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How Kit-Kat made chocolate part of Ramadan

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By The Drum, Editorial

December 4, 2023 | 4 min read

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KitKat set out to create a chocolate to celebrate the holy month of Ramadan and went on to win the Inclusivity & Diversity trophy at The Drum Awards for Social Purpose. Here is the award-winning case study.

Example of the campaign work

KitKat has long been synonymous with the “break” and its various meanings and interpretations within culture. From the water-cooler break at the office, to the serendipitously unplanned break, to mental breaks. It’s a brand famous for glorifying however you like to break.

But one break that hasn’t been celebrated enough by brands is the break that happens every evening during the holy month of Ramadan: breaking your fast. There are almost 2 billion Muslims in the world, yet brands tend to ignore the most important holiday celebrated by this community. The month of Ramadan is a time of spiritual discipline, charity, generosity, and reflection. But it’s also a time of celebration and joy. The meal that happens at sundown every day of the month is called Iftar. It’s a time to gather with loved ones, crowd around the table for big meals, and exchange gifts.

The ambition was to break through the clutter in the category by rejecting occasions that every chocolate brand tries to insert themselves in, and instead bring representation and inclusion to one that’s often overlooked.

Canada is home to diasporas of culture and religion, and yet national holidays and celebrations remain entirely denominational of the Christian faith. There are almost 2 million Muslims residing in Canada who, year after year, are ignored by big brands who concentrate ideas, product design, and marketing spend on holidays like Christmas and Easter.

So to honor the important holiday of Ramadan in Canada, we created the KitKat Iftar Bar. It was inspired by the cultural insight that chocolate is a marker for celebration and while brands rally around holidays like Christmas, Easter, and Halloween others are often disregarded. As a beloved and iconic brand, KitKat had the power to bring cultural awareness to this important holiday.

Unlike the regular four-piece KitKat, the Iftar Bar is 30 pieces long, designed to be enjoyed piece-by-piece each evening during Iftar. The Iftar Bar is divided into three parts, paralleling the three stages of Ramadan called Ashras (ten in Arabic). The packaging features a tile pattern inspired by the iconic geometric patterns found commonly in Islamic architecture. A calendar detail is included under the physical bar to keep track of how far along people are in their fast with each day revealed one-by-one as each piece is broken off. The Iftar Bar also features iconography of the 30 phases of the moon inspired by the Islamic lunar calendar, showcased on the packaging sleeve as cutout moon phases that animate when the inner box is pulled out.

As a brand that has stood for the break, KitKat had the power to bring awareness to this holiday - one where a break has extreme significance. The campaign was designed to speak to Muslim communities in Canada who participate in and celebrate the holy month of Ramadan, but also to start a wider conversation and awareness about the traditions and meaning of the holiday.

Community involvement was an integral part of creating and launching the Iftar Bar. KitKat worked closely with agency partners and staff who are members of the Muslim community to bring the Iftar Bar to life. Then, to get the Iftar Bars into the hands of those from the Muslim community, KitKat partnered with content creators to host giveaways to their communities on Instagram.

Despite no paid media or press release, the KitKat Iftar Bar went viral, with over 2 million impressions after only seven days and generated overwhelmingly positive responses. Muslims celebrating Ramadan all over the world were sharing their Ramadan traditions with KitKat, with influencers on social media, and engaging in conversation about what the holy month of Ramadan meant to them.

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• Dec 23, 2020

KitKat advertising analysis: Have a Break, Have a KitKat

Updated: May 28, 2021

You can listen to the podcast of this same blog post, here

I am sure kitkat has been one of the favorite chocolate for most of us., so if i ever ask you to associate a few words that you can relate to the chocolate, it would be the red wrapper, the famous tagline of ‘have a break, have a kitkat’, and many more things., kitkat has, for years now, associated itself with this particular style of consuming it., taking the chocolate out of the red wrapper, creating a slit in the silver foil through your fingernails, breaking the biscuit, and then devouring the chocolaty biscuit goodness., as a kid, it was this style of consuming the chocolate that hooked me up, and now as an adult, i don’t have it any other way, in today’s blog post, we analyze the advertising communication of kitkat over the years and also try to understand how important a role did the tagline ‘have a break, have a kitkat’, played in the success of the brand., the post includes the following:, 1. brief history of kitkat, 2. the introduction and growth of the tagline ‘have a break, have a kitkat’, 3. advertising campaign analysis of kitkat in india, 4. advertising learnings, let’s look at each one of them in detail now, watch the youtube video.

