce brand extensions to occupy more shelf spaces and increased visibility 2. Start fresh advertisements with the same jingle to establish its position back into consumer minds 3. Making it available in smaller SKUs and at varied price points will help increasing the
  • 4. consumer base Threats 1. Intense competition leading to frequent value for money deals & discounts 2. Distribution problems due to the cluttered segment & scattered market 3. Spurious look-alike brands Vicco Vajradanti Paste Parent Company Vicco Category FMCG Sector Oral care Tagline/ Slogan Ayurvedic jadibootiyo se bana sampoorna swadeshi USP Contains the pure extracts of 20 herbs and barks, tested over generations, that have been blended into a potent combination that not only cleans teeth, but also protects and strengthens them STP
  • 5. Segment Medicated toothpaste Target Group Lower and middle class in rural areas Positioning Gives strong gums, which makes the bite mighty, which no cosmetic toothpaste can ever give. SWOT Analysis Strength 1. A heritage brand with the trust of Vicco associated to it. 2. Natural ingredients 3. Strong brand recall- it being amongst the first to advertise, sonic branding has been very successful, people still remember it by its jingle 4. Good availability in the rural and semi-urban areas Weakness 1. Vicco is not advertising and promoting the product aggressively now 2. Less brand awareness in urban and semi-urban areas, which is also potential target group Opportunity 1. Can target urban population with rising consciousness for natural chemical free products. 2. Re-enter the consumer mindspace by starting advertisements again keeping the same jingles. Threats 1. Not much awareness in the market regarding the effectiveness of the product. 2. Lot of competition in the market from regular toothpaste brands.
  • 6. 3. With rising incomes, people have started migrating from inexpensive local brands and prefer international brands Competition Competitors 1. Dabur Lal Toothpaste 2. Colgate 3. Meswak Product Vicco was in the ‘naturals’ segment of the beauty industry. Vicco Turmeric, the flagship product, is still recognized by many in the industry as one of the best products till date. Not only in the country, Vicco Turmeric was successfully exported to many countries. Vicco Turmeric contained 16% turmeric and 0.5%sandalwood. The process of manufacturing was clearly defined on the packs which depicted Vicco’s confidence. The product had a strong aroma of sandalwood oil which became synonymous with the brand. Though, at the early stages the yellow color of the cream was a deterrent (other beauty cream were white), but due to its effectiveness and Word of Mouth publicity, Vicco became a rage in the country. All in all, at this juncture one can conclude that Vicco Turmeric was an excellent and revolutionary product. Packaging Vicco was one of the first brands to promise ayurvedic beauty care in a tube. At that point, its competitors were HUL’s Fair and Lovely, CavinKare’s Fairever and Emami’s various skin products. Vicco had an advantage of a superior natural product over them but when it came to packaging, it scored very low. All the competitors had evolving packaging to lure their target group whereas Vicco stuck to the reddish orange tube. It understood the value of packaging very late and hastily brought in two-three variations but that ended up confusing the TG and hurt them severely The three new introductions were brought out in a very little time. In fact that was the primary reason for generating all the confusion. The packaging killed its distinctness and slowly it moved towards a packaging which was similar to ‘Fair and Lovely’. The Vicco loyalists had just wanted a good packaging which was misinterpreted as ‘similar to competitor packaging’. Promotions
  • 7. Most of the population who are in the 20+ age group distinctly remember the Vicco Turmeric Cream and this can be primarily attributed to its super famous jingle’ “Vicco turmeric, nahi cosmetic, Vicco turmeric ayurvedic cream…”. Vicco used 3 different advertisements, one of which starred famous actress Sangeeta Bijlani and another starring Mrunal Kulkarni. Both of them registered and instant connect with the audience which was supported by Vicco’s inherent theme of marriage being the biggest occasion in a woman’s life. In the initial years, the brand thus captured heavy market share. They also successfully bought TV ad spots during Chitrahaar, Rangoli to reach a wider population base. Moreover, Vicco was among the first brands to start the mystery buyer program which was eventually not leveraged. But the ads were not revived and same ads were relayed year after year though consumer preferences were changing. Not using consumer insights for their executional idea and relying heavily on their blockbuster product was a costly mistake and they lost all market share. Eventually the ads were also faded off. Understanding Consumer As already discussed above, Vicco serves as a classic example of Marketing Myopia. In the early 90s, the woman in the country was evolving. She was becoming self confident and independent and had started progressing. But the Vicco advertisements emphasized on marriage being the single biggest achievement/occasion in her life. This mismatch was due to their lack of customer insights. If they had proper access to what their target group actually wanted, they might have implemented the insights in the copy strategy. The competition thus started overtaking Vicco, in terms of advertising and positioning, and the conservative approach of Vicco saw it lose to HUL Fair and Lovely. We can conclude by saying that Vicco excelled when it came to the product and promotions(at that particular time) but their lack of the understanding of their evolving customer base, continuation with the same theme in their ads and highly ordinary packaging cost them their market share SWOT : Brand experts say Vicco may not command a high valuation as it failed to keep pace with consumer trends though it continues to hold brand recall and strong equity. Vicco was one of the earliest brands which promised, and advertised, beauty care in a tube. They used the medium of cinema extensively and had long-standing appeal. Brand Repositioning Repositioning refers to the major changes in positioning for the brand/product. To successfully reposition a product, the firm has to change the target market’s understanding of the product. Firms may consider repositioning a product due to declining performance or due to major shifts in the environment. Many firms choose to launch a new product (or brand) instead of repositioning because of the effort and cost required to successfully implement the change The segments it plays in are majorly driven by the population under 30 years of age, and the brand
