EXECUTIVE SUMMARY

For this assignment I have chosen confectionery manufacturer Nestle Kit Kat. The

information that contains in the introduction are the purpose and scope of this assignment, the

background of Nestle company, the milestone, the awards that were achieved by Nestle

Malaysia and also the market share percentage information. In order to complete this

assignment several analysis were carried out. Those are the PESTLE, Porter’s Five Forces

and SWOT Analysis which analysed the external environment of Nestle Kit Kat. As for the

Internal Analysis, marketing objectives current corporate and business strategies was carried

out. Besides that, the current marketing mix strategies was also fulfilled to collect the

information to support this assignment. Finally, for the conclusion I have listed down the

overall important points and also a major weakness of Nestle Kit Kat Malaysia and a

recommendation to overcome the weakness.

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 TABLE OF CONTENTS

BIL CONTENTS PAGE

1 1.0 Introduction 3-4
2 2.0 External Analysis 4
2.1 PESTLE Analysis
2.2 Porter’s Five Forces Analysis 4-10

10-16
3 3.0 Internal Analysis 16
3.1 Current Marketing Objectives
3.2 Current Cooperate & Business Strategies 16
3.3 Current Marketing Strategies
3.4 Current Marketing Mix Strategies 17
3.4.1 Product
3.4.2 Price
3.4.3 Place 18-19
3.4.4 Promotion
20

20

20

20-21

21
4 4.0 SWOT Analysis 21-23
5 5.0 Conclusion 23
6 List of References 24-28
7 Appendices 29

1. INTRODUCTION
This assignment is based on confectionery manufacturer in Malaysia. In order to

complete this assignment the following analysis like, External, Internal and SWOT

2
 analysis were conducted. Besides that, marketing strategies, marketing mix strategies,

segmenting and market targeting were used to complete this assignment.

Nestle company is known as one of the largest manufacturer of Food and Beverages

industry in the world. The Nestle group was first humbly started with the vision of a

Swiss Chemist who is known as Henri Nestle. He is also the founder of the Nestle

Company (Nestle, 2015). In Malaysia Nestle was established in the year of 1912 and the

headquarters is located in Mutiara Damansara and their manufacturing facilities is based

in Shah Alam in Selangor and Petaling Jaya. Besides that, the state of the art National

Distribution Centre is locataed in Bukit Raja Klang, Selangor (Nestle, 2012). In Malaysia

Mr.Peter R Vogt is the managing director of the Nestle (Malaysia Berhad)

(http://www.nestle.com.my, 2015). Furthermore, the year 2012 was a significant

milestone for Nestle and that was the year they celebrated the 100 years of Nestle in

Malaysia. For the year 2015 it is announced that the proposed final dividend for Nestle is

RM1.75 per share ( Abdul Rauf, 2015). However there are many products of Nestle but

the main discuss of this assignment are about the confectionery products and the main

product would be “Kit Kat”. At the beginning Kit Kat was known as Rowntree Chocolate

Crisp and a couple of years later it was changed to Kit Kat. In 1988 Kit Kat became a part

of the Nestle confectionery product and was the number 1 chocolate brand in Malaysia

(Nestle, 2015). According to Croydon (2010), the greatest milestone of Kit Kat was the

75 years celebration in year 2010. The following are a few awards Nestle received, Halal

Excellence Awards 2014, The Putra Brand Award, Advertising + Marketing Magazines

Agency of The Year & MARKIES Awards 2014 (http://www.nestle.co.uk, 2015).

