Introducing 

Prezi AI.

Your new presentation assistant.

Refine, enhance, and tailor your content, source relevant images, and edit visuals quicker than ever before.

Loading…
Transcript

BY: JULIA LEPECKI

Background history

Background

History

  • Kit Kat was introduced on August 29, 1935. It was firstly owned by the confectionery business based in York, United Kingdom, called Rowentree

  • During 1969, Ki Kat was still unknown to Americans, as it was only selling in the UK. This was a problem because Rowentree wanted to start expanding worldwide.

  • The company sold the U.S. rights to manufacture and distribute Kit Kat’s to Hershey in perpetuity, and the results were very positive as the chocolate bar started to get more popular

  • As the deal with Hershey’s was in perpetuity, this meant that it would last forever, and hence the stream of cash flows would continue for an indefinite amount of time

  • Even though in 1988, Nestlé merged and acquired Rowentree, the original contract with Hershey’s was still honored, but it had one new condition: if Hershey’s were to ever attempt to sell itself to another business, then Nestlé would regain the rights of Kit Kat

Small video about the history of Kit Kat

Video

https://www.nestletravelretail.com/brand/kitkat/our-story

Introduction

  • Kit Kat was introduced as a type of chocolate that was made up of three layers of wafers. These wafers are covered with a layer of chocolate inside and out. The original package came with four fingers, and the design was red and silver (just like it is nowadays).
  • During World War 2, there were many food shortages, including whole milk, so Rowntree's had to cut out the milk consumption in their chocolates, and the Kit Kat Dark was born. From 1942-1949, the wrapper’s color was changed to blue, to show the change in the recipe.
  • By 1950, Kit Kat had expanded and became international, selling in places such as South Africa, Australia, New Zealand, and Canada.

Introduction

Introduction

  • In 1958, the television was the main source for expanding brands, and so, they created their iconic and classic phrase “Have a break, have a Kit Kat”
  • Each chocolate bar was sold for 2d (pennies) which is the same as $2 (dollars)

Kit Kat Factory in Japan

Marketing strategies

Growth

According to research, 60% of Kit Kat purchases are made by impulse, and therefore Nestlé is always trying to innovate:

Environmental impacts:

  • Nestlé has constantly wanted to talk about climate change and its importance through their environmental policies.
  • In 2009, they reduced their carbon footprint in the creation of Kit Kat, by using a Cocoa Plan that is 88% fairtrade certified (a product that goes in accordance with Fairtrade International’s rigorous environmental, economic and social standards)
  • 20% of the cocoa comes from sources that are environmentally friendly
  • Now in 2021, UK and Ireland are certified as 100% sustainable sources

2004 Innovation

Marketing strategies

  • In 2004, Nestlé started to create new variants of Kit Kat to inspire the consumers, and through October to September, the Kit Kat brand had gone up 19%.
  • The single one finger Kit Kat had gone up 19% and the whole four-finger bar was at a 21% growth in sales
  • They had created a new two-finger white chocolate Kit Kat, and it exceeded all of the company’s expectations, by achieving a value sales excess of 1 million euros. The market share of the two-finger bars went from 19% in to 23.3% in 2004.
  • The sales growth in the UK went by 5.3% in 2003, making sales value go to 2.5 billion euros

Social Media Campaign

  • In 2009, Nestlé created the biggest internet-based social media advertising campaign in Australia
  • It was known as the “$1 million campaign”
  • It promoted the new Kit Kat Chunky product, and the targeted audience were teenage boys
  • The interactive campaign invited young boys to play a virtual game through social media
  • The company spent $1 million and 70% of the money went to social medias, like Myspace, Youtube, blogs, and mobile banners promoting Kit Kat Chunky
  • It was a huge success and the brand awareness went up 8% and 63% more customers bought Chunky bars after the campaign

Marketing strategies

Social Media

Use of social media to interact with consumers

  • They have more than 441 million followers on Twitter and 960 million followers on Instagram

Pricing strategy

Pricing strategies

  • The pricing of Kit Kat varies by product and by the place it's sold
  • At gas stations and convenience stores, the purchasers numbers are of small volume, and therefore they set a higher price to make more profit. The normal Kit Kat of 45 grams is sold for $1.49 and the king size of 85 grams for $1.99
  • Dollar stores often sell products with outdated promotions on the package, and so are able to purchase Kit Kat products at a reduced rate. This means, they can resell it for far less in other retailers. ($0.69-$1.00)
  • A pricing tactic that many businesses, including Kit Kat do is odd-even pricing. Some retailers (gas stations, supermarket and dollar stores), give Kit Kat products an odd-numbered price to imply that the consumers are saving money and encourage them to impulse buy.
  • However, there are some other retailers like drug stores and hypermarkets (Walmart) that price the chocolate at $1.00 to convey quality to the consumers.