  • 8. fails to connect with this major segment. The brand has stuck to its age-old branding ways and has failed to pay sufficient attention to its packaging, branding, advertisements, etc. For a market that is getting more and more thinly sliced in terms of product differentiation and the benefits offered by the products, Vicco offers highly generalized products with no significant differentiation, ending up becoming a simple ‘me-too’ brand that is mostly ignored while making purchase decisions. In a market that is promoting separate creams for day use and night use, separate fairness creams for different skin types and for different skin problems as well as for different seasons and age-groups and sexes; Vicco Turmeric and Vicco Fairness Cream appear as very generalized offerings with a one-size-fits-all being declared as suitable for all seasons, all sexes, all age groups, all purposes and all needs. At the same time, when toothpastes are being differentiated for sensitive teeth, whitening, gum care, family use, fresh breath, youth, etc. Vicco Toothpaste is a general offering for whoever wants strong teeth – Indians, foreigners, kids, elders all included in one. In the Indian market scenario, where majority of the consumers belong to the young, fast-moving and aspirational generation, Vicco does not establish the kind of connect that an FMCG brand in its category requires in order to be minimally successful in the market. New brands like Shahnaz or Himalaya and even Dabur have been a lot more successful than Vicco has been. Over the years, all its competitors changed their outlook, their commercials, re-defined their target markets and communication strategies and grew; but Vicco continued to remain where it was. In a way, Vicco can be claimed as a classic example of a marketing myopia that often plagues successful brands and ends up making them complacent and taking their success for granted. The target audience for Vicco has changed its perspectives completely from what it used to be when Vicco started, which the brand is taking its own time to understand and realize. To save Vicco, the company first needs to re-brand itself. Launching new contemporary communications on a large scale aggressively would be required as soon as possible. Bringing some contemporary endorsers on board would indeed be helpful. It would have differentiated its products clearly, as to what particular ingredient they wish to encash upon, and what particular positioning they desire in their target audience minds. Defining the target audience clearly would also be required. An introspection of what is desired and what is being done would help a lot. Strategy – you will need to create a flexible strategy that can respond to changes in customer perceptions and demand. It may also help you identify whole new markets that you can successfully target. The purpose of your marketing strategy should be to identify and then communicate the benefits of your business offering to your target market. Once you have created and implemented your strategy, monitor its effectiveness and make any adjustments required to maintain its success. One of the key elements of a successful marketing strategy is the acknowledgement that your existing and potential customers will fall into particular groups or segments, characterized by their "needs". Identifying these groups and their needs through market research, and then addressing them more successfully than your competitors, should be the focus of your strategy. You can then create a marketing strategy that makes the most of your strengths and matches them
  • 9. to the needs of the customers you want to target. For example, if a particular group of customers is looking for quality first and foremost, then any marketing activity aimed at them should draw attention to the high quality service you can provide. Once this has been completed, decide on the best marketing activity that will ensure your target market know about the products or services you offer, and why they meet their needs. This could be achieved through various forms of advertising, exhibitions, public relations initiatives, Internet activity and by creating an effective "point of sale" strategy if you rely on others to actually sell your products. Limit your activities to those methods you think will work best, avoiding spreading your budget too thinly. A key element often overlooked is that of monitoring and evaluating how effective your strategy has been. This control element not only helps you see how the strategy is performing in practice, it can also help inform your future marketing strategy. A simple device is to ask each new customer how they heard about your business. Once you have decided on your marketing strategy, draw up a marketing plan to set out how you plan to execute and evaluate the success of that strategy. The plan should be constantly reviewed so it can respond quickly to changes in customer needs and attitudes in your industry, and in the broader economic climate. Strengths could include: · personal and flexible customer service · special features or benefits that your product offers · specialist knowledge or skills Weaknesses could include: · limited financial resources · lack of an established reputation · inefficient accounting systems Opportunities could include: · increased demand from a particular market sector · using the Internet to reach new markets · new technologies that allow you to improve product quality Threats could include: · the emergence of a new competitor · more sophisticated, attractive or cheaper versions of your product or service · new legislation increasing your costs · a downturn in the economy, reducing overall demand Questions to ask when developing your strategy 1. What changes are taking place in our business environment? Are these opportunities or threats? 2. What are our strengths and weaknesses? 3. What do I want to achieve? Set clear, realistic objectives. 4. What are customers looking for? What are their needs? 5. Which customers are the most profitable? 6. How will I target the right potential customers? Are there groups that I can target effectively? 7. What's the best way of communicating with them?
