Environmental analysis of Nivea in Thailand

Environmental analysis of Nivea in Thailand In todays world, all businesses are facing the dynamic of world economy. In business world, there is always strong competition in the market with new business players and convergence of the industry. Companies have to adjust themselves in order to survive and to conduct good performances; even the market leader of the industry needs to be successful with improved performance, high profitability and competitive edge. To be successful, a business needs to set its overall direction for the company through business plan aiming to achieve business goals and objectives. One of the most important parts of the overall business plan is the marketing plan. In formulating an effective marketing plan, a company needs to follow segmentation, targeting and positioning (STP) steps as they are the foundation of marketing strategy (Desarbo et al., 2008). STP process is in the area of market-oriented approach, which primarily examines the external environment based on market needs so as to develop products which well respond to the market. Currently, while the overall markets are becoming more mature and customer needs are greatly diverse, the use of STP strategy is indispensable. In highly dynamic environment, most companies conduct segmentation research studying the changes in the marketplace and adapt themselves to the dynamic world. Therefore, it is very common that most businesses are increasingly segmenting markets and identifying each target market in order to explore new opportunities, develop right positioning to establish brand image and brand reputation, deliver proper communications to the target audiences, and also effectively invest resources and specific capabilities to the main marketing activities. The company will be able to create a value proposition specific to the target market by developing an effective marketing strategy, including marketing mix. By going through the STP process, a company will be likely to establish its own identity and differentiate itself from other competitors in the marketplace. This research studies the mens grooming product industry in Thailand. The methodology is to examine how the product owner develops its marketing strategy and how the STP process has vital role in formulating the strategy. In Thailand, mens grooming market is a high growth industry, with approximately 14 percent growth annually from 2005 to 2008 and the market size in 2009 expanded with the value of Bt5.5 billion. Growth of the industry in year 2008 mainly came from growth of mens skin care market, with 26% percent growth in terms of current value (Euromonitor International: Mens Grooming Products Thailand, 2009). Mens skin care market is considered not only an attractive market but also a very highly competitive market in Thailand. This paper uses a case study of NIVEA FOR MEN brand in Thailand, the line of products manufactured by Beiersdorf Thailand, as it is a good case study about mens skincare market. Moreover, it specifically concentrates on male skin care market which is segmentation method of NIVEA FOR MEN. Therefore, this case study is of interest of the author to study the whole process of STP which can lead to the formulating of marketing strategy of a leading brand in mens skin care market, NIVEA FOR MEN. Prior to this study, there have been some researches studying male consumers behaviors which claimed that men consumers are now much more a part of modern consumerism as women (Sturrock et al., 1998). In recent years, a number of researchers aim their interests at male consumers in order to study male consumption of products and styles which contributes to the production of self image (Firat, 1993), and also the construction of self concept (Thompson and Hirschman, 1995). In this paper, the qualitative approach, in-depth interview will be the main research method. The research will provide more details of the area of study and clarify the discussed concepts. 1.2 Purpose of the project Points of the authors interest in this research are the rapid growth of mens grooming product industry and the way a leading brand in this industry has employed marketing strategies. An overall purpose of the project is to study the thorough process of segmentation, targeting, and positioning (STP process) that is the main part in creating effective marketing strategy, and to examine how and to what extent the STP process can be applied to men skin care industry as well as to assess its implementation on a leading brand in men skin care market, NIVEA FOR MEN which is owned by Beiersdorf Company. 1.3 Design of the Project and Objectives This paper mainly deals with the scope of the process of segmentation, targeting, and positioning of a leading brand in men skin care market. As the stated process is the foundation and genesis of marketing strategy formulation, this research covers the linkage among these market-led marketing strategies. The paper will analyze market attractiveness in Thailand, and male consumers needs as well as Beiersdorf Thailand resources and capabilities. The investigation will be done by in-depth interview with marketers in Beiersdorf Thailand in order to gain insight information about the STP process and also the implementation of NIVEA FOR MEN marketing strategies. After all, the theory will be concluded and will also be used as a base of recommendation for the potential growth direction of NIVEA FOR MEN, a market leader in the very high growth industry. The objectives of this research are as follows to trace the origins of marketing strategy concept in real word situation in mens grooming products market and men skin care market in Thailand; to investigate the process of segmentation, targeting, and positioning of NIVEA FOR MEN brand; to examine the linkage among segmentation, targeting, and positioning as well as to study how STP process leads to the formulation of marketing strategy of NIVEA FOR MEN; to study the creation of competitive positioning and marketing plan as a market leader men facial care industry; and to make recommendation in respect of the maintenance of its market leader positioning according to consumers perspectives. 