2.0 EXTERNAL ANALYSIS

2.1 PESTLE ANALYSIS

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 SITUATION IMPACT OPPORTUNITIES THREATS
POLITICAL  The political 4
CPI The corruption environment of
perception index of Malaysia brings
Malaysia. For the year opportunities to
2014 Malaysia’s score Nestle because it
was 52 and its ranking has been improving
was the 50th place out of over the past few
175 countries years and that
(Tranperancy.org, 2015) means there will
not be the necessity
of part taking in
unlawful acts and
they could spend
the same amount of
money in
expending Nestle’s
business.
 One of the
advantages is to
open more branch
or outlets in
Malaysia.
ECONOMY  This clearly 4
The changing of illustrates that this
Consumer Price Index situation is a threat
(CPI) for June 2015 to Nestle. This is
escalated to 2.5% to considered as a
113.0 compared to the threat because if
previous year for the the CPI rises
same month the CPI Nestle needs to
was 110.2 for the Food work on increasing
and non-Alcoholic their pricing for
Beverages. The Food their products and
and Non-Alcoholic this act may cause
Beverages’ CPI in total a slight decline in
increased to 13.4% and their sales.
it overall weighs 30.0  Furthermore this
which eventually rose may lead in
extra 3.4% for the year affecting the
2015 (Department Of pricing of
Statistics Malaysia, merchandise and
2015). service.
 Due to this it is
obvious that the
pricing of
confectionery
products will
increase too.

4
SOCIAL  This situation is an 4
Malaysia is opportunity for
multicultural and Malaysia. Though
multiracial country Malaysia is
(Carreon, 2012). multiracial and
multicultural
Majorities in the country the largest
community are Malays. population of
people belong to
The demand of Halal Islam they are the
products in the market. majority in
Malaysia therefore
the products sold
here has to be
halal.
 Furthermore, all
the confectionery
products of Nestle
are Halal (Anon,
2015).
THECHNOLOGY  This is an 4
Malaysia is banking in opportunity for
Technology in order to Nestle. For
reach its ambitious goal instance they can
of achieving high choose to advertise
income status by the via Internet instead
year 2020 (The of spending a large
Guardian,2013). amount of capital
The usage of internet for printing out
has increased in banners.
Malaysia.  Besides, Nestle
uses the web
technology to sell
its product and
provide
information.
 Site Info-
Nestle.com.
my
 Malaysia’s total
visitors to this site
is 67.5% and
Australia’s is
21.3%
(W3techs.com,
2015). Compared
to Australia,
Malaysia has more
visitors and

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 customer who uses
the Site-Info. This
clearly states that
the Technology
environment has
contributed
positively for
Nestle in Malaysia.
ENVIRONMENT  This is an 3
The climate of opportunity for
Malaysia which is the Nestle because
Tropical Rainforest Malaysia’s climate
Climate is hot and humid
(Weatheronline.co.uk, throughout the year
2015) and such climate is
needed to plant the
cocoa. Therefore,
there is no need to
import raw
material from other
countries because
the weather
benefits Nestle and
this helps in
reducing the cost
spent on raw
materials (ICCO,
2013).
LEGAL  This is a threat to 3
The implementation of Nestle. After the
Good and Service Tax GST was
(GST) 6% on 1st April implemented the
2015 (GSTmalaysia, sales for many
2015) services and
products had
declined however
the impact of GST
on Nestle was only
for a short-term
(www.bloombergtv
.my, 2015).
 Before the
implementation of
GST the sales of
Nestle was
311.8Million
however after the
implementation
Nestle experienced
a marginal drop of

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 2.0% in its
domestic sales
(http://www.nestle.
com.my, 2015).

DEGREE OF SERIOUSNESS

1 Very High Opportunities/Threat

2 High Opportunities/Threat
3 Medium Opportunities/Threat
4 Low Opportunities/Threat
5 Very Low Opportunities/Threat

2.2 PORTER’S FIVE FORCES ANALYSIS

FORCES EXPLANATIONS RATING

Threat of existing Rivalry
Threats of New Entrants
 The existing rivalry has 3
moderate impact of threat
towards Nestle because their
confectionary products are
almost the same.
 For instance, Nestle KitKat
and Cadbury fingers are almost
the same but the both are
unique in the form of taste.
 Nestle is one of the leading
company in Malaysia and it
faces competition from
companies such as Jack & Jill,
The Hershey, Kraft Foods and
Cadbury (Dass, 2013)
 Those are confectionery
product manufacturers.
 The above companies are
continuously fighting for the
position. However, due to
Nestle’s position in Malaysia
the impact is manageable.
 Moreover Nestle Malaysia
uses the economy scale in their
business in order to make it
possible for their customers to
purchase confectionery
products of good quality for a
cheaper price (Johnson, 2005).
 The treats for new entrant are 2
low for Nestle because Nestle

