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Market penetration Market development Essay

Beiersdorf has expanded in each possible direction. Market penetration is demonstrated by NIVEA Lip Care products, which have been extended with new variants. The latest of these (Pearl and Shine) became the market leader in 2003. An example of product development is Visage Soft Facial Cleansing Wipes. Market research showed that women were looking for a new way to clean and tone their skin.

The Wipes quickly took the number one spot in the UK wipes market market. Market development is demonstrated by the launch of NIVEA deodorant into the UK and new markets in Europe. The UK launch was into a market dominated by Unilever. Following market research, NIVEA entered this market in a more specialist skincaring segment, positioning the deodorant so that it had the same values as the NIVEA cream. Diversification is shown by the development of NIVEA FOR MEN. This built on the strong brand. It recognised that men also used facecare products. The product range included shaving foam and gel, aftershave and moisturising lotion.

Introduction Beiersdorf is the skincare business behind leading brands such as NIVEA, Atrixo and Elastoplast. Beiersdorf’s first product was NIVEA Cream, the first modern cosmetic product, now used by an estimated one billion people worldwide. Beiersdorf has helped to stay ahead of competition over the last ten years by growing the business.

Growth Business growth can be measured by how it increases sales turnover, profits, market share, number and range of products, geographical spread or its number of employees. Businesses can grow from inside, by increasing their product range, or from outside, by acquiring other businesses. Beiersdorf has concentrated on the first route, called organic growth. It has developed new products; established in new countries and expanded market share in its established markets. Its growth focuses on a relatively small number of key brands.

Conclusion Beiersdorf is Europe’s leading skincare company. It has competed effectively by continually growing both its products and its markets.

Ansoff ’s matrix Business writer Igor Ansoff suggested four possible directions for growth. Businesses can grow by selling:

◗ More of their present products in present markets – market penetration.

◗ New products into present markets – product development.

◗ More of their present products into new markets – market development.

◗ New products into new markets – diversification. Ansoff showed these in a table. Any of these, or a combination, can be used for expansion.


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