1. Brief History of KitKat

Kitkat was launched back in 1935 in london, back then the chocolate was called ‘rowntree’s chocolate crisp’., however, two years later it was renamed as ‘kitkat chocolate crisp’ and after world war ii, the ‘chocolate crisp’ was dropped as well., back in those days, the flavor of the chocolate kept changing due to the unavailability of resources during and post the war period., and this was the first and the last time, when the iconic red wrapper of kitkat was replaced with a blue one- that denoted lack of fresh milk., the name ‘kitkat’ comes from christopher catling’s famous political and literary club called kitkat., today, the brand is present in more than 80 countries., kitkat has been in india since 1995., fun fact: with around 540 kit kat fingers consumed every second worldwide and 17.6 billion fingers sold every year, kit kat got featured in the guinness book of records in march 2010., the tagline ‘have a break, have a kitkat was introduced back in 1958 by donald gillies, working at the ad agency jwt in london., the launch of the tagline was made with 4 commercials and a press campaign., after the launch, the consistent usage of the tagline has now made it an advertising icon in itself and is now a registered property of the brand., the tagline had intended double meaning for the word ‘break’- first, the break associated with breaking the breaking the chocolate piece, and second, the break associating with resting., over the years, the brand and the advertising agencies using the slogan could come up with multiple alterations that helped the brand stick to the tagline., it takes years for a brand to build something this iconic, and more than a building, be able to sustain it for a long time., today the tagline is used across the countries, and each country manages to add its own layer of creativity- that’s what makes the tagline so versatile., from then, till now, the brand has ensured ‘no breaks’ when it comes to the tagline., barring one occasion., this year, that is,2020 marked the 85th anniversary of the brand, and they decided to launch a global campaign on social media., the campaign revolved around people coming up with a ‘soundalike’ variant of the tagline, while the brand takes a break from the original tagline for 10 days., it was centered around a competition whereby, the best slogan/tagline would be picked at the end of the competition., kitkat has been responsible for some of the most iconic campaigns over the years, we will share a few of them here, in the order of past to present, 1. the adorable squirrel dance (2010).

As a kid, I remember this commercial distinctly, and over the years if I had to pick my favorite from the lot, it has to be this one.

The focus of the advertisement was to bring in a new spin to the usual tagline and there was a clear shift from the product usefulness to the benefit of the consumer., the line ‘zindagi aapko shayad kuch haseen dikha de’ was highlighting the consumer benefit in this case., 2. babies dancing (2013).

Similar spin to the previous one, but here the line was slightly tweaked to ‘Na jaane aagla pal kya le aaye’.

The baby's dancing style has been incorporated by evian for years now, and this campaign seemed very similar to that., the ad focuses on you noticing something ‘good’ which you might have missed otherwise, had it not been for kitkat., i feel the best part about this ad is the catchy tune, that makes you tap your feet and brings a wide smile on your face, watching the babies dance., 3. the rapping announcer (2016).

The tagline ‘Har break hai mauka, Kuch Alag Kar dikhaneka’ is again adding a new twist to the existing tagline.

And this ad truly highlighted the flexibility that the tagline brings in., the execution was flawless, and it created this peculiar interest in the mind of the viewers, everyone needed the answer to ‘will verma make it’ and hence you wanted to watch the video till the end., 4. kitkat break with ayushman (2020).

2020 was a different year, a year that demanded changes in the creative approach of the brand.

Keeping the same in mind, kitkat created a very relatable scenario of online classes., they roped in ayushman khurana as the brand ambassador, thanks to his tremendous youth-centric following., the communication was simple yet in the same zone of ‘break banta hai’, these learnings are a combination of all 4 advertising campaigns., a. tagline consistency helps in brand recall, if i were to only mention the tagline ‘have a break, have a ___’ we would still be able to relate to the brand kitkat., that’s the power of consistency, and it helps tremendously with brand recall., b. focus on customer experiences, one most important thing that can be observed through these ad campaigns is that they talk about customer experiences after consumption of the product., and this helps the brand because consumers are constantly on the lookout for the answer to what’s in it for me, c. consistent brand colors create a stronger connection, this learning is not specific to the advertising campaigns but rather the product itself., the red and silver packaging has been constant since the start; this helps consumers relate to the brand in a much more direct way., also read: google advertising campaigns in india.

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What’s Up with KitKat in Japan?

Japan is a KitKat-lover’s paradise, with so many unique varieties—an estimated 300—that some travelers visit Japan just to try them. (Los Angeles Times)

How is KitKat a case study in globalization?

Teachers, scroll down for a quick list of key resources in our Teachers Toolkit.

