CASE STUDY 1: Long term maintenance of Nestle - Kit Kat

Group 4:
Tran Thi Lan Huong - BAFNIU18036
Vo Ngoc Thu Ha - BAFNIU18028
Nguyen Thi Phuong Linh - BABANS18184

___________________________

1. How does Kit Kat’s advertising target both the consumer and the
purchaser?

According to the text, the targeted consumer can be children and the targeted
purchaser can be adults.

It is quite significant to understand clearly the differences between Brand

Marketing Strategies and Product Marketing Strategies.

Branding is the collection of attributes that the consumer has come to expect
from a product, which will strongly influence their buying patterns. Branding
can be achieved using a company name - it can be applied generically or, as in
the case of Kit Kat, on an individual basis. The brand name promises the
consumer particular benefits, such as quality and value for money, with these
expectations being built up over many years. A brand name is often considered
by a company to be its most important intangible asset. In a market where
repeat purchases are the key to profitability, a brand name becomes paramount
to a product’s success. A catchy name and distinctive packaging are vital
ingredients in any brand image, but the true essence of a brand identity lies in
the consumer’s mind i.e. the perceptions of the product. A company must be
constantly aware of these perceptions and try to preserve and build on them
through advertising and other promotions. Branding enables marketers to build
extra value into products and to differentiate them from their competitors. The
history of Kit Kat emphasises the importance of successfully managed brand
names to the company that owns them. 

No matter how effective the promotion and packaging, a firm will find it very
difficult to market a product which fails to satisfy a consumer need. Kit Kat
owes much of its success to a unique dual appeal - as a four-finger chocolate
bar, (known in the confectionery trade as a countline), sold at corner shops and
newsagents, but also as a two-finger biscuit sold in supermarkets. It is a
product that has endured because of its wide appeal across the age ranges and
to both sexes.

Altering the actual product is potentially a very hazardous act for an established
brand name as it risks altering the consumer perceptions of quality built up
over decades.
Tampering with the recognised core qualities could well damage the integrity
of the brand. For Kit Kat, these intrinsic elements of the brand, or unique
selling points include the:

● chocolate fingers

● foil and band wrapping, unique in the countlines market and seen as
an important feature which encourages involvement and sharing by
consumers

● well-known strapline - Have a Break, Have a Kit Kat. 

For the last couple of years, Nestle has been producing numerous limited
editions of Kit Kat, such as Kit Kat Chunky Peanut Butter and Kit Kat Green
Tea Chocolate. In Japan, there are more than 30 different flavours available,
including wasabi, strawberry cheesecake, lemon vinegar, and cucumber. In
China, it is sold in plastic
bag due to the humid weather in the region.

Limited editions are used to attract consumers, market research has shown that
loyal consumers prefer special editions to be available for a limited time only.
Consumers are likely to purchase the original Kit Kat at the same time or
shortly
after. Therefore, this strategy is a good way to test a new market as well as
prolong Kit Kat’s product life-cycle.

Moreover, Kit Kat also launches two-stick and four-stick versions of chocolate
bars, which meet the demands of many types of consumers. The brand is
clearly differentiated from its competitors with distinctive colors: red, white
and silver. It is
positioned as a chocolate for the masses. It has a clear youth target market and
become unique in mindsets of loyal consumers.

The phrase: "A mother trying to feed her son or daughter" is useful to
understand the advertising strategies used for Nestle and for Kit Kat.

In the first case, any mother around the world wants the best for her children,
so she will look for high-quality and healthy products to feed them. Therefore,
brands which can response to these requirements may get her choice. On the
other hand, there is child who doesn't really know what is best for him but he
knows pretty sure what he likes, so it won't take a long time for him to ask for
his mother. It is also a way for brand to directly attract the consumers, not the
purchasers.

=> That the brand values of quality and good ingredients, as well as the big size
packaging offers that allows to save some money, will be decisive for the
mother to buy the product.
2. Draw up a Growth-share matrix (BCG approach) and Product/market
expansion grid. With reference to these and using SWOT analysis, explain
Kit Kat’s marketing strategy.

 SWOT Analysis:

S - Strengths - Belong to Nestle - the world's largest food and beverage

company
- Unique taste - chocolate covers wafer
 - Diverse tase - matcha, stawberry, blueberry,…
- Large distribution - available in more than 100 countries
- Affordable price
- Convenient - covered by wrapper
- Various size - 2 bar, 4 bar, …
- Strong marketing skills - have great tagline to mantain
the brand image
- Easy to break because of the wafer
- Short self-life
W - Weaknesses - Small changes in packaging
- Less popular with the young generation nowadays
- Fake products damage the brand image
- Expansion to rural areas
O - Opportunities - Catch up the trend of having healthy lifestyle
- Digital age helps boost up the promotion
- Competitive local brands
T - Threats - Appearance of substitutions - sweet/energy bar/granola
- Imitation of the product