Chocolate bar sales in 2017

Sales Graphs

  • In this graph it shows the sales of the leading snack chocolate candy bars in the US in 2017
  • As we can see, Kit Kat is in third place
  • Its sales made more than 114.8 million dollars in 2017, 56.8 million dollars less than Reese's

Sales in Singapore

  • Over the years of 2012-2016, Kit Kat in Singapore has grown exponentially
  • People from 35 to 54 years of age are seen as the age group that buys the most Kit Kat products. The sales have an annual growth of 3.2%, increasing capital from $348,579 (in 2012) to $395,384 (in 2016)
  • The age group of 25-34 increase sales by 3% every year. In 2012, Kit Kat earned $105,956 from their sales, and by 2016 the numbers when up to $119,255
  • The age groups 12-17 and 18-24 have a similar increase in sales, having an annual growth rate of 2%
  • In 2016, Kit Kat sold more than $166,340.8 to 12-17 year olds, having an increase of $12,667.6 since 2012
  • The only age group that had a decrease in sales was from people aged 55 and above. There was a decrease of 0.2% throughout 2012 to 2016

Singapore sales

2015 Kit Kat Sales

  • In 2015, Kit Kat was the largest chocolate brand in the world by value of sales
  • It was present in 64 countries, and had a value of sales of more than 2400 million US dollars

2015 sales

Maturity: Kit Kat nowadays

Maturity + extension strategies

  • The brand is now in its maturity stage
  • Kit Kat sells more than 1 billion products annually in the UK, this means that every second 564 chocolate fingers are eaten
  • Around the world, 17.6 billion Kit Kats are eaten across the year
  • The largest single retail outlet is Dubai Duty Free, as they sell over 1 tonne of Kit Kats per day
  • In 2018 they had a net worth of more than $400,000
  • By 2019, they had pulled in more than $331.54 million, and thus they earned 7.59% market share
  • They generate $7 million in revenue
  • Nowadays, the brand is present in more than 80 countries

JAPAN

Extension strategies

  • Kit Kat's are very famous in Japan for having a near gramatical connection with the word "kitto katsu" that means: you'll surely win.
  • In 2003, Nestlé created a pollster in Japan where they saw that 34% of Japanese teenagers bought Kit Kats as their good-luck charm
  • Japan is known for creating more than 200 diverse types of Kit Kats
  • In 2011, Fukushima (eastern Japan) was hit by a tsunami, and people sent Kit Kat boxes to reconstruction workers as a way to encourage them
  • Sales in Japan have increased about 50% between 2010 and 2016
  • At Japanese drug stores, packages of 9-12 Kit Kats are sold for 198 to 400 yen a pack (1.82 to 3.68 US dollars)

Kit Kat Chocolatory

Kit Kat Chocolatory

  • In 2016, Nestlé opened the first Kit Kat Chocolatory, where costumers can design their own Kit Kat
  • There's more than 30,000 combinations they can try out
  • 30-40% of people who entered the stores had never tried a Kit Kat or weren't regular consumers
  • This shows a good increase in sales

FLAVOR INNOVATION

New flavors

Wasabi Kit Kat

Mint + dark chocolate Kit Kat

Strawberry Kit Kat

Key Lime Pie Kit Kat

Japanese sweet beans Kit Kat

Sakura Kit Kat

Kit Kat Zebra

Matcha Kit Kat

Shinshu Apple Kit Kat

Lemon Crisp Kit Kat

White Cream Kit Kat

Mocha + chocolate Kit Kat

KIT KAT EXTENSION PRODUCTS:

