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 products 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 products 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 UKs 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 Nestl 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, Nestl 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 Nestl
projects, followed Nestls 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, Nestl 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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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.
The research also identified the type of
packaging with the greatest appeal - a
mainly red and silver flow wrap. It also
became clear that Kit Kat ChunKy would
inject new interest in Kit Kat across a
broad range of consumers, including
young children and older adults.

The research examined different types

of wrappings and formats. In particular,
it compared two-finger and single-finger
variants of Kit Kat ChunKy.

The single-finger proved to be most

popular with the 12-20 year old group,
and was also the most distinctive form
that the new product could take. The
research also indicated that a two-finger
variety would, in some ways, compete
with the four-finger variety. This would
lead to Kit Kat competing against itself;
not a very good idea! By contrast, the
single-finger Kit Kat ChunKy provided
a promising line extension.

Objectives
for the launch
A wise company will look to justify
every new venture in strict business
terms: it will set tough performance
targets. These in turn can be converted
into production targets, cost estimates
and revenue projections.

Quantitative objectives
Nestl set demanding quantitative objectives for the launch. Nestl 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 2,750 tonnes
of product) in 1999, the year of
the launch
increase sales in subsequent years.

Qualitative objectives
Nestl also set several qualitative
objectives. These were to:
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 Kats 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

Supporting the launch:

media, PR and
point of sale
For a new product to grab public
attention quickly, it is vital to support its
launch with well-targeted advertising
and promotional activities.
ChunKy was supported by two dedicated television adverts complemented by
a phone site campaign. The advertising was a big departure from previous
campaigns in that it focused on the
targeted age group. It concentrated on
17-18 year olds in order to capitalise on
aspirational identification from the
younger groups, without alienating
older consumers.
In addition, Nestl invested in a range
of public relations activities through
radio and the national press. A detailed
point-of-sale campaign supported the
launch with attractive dumpbins in
stores, and posters for shop windows.
Field sales staff were involved in a
detailed communication exercise
to raise awareness in all forms of
distribution channels.

create real innovation

in the countline market.

Both the quantitative and the qualitative

objectives for the launch were quickly
met. The most successful aspect of the
launch and subsequent marketing
activity has been that of revitalising
interest in the Kit Kat line, particularly
among the 12-20 year old age group.
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. In
addition, 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.

Conclusion
The launch of Kit Kat ChunKy has
shown that intelligent innovation and
adaptation, supported by meticulous
market research and product promotion, really can extend a successful
products life-cycle significantly.

The success
of the launch

Why was the launch of the new

Why might it be necessary to

Why is it important to establish

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, 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; they therefore identify with images
favoured by older teenagers.
Countline: A chocolate based bar.
Distribution channels: Routes through which a product travels
from the manufacturer to purchase by the final consumer.
Icons: Established images that are widely recognised by the public.
Life-cycle: The key stages in the life of any product, from
its birth (launch) to its maturity and eventual decline.
Line extension: The addition of a new, complementary format
to an existing product line.
Market focused: Being driven by the needs and wishes
of consumers.
Market research: Research carried out to identify the needs
and requirements of consumers and others in the market place.
Phone site campaign: Alerting consumers to a new product
by means of advertising on the outside/glass of public
telephone boxes.
Qualitative objectives: Objectives that relate to achieving
changes in attitudes towards, and perceptions of, a product.
Quantitative objectives: Objectives that are set out in
numbers eg a 10% increase in sales, a 5% decrease in wastage

The launch of Kit Kat ChunKy proved

to be one of the best marketing success
stories in recent times. Over 50 million
bars were despatched within the first
few weeks of the launch. Kit Kat
ChunKy almost immediately became
the best selling countline, and this
success story has continued. Nestl
provided excellent support for retailers
by providing them with in-store
promotions and a smooth supply of the

Glossary of Keywords

product in order to meet the massive

customer demand. Within 6 months,
more than 20% of the UK population of
the UK had tried the product, and
repeat rates have been very high.

Repeat rates: The proportion (%) of consumers who make

further, subsequent purchases.
Representative samples: Carefully selected small groups
that contain a typical range of the people who comprise the
total targeted group.

How would you go about

developing a high level of
consumer awareness of a
product launch linked to a
variant of an existing product?

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Using focus groups in this way,

researchers were able to compile data
on the views and feelings of representative samples of the targeted groups
of consumers.