Discussion Ideas

• KitKat, owned by the Swiss company Nestle and licensed by Hershey in the United States, started as a British candy bar, Rowntree’s Chocolate Crisp . The basic recipe has remained unchanged since the 1930s: two to three layers of cookie wafers covered by chocolate.
• The candy bar was developed as “ the perfect complement to a working man’s cup of tea. ”
• KitKat came to Japan in 1973. It was originally marketed as an alternative to rice cakes, the regular snack in tourist shops in Hokkaido, Japan’s northernmost major island. Find Hokkaido on our 1-page map of Japan.
• strawberry (the original, Hokkaido-associated version)
• blueberry cheesecake
• “European cheese”
• cafe au lait
• maple syrup
• vegetable juice
• gold-foil “Kobe pudding”
• packaging. Marketers altered KitKat’s traditional dark-red packaging with an array of bold, bright colors —a marketing scheme familiar to Japanese consumers. ( Even art depicting excrement is adorably pastel. )
• innovation. Japanese business culture has a global reputation for innovation. Today, KitKat Japan introduces 20 new flavors every year.
• communication. Japan is an industry leader in communications technology, and Japanese citizens are among the most technologically savvy in the world. News about new or limited-edition flavors can spread quickly and “go viral”, creating a curious market.
• travel. Many flavors are associated with specific regions of Japan. The popular flavor momiji manju (a pastry made of rice and buckwheat), for instance, is considered “soul food” in the city of Hiroshima .
• pop culture. Japan’s production of wildly flavored KitKats has become part of the country’s identity. It’s an accessible symbol of Japan’s internationally recognized popular culture.
• economy. Nestle Japan is a thriving business, an important part of the Nestle family of food and beverage brands . In addition, the flavored KitKat bars are popular among domestic and international tourists—the original market for the Hokkaido KitKats all those years ago.
• It complements an existing culture . Giving sweets as gifts is a national custom in Japan.
• It recognizes national pride. Japan “has deep pride in its local culinary traditions and industries,” which are reflected in the many flavors.
• It’s a play on the Japanese language. “Not least, the chocolate bar’s English name is a cognate—it sounds like kitto kattsu , which means ‘you will surely win,’  a sort of good luck blessing.”
• It’s made some smart partnerships. “ In 2009, the company created ‘KitKat Mail,’ a partnership with Japan’s postal service that allowed students to send KitKats as good luck charms before the country’s high-pressure January university entrance examination. Some KitKat wrappers contain blank spaces for students to scribble in heartwarming messages … In March 2011, after an earthquake, tsunami and nuclear disaster devastated a swath of Japan’s Pacific coast, people sent KitKats to the region , appending the message: kitto fukkyu kanau , or, ‘you’ll surely recover.’ … Nestle Japan threw its support behind the damaged Sanriku Railway — it released a special line of KitKats and donated some of the proceeds to reconstruction. It decorated two rail cars and in 2014, to celebrate the rail’s return to full operations, allowed riders to use some limited edition KitKats as tickets.”

TEACHERS TOOLKIT

Los Angeles Times: How the humble KitKat conquered Japan with ever-changing flavors. Anyone for sushi KitKat?

Nat Geo: What is globalization?

Wikipedia: Kit Kats in Japan: Varieties

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Nestlé KITKAT in Japan (A): Sparking a Cultural Revolution

By: Philip Sugai, Adrian Sossna

In 2008, the marketing manager for Nestlé Japan's confectionery business and his team were struggling to redefine the KITKAT brand within the Japanese market. KITKAT as a brand faced a real threat as…

• Length: 12 page(s)
• Publication Date: Jul 14, 2017
• Discipline: Marketing
• Product #: W17424-PDF-ENG

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In 2008, the marketing manager for Nestlé Japan's confectionery business and his team were struggling to redefine the KITKAT brand within the Japanese market. KITKAT as a brand faced a real threat as the retail environment rapidly shifted toward increasingly powerful convenience store chains and consumer preferences shifted toward more novel consumable products. With more than 200 companies competing within Japan's crowded and relatively stable confectionery market, Nestlé Japan was facing the harsh realities of Japan's famed position as the world's toughest consumer market. To address these challenges, Nestlé Japan worked over 15 years to instill deep meaning in the KITKAT brand and then, based upon this foundation, created a comprehensive product portfolio. How can KITKAT capitalize on its past success as it moves forward?

Philip Sugai is affiliated with Doshisha University.

Learning Objectives

This case series is designed for introductory marketing courses at the MBA level in order to help focus students on the process of marketing strategy development. Because it explores issues related to brands and the concept of premiumization, it is also appropriate for courses on brand management, marketing strategy, new product development, innovation, consumer behaviour, and general strategy. Finally, as this case series introduces a number of insights about Japanese consumer behaviour, it is also appropriate for courses focused on Japan, business in Japan, or business in Asia. This case series outlines effective solutions for brands struggling to re-focus and instill deep meaning into a consumer product brand. Students will learn The use of marketing research to identify the most important problems faced by a specific target customer group (or lightning rod target customer segment); How to leverage these insights to develop a clear and compelling story that resonates with this target customer group; How to assemble a comprehensive ecosystem of partners to reinforce this story and ensure that it is consistently delivered with the highest possible value to all members; How to identify scarce resources within the delivery of products or services and leverage these for competitive advantage; How to infuse meaning into a brand during a time of crisis (in this case, during one of the worst earthquakes ever experienced); and How to build premiumization efforts upon an existing product line or category.

