A careful market segmentation is critical to successfully selling products; you need to understand what makes different consumers tick and how best to reach them. Skincare giant Nivea conducted an impressive market research campaign that can be modeled by other firms.
First, a little background: Beiersdorf is an international skincare company with leading brands such as Nivea and Eucerin. They have expanded significantly in the UK market through effective segmentation that matches consumer needs. The company has become the value leader in the field, meaning people spend more on Nivea sun protection products than any other brand.
One important product line for Nivea is sun-related skincare products, worth upwards of £173.6 million in the United Kingdom alone. Nivea’s reputation in this broad segment is bolstered by robust scientific research and development focused on providing the best protection possible from the sun’s skin-damaging rays.
The key was to further segment the sun protection products market by two important factors: Skin type and the climate where the products are used. Skin types include very light, fair, normal, dark and children (who tend to have thinner, lesser developed skin) while the climates include moderate, hot and very hot. The level of protection is measured by SPF, which stands for Sun Protection Factor. The lighter the skin and the higher the temperature, the higher the SPF that is needed. SPF 20 may be adequate protection for a fair-skinned person in the UK, but SPF 40 might be recommended for the same person if they were in a more tropical environment.
The company’s market research revealed significant demographic differences between men (who go for convenience), women (who gravitate towards more luxurious products) and children (a market reached through adult parents, mostly mothers). Through the use of surveys and focus groups, Nivea was able to determine the attitudinal differences between distinct segments of consumers.
They discovered concerned consumers who were not at all concerned about getting a tan but instead were more focused on protection from sun damage. Sun avoiders don’t buy these products at all because they avoid high-exposure situations, although with education they may be convinced of the need for sun protection product purchases. Conscientious sun lovers love being out in the sun but are concerned about protection. Careless tanners, on the other hand, don’t worry about the sun at all and buy low-SPF products if they buy any at all. Finally, the naïve beauty conscious people are the ones who want to have a good tan but don’t adequately understand the relation between SPF and protection.
Nivea used this research to develop their unique brand positioning that includes making sun care as simple as possible, providing education about the importance of protection and finding ways to reinforce that protection message. One product innovation that came from this research was a product that offered full and instant protection from both UVA and UVB sunrays because many consumers fail to apply such products in the necessary time frame for effectiveness (20-30 minutes before exposure). Other product innovations have included sprays that are easy to apply, colorful products for children and water-resistant products for both children and adults. Advertising for children’s products targets the mothers of children with a protection message.
Interested researchers can get an important insight from the Nivea case study: a sophisticated market segmentation strategy goes beyond simple demographics. Through targeted research, firms develop an understanding of customer segments that takes buying habits and motivations into account. Using this segmentation, product development and messaging both become more effective and sales and revenue increase.
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Page 4: Consumer segmentation
Segmentation has been vital to the success of NIVEA Sun and allowed the brand portfolio to grow to over 40 products, all meeting clear consumer needs. The following factors are used to develop and define the sun care segments:
- Demographics - different groups of consumers behave differently (factors relate to age, gender, etc). Demographic differences relevant to NIVEA Sun include different buying behaviours between men/women and adults with children. There is a stark contrast between awareness and usage of sun care products between men (who prefer convenience) and women (who enjoy more luxurious sun care products). Similarly, adults with children are another broad segment with differing needs.
Demographic segments are broad. As research shows, the level of awareness of sun care transcends income and social class.
- Attitudinal this is the most important segmentation variable. Consumers' attitudes towards sun care influences their purchases. NIVEA Sun conducts market research to understand user attitudes. This involves questionnaires using a nationally representative sample, and more intensive research with small groups, to discuss individual skin protection habits and preferences. This has identified 5 distinct groups for protection and after sun:
- Concerned Consumers 'a good tan is not important'. These consumers are conscious of the harmful effects of the sun and purchase sun protection products that are most likely to offer high sun protection factors
- Sun Avoiders - avoid sunbathing and using sun protection when in the sun - it is seen as a chore. These are unlikely to purchase a sun care product. Through education, this segment may be convinced to protect using more easy-to apply products such as sprays.
- Conscientious Sun Lovers - adore sunshine and like to use a trustworthy brand with suitable protection factors. They know about sun care and use this knowledge to purchase suitable products for their skin.
- Careless Tanners - adore the sun but don't protect against harmful dangers. Tanning is important to this group, not protection. They don't worry about the long-term damage to their skin and may purchase a low SPF product, if any at all.
- Naive Beauty Conscious - like to have a good sun tan. They recognise that sun protection is important but fail to understand about Sun Protection Factors (SPFs). These consumers may still be interested in the core features of a sun protection product (e.g. SPF) and be more inclined to purchase an added-value offering such as a mousse.
Consumer segments were identified by analysing answers to questions about attitudes.
The two main aspects of attitudes relate to:
- Usage occasion (when) e.g. holiday, outdoor sports, gardening, working etc. This relates to the Sun Protection Factor (SPF) required, e.g. the SPF required for a holiday in Egypt differs greatly to outdoor work in the UK. This is one of the reasons why NIVEA Sun produce a wide range of sun protection from SPF 4 to 50 . Research has shown that consumers often purchase a variety of SPF's for differing needs and occasions. This factor alone however is not an accurate means of segmenting markets.
- Benefit sought - protection is the primary benefit but the preference by which this is delivered will vary by segment, e.g. convenience is important to men (so they choose spray applicators). Parents want to provide maximum protection for children (high SPFs and coloured products are therefore important).
The benefit sought differs across the attitudinal segments. Whilst 'Concerned Consumers' want a very functional product providing 'adequate protection' (e.g. SPF 30), 'Naive Beauty Conscious' may want a more luxurious sun protection product (e.g. mousse). This also applies to consumers with special skin types, who require a more specialised product. Recognising that this is a separate segment, NIVEA Sun has formulated sensitive skin products.