NEW YORK - Germany's Beiersdorf believes it has cracked the secret to successful marketing. Having come to the conclusion that "less is more," the cosmetics company has decided that from now on it will focus its efforts only on its leading brands.

Beiersdorf is not alone. Unilever has been selling off its least successful brands for the past three years. Not long ago, the company's portfolio numbered 1,600 items. Now that number has been reduced to 750, and in the near future, the company hopes to focus on just 400 core product lines.

Beiersdorf, meanwhile, takes a more nuanced approach, focusing its efforts on its top 10 brands, which include Futuro, Eucerin and Nivea.

The Nivea brand was born in 1911, when a cream appeared on the market, the name of which comes from the Latin nivius - snow-white. Now Nivea will apparently become one of the main points of application of Beiersdorf's marketing efforts. Today, the Nivea line includes tanning and sun protection products, face and hair care products, shaving creams and gels, etc. Last year, sales of this brand amounted to 2.62 billion euros ($2.96 billion) - more than half of the company's total sales.

Unilever is doing something similar now, concentrating its efforts on its star brand Dove. In 2002 alone, sales of the Dove line grew by 25% to about 2 billion euros ($2.26 billion). The company invested the money from the sale of hundreds of less successful brands in the development and marketing of the most profitable ones.

Unilever's ideology is fully consistent with the principle of one of the gurus of branding, David Acker: "If a brand is not first or second, it is sold."

Concentrating efforts will likely help optimize advertising spending. Beiersdorf's advertising budget last year was about €1.3 billion ($1.5 billion). By comparison, Unilever spent €7.3 billion ($8.2 billion) on marketing its products, while advertising for 250 Procter & Gamble brands cost the company €3.77 billion ($4.27 billion).

"You can grow well by focusing on just 10 brands," says Beiersdorf CEO Rolf Kuenisch, a former Procter & Gamble executive. "When you have 400 brands, you can theoretically manage them, but in practice it's very difficult."

Henkel, which owns the Persil brand of washing powder, among others, has a different branding philosophy. Over the past 12 months, the company has been increasing its stake in existing subsidiaries and buying up new brands in Algeria, Iran, Serbia and Guatemala. Today, its portfolio includes 700 brands of various products.

Henkel is trying to strengthen its image and for this purpose intends to rename 50 subsidiaries belonging to it, adding its own name to their names. For example, Henkel Loctite, Henkel ENAD will appear on the market, and then consumers will know for sure who these brands belong to.

JP Morgan analyst Simon Keller believes that the diversification focus will prevent Henkel from achieving the same growth rates in the cosmetics and hair care market as L'Oreal SA or Beiersdorf.

However, cosmetics and hygiene products account for only 22% of Henkel's profit structure. The rest is provided by sales of products such as adhesives and household chemicals, in particular Persil powder. In the cosmetics market, this company is among the laggards.

This is where Henkel's problem lies. Today, one of the main conditions for growth is a leading position on the market. "You can provide the lion's share of a company's profits through one or two brands," says UBS analyst Quiroga Thiele. "However, it is becoming increasingly difficult to break through to the top." (WSJ, 21. 07. 2003, Ekaterina Kudashkina)

Nivea is losing relatives