Jul 14, 2017 (Revised: Jun 20, 2019)

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The Ingenious Way Nestlé Convinced People In Japan To Drink Coffee

The Japanese Kit Kat is a world of its own. In 2018,  The New York Times explored Japan's Kasumigaura factory, where Kit Kats are manufactured. Frankly, it makes Charlie and the Chocolate Factory look like a boring, 9 a.m. office meeting. The country offers Kit Kats of almost every shade and flavor imaginable, from strawberry to sweet potato. Soy sauce-flavored candy? Why not, right? (via NPR ).

And somewhere between the package of plum wine Kit Kats and banana Kit Kats, there's another flavor — cafe au lait — with a deep history. In Japan, coffee-flavored candy isn't simply another item on the long list of fascinating flavors. Before these Kit Kats emerged, coffee-flavored candy was part of a pretty creative marketing scheme that would have made Don Draper's jaw drop to the floor. Kit Kat's parent company, Nestlé, spent years marketing coffee-flavored candy to Japan. The reason? They wanted consumers to get an acquired taste for the real drink so they could buy that too, according to a case study from Better Marketing .

Nestlé aimed to change tea lovers into coffee drinkers

In the 1970s, Nestlé was hustling to sell coffee in Japan. And this was a fascinating time for Japanese cuisine: Japan had recently established its first McDonald's franchise. Yoshoku , a style of Japanese food that plays off of popular western dishes — like hamburgers and spaghetti — had been developing for decades (via The New York Times ). This was the moment for western companies looking to market their products in the east-Asian country.

But Nestlé wasn't finding much success, according to Better Marketing. Unlike coffee-centric countries — take Italy or Costa Rica — Japan has a rich history with tea. Not coffee. So Nestlé enlisted the help of Clotaire Rapaille, a psychoanalyst. 

"Nestlé? What can I do for Nestlé?" Rapaille responded, according to PBS . He'd spent years working with children who had autism — a far cry from corporate marketing. Nevertheless, Rapaille headed to Japan, where his expertise in psychology and memory allowed him to crack an important code. When consumers have a childhood memory of something — like chicken noodle soup, or mom's hot cup of coffee — that long-embedded memory creates a bond between the consumer and the product, Rapaille deduced. When Rapaille interviewed and tested consumers in Japan, he found many didn't have those fond, childhood memories of coffee: Tea, simply, was, and is, a much larger part of the culture. Rappaile aimed to change that.

Nestlé hit the coffee-flavored candy market hard

Nestlé engaged in a years-long plan: It started with sweet, coffee-flavored products for kids. "We started, for example, with a dessert for children with a taste of coffee. We created an imprint of the taste of coffee," Rappaile told PBS.

However, it's unclear whether Nestlé whipped out the coffee-flavored Kit Kat bars immediately. They most likely started with other coffee-flavored candies, judging from Rappaile's PBS interview. While Japan's Kit Kat market is off-the-charts intricate and popular, the Japanese flavors didn't really emerge until the 2000s, according to The New York Times. It's more likely that espresso and cafe au lait Kit Kats popped up around that time.

Still, while they may not have been Kit Kats, Nestlé's coffee-flavored desserts made a difference. According to Better Marketing, those early, coffee-flavored treats likely created an "imprint" on children. By the time these young consumers were older, and interested in the real drink, Nestlé coffee was ready for them. By 2014, the coffee market was hitting record highs in Japan, according to The Japan Times . And by the time coffee-flavored Kit Kats were introduced, consumers were well-acquainted with the drink and flavor. We can thank Clotaire Rapaille, who knew early on that food and memory go hand in hand.

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Case Study Analysis of Kitkat in Japan

What is nestle japan’s biggest challenge regarding kitkat in japan.

What Are Some of The Key Strengths of Kit Kat In Japan? Explain How And Why These Are Important For Creating a Sustainable Brand.

The fact that Nestle Company has a huge experience in the manufacture of the products considered to be highly qualified. The experience is a positioning strategy that the KitKat brand has exploited in Japan to become the most preferred chocolate products within a short period. In this way, the competitive advantage that the KitKat has in the Japan market proves to be an indisputable strength of growth. The other strength of KitKat brand is the fact that the product has a high market share and this proves to be the pillar to its successful branding (Grönroos and Gummerus 2014, p.206). The KitKat brand is one if the product lines that Nestle Company has managed to renovate and to take over as the leader in sales within the Japanese market. Apparently, using the branding ability and the recognition of the local preferences of the customers are the strengths that Nestle Japan can employ in leveraging its growth plans.

The fact that the KitKat brand has been accepted successfully in the Japanese market, it is significant that the company should consider the expansion of its product lines to other nations. Nestle Company has a great experience in many countries all over the world. A close examination of the experience indicates that the company can use the knowledge regarding the local preferences of the people of every country they have ventured into already to introduce the KitKat brand (Urde, Baumgarth, and Merrilees 2013, p. 13). For instance, the KitKat chocolates would be welcome by the American consumers. The justification in this evaluation is that the young adults in the Japanese market have a high affinity for chocolate products. Owing to the fact, Nestle Company in Japan understands that marketing earns the corporation huge profits and a large customer base; the use of its current efficiency in nutrition; health as well as wellness, the company’s entry into the new markets for purposes of growth will be smooth.