1.4 NIVEA International History and NIVEA Thailand History The case study of Beiersdorf Thailand, NIVEA FOR MEN is used in this research as it is the best case to study about the market-oriented approach with focusing on segmentation, targeting, and positioning process. Moreover, it is of interest of the author as NIVEA FOR MEN, with the various lines of products, is the leading brand in Thai rapid growth industry, mens skin care market. The history of Beiersdorf AG is briefly summarised (See Appendix [4-1]). Both NIVEA international history and NIVEA Thailand history are summerised to illustrate NIVEAs current conditions in world market and in Thailand. 1.4.1 NIVEA International History Figure [1-1]: NIVEA Worldwide Source: www.nivea.com NIVEA is one of the worlds leading international skincare industries, founded in 1911 in Germany by Oskar Troplowitz, who named the company NIVEA, from the Latin word nix or nivis, meaning snow, in reference to the colour of the product. Currently, NIVEA is claimed to be the worlds largest skincare brand with a strong international presence in around 170 countries and an enviable reputation. Also, Beiersdorf has had strong sales worldwide as during 2008 and 2009, Beiersdorfs annual sales in terms of worldwide products sales are at à ¢Ã¢â‚¬Å¡Ã‚ ¬ 5,971 million and à ¢Ã¢â‚¬Å¡Ã‚ ¬ 5,748 million, respectively. Beiersdorf had already established an international presence with a large number of products prior to World War II. Trademarks were registered in many countries in order to protect these brands. According to the Beiersdorf website (2010) after World War II, these trademarks were lost in almost all countries, particularly those for NIVEA, and the company tried in each of these countries to recover the trademarks. Beiersdorf began expanding internationally in 1952s. Among the countries involved in the first international expansion were the Netherlands, followed by Argentina, Switzerland and Brazil in 1958. The following overview shows when the rights were recovered in each country. 1961 Sweden 1963 Mexico 1966 Finland/Denmark 1968 African Commonwealth Countries (except South Africa) 1973 U.S.A 1974 France incl. former colonies, now Chad, Mali, Cameroon, The Congo, etc 1977 Hong Kong, Thailand, Malaysia, Singapore, Gibraltar, Cyprus, Malta, Bermuda, Bahamas, Jamaica, Barbados, Trinidad and Tobago 1985 Norway 1992 United Kingdom, Ireland, Canada, South Africa, New Zealand, India, Pakistan, Israel, Australia 1993 Romania 1998 Poland Besides guaranteeing continued high quality on individual products, NIVEA expanded their product range into new cosmetic fields, such as decorative cosmetics and hairstyling and made notable innovations in skincare. Moreover, NIVEA began expanding their product line to provide complete cosmetic care for the whole family and for style-conscious singles. 1.4.2 NIVEA Thailand History In 1984, the NIVEA brand was introduced in Thailand, imported and distributed by Beiersdorf (Thailand) Co., Ltd. The brand was introduced as the first mass market skincare cream and the worlds first true cosmetic moisturizer in the famous blue tin with the white logo. NIVEAs products included NIVEA Crà ¨me, Skin Lotion and Labello Lip Care. According to the Beiersdorf (2010) website, Thai Food and Drug Administration (FDA) chooses the NIVEA factory for shooting Good Manufacturing Practices (GMP) Introduction Video. Later, in 1995, NIVEA obtained the GMP certificate from the local FDA Public Health Ministry which was the first GMP certificated to a cosmetic factory in Thailand and NIVEA Research and Development (RD) presented the New Method in Non-Animal Allergy Testing, to the Dean and professors of Pharmaceuticals Science Faculty, Chulalongkorn University. (Nivea website, 2010). By 2008, NIVEA in Thailand was successfully growing and had achieved an excellent 32% market share in the Super Hypermarkets sales channel which is of strategic importance in the Thai market (Nivea website, 2010). Overall, in skin care market, Beiersdorf Thailand is market leader with 11.9 percent market shares in 2008. In this year, Beiersdorf Thailand overtook Unilever Thai Holdings to lead sector sales (Euromonitor International: Skin Care Thailand, 2009) (See Appendix [1-2]). In Thailand, NIVEA achieved market leadership in Mens grooming sectors in year 2008 with 23.4 percent market share, followed by Gillette by Procter Gamble with 14.1 percent market share (Euromonitor International: Mens grooming products Thailand, 2009) (See Appendix [1-3]). NIVEA is also number one in body care sector, with body care brand share 23 percent and 23.5 percent in 2007 and 2008, respectively. (Euromonitor International: Skin Care Thailand, 2009) (See Appendix [1-4]). The NIVEA brand is now available in Thailand in the following products: NIVEA Body NIVEA FOR MEN NIVEA Visage NIVEA Deodorant NIVEA Sun NIVEA Lip Care NIVEA Bath Care