Kitkat Case Study
Kitkat Case Study
Kitkat Case Study
Agenda
BRAND - KIT KAT A case study on long term Kit Kats brand name maintenance strategies It is about how a once number 1 brand, fallen to number 8, got back to the top.
Agenda
Group Details Company Profile Current Problems PEST Analysis SWOT Recommendations Conclusion
Situational Analysis
Kit Kat 4 Finger, KitKat Caramac , KitKat 4 Finger Fine Dark, 2 Finger Kit Kat, Kit Kat Chunky, KitKat Chunky Peanut Butter
Image in Market
Kit Kat is a brand leader over sixty years One of the best selling chocolate bars and has acquired an instantly recognizable brand name and identity.
In 1997, British sales of Kit Kat amounted to some 227 million. Forty four Kit Kats are consumed every second in the UK!
The UK confectionery market : is worth over 5 billion per annum and is highly competitive.
Primary Objective
To maintain its position as the UKs number one selling confectionary brand
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Qualitative Objectives
broaden the number of occasions on which people consume Kit Kat, 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, and by persuading lapsed users to return to the product, with particular emphasis on the 12-20 year old segment create real innovation in the countline market.
Marketing Strategy
Broad in appeal, young in feel and big in stature
Market Size/Growth In 1997, British sales of Kit Kat amounted to some 227 million. Forty four Kit Kats are consumed every second in the UK! Market Segments 12 20 years old -> Single Finger 25 50 years old -> Four Finger Kit Kat Benefits Customer seeking Seek Novelty and Change Seek Excitement
Decision Maker Children Parents / Relatives
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PEST Analysis
Climate or Context
Political and regulatory environment Deregulation to create free market force to open for tense competition. The feeling of acceptable goods is directly affected the distribution channel for product. Economic Environment As economic grows, disposable income are expected to increase which has droved the expense on functional food products. Inflation-moderate Social and Cultural Environment
habit
Technological environment Technical manufacturing quality has to be of high standards Safety norms need to be considered
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SWOT Analysis
STRENGTHS
OPPORTUNITY
Expansion - It has the potential to expand to smaller towns and other geographies. Modifying products to satisfy customer seeking novelty and change 4 fingers, 2 fingers, Caramac, chunky, Peanut Butter
Global hub - Since manufacturing of some products is cheaper in India, India could become an export hub for it.
THREATS
Competition - It faces immense competition from the organised as well as the unorganised sectors. The Indian Government has reduced the import duty of food segments thus intensifying the battle. Changing consumer trends Sectoral woes - Rising prices of raw materials and fuels, and inturn, increasing packaging and manufacturing costs
Still spending a big amount on the advertisement. Dont have a strong special feature of its product. Can not deliver better benefit than its competitors. Sales profit was not very impressive. They have reverse marketing relationship with their supply-packaging suppliers. High operating cost and slight price
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In 1999 was a watershed year for Kit Kat as it dropped to its lowest share ranking in decades, at number 8 in the highly competitive confectionery category. Revitalizing a Brand Leader was felt 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.
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Teens eat more bars per capita than any other group. They are looking for a big eat, and are willing to pay a higher unit price along the way. But teens, especially boys, were not interested in Kit Kat. They saw it as a brand Moms share with their kids, not a gut-fill bar like Oh Henry! A Kit Kat for teens (Chunky) would have to be created.
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Execution : Phase 1
Advertising
In March 2000, an outdoor campaign launched, and ran through July. In 2001, outdoor and magazine advertising ran throughout the year. The new campaign updated the break idea, with a more contemporary and youthful feel. Over the two years,there were 37 outdoor and 27 magazine executions .
Chunky:
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Execution : Phase 2
Exclusive Chunky Advertising:
Outdoor advertising modified the previous years campaign, reinforcing Chunkys big eat in teen languagewith headlines like Choc-o-lot, Kit Kong, Beat hunger with a big stick and Katlossal.
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Insight: Kit Kats financial plan would not support the media increase needed to support different positionings for Chunky and Original. Kit Kat needed a common theme, to avoid fragmenting its message.
It was clear that Have a Break still had pulling power. For 2003, the key was to find the break positioning that big eat Chunky and controlled eat Original could share.
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Execution : Phase 3
Spending Levels:
These continued to be competitive, though by no means excessive.
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Conclusion
If Kit Kat is to maintain its brand leadership, it should be aware of and adapt to these changes. The market never forgives complacency.
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Conclusion
Kit Kat's success can be attributed to consistency in its marketing, whilst allowing for minor changes to maintain a modern image.
Above all, the brand has enjoyed continuous backing with investment in marketing to both the trade and consumer sectors, enabling it to compete successfully with both established and new products. Continuous reinforcement of the brand message through advertising and promotions has enabled Kit Kat to sustain its popularity over a long period of time in the face of rapidly changing consumer attitudes and tastes and consumption patterns.
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