EXTENSION PRODUCTS

Kit Kat Plans to be Carbon Neutral by 2025, to boost sustainability efforts

Environmental sustainability

  • They plan to reduce carbon emissions by 50% through ingredient sourcing, manufacturing and distribution
  • Before the end of 2025, their manufacturing sites will be using 100% renewable electricity
  • Nestlé has already planted more than 15 million cocoa trees
  • They have already invested $420 million AUD in cocoa sustainability, as it will help reduce their environmental footprint

Common costumer request on social media: Kit Kat Vegan

Kit Kat Vegan

  • Through social media, consumers were able to catch Kit Kat's attention to bring to life a Kit Kat that is vegan
  • It will be made out of 100% sustainable cocoa as they have a Rainforest Alliance Certification
  • Rainforest alliance: ensures farmers follow strict rules for sustainable cocoa agriculture

Decline

  • Their decline phase went from 2010-2015, where their sales started to decrease by 10.3%.
  • The management of Kit Kat at that time had predicted that if they didn’t do something about it, there would be a further decline in sales by 9.3%.
  • To revitalize their brand, they decided to do a partnership with Google, more specifically, Youtube
  • They redesigned the wrapper, making the biggest change on the package since the product came to the market 90 years ago.
  • The sale of the new Youtube Break Kit Kats were aimed to help consumers “make the most of their down time” by showing people what to do to relax
  • There were more than 600,000 limited edition packs, and helped Nestlé regain 20% market share and increase sales by 3.9%
  • November sales increased in 2015 to 194 million euros. Last year through the same period, the sales had been of 186.6 million euros

Decline

Youtube Partnership

  • In 2016, they decided to go even further with the partnership and added QR codes to more than 47 million limited packages, where customers scanned the code and would be taken to 1 out of 74 specially chosen Youtube videos.
  • Consumers would watch a video with any of the four topics: gaming, sports, comedy and music. So, they would have a break watching something whilst eating chocolate
  • 36% of Youtube users, would go to the website with the purpose of watching those videos

Youtube Partnership

Kit Kat: Buzz Score

Buzz score

  • This graph was used to measure the success of the Youtube Kit Kat Break marketing strategy
  • In it we can see whether respondents have heard positive or negative things about the brand in the first 4 months of 2015
  • As seen in the graph, the data shows a positive effect on the campaign, and the scores peaked at 5.5% by the middle of March, having a rise of 2.5% since January

Graphs

Ad awareness and consumers

  • YouGov also decided to assess whether the customers had seen or heard about Youtube Kit Kat adverts
  • There was an increase of respondents from 2% to a peak of 7.9%, meaning that the 10 million euros used for the campaign was worth it
  • In the current customer score graph, we can see if either consumers made a purchase of Kit kats in the first four months of the year
  • The percentage went from 11.2% to 17.1%, showing an increase of 52.7% in sales due to the Youtube campaign

