KIT KAT BRAND

AUDIT

Cécile Tiphine
Alexandre Gonfalonieri
Bai Xue Lachartre
Juliana Trieu
Mélanie Garcia
Sarah Khelfi
TABLE OF CONTENTS
INTRODUCTION

1. Brand audit objectives, scope, and approach

2. History
3. Background about the industry
4. Consumer analysis

PART I - BRAND INVENTORY (supply side)

1. History
 Ownership
2. Product related attributes (territory, identity& mantra)
 Brand elements& associations
 Supporting marketing programs
3. Brand portfolio
 Role of the brand within the portfolio
4. Market analysis
 Chocolate industry
 Competitive brands
 POPs and PODs
5. Strategies (4P)
 Product Strategy
 Place Strategy
 Pricing Strategy
 Promotion Strategy

PART II - BRAND EXPLORATORY (demand side)

1. Brand positioning analysis

 Target market
 Anatomy of brand positioning
2. Consumer perception analysis
 Perceptual map
 Brand associations
 Customer based brand equity analysis and sources of KitKat’s brand equity
 Do the desired and perceived match?
 KitKat, a lovemark?

PART III - CONCLUSION AND RECOMMENDATIONS

APENDIX

SOURCES
 Introduction

Brand audit objective, scope and approach

As part of this brand audit, our goal is to assess the health of the KitKat brand within
Nestlé’s portfolio by uncovering its sources of equity, its position on the market
compared to its competitors and by suggesting ways to improve that equity. While
keeping a consumer-focused approach, we will try to evaluate the strength of the brand
through its marketing and brand strategies both in internal and external ways.

With 4million tons per year of cocoa consumed in the world1, cacao is the 3rd most
demanded and exchanged raw material in the world.

France is ranked 6th in terms of chocolate consumption, with 400,000 tons of chocolate
eaten by the French in 20132. Additionally, the same year, 80.4% of French people ate
chocolate at least once a week3, and the demand for chocolate skyrocketed especially
during Easter and Christmas (festive seasons). Because of its anti-depression virtues and
comforting sweetness, chocolate is an ideal treat for many people.

History
KitKat was created in 1935 in England by Rowntree Mackintosh under the name
“Rowntree’s Chocolate Crisp” and was commercialized as a 4-bars wafer made of milk
chocolate. In 1937, as the name was considered too long and complicated, it was
changed to: “KitKat Chocolate Crisp”. The packaging underwent a few changes too: in
1942, due to a milk shortage during World War II, the wafers had to be coated in dark
chocolate, which resulted in a blue packaging (instead of a red one) in order to let
people know that the recipe had changed. It was finally in 1949 that the brand name was
shortened to “KitKat” and the packaging returned to its normal red, as we know it now.
The famous slogan “Have a break, have a KitKat” was invented in 1958 by a British
advertising agency called JWT and is still used nowadays. The agency gambled on the
efficiency and simplicity of the tagline, which has proven successful since it has not been
changed for half a century.

Internationalization
KitKat went international in 1970 with its commercialization in France. A few years
later, in 1988, the brand was exported to Canada, South Africa, Ireland, Australia and
New Zealand and was bought by Nestlé. It would not be wrong to assume that part of
KitKat’s success is due to its British origins. In fact, as a British candy, KitKat was able to
reach Europe, the US and Australia really soon, and above all before any of its
competitors tried to export their products and build an influence there. Nowadays,
KitKat is present in over 70 countries worldwide and is doing extremely well in Japan,
where it has an enormous range of products and even dedicated stores.

1
http://www.consoglobe.com/penurie-de-chocolat-cacao-cg
2
http://www.rtl.fr/actu/economie/la-consommation-de-chocolat-en-france-a-augmente-de-17-en-cinq-ans-
7774721775
3
http://www.lsa-conso.fr/les-francais-et-le-chocolat-etude-exclusive,204667
Industry
KitKat is competing in the confectionery industry and more particularly in the chocolate
bar market. Recently, the industry has been facing a cocoa deficit, which resulted in
overall increases in prices. This problem pushed the companies to change their products
in order to reduce the production costs.
The confectionery industry is a mature one, with many established competitors in it. It is
currently growing (around $85 billion of global sales in 20124), and it is expected to
keep on growing because of the counter-cyclical nature of this industry: indeed, in times
of economic crises, consumers perceive candies as affordable luxuries.

Market Share of Chocolate Confection Sales

by global region in $ billions (2011)
As a well-known brand, KitKat's main purpose
is to bring joy to every chocolate lover
between 10 and 50 years old. KitKat tends to
reach everyone no matter the age, ethnical
and demographical factors, and to enable
people to treat themselves and relax with a
snack during break time. The customers are
not the only ones who benefit from KitKat, but
also Nestlé. According to insiderermedia.com,
in 2014 KitKat has reached a sales growth of
100 million pounds in the United Kingdom5.