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 is a world leading nutritious,
wellness and health company
besides, this industry is a
competitive and very large
industry (Slideshare.net, 2015).
 Furthermore, to compete with
a leading company like Nestle
is not easy because it’s a huge
company therefore to start up a
new business, a big amount of
capital is needed and it will be
very tough to develop a brand
new company and to take the
current position Nestle holds in
Malaysia.
 Besides that, customer will
have trust towards Nestle
because it has been operating
for more than 100 years now
and it would not be easy to
convince the people with a
new brand because Nestle
earned the bond of loyalty with
their customers which is
difficult to break by the new
entrants.
Threat of Substitutes  The threats of substitutes for 5
Nestle is considerably high this
is due to the availability of
substitute product in the
market for a lower cost which
tends customers to switch to
the other brand or product
(Wikiwealth.com, 2015).
 In Malaysia there are many
local manufacturers that
manufacture the similar
products that Nestle markets
and directly compete with
Nestle.
 Therefore, it is crucial for
Nestle to always have a proper
plan in marketing and
innovating their confectionery
product they sell.
 Besides that, there are
possibilities of people being
health conscious by choosing
confectionery product that are

8
 less in sugar (Rousselot.com,
2015) therefore the threat of
substitute is high for Nestle
and they have to constant in
improving their products
because the competition can be
extremely fierce.
Bargaining power of Buyers  The bargaining power of buyer 3
for Nestle is moderate.
 In purchasing certain products
of Nestle customers have high
bargaining power, but as for
the confectionery products the
bargaining power of buyer is
moderate (Slideshare.net,
2015).
 This is because the brand and
the quality of Nestle product is
good and still influences their
buyer (Michael, 2012).
Bargaining power of  It is Obvious that the 2
Suppliers bargaining power of suppliers
for Nestle Malaysia is Low.
 One of the reason for the
bargaining power of the
supplier is low because Nestle
Company is a huge
manufacturer and it operates in
a big scale therefore the raw
materials that they would
purchase will be in a huge
amount and the suppliers
would offer a price which
Nestle requests (Nestle Public
Affair, 2007)
 This is to maintain the good
relationship with Nestle.
 Not only in Malaysia but
Nestle is known for having a
good relationship with their
suppliers around the globe
(Slideshare.net, 2015).
TOTAL According to this rating it is 15/25
understood that Nestle Malaysia
would face a moderate amount of
competition therefore, Nestle is
capable of tackling this situation
because they are always improving
their product.

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 DEGREE OF SERIOUSNESS

1 No Threat
2 Small Threat
3 Medium Threat
4 Serious Threat
5 Very Serious Threat

3.0 INTERNAL ANALYSIS

The student has picked Kit Kat as the Brand Power in Nestle for the Internal Analysis.

3.1 CURRENT MARKETING OBJECTIVES

The current marketing objective for Kit Kat is to produce the Kit Kat in a reduced

portion and also which contains low sugar, this is in order to attract all age group

of consumers to buy their product. Besides that, all the flavours of Kit Kat is

natural and are intended to be healthier and at the same time to create a experience

of good quality of chocolate for a cheaper rate (Nestle, 2015).

As for me I think it is a good marketing Objective because Nestle is ready to serve

all age groups by having multi choices of Kit Kat from the healthier range to the

indulgence of it. This eventually attracts all kind of consumers.