The Nature of the Marketing Environment

Primarily, KitKat brand is one of the brands that explain the success that Nestle Corporation in Japan has achieved because of the favorable nature of the marketing environment. Marketing a brand in Japan requires that the strategies applicable be consistent with the culture of the Japanese. KitKat brand embraces the use of color in packaging. In Japanese culture, color is a significant aspect, and since the KitKat brand packages its brand colorfully, the brand is noticeable easily. One other aspect of marketing is the meeting of health standards set by the Japan Food and Drug Administration. The reputation that Nestle Company has gained over the years through high nutritious, healthy and safe products assures the Japanese customers of quality products, in this case, the KitKat chocolate brand.

For the Nestle Japan to remain competitive in the market, it would be recommended that the corporation should adopt the strategy of delivering ordered nestle products, KitKat chocolate in the offices so that they can establish a long relationship with consumers that have no opportunity to go and make purchases during working hours. The strategy is based on the consumer-centric approach to marketing and increasing sales. Apart from using the customer-centric approach, the company can give back to the society by engaging in corporate social responsibility.

To create a strong customer base at the workplaces, the company can fund training and development projects in different organizations and institutions (Urde, Baumgarth, and Merrilees 2013, p. 15). The training and development programs will help the institutions and organizations that benefit to develop a continuous relationship with Nestle Company in Japan. Thus, continued sales and high reputation of its KitKat brand. Using its reputation, the company can usher in a new frontier for KitKat since the customers at workplaces and those of work will evaluate the quality from the experiences with Nestle Company’s products. In fact, the KitKat product will attract, and customers will develop prevalence for it than other chocolate brands from other companies.

What Type of Product Is The Kit Kat (In Japan) Positioned As And Explain Its Value Proposition?

KitKat Product is positioned as a convenience product in the Japanese market. Much as it is considered a luxury product, it has nutritional value, which the customers depend on to stay healthy. The justification for this is noted in frequency with which the consumers make purchases. Apparently, the prices of the KitKat chocolate is low regarding pricing, requires low involvement (Osterwalder, Pigneur, Bernarda and Smith 2014, p. 37). In this way, the Nestle Company has made it a widely available in the Japanese market.

The value proposition attached to the KitKat brand is the fact that the chocolate is a notorious and a component that contributes to a healthy heart. Primarily, the nutrients of the KitKat chocolate increase the brain activity and prevent cancer. In this way, many people in the Japanese market purchase the product. Apart from the nutritious value, people like being happy and joyful. For this reason, eating chocolate, especially the KitKat brand is perceived to be the source of feelings of happiness. Consumers usually record high level of happiness when they eat the KitKat Chocolate product.

How Should the Marketing Team At Nestle Japan Approach Their Marketing Efforts?

The customers prove to be the most significant stakeholders in organizations. Since the products manufactured are meant for the customers, it is imperative always to seek the preferences of the customers. Similar to Nestle Company in the Japanese market that specializes in KitKat chocolate, the customers’ needs can be used as a way of increasing the value of this product. While delivering the products to the customers, Nestle Japan can include incentives such as shopping vouchers and other rewards to the customers such as learning tools for children (Grönroos and Gummerus 2014, p. 208). In this way, the company can increase its customer base without increasing the prices since the customers will be delighted as they will expect more surprises. Additionally, it should be acknowledged that this marketing strategy of giving offers and rewards for purchasing the KitKat product should be season sensitive: festival and school-going periods.

Reference List;

• Grönroos, C. and Gummerus, J., (2014). The service revolution and its marketing implications: service logic vs. service-dominant logic.  Managing service quality ,  24 (3), pp.206-229.
• Osterwalder, A., Pigneur, Y., Bernarda, G. and Smith, A., (2014).  Value proposition design: How to create products and services customers want . John Wiley & Sons.
• Urde, M., Baumgarth, C. and Merrilees, B., (2013). Brand orientation and market orientation—From alternatives to synergy.  Journal of Business Research ,  66 (1), pp.13-20.

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Achieving sales lift with occasion-based campaigns

Hershey ran a Kit Kat campaign to test the effectiveness of occasion-based creative in boosting sales.

• +12.4% Sales lift

The campaigns ran in grocery stores across Minnesota, Iowa, Nebraska, South Dakota, Illinois, and Arizona for 3 months.

Hershey’s primary goal with the Kit Kat campaigns was to test the effectiveness of occasion-specific creative in generating sales lift for their products.

One test group of stores ran two different occasion-based campaigns:

The morning campaign paired a Kit Kat with coffee and encouraged consumers to grab a Kit Kat for the long day ahead.

The evening campaign recommended a Kit Kat as a pick-me-up to get through the rest of the day.