The differentiation among chocolate brands is not obvious, but KitKat succeeded in
reaching customers with an emotional appeal (joy and sharing), especially in Japan
where it has become a real lifestyle (KitKat is associated with good luck there). There
are more than 200 flavors of KitKat in Japan, such as blueberry cheesecake, green tea,
peach etc.

Map of KitKat in Japan

4
http://www.pmmi.org/files/Research/PIB2013Confectionery.pdf
5
http://www.insidermedia.com/insider/yorkshire/119598-nestle-uk-swings-back-profitability/
Consumer analysis

The majority of chocolate consumption is in Western Countries, as87% of the total

consumption concerns the European Union8. However the consumption per capita in
Western countries is declining.
In average, children consume more chocolate than adults. In France, the average
consumption of children is around 11.9 grams per day compared to 5.7 grams per day
for adults9. In general, females tend to eat more chocolate than males.

Consumer behavior
In the minds of consumers, chocolate has always been considered as a luxury product,
even if opinions are progressively changing to “even the most expensive chocolate is an
affordable luxury”.
Chocolate is seen as a product which provides pleasure. For this reason, in 40%of the
cases, chocolate bars are bought on an impulse10. To experience a new kind of pleasure,
consumers are willing to try new flavors. Those flavors can be original associations, like
chocolate with blueberry, or exotic ones like chocolate with pepper or wasabi.
In general chocolates are consumed between meals. For this reason, consumers are
demanding more convenience concerning the packaging11: sometimes, they do not want
to eat all their chocolate or their bar at once, so in order not to put chocolate everywhere

6
http://www.lemanger.fr/index.php/la-folie-du-kit-kat/
7
http://www.lefigaro.fr/conso/2014/04/20/05007-20140420ARTFIG00029-le-chocolat-fait-toujours-fondre-les-
francais.php and http://www.rtl.fr/actu/economie/la-consommation-de-chocolat-en-france-a-augmente-de-
17-en-cinq-ans-7774721775
8
http://www.lefigaro.fr/conso/2015/04/03/05007-20150403ARTFIG00002-chocolat-les-francais-ne-sont-pas-si-
gourmands-que-ca.php
9
http://www.syndicatduchocolat.fr/le-chocolat/chocolat-consommation/
10
http://www.google.fr/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0CDYQFjAC&url
=http%3A%2F%2Fmarketing4innovation.ning.com%2Fforum%2Fattachment%2Fdownload%3Fid%3D6620432%
253AUploadedFile%253A9630&ei=G0RCVf7pO8vnapz5gfgD&usg=AFQjCNEU5wm0V7FaaOoXu-
B4SZBRyiTTCA&bvm=bv.92189499,d.d2s
11
http://www.kpmg.com/by/en/issuesandinsights/articlespublications/press-releases/pages/global-chocolate-
market.aspx
it would be more convenient for them to have a packaging that can be refolded with the
chocolate inside, like Mars’ Twist Wrap that enables customers to twist the wrapper
closed, making it easier to save a piece for later. Moreover, due to obesity issues in some
countries, health is becoming an important factor in the consumer behavior.

Future
In the next few years the chocolate industry will have to face a shortage of cocoa.
According to the International Cocoa Organization (ICCO), the shortage will happen in
2020 due to a demand higher than production12.
In just one year, from 2013 to 2014, the price of cocoa increased from $2,100 per ton to
$3,000. The 42% increase shows that there is already an imbalance between the
demand and the production13. So why does the demand increase? Today almost 4
million tons of cocoa are consumed each year in the world, namely a third more than ten
years ago. The reason behind it is the appearance of new consumers as China. According
to Euromonitor, chocolate sales in China in 2013 increased by 7%14. This growth is due
to the development of the middle class, which is influenced by the Western consumer
behavior. In China, chocolate consumption is expected to grow between 5-6% until
201815.
In addition to the increase in demand, the cocoa market will be facing another problem.
Western Africa, mainly the Ivory Coast and Ghana, produce 70% of cocoa16 but these
countries will be experiencing some issues with plant senescence. Political issues in
Ivory Coast, plant illness and the drift from the land will also influence negatively the
cocoa production.
In order to face those problems, KitKat will have to increase the price of its products or
find substitute components for its recipes or reduce cocoa use in the products.

12
http://www.icco.org/about-cocoa/chocolate-industry.html
13
http://www.atabula.com/surchauffe-sur-le-marche-du-chocolat/
14
http://www.atabula.com/surchauffe-sur-le-marche-du-chocolat/
15
http://www.latribune.fr/entreprises-finance/industrie/agroalimentaire-biens-de-consommation-
luxe/20140516trib000830430/comment-le-leader-mondial-du-chocolat-veut-eviter-une-penurie-de-cacao.html
16
http://www.planetoscope.com/sucre-cacao/1442-production-mondiale-de-cacao.html
 PART I - BRAND INVENTORY (supply side)

1. History

 Ownership

As it was previously said, KitKat was originally owned by Rowntree’s, a confectionary

company based in York, in the United Kingdom. It was only in 1988, after KitKat was
exported to Canada, South Africa, Ireland, Australia and New Zealand and its famous
tagline was created (have a break, have a KitKat, 1958) that Nestlé purchased
Rowntree’s and, as a consequence, became the owner of KitKat. It gave Nestlé global
control over the brand, except in the US where Hershey controls the production and
distribution of the chocolate bars.