3.2 CURRENT CORPORATE AND BUSINESS STRATEGIES

3.2.1 CORPORATE STRATEGY
It is obvious that Nestle Malaysia has used the cost of leadership on

Kit Kat with the custom of the economy scale. Kit Kat is considered

among the top 10 best confectionery product in Malaysia (Said, 3013).

Kit Kat causes business war among the other confectionery sectors

available in Malaysia such as, Hershey and Cadbury. It is learnt that,

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 Kit Kat focuses more on to the volume than the price. Here are few

examples to support. According to Brabeck (2010), Kit Kat has

reduced its price in order to make it affordable for the middle class

consumers to purchase too here is why, the Nestle Kit Kat (46g) is RM

3.40 and Hershey Chocolate (40g) is sold for 3.59 this clearly

illustrates that Kit Kat’s Corporate strategy is Cost Leadership.

3.2.2 BUSINESS STRATEGIES

The business strategy that Nestle uses is growth strategy on Kit Kat.

Kit Kat has over 200 flavours and certain of it are limited edition this

has been available since the year 2000 (Said, 2013). Moreover Kit Kat

is always up to date and also never fails in innovating the product

though Kit Kat is a single confectionery product but they have many

flavours to create a pleasant experience for their consumers. The

flavours available in Malaysia are Green Tea, Caramel, Chunky

Hazelnut and etc. However, the business strategy was not use full

anymore because the demand for the original flavour was greater than

the others and therefore the various flavours demand had declined

(Margaret, 2009).

3.3 CURRENT MARKETING STRATEGIES (STP)

MARITAL STATUS MARRIED SINGLE

AGE
12-17 YEARS √
18-30 YEARS √ √
30 AND ABOVE √ √

MARKET SEGMENTATION
The table above clearly illustrates the Demographic segmentation used by Kit Kat

Nestle Malaysia. It is understood that Kit Kat has done a segmentation based on

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the age group and also marital status. As it illustrates the subgroup of age 12-17

are students and those would normally not have an earning but they will purchase

through influencing their parents. Next are the subgroup of 18-30 years those are

normally earning already and majority are married and they do have the

purchasing power. Lastly is the subgroup of 30 years and above they have their

purchasing power too. However, it is obvious though Kit Kat has done the

segmentation for certain age of group the confectionery product is the favourite

chocolate among all age of groups. It can be the married or the singles.

MARKET TARGETING
Kit Kat targets all age groups including males and females. Mainly it targets the

age group of 5 to 25 and also focusing on the college students and teens (Bakhshi,

2014). Besides, those who are keen in experiencing a wonder taste of quality

chocolates are the target of Kit Kat Nestle.

POSITIONING
The positioning of Kit Kat is done through its famous tagline, “Have a Break,

Have a Kit Kat” (Break With Kit Kat, 2015). This tagline in general is short and

catchy to the consumer or the new customers. People get attracted very fast and

this makes it able for the customer to remember. Furthermore, the availability of

Kit Kat in almost all the stores makes it convenient for the customers to purchase.

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3.4 CURRENT MARKETING MIX STRATEGIES (4Ps)
3.4.1 PRODUCT
There are more than 200 varieties of Kit Kat Nestle available around

the Globe and certain flavours are limited edition (Said, 2013). There

are two types of Kit Kat one is the four fingers and the other is the two

fingers Kit Kat. Here are few Kit Kat varieties available in Malaysia

and is available in almost all mini marts and supermarkets as well,

Green Tea, Chunky Hazelnut, Cookies Crème and the original flavour

(Google.com, 2015). The advantage of Kit Kat is, it gives the benefit

for the customers to choose the flavours they want to have according to

the individual taste. Therefore the consumers will not need to switch to

other confectionery product in order to experience a different taste. So

this will generate profit for the company.

3.4.2 PRICE
The strength of Kit Kat in maintaining a strong brand image in

Malaysia is the level of flexibility in pricing (Nestle Malaysia, 2015).