Morning campaign

Evening campaign

Sales lift for Kit Kat in stores that ran occasion-based campaigns

A regression analysis was used to determine the estimated sales lift from the ad playing in a set of test stores versus a set of control stores. This regression also controlled for convoluting factors like price, seasonality, and store foot traffic.

Growing sales with occasion-based campaigns

Modern brands understand the value of delivering the right message at the right time to the right people. Grocery TV gives brands the flexibility to experiment with creative targeting and maximize their potential for success.

Occasion-based campaigns, customized for a certain time of day, season, or holiday, can be an effective way to better relate to shoppers and their state of mind.

Grocery store shoppers encompass a wide variety of demographics. Brands can select stores based on their demographic targeting needs such as household size, age, ethnicity, and lifestyle.

Grocery TV makes it easy for brands to test different campaigns at different times of the day in order to tailor messaging to the consumer’s state of mind. For example, Kit Kat’s morning campaign paired a Kit Kat with coffee to get the consumer through their “long day ahead.”

When it comes to delivering the right message in the right place, Grocery TV offers CPG brands the advantage of reaching their customers where their products are actually sold.

Grocery TV provides brands with the unique ability to reach our shoppers and drive purchase behavior right at the pay point. In an environment where shoppers only have a few moments to decide whether or not to make an incremental purchase, Grocery TV can make a big difference.

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Kit Kat Case Study

Executive Summary:

This report is based upon the chocolate confectionary market in particular it is dealing with Kit Kat that is a product of Nestle. Further more the report will include; the situation facing Kit Kat within the chocolate confectionary market, the marketing strategies Kit Kat adopt to obtain maximum customer satisfaction and profitability, the effects European integration will have on the brand and also future recommendations that will help Kit Kat to stay ahead of the competition with threats coming from Cadbury’s, a rival chocolate confectionary company, who have just launched a new product called ‘Time Out’ that is similar in ways, mainly it’s wafer thin base, to Kit Kat.

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Without paying upfront

The results of these findings were as follows:

* Kit Kat markets it’s product in two different formats (two finger format and a four finger format) that are promoted and marketed differently. This is to cover more than one market segment, but the consumer does not seem to be able to tell the difference.

* The chocolate confectionary market is very competitive so Kit Kat will have to keep inventing new ideas and strategies to stay leader in the market.

* Kit Kat’s organisational structure is Functionally organised: where functional specialists head different marketing activities and it also has a Product Management Structure: using this approach a manager develops and implements a complete strategy and marketing programme for a specific product or brand. (Kotler pg116)

After assessing Kit Kat’s strengths, weakness’, opportunities and threats recommendations can be made on how to defend the company against Cadbury’s introduction of a new product and other elements:

* Kit Kat could introduce new brand flavours like the Limited Edition bars: Orange flavour and Mint flavour. Due to the fact that these were well received while on limited edition it is predicted that they will be well received by the consumer if they were realised as a full product and also promoted well.

* The introduction of a larger more hunger satisfying chocolate bar that could compete with Mars Bar and also wear off the threat from the Cadbury’s Time Out bar.

* When going further into the European market Kit Kat should adopt a Geographic marketing organisation where sales and marketing people are in charge of different countries and regions. This will allow the sales and marketing people to get to know their customers and also work with a minimum of travel time and cost.(Kotler pg. 116)

* To fit in with today’s more healthy consumer it is proposed that Kit Kat develop a new healthy Kit Kat brand that could be for people on the move that do not have time to eat a proper meal but want to keep healthy and fit and this could open up a new target segment for Kit Kat.

Introduction:

Snacking is a common occurrence in today’s society. With a large range of products being offered with different marketing strategies behind each one, competition is fierce in a continually rising market. Nestle Kit Kat that has been around since 1935 and has been Nestle Rowntree’s biggest brand since the 1950’s with other Rowntree brands being Polo, Rowntree’s Fruit Pastilles and many others. With the chocolate biscuit market having grown by 20% in the past five years company’s are now more than ever having to be continually in touch with customer needs and wants and with Kit Kat’s main brand strategy believing in offering consumers value for money this puts them in good stead for the future. But the pressure will continue to be on Kit Kat being market leader as the chocolate confectionary countline market has seen new products being introduced like the entrance of Fox’s Rocky bar that has already claimed 4.1% of the market and the release of Cadbury’s Time Out bar in Ireland. With the increase in the amount of competition in the market Kit Kat are going to have to be more innovative and will have to step up their quest to give consumers ultimate value for money and their objectives for the future are as follows:

* Increase sales across all of the European markets

* To become obvious leader in the UK confectionary market

* Generate genuine growth in the profitability and productivity of it’s confectionary business

* Increase efficiency of it’s supply chains so therefore improving customer service

The later of these bullet points is a primary example of the drive that today’s companies should be aiming for. Customer satisfaction is the main aspect of a profitable company and a non-profitable company. They are attracted by promise and held by satisfaction (Kotler pg104.) So in today’s world if a companies only goal is to sell a product and make a profit relentless to the need of the customer then the company is bound to falter. This is why Kit Kat has been Nestle Rowntree’s biggest brand since the 1950’s due to them putting the customer at the centre of the company and satisfying them so that they come back for more.