Bibliography

Bibliography

  • https://www.guvenbusinessgroup.com/blog/Kit-Kat-Oat-Bar-life-cycle-stages (life cycle stages)
  • https://notesmatic.com/2019/04/the-magic-of-kitkat-marketing-strategy-behind-nestles-iconic-brand/#:~:text=Nestle%20has%20used%20several%20ad,part%20of%20its%20marketing%20strategy. (marketing strategies)
  • https://www.referralcandy.com/blog/kit-kat-marketing-strategy/ (marketing strategies)
  • http://breakwithkitkat.weebly.com/kit-kat-survey-results.html
  • http://breakwithkitkat.weebly.com/global-business-strategy.html
  • https://www.owler.com/company/kitkat
  • https://www.scoop.co.nz/stories/BU2104/S00325/kitkat-to-be-carbon-neutral-by-2025-boosting-sustainability-efforts.htm
  • https://www.ft.com/content/65e12646-61a0-11e9-b285-3acd5d43599e
  • https://www.mbaskool.com/marketing-mix/products/17367-kit-kat.html (pricing strategies)
  • https://www.marketing91.com/marketing-mix-kitkat/
  • https://studylib.net/doc/8231558/kit-kat-marketing-mix-analysis
  • https://www.greenontheinside.net/the-marketing-mix-of-kitkat-essay-example/
  • https://addi.ehu.es/bitstream/handle/10810/14506/T;jsessionid=8145C39B850DE36143C6C665F6A58711?sequence=2
  • https://www.zabanga.us/sales-promotion/kitkat-have-a-break.html
  • http://www.selectmytutor.co.uk/article/159/kit-kat-marketing-strategy.html
  • http://breakwithkitkat.weebly.com/growth-strategy.html (growth strategy)
  • http://breakwithkitkat.weebly.com/history-of-kit-kat.html (kit kat’s history)
  • https://www.nestle.com/media/news/nestle-first-vegan-kitkat-coming-soon
  • https://www.nestle.com/stories/ultimate-kitkat-chocolate-bar-innovation (innovation)
  • https://sites.psu.edu/tota137/2019/04/04/have-a-break-have-a-kit-kat/
  • https://www.mentalfloss.com/article/69593/12-snappy-facts-about-kit-kat (interesting facts)
  • https://www.nytimes.com/interactive/2018/10/24/magazine/candy-kit-kat-japan.html
  • https://www.creativereview.co.uk/have-a-break-have-a-kit-kat/
  • http://www.hrelements.com/wp-content/uploads/2015/09/436-Nestl%C3%A9-Kit-Kat-Revitalising-a-Brand-Leader.pdf
  • https://www.coursehero.com/file/p76jbj5/Decline-stage-2002-2007-This-was-the-period-where-the-sales-of-KitKat-were/
  • https://www.confectionerynews.com/Article/2020/10/21/Confectionery-takes-a-hit-in-Nestle-nine-month-sales-for-2020-pet-food-coffee-and-nutrition-products-stay-strong#:~:text=Demand%20for%20food%20and%20drinks,26.4%25%20in%20the%20third%20quarter. (decline)
  • https://www.marketingweek.com/kit-kat-doubles-media-spend-to-reclaim-lost-sales/
  • https://www.campaignlive.co.uk/article/brand-remission-kit-kat/886769
  • https://www.marketingweek.com/nestle-launches-upmarket-extension-to-kit-kat-range/
  • https://www.thecasecentre.org/educators/products/view?id=70058
  • http://breakwithkitkat.weebly.com/brand-positioning.html
  • https://yougov.co.uk/topics/politics/articles-reports/2015/04/21/consumers-take-break-kit-kat
  • https://www.statista.com/statistics/697426/uae-retail-value-sales-share-of-kit-kat/
  • http://insidethefood.com/post/how-kit-kat-bars-are-made-inside-the-confectionery-industry
  • http://breakwithkitkat.weebly.com/kit-kat-survey-results.html (statistics)
  • http://breakwithkitkat.weebly.com/stage-1---segmentation.html
  • https://today.yougov.com/topics/food/articles-reports/2018/10/30/most-popular-candies-halloween
  • https://addi.ehu.es/bitstream/handle/10810/14506/T;jsessionid=8145C39B850DE36143C6C665F6A58711?sequence=2
  • https://www.secondshistory.com/home/kit-kat-japan
  • https://www.ft.com/content/7ec44105-c123-4dc8-a262-e5747eae1e1a
  • https://matcha-jp.com/en/5656
  • https://www.goodfood.com.au/eat-out/just-open/worlds-first-permanent-kit-kat-chocolatory-shop-opens-in-melbourne-20161013-gs1k8o
  • https://www.hersheyland.com/kit-kat
  • https://www.nytimes.com/interactive/2018/10/24/magazine/candy-kit-kat-japan.html#:~:text=The%20most%20popular%20kind%20of,million%20of%20these%20each%20day.
  • https://www.umami-insider.com/japan-kit-kat-bars-300-flavors/
  • https://www.marketingweek.com/kitkat-embarks-on-biggest-packaging-redesign-to-let-consumers-youtube-their-break/
  • https://www.nestle.co.uk/en-gb/media/pressreleases/nestle-and-google-team-up-for-kitkat-youtube-partnership#:~:text=Nestl%C3%A9%20and%20Google%20are%20returning,QR%20code%20ready%20to%20scan.
  • https://tokyocheapo.com/food-and-drink/where-to-buy-unusual-japanese-kit-kat-flavors/

Bibliography

Learn more about creating dynamic, engaging presentations with Prezi