  • 10. 8. Could I improve my customer service? This can be a low-cost way of gaining a competitive advantage over rivals, keeping customers, boosting sales and building a good reputation. 9. Could changing my products or services increase sales and profitability? Most products need to be continuously updated to maintain competitiveness. 10. Could extending my product list or service provision meet existing customers' needs more effectively? Remember that selling to existing customers is generally more cost effective than continually trying to find new ones. 11. How will I price my product or service? Although prices need to be competitive, most businesses find that trying to compete on price alone is a poor strategy. What else are my customers interested in? Quality? Reliability? Efficiency? Value for money? 12. What is the best way of distributing and selling my products? 13. How can I best promote my products? Options might include advertising, direct marketing, exhibiting at trade fairs, PR or marketing on the web. 14. How can I tell if my marketing is effective? Check how your customers find out about your business. A small-scale trial can be a good way of testing a marketing strategy without committing to excessive costs. Consider whether you can sell more to your existing customers or look at ways of improving the retention of key customers. Focus on the market Your marketing strategy document should: · analyse the different needs of different groups of customers · focus on a market niche where you can be the best · aim to put most of your efforts into the 20 per cent of customers who provide 80 per cent of profits Don't forget the follow-up · Approach a third party for feedback about your strategy - they may be able to spot any gaps or weaknesses that you can't see. · Put your marketing strategy into effect with a marketing plan that sets out the aims, actions, dates, costs, resources and effective selling programmes. · Measure the effectiveness of what you do. Be prepared to change things that aren't working. Pitfalls to avoid · Making assumptions about what customers want. · Ignoring the competition. · Trying to compete on price alone. · Relying on too few customers. · Trying to grow too quickly. · Becoming complacent about what you offer and failing to innovate. Market Segmentation: Personal care and beauty are growing markets as affluence increases, as populations age, and as the desire to conform to a particular image becomes an important issue. Consumers are becoming increasingly demanding, with a need for premium products and an increasing expectation of dramatic benefits from products at all levels.
  • 11. This is further complicated in globalised markets, where definitions of beauty can be very different in different regions. As every customer has unique needs and expectations towards certain products, the ultimate goal of market segmentation is to organize customers into groups which allows targeting of customers with similar needs of and response to the products. The key is to minimize differentiation within each segment and maximize variation across segments. Generally, skin care products can be segmented based on four main categories: geographic, demographic, psychographic and behaviour. To begin with, geographic is an important factor in separating the skin care markets. People in various countries and continents basically shape their difference in needs of skin care products. Women in different climatic conditions and with different skin colours will have completely different skin concerns. For example, women in inland area with a dry climate will demand skin care products with higher moisture content compared to those in the coastal regions. Asian women are more inclined to whitening function than black and white women. In contrast, white women are more likely to have brown spots than yellow and black women. Demographic segmentation separates customers according to their ages, genders, income levels,. Within the market there are several distinct channels of distribution/price point classifications. They are: · Prestige--department and specialty stores (Macy's, Neiman-Marcus, Fred Segal and Sephora) · Broad--mass merchandisers, cosmetic discounters, drug stores, food stores and wholesale clubs (Costco, Sam's Club, etc.) · Alternate--direct sales (Avon, Mary Kay) · Specialty--(Body Shop, Bath and Body Works), Spas and Salons In addition there has been a democratization of luxury. The upper-class family group is massive. More than eight million households have incomes above $100,000. Luxury spending is growing four times faster than overall spending. Working women of all ages have more money and they are spending it on personal luxuries. This is a reaction to the chaos of 24/7 consumerism. She'll buy, but she wants more than just another product. She is not seeking empowerment--she is empowered. She is choosing to take better care of herself and others. She is looking for peace, solutions and fulfillment. Purchasing has moved beyond price. The Price:Value ratio has become more meaningful. She is seeking a "value added" experience or product. Our strategy of combined channels of distribution allows us to fit into her schedule while our product philosophy provides her with the benefits she is seeking. Our target customers (vs. end user) for wholesale distribution will be resellers who recognize the needs of this consumer and who she identifies with. We have used the term resellers because they will not be limited to retailers. We will reach the consumer through four distinct reseller channels.