Methodology: The information about the company and the product came from chapter 3 of ‘Principles of Marketing’, Kotler, Armstrong, Saunders, Wong (1999). The book was published in 1999 so the information in it will be out of date and will therefore not give an accurate reflection of the state of the product and market today.

Page Title Page Number

Executive Summary 1

Contents Page 3

Introduction 4

Analysis of Report 6

Conclusion 11

Recommendations 12

References 13

Appendices 15

Analysis of Case Study:

Market Situation

The market situation that Kit Kat face is one of both promise and concern. With Kit Kat being market leader in the CBCL (Chocolate Biscuit Countline) and with their drive to be number one in the market this puts them in a good position for the future but with heavy competition coming from old and new sectors of the market it will be a tough mission to keep Kit Kat market leader.

Kit Kat has a number of strategies to help make maximum profit and to also keep consumer satisfaction high one of which is the marketing and promotion of their brand. The Kit Kat brand is available in two formats:

* Two-finger format that is sold in multipacks at large grocery stores and is marketed at parents for their children’s consumption. It advertises it’s product by putting adverts on morning television that will appeal to people aged 35-44 years old with children. The two finger format is part of the CBCL (Chocolate Biscuit Countline) and is market leader in it’s field, so therefore is able to dictate the price of the market that the competition will follow, with the two finger formats main competition coming from United Biscuits and Jacobs. The promotions are grocery orientated giving promotions like one bar free with every purchase.

* Four-finger format which is sold separately in CTN’s (confectioner/tobacconist/newsagent) with 80% of the four-finger format being sold this way. The target market is for people aged 16-24 years old and to coincide with it’s target market it advertises it’s product through independent radio and trendy magazines trying to keep it’s image up-to-date and trendy with the younger generation. It is part of the General chocolate countline sector which implies personal consumption. Due to the four-finger format being third in the market behind Snickers and Mars Bar, that are two Mars product, this means that they cannot set the price for the market to follow and have to reduce it’s price to go along with Mars Bar that is market leader. Promotions for the four finger are along the lines of 1p off every bar due to the different target segments.

Kit Kat sells it’s product in these two formats to cover two market segments also the increasing power of the multiple grocers that are becoming a lot more sophisticated and powerful. Kit Kat produce different packs for the multiple grocers to avoid price comparison by the consumer and also restricts the power of the multiple retailers in their negotiations to increase their profitability. (Kotler pg134) Due to the two finger format being number on in the market this gives it an advantage in that it can dictate the price of the market where as the four finger is third in the market so it therefore has to reduce it’s price behind the market leader, Mars Bar, if it wants to compete for the number one spot.

As Kit Kat has tried to create two different format of it’s brand to cover two different market segments the consumer does not see any difference in the total brand which could put the promoting and advertising of the two products in jeopardy due to the fact that the consumer can’t tell the difference. Sale figures may fall for the four finger in years to come due to the fact that the population of 15-24 year olds declines (Kotler pg136) but as this could result in a depressing finding for the four finger market the fact that ‘the influences of the seniors as a market segment will grow over the next several decades. By the year 2000 people aged 50 or more made up 38 percent of the population and accounted for 75 percent of the country’s wealth.’ (Mill & Morrison pg361) This could open up a new target market for Kit Kat in that they could advertise and market it’s product to seniors due to the increasing number of them and the decreasing number of people aged 15-24 years old.

Competition and European integration

The chocolate confectionary market is extremely competitive and very stable. With the main competition coming from Cadbury’s that has launched a new product called Time Out that is aimed at the CBCL market. Time Out is a mixture of both chocolate bar snacks, like Twix and wafer based snacks, like Kit Kat. This could be very dangerous for Kit Kat as Time Out’s sales in the countline market steadily increase from 18 million in 1992 to 39 million in 1994 (Kotler pg137). To combat this Kit Kat will have to look at introducing new flavours and brands into the market to try and take the attention off Time Out. This factor has proven very popular in recent years with big companies like Coca Cola and Tango introducing lots of new flavours in their products to try and compete in their competitive markets.

Kit Kat is wanting to become a globally renowned brand so it will therefore have to integrate it’s brand into Europe this however does pose some problems:

* Some Kit Kat’s that are produced in Europe will have to have different chocolate than others to fit in with some regulations across Europe

* Kit Kat cannot advertise itself the same way in other countries as it does in the UK because of factors like lifestyles, cultures and language differences.