Compared to the other confectionery competitors Kit Kat’s pricing are

much cheaper and it makes it affordable for the consumers to purchase

and this is one of the tactics to maintain their existing customers and

attracting their new customers.

3.4.3 PLACE
Nestle makes sure the distribution of Kit Kat is done to almost all the

stores including supermarket, hypermarket and movie concession

counters and not leaving out the retailer channels and the wholesaler as

well (Businesscasestudies, 2015). This is to make sure the availability

of Kit Kat anywhere anytime for the customers. This situation gives

the convenience for their consumers.

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 3.4.4 PROMOTION
There is a wide range of promotion tactics for Kit Kat. For instance

there are promotion like family packs or value packs of Kit Kat

promoting if the customers purchases 5 they will get a free Kit Kat it is

all done in a single packaging (Businesscasestudies.co.uk, 2015). Here

is another example of Kit Kat promotion, buy a 6packs of Kit Kat to

redeem a free movie ticket and it could be done by exchanging the Kit

Kat receipt at the Movie ticket counters (Promotions, 2009). This is

understood to be one of the effective ways of attracting customers.

4.0 SWOT ANALYSIS

STRENGTH
 Kit Kat is the number one
Confectionary product in Malaysia.
 The availability of product in all the
stores in Malaysia.
 The tagline of Kit Kat, “Have a
Break, Have A Kit Kat’ is well known
around the global and Malaysia.
 Nestle’s bestselling confectionery
product is Kit Kat and it has made a
WEAKNESSES
 People are health conscious
nowadays, therefore they would not
want to consume confectionery
products much. This may result in a
sale decline.
 The packaging of Kit Kat has been
the same throughout the years, a
slight changes will attract more
customers.
 The different varieties of Kit Kat are
not available in many stores. This is
lacking in fulfilling the needs and
wants of the consumers.

good revenue.
 The pricing of Kit Kat is lower than

its competitors, Hershey and Kraft

Food.
 Nestle Kit Kat was the first Chocolate

wafer that came into the market. It’s

considered as the pioneering brand.

 Kit Kat is a well known company and

it has good financial support.

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 OPPORTUNITIES
 Nestle is a large and well known
company with a stable financial
status, it makes it possible to open
many more outlets here in Malaysia.
 The usage of Internet in Malaysia has
increased therefore, Kit Kat could
also promote and sell their products
online.
 The Corruption Perception Index
(CPI) has improved in the ranking
since the past year, Therefore they
will not be any unlawful expenditure
for Nestle Kit Kat.
 The Tropical Rainforest Weather in
Malaysia makes it easier for Kit Kat
to get its raw material such as cocoa
in local itself instead of spending
more on importing the product from
other countries.
THREATS
 The implementation of GST 6%
which will change the purchasing
behaviour of the customers and they
might not purchase the Kit Kat
products for time being.
 The hike of Consumer Price Index
(CPI) which causes Kit Kat to
increase it’s pricing will result in
decline of sale and may cause their
customer to switch to different
substitute products which are cheaper
and affordable.
 The healthy competition among the
other confectionery products
manufacturers such as Kraft Foods
and Hershey.

5.0 CONCLUSION
In a nut shell I would say that Nestle Malaysia is a large and well known company and

the confectionery product, Kit Kat is the number One confectionery product in Malaysia.

This is known through the PESTLE, Porter’s 5 Forces, Marketing and SWOT Analysis.

Kit Kat has competitors like Hershey and etc but somehow strives through to be the

number One Confectionery Brand in Malaysia by creating multi varieties of Kit Kat

available in the market.

However one of the weaknesses that I considered to be major is that people are getting

health conscious. As a confectionery company it would be good if Kit Kat could have

varieties of Kit Kat products with less sugar contain in it which will even attract

customers with diabetic to consume the product. If this recommendation is considered

there are possibilities to increase the sale of Kit Kat in Malaysia.

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APPENDICES

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 The types of promotion offered by Kit Kat

Few varieties of Kit Kat products available in Malaysia

21