  • 12. 1. Spas and Health Clubs: Most high-quality day spas and health clubs (and many upscale spas at resort properties) use generic products. (Much like the hair salon industry before Aveda.) Our goal will be to develop affiliations with select spas in urban areas and vacation destinations. Our manufacturing partnerships will allow us to offer these customers bulk product at favorable prices to them while allowing us excellent margins. 2. Lifestyle Retailers: Our target retailer will be lifestyle-based rather than the typical soaps and potions or natural product retailers. These retailers exist in almost every city. Whether it is Wilkes Bashford in San Francisco, Mario's in Seattle, Harold's in several south central cities, Fred Segal in Los Angeles, Bergdorf Goodman in New York or Colette in Paris. These retailers have developed a loyal and sophisticated customer base. They understand the concept of lifestyle. 3. Cosmetic Specialty Retailers: Sephora is the major force in this category. 4. Boutique Department Stores: This category is composed of what was once called "Carriage Trade" retailers. We will limit our distribution within this segment to Saks, Niemans and Barneys. he Zydus Group flagship is eyeing targets in segments like anti-wrinkle cream, bleaching cream, under eye cream as well as hair care he skin care market can be segregated into toners, cleansers, sunscreens, anti-wrinkle creams dark However, within a period of five-six years, the use of skin care products has increased significantly in India. With changing life styles, increase in disposable incomes, greater product choice and availability, and influence of satellite television, more people are taking interest in personal grooming. The facial skin care market is booming. Products are competing with one another to take shelf space in the retail stores. Facial skin care products have become an essential part of the beauty market. Like western countries, creams and potions are applied in India also, in an effort to remove the pimples and the acne, fight stress and worry lines, and to remain young. Since the penetration level is still relatively low, growth is expected to be around 25% over the next five years. Some of the major players in this segment are Hindustan Lever (Fair & Lovely, Lakme, Ponds)
  • 13. with a market share of 53%, followed by CavinKare- Fairever with a market share of over12 % and Godrej-Fair Glow with a market share of 3.4 %. The other players that have a presence in the market are Emami (Gold Turmeric and Naturally Fair), Revlon (Fair & Glow). -circle removing creams, astringents, facial creams, moisturizers, fairness creams, day and night creams, etc. Out of these, facial creams, moisturizers, fairness creams, day and night creams, etc. are the most popular products and account for approximately 60% of the skin care segment. Product Intoduce new products And line extension based on size, flavour color he company improved the product to make it more effective and more consumer-friendly. Beiersdorf tested the improved products on a sample group from its target audience before finalising the range for re-launch. This testing resulted in a number of changes to existing products. Improvements included: · changing the formula of some products. For example, it removed alcohol from one product and used natural sea salts and minerals in others · introducing two completely new products · a new modern pack design with a flower pattern and softer colours to appeal to younger women · changing product descriptions and introducing larger pack sizes. Each of these changes helped to strengthen the product range, to better meet the needs of the market. Price · cost based pricing this can either simply cover costs or include an element of profit. It focuses on the product and does not take account of consumers · penetration price an initial low price to ensure that there is a high volume of purchases and market share is quickly won. This strategy encourages consumers to develop a habit of buying · price skimming an initial high price for a unique product encouraging those who want to be 'first to buy' to pay a premium price. This strategy helps a business to gain maximum revenue before a competitor” product reaches the market. On re-launch the price for NIVEA VISAGE Young was slightly higher than previously. This reflected its new formulations, packaging and extended product range. However, the company also had to take into account that the target market was both teenage girls and mums buying the product for their daughters. This meant that the price had to offer value for money or it would be out of reach of its target market. As NIVEA VISAGE Young is one of the leading skin care ranges meeting the beautifying needs of this market segment, it is effectively the price leader. This means