* The packaging of the brand is different in the UK than elsewhere in Europe

* The product lifecycles will be different in other countries than in the UK

For Kit Kat to integrate into Europe it cannot standardise it self due all of the differences mentioned above but there are some opportunities that Kit Kat could take advantage of in these problems. The packaging of Kit Kat is a lot cheaper in other counties than it is in the UK so this will give more money to the company. Unfortunately the cheap wrapping cannot be done in the UK due to the fact that the consumer in the UK like the wrapping that is produced for the UK so to change this may result in a fall in sales. Although some of the chocolate produced in Europe is different from the UK consumers do not seem to be able to notice the difference which could lead to easier distribution of the chocolate in Europe.

At the moment due to the large size of the company the organisational structure of the company is as such:

* Functional organisation: where functional specialists head different marketing activities, this is the most common form of marketing activity.

* Product management organisation: when a manager develops and implements a complete strategy and marketing programme for a specific brand.

The advantage of these types of marketing are that managers have close relationships with their target markets and are able to make rapid decisions. The disadvantages are that there are lots of different management levels so the employee’s are receiving lots of orders from many different types of management. Another disadvantage is that these methods of marketing are very costly with brand managers requiring assistants and assistants are required whenever a new brand is to be launched.

Other possible marketing strategies that Kit Kat could use are:

* Geographic organisation: where sales and marketing people run specific countries and regions.

* Market management organisation: where products are assigned to different product managers who work with functional specialists to develop and achieve their plans.

The Geographical organisational marketing technique I think will be the best suited to Kit Kat for their integration into Europe and wanting to become a global brand name because this technique will allow the salespeople to get used to their surroundings and to get to know the kind of customers that they are dealing with and to understand their needs and wants better. The marketing management organisation would be best suited to a company that sells only one product to many different markets but this does not apply to Kit Kat.

Conclusion:

To conclude Kit Kat’s current position in the market is at the moment relatively stable. With the sales of it brand doing well in both of it’s target markets. With the company determined to fight for it’s place in the market and with it’s drive to advance the quality of product being produced and constantly trying to improve customer satisfaction Kit Kat is going the right way about leading the market. The move to expand into Europe should increase the companies suppliers and distributors links and also globalise the brands name. However, there are threats and weakness’ within and around Kit Kat at the moment.

With the main threat coming from the launch of Time Out that is trying to combine two popular snacks: Kit Kat and Twix to produce a new exciting product that gives the consumer the best of both worlds. This could take a lot of sales away from Kit Kat so they will need to act fast to take away the threat. The balance between strengths and weakness’ is marginally equal but because of Kit Kat’s number of opportunities that it has the strengths should soon out way the weakness.’ The brands marketing strategies are suited for the type of marketing that they are doing at the moment but with the change in the brands objectives then the objectives will have to change aswell. For example at the moment a functional and product management organisation is put in place but when the brand integrates into Europe it will have to change it’s strategies to accommodate the type of market that they are wanting to satisfy.

Recommendations:

It is after analysing the details on Chapter 3 of ‘Principles of Marketing’ that I can provide suitable recommendations for Kit Kat’s future:

* When integrating more into the European market a Geographic marketing strategy should be deployed to fit in with the different types of cultures and consumers that will be encountered. This type of marketing will give the salespeople a better view of their consumers so will therefore be able to understand and interpret their needs and wants more suitably.

* The introduction of a new kind of Kit Kat that is more hunger satisfying to challenge Mars Bar and also compete with the launch of Time Out. This new product should be priced relatively the same as Mars Bar to try and compete with at seeing as it is market leader.

* The introduction of a variety of new brand flavours should be implemented. This type of marketing has been implemented with big companies like Coca Cola and Tango and has proved to be a hit. Kit Kat should start with releasing the two Limited Edition bars that were previously released and were received very well. It these prove a great success it should conduct test to see what the consumers want as their next flavour.

Appendices:

SWOT Analysis of Case Study:

* Kit Kat has a good image in the UK

* The two finger format is market leader

* Kit Kat spends an average of 10% of it’s total sales value on advertising which is the largest expenditure in the market

* Two Limited Edition Kit Kat’s that were brought were a success

* Sells it’s product in two different formats to cover two different target markets

Weakness’

* Kit Kat has tried to distinguish between the two formats that it sells but the consumers don’t seem to notice

* Four-finger format is not the market leader so cannot dictate the price in the market

* The number of people from the age of 15-24 years old is decreasing this will have a negative effect on the four finger format as this age group is the one that the four-finger market targets

* Has to develop new strategies for integrating into the European market so that ultimate customer satisfaction is achieved

Opportunities

* Outside the UK more people buy the four-finger format than the two-finger format

* Consumers can’t tell the difference between the chocolate that is different in other countries

* Release the Limited Edition Kit Kat brands that were so well received when they came out

* There is a 20% growth in the chocolate confectionary market in the last five years

* New product development from competitors like the Time Out bar from Cadbury’s

* The cost of establishing new brands has increased

* Competition coming from small brands and grocery retailers’ own labels

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