 Marketing Strategy:
1. Based on Grow-share matrix: Kit Kat is the leader of UK’s market for
many years with impressive market growth rate. It oftens earn large interest per
annum. Howerver, it still has low market share because of strong competitors
in confectionary industry. Nowadays, this industry seem to be a fertile land and
a lot of company joined to explore it. This will be a challenge for Kit Kat to
raise its market share. It need to think of appropriate plan to expansion and do
more market research. Investing more in the market is what Kit Kat should do
to make the question mark become the star.
2. Based on Produc/Market expansion grid: Kit Kat need to penetrate the
market since the chocolate bar is too familiar with people and it have
diversified its products very well already. Now, it is available in more than 100
countries so it is also unecessary for Kit Kat to find a new market. That is why
Kit Kat face less risks than competitors. It can earn more interest from current
customers and current markets. However, it needs to be flexible and sensitive
with tendencies lest to lose these customers and markets to competitors.
3. Based on SWOT analysis: Obviously, Kit Kat is a very strong brand name.
Its products satisfied people of all age. Its success can be attributed to
consistency in its marketing, whilst allowing for minor changes to maintain a
modern image. It doesn’t have much weaknesses or serious threats. However,
the bigest problem is Fake product from local manufacturing and imitation of
the ideas that would take the customers from it. This sometimes will hurt the
brand image and Kit Kat needs to put more effort on promotion.
4. STDP:
 Segmentation:
Geographic segmentation: Urban areas and Rural areas. Since it has already
been much popular in the urban areas, the expansion to the rural areas will
bring more interest to Kit Kat. This is a possible plan because its price is
affordable and it is more like a choco-snack than a sweet.
Demographic segmentation:
- Children/Students: As a chocolate snack with the tagline “Have a break, have
a Kit Kat”, it has been a good choice for the break time of many students.
- Who go to work (about 24-54 years old): A large number of this group have
been loyal customers of Kit Kat since they were young. Having a Kit Kat
during break time became their habit. And when they has children, they often
buy Kit Kat for their kids.
Psychographic segmentation:
- Healthy lifestyle: More and more people want to have a healthier lifestyle. If
Kit Kat can catch up this trend, it will have more loyal customers.
- Diverse tastes: Kit Kat is very good at diversifying its taste based on what
people want, such as matcha and strawberry - loved flavor of many Japanese
people. It not only a chocolate snack for now, it is a chocolate snack with many
flavor.
- Convenience: Kit Kat is covered by wrapper and has many sizes. It is easy to
eat and carry. It is also easy to find - it is often put near the casher of stores.
Behavioral segmentation:
- Break time: People often find something to eat during the break time of
school/work or an interval of sport activities (like basketball match) to refill
their energy. “Have a break, have a Kit Kat” become a strong tagline in this
case.
 Targeting:
Kit Kat aim to all age of customers. It has a particularly broad customer profile.
However, there are different groups of age that is the main target of Kit Kat in
different countries.
+ In France, people from 35 to 54 years old - who have children below 18 years
old is the main target. They can be lower, middle or upper class since the price
of Kit Kat is affordable.
+ In Japan, students/young people from 12 to 24 years is the main target
because this group is sensitive with tendencies, they will be loyal customers
easily if Kit Kat improve its products in the way they love.
 Positioning:
“Broad in appeal, young in feel, big in stature” is a quote to summerize its
positioning.
+ It is sold to all age customers
+ It wants to maintain the position as the UK’s number one selling
confectionery brand
+ It kept the prices stable at all times and used a wide range of promotional
tactics (free bar in multi-bar,…)
+ It wants to offer value and gain the trust of customers
 Differentiation:
- Built the product strategy on the unique chocolate fingers and wrapping
- Used advertisement to promote and enhance the brand image

3. Describe the elements that make up the marketing mix of Kit Kat.
Explain why it is important to balance the marketing mix of Kit Kat.

- The elements that make up  the marketing mix of Kit Kat are :

+ Product:
No matter how effective the promotion and packaging, a firm will find It very
difficult to market a product which falls to satisfy a consumer need. Kit Kat
owes much of its success to a unique dual appeal as a four-finger chocolate
bar,  (known in the confectionery trade as a countline), sold at corner shops and
newsagents, but also as a two-finger biscuit sold in supermarkets. It is a
product that has endured because of its wide appeal across the age ranges and
to both sexes. 

+ Place:
Nestlé has developed distribution channels which ensure we availability of Kit
Kat to buy wherever and whenever the consumer wishes to purchase it. Sales of
confectionery depend heavily on its availability,with market research showing
that over 600 of all purchases are made on impulse. Consequently, Nestlé tries
to supply as many outlets as possible-both wholesaler and retailer channels. 

+ Price:
A key advantage of maintaining a strong brand image in a competitive market
is a degree of flexibility in the pricing strategy. It is a common characteristic of
imperfectly competitive markets for producers to concentrate on non-price
competition. When looking at the pricing strategy for Kit Kat, it can be seen
from the figures that the real price has remained remarkably stable over the last
sixty years.

+ Promotions:
Nestlé has used a wide range of promotional tactics with Kit Kat. Promotion
offers have included free bars In the multi bar family packs and an instant win
deal with Burger King in 1996.1hls promotion, where over 75 million free
burgers were on offer, Increased sales of Kit Kat by an estimated 30 In 1998,
an on-pack promotion featuring "The Simpsons" with the chance to win
£20,000 cash and hundreds of other prizes, Increased sales of Kit Kat by a
staggering 41 

- Balance the marketing mix of Kit Kat  is important because:

+ Develop its strengths and limit its weaknesses
+ Become more competitive and adaptable in its market
+ Improve profitable collaboration between departments and partner
=> That make Kit Kat can survive long-term and firmly in the market because
marketing mix help Kit Kat have ability to adapt the changes in the market
through time. Hence, it shows exactly what the market needs so that Kit Kat
can provides products which are suitable to the customers wants.