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Kit Kat: Revitalising a Brand Leader

1992 Green chocolate arrived

The Life-cycle of a Product

Introduction

1995 The standard range of Smarties
was relaunched with colourful
new packets
Decline

Maturity

Growth

Some products are an immediate success; they
capture public imagination. Often this results
from well targeted, exciting promotional and

Launch

Sales

All products have a life-cycle. It starts with preparations
for the product’s launch, followed by the launch itself.

1997 Giant Smarties were launched
1999 Smarties ice cream was launched
2000 Mini Smarties came on the scene
2001 Tetrahedon pack for Mini Smarties

advertising activity and from careful market
research that has identified a genuine gap in
the market. Other products take longer to
come to consumers’ attention, and longer still
to become popular. Some new products flop,

Every alert, market-focused producer
recognises the need for regular change.
This is required because:
• consumers want and demand change

and soon disappear from sale.

Time

The growth stage comes next. Growth can
take weeks or months (eg the latest
fashion clothes) or years (eg the typical
packet or canned food and drinks
found in supermarkets). Eventually
the maturity stage is reached, where
sales of the product and
consumers’ level of product
awareness are both high. At
this stage, products risk going
into decline, largely because
they have become too
familiar and are seen as
less exciting than recently
launched alternatives.

The life-cycle
of a Product
Marketing departments are expected to ensure that products do not go
into decline. Mature products need
new life injected into them, to keep the
buying public interested and aware of
the product’s benefits.
This case study provides a classic
example of how to put new life into a
favourite, leading brand: Kit Kat.

Why Kit Kat
needed revitalising
Kit Kat is the UK’s best-selling chocolate bar. However, in the competitive
modern world consumers’ tastes
continually change. As a result, even
the most popular icons have to
re-invent themselves from time to time
in order to keep their appeal and stay
‘on top’. For example, pop stars adjust
their image, film animators amend their
favourite cartoon characters, and car

designers re-design old favourites such
as the VW Beetle and the Mini. One
secret of success is to retain enough of
the old image to keep the loyalty of
present enthusiasts for the product,
whilst making sufficient innovations to
attract a whole new group of consumers.
In the world of popular chocolates and
sweets, there has been in recent years
an ongoing revolution in modifying
products. In previous times, sweets and
chocolate bars remained in more or
less the same form for many years. Today,
however, modern sophisticated consumers constantly seek novelty and
change, and consumers have become
the driving force behind product
modification.

Take Smarties, for example, which have
undergone a series of changes in recent
years. Until the late 1980s, Smarties
came in well-established standard
flavourings, colours and packaging.
Then:
1989 Nestlé introduced blue Smarties
1991 Printing on sweets was introduced

• rival firms are constantly re-inventing themselves and their products
• innovation and inventiveness keep
an organisation flexible and able to
respond to further change.
Although Kit Kat continued to be the
Number 1 confectionery brand, by the
late 1990s its volume sales were falling.
Faced with several increasingly attractive competitive offerings, consumers
began to see Kit Kat in its traditional
form as lacking in excitement and interest, with purchases being driven more by
habit than positive choice. Although the
four-finger Kit Kat continued to be
highly popular with its core target
market of 25-40 year olds, it was losing
popular appeal with younger consumers.
The image problem was most evident
among core countline consumers ie 1220 year olds. In this important age group,
while Kit Kat had been part of ‘growing
up’ and may also have made regular
appearances in lunch boxes, it was hardly
relevant to their lifestyle. The traditional
four-finger Kit Kat did not seem relevant
to them. In 1999 therefore, Nestlé felt it
was time for some re-invention. The
company decided to develop a new
format of Kit Kat whilst still retaining
the four-finger variety with which
consumers are so familiar.

Project Tyson
Project Tyson resulted in the launch of
Kit Kat ChunKy, a super size Kit Kat
finger with a real mouthful of chunky
milk chocolate. This ‘heavyweight’
idea assumes that younger consumers
are looking for novelty, interest and
even excitement when they buy a
chocolate bar. While most of us are
loyal to the chocolate products we buy
regularly, we also seek novelty.
Project Tyson, as with all Nestlé
projects, followed Nestlé’s internal
advertising code of conduct, which
reflects the industry position on
advertising to children. The project
team ensured, for example, that the promotional campaign would not encourage children to pester their parents for
products nor would it encourage
children to eat confectionery frequently
throughout the day, in preference to
properly balanced meals.
To find out exactly what consumers
were looking for, Nestlé carried out
detailed market research, including
detailed qualitative research. Many
pairs of young people were invited to
give their views on different formats for
the new product eg whether they preferred one or two fingers, what flavours
they preferred (caramel, peanut butter,
orange jelly, chocolate layers etc).
Researchers also considered the most
appropriate form of packaging to add
further interest and attraction to the
product. Other forms of market
research included group discussions
with young people who, typically, were
regular consumers of chocolate bars. A
survey group might consist of, for
example, males and females who were:
• 17, 18, 19 or 20 years old
• of different ethnic origin
• from different parts of the UK
• a mix of students and non-students.