  • 14. that it sets the price level that competitors will follow or undercut. NIVEA needs to regularly review prices should a competitor enter the market at the 'market growth' point of the product life cycle to ensure that its pricing remains competitive. The pricing strategy for NIVEA is not the same as that of the retailers. It sells products to retailers at one price. However, retailers have the freedom to use other strategies for salespromotion. These take account of the competitive nature of the high street. They may use: · loss leader: the retailer sells for less than it cost to attract large volume of sales, for example by supermarkets · discounting alongside other special offers, such as 'Buy one, get one free' (BOGOF) or 'two for one' Distribution/Place . NIVEA VISAGE Young aims to use as many relevant distribution channels as possible to ensure the widest reach of its products to its target market. The main channels for the product are retail outlets where consumers expect to find skin care ranges. Around 65% of NIVEA VISAGE Young sales are through large high street shops such as Boots and Superdrug. Superdrug is particularly important for the 'young-end' market. The other 35% of sales mainly comes from large grocery chains that stock beauty products, such as ASDA, Tesco and Sainsbury”s. Market research shows that around 20% of this younger target market buys products for themselves in the high street stores when shopping with friends. Research also shows that the majority of purchasers are actually made by mums, buying for teenagers. Mums are more likely to buy the product from supermarkets whilst doing their grocery shopping. NIVEA distributes through a range of outlets that are cost effective but that also reach the highest number of consumers. Its distribution strategies also consider the environmental impact of transport. · It uses a central distribution point in the UK. Products arrive from European production plants using contract vehicles for efficiency for onward delivery to retail stores. · Beiersdorf does not sell direct to smaller retailers as the volume of products sold would not be cost effective to deliver but it uses wholesalers for these smaller accounts. · It does not sell directly through its website as the costs of producing small orders would be too high. However, the retailers, like Tesco, feature and sell the NIVEA products in their online stores. · Promotion · Promotion is how the business tells customers that products are available and persuades them to buy. Promotion is either above-the-line or below-the-line. Above-the-line promotion is directly paid for, for example TV or newspaper advertising. Below-the-line is where the business uses other promotional methods to get the product message across Events or trade fairs help to launch a product to a wide audience. Events may be business to consumer (B2C) whereas trade fairs are business to business (B2B).
  • 15. · Direct mail can reach a large number of people but is not easy to target specific consumers cost-effectively. · Public relations (PR) includes the different ways a business can communicate with its stakeholders, through, for example, newspaper press releases. Other PR activities include sponsorship of high profile events like Formula 1 or the World Cup, as well as donations to or participation in charity events. · Branding a strong and consistent brand identity differentiates the product and helps consumers to understand and trust the product. This aims to keep consumers buying the product long-term. · Sales promotions, for example competitions or sampling, encourage consumers to buy products in the short-term. NIVEA chooses promotional strategies that reflect the lifestyle of its audience and the range of media available. NIVEA realises that a 'one way' message, using TV or the press, is not as effective as talking directly to its target group of consumers. Therefore NIVEA does not plan to use any above-the-line promotion for NIVEA VISAGE Young. Consumer-led promotion The promotion of NIVEA VISAGE Young is consumer-led. Using various below-the-line routes, NIVEA identifies ways of talking to teenagers (and their mums) directly. · A key part of the strategy is the use of product samples. These allow customers to touch, feel, smell and try the products. Over a million samples of NIVEA VISAGE Young products will be given away during 2008. These samples will be available through the website, samples in stores or in 'goody bags' given out at VISAGE roadshows up and down the country. · · NIVEA VISAGE Young launched an interactive online magazine called FYI (Fun, Young & Independent) to raise awareness of the brand. The concept behind the magazine is to give teenage girls the confidence to become young women and to enjoy their new-found independence. Communication channels are original and engaging to enable teenagers to identify with NIVEA VISAGE Young. The magazine focuses on 'first time' experiences relating to NIVEA VISAGE Young being their first skincare routine. It is promoted using the Hit40UK chart show and the TMF digital TV channel. · In connection with FYI, NIVEA VISAGE Young has recognised the power of social network sites for this young audience and also has pages on MySpace, Facebook and Bebo. The company is using the power of new media as part of the mix to grow awareness amongst the target audience