Nivea Marketing Project
PRICING:
NIVEA which is truly a global brand has not met with success in India because the target segment of NIVEA were primarily women from the upper strata of society.Its products especially men care products are very costly. The price of all its products which are used on a daily basis like Deodorants, talcum powder and soaps are of the same price as that of the competitors. But other products like lip care and Men care are highly priced compared to that of its competitors.
The pricing strategy that NIVEA uses for its premium products is Price Skimming i.e. 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’s 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 (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 sales promotion. 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
NIVEA which is truly a global brand has not met with success in India because the target segment of NIVEA were primarily women from the upper strata of society.Its products especially men care products are very costly. The price of all its products which are used on a daily basis like Deodorants, talcum powder and soaps are of the same price as that of the competitors. But other products like lip care and Men care are highly priced compared to that of its competitors.
The pricing strategy that NIVEA uses for its premium products is Price Skimming i.e. 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’s 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 (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 sales promotion. 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