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cost estimates and revenue projections. Distribution channels: Routes through which a product travels from the manufacturer to purchase by the final consumer. There has been a clear knock-on effect into other age groups and only a limited negative effect on the sale of the traditional four-finger Kit Kat. The research also indicated that a two-finger variety would. It concentrated on 17-18 year olds in order to capitalise on aspirational identification from the younger groups. more than 20% of the UK population of the UK had tried the product. Qualitative objectives Nestlé also set several qualitative objectives. and posters for shop windows. 5 How would you go about developing a high level of consumer awareness of a product launch linked to a variant of an existing product? • To download this case study • A profile of the organisation • Revision help www. • create real innovation in the countline market. Market focused: Being driven by the needs and wishes of consumers. a 5% decrease in wastage The launch of Kit Kat ChunKy proved to be one of the best marketing success stories in recent times. it compared two-finger and single-finger variants of Kit Kat ChunKy. In particular. A detailed point-of-sale campaign supported the launch with attractive dumpbins in stores.The research provided clear evidence that: • the targeted population of 12-20 year olds were attracted to the idea of the single ChunKy finger • Project Tyson could be a winner. Both the quantitative and the qualitative objectives for the launch were quickly met. from its birth (launch) to its maturity and eventual decline. Quantitative objectives Nestlé set demanding quantitative objectives for the launch. with the vision that Kit Kat would be the natural choice for all breaks • increase Kit Kat’s market penetration by enticing new consumers to the brand. . Phone site campaign: Alerting consumers to a new product by means of advertising on the outside/glass of public telephone boxes. really can extend a successful product’s life-cycle significantly. Life-cycle: The key stages in the life of any product.750 tonnes of product) in 1999. www. These were to: • broaden the number of occasions on which people consume Kit Kat. The research examined different types of wrappings and formats. researchers were able to compile data on the views and feelings of representative samples of the targeted groups of consumers. Kit Kat ChunKy almost immediately became the best selling countline. Conclusion The launch of Kit Kat ChunKy has shown that intelligent innovation and adaptation. why is it important to gain a high level of consumer awareness quickly? Aspirational identification: The tendency for younger consumers (eg 12-14 year olds) to look up to and want to be like older teenagers. Nestlé provided excellent support for retailers by providing them with in-store promotions and a smooth supply of the 1 Glossary of Keywords product in order to meet the massive customer demand. in some ways. and perceptions of. Quantitative objectives: Objectives that are set out in numbers eg a 10% increase in sales.uk • Information on the organisation Questions www. and was also the most distinctive form that the new product could take.uk Using focus groups in this way. These in turn can be converted into production targets. PR and point of sale For a new product to grab public attention quickly. The most successful aspect of the launch and subsequent marketing activity has been that of revitalising interest in the Kit Kat line. and repeat rates have been very high. and this success story has continued.co.uk Browse the Web © Business Case Studies LLP.a mainly red and silver flow wrap. Qualitative objectives: Objectives that relate to achieving changes in attitudes towards. Nestlé aimed to: • achieve 90% distribution in all sectors of the confectionery market within the first four weeks after the launch • sell 50 million units (ie 2. Icons: Established images that are widely recognised by the public. The success of the launch Why was the launch of the new 2 Why might it be necessary to 3 Why is it important to establish 4 In launching a new product that Kit Kat ChunKy targeted primarily modify a well-established both quantitative and qualitative is a variant on an existing at people aged from 12 to 20? confectionery item? objectives for a product launch? product. Repeat rates: The proportion (%) of consumers who make further.nestle. Line extension: The addition of a new. supported by meticulous market research and product promotion. particularly among the 12-20 year old age group.co. a product. Market research: Research carried out to identify the needs and requirements of consumers and others in the market place. The single-finger proved to be most popular with the 12-20 year old group. Over 50 million bars were despatched within the first few weeks of the launch. The research also identified the type of packaging with the greatest appeal . the year of the launch • increase sales in subsequent years. The advertising was a big departure from previous campaigns in that it focused on the targeted age group. without alienating older consumers. compete with the four-finger variety.co. including young children and older adults. and by persuading lapsed users to return to the product. subsequent purchases. Countline: A chocolate based bar. with particular emphasis on the 12-20 year old segment Supporting the launch: media. In addition. In addition.businesscasestudies. Representative samples: Carefully selected small groups that contain a typical range of the people who comprise the total targeted group. the single-finger Kit Kat ChunKy provided a promising line extension. they therefore identify with images favoured by older teenagers. complementary format to an existing product line. Within 6 months. the Kit Kat ChunKy is a versatile product with an ability to inject new ideas into the market focused at 12-20 year olds eg by producing varieties such as orange flavoured ChunKy. ChunKy was supported by two dedicated television adverts complemented by a phone site campaign.businesscasestudies. It also became clear that Kit Kat ChunKy would inject new interest in Kit Kat across a broad range of consumers. not a very good idea! By contrast. Objectives for the launch A wise company will look to justify every new venture in strict business terms: it will set tough performance targets. This would lead to Kit Kat competing against itself. Nestlé invested in a range of public relations activities through radio and the national press. Field sales staff were involved in a detailed communication exercise to raise awareness in all forms of distribution channels. it is vital to support its launch with well-targeted advertising and promotional activities.