Hershey is the largest producer of quality chocolate in North America, and since 1970 it
has owned a license to produce KitKat bars in the US thanks to a licensing agreement
made with Rowntree’s back in the early days of the brand. After having bought
Rowntree’s, Nestlé had to honor the agreement, which allowed Hershey to retain the
KitKat license as long as Hershey was not sold.

2. Product related attributes

 Brand elements & associations

Kitkat’s brand name itself is part of the brand elements: the name is short, catchy, and is
easy to be remembered by consumers.
Kitkat’s logo is represented by two colors: white and red. Red color represents
excitement, youth and energy. The logo is a slanted ellipse with the word mark within
it.
One of Kitkat’s powerful brand elements is its slogan: “Have a break, Have a KitKat”.
With this tagline, KitKat wants to be strongly associated with break times, encouraging
people to have a KitKat each time they are taking a break and want to relax. This tagline
also inputs the idea of youthfulness and fun in the minds of the consumers.
KitKat bars have 4 fingers, which is a distinctive shape that differentiates it from their
competitors since their bars are usually composed with one single bar.
Associations: Taking a Break, Sharing, Pleasure, Fun.
  Supporting marketing programs

“Stress relief” marketing campaign17

Nestlé launched in Malta an interactive marketing campaign to help citizens relieve
stress.
In addition to the launch of posters in bus shelters with stress relief advice, KitKat
provided pillows for commuters to rest against and bubble wrap for them to pop.
The company also offered more than 10000 “Stress relief kits” to Maltese companies.
The kits included a booklet with fun break ideas, bubble wrap and KitKat bars.
The brand created a special area in Valletta city where passers-by could rest on some
comfortable beanbags, and even get a free massage.
This campaign was spread offline and online; on KitKat Malta Facebook page, the
company launched a contest to win a 1000 Euros voucher for a travel to any
destination. To win this competition, participants had to take a photo of them having a
break.
An application called “KitKat Break Prompter” was created with the purpose of
reminding people when it’s time to take a break and also included several 5-minute
activities.
This marketing initiative was really efficient since it enabled the brand to interact with
the consumers who were involved in the campaign. The consumers became real brand
ambassadors.
On social media, it generated positive comments and earned more than 5000 likes. This
campaign helped increase brand awareness and develop positive brand equity.

Android KitKat
In 2013, Google in association with KitKat launched an operating system called Android
4.4 KitKat for smartphones and tablets18.
To further enforce the promotion of this new operating system, the “Have a seat”
campaign was launched in Amsterdam19. Special billboards with a seat were placed in
the streets of the city, and people were invited to seat on it, and if the person was still
there at the announced time, they could win a Nexus 7 tablet.
Google has always named its operating system after confectionery names: “Android is
the operating system that powers over 1 billion smartphones and tablets. Since these
devices make our lives so sweet, each Android version is named after a dessert:
Cupcake, Donut, Eclair, Froyo, Gingerbread, Honeycomb, Ice Cream Sandwich, and Jelly
Bean. As everybody finds it difficult to stay away from chocolate we decided to name
the next version of Android after one of our favorite chocolate treats, KitKat®”
This campaign was well developed and generated a lot of interest. Company integration
plays an important role in this success, the two companies seem to be in sync; winning a
nexus the KitKat way (by taking a break), attracted a lot of participants. The benefits in
such a co-branding project will be numerous and lie in the prospect of linking positive
brand perception with different products. KITKAT is a global name that will be
recognized by many people, and this recognition will be reflected on Google’s Android,
creating further consumer awareness. Both brands also hope to increase sale numbers.

17
http://jpadvertising.com/portfolio/kit-kat-stress-relief-marketing-campaign/
18
http://marketingstories.net/kit-kat-equipe-ses-billboards-de-sieges-pour-un-concours-tres-special/
19
https://www.jwt.com/en/amsterdam/work/haveaseat/
  Brand Mantra

Brand function: Snack

Descriptive modifier: Folks
Emotional modifier: Fun

KitKat’s internal core values lie in those characteristics:

Kit Kat puts an emphasis on being a fun brand, intended to give a break to every man
and woman that needs it through a tasty snack that they will be able to break and share,
anytime and anywhere.

3. Brand portfolio

 Role of the brand within the portfolio – BCG matrix

Nestlé’s brand portfolio is very large and extensively covers all categories of food and
beverages. KitKat is part of the chocolate and confectionery category, which includes:
Aero, Butterfinger, Cailler, Crunch, KitKat, Orion, Smarties, Wonka.
KitKat plays an important role within Nestlé portfolio. It generated 8.9% of organic
growth in 201320 and is the N°1 Chocolate brand in Japan. According to the BCG matrix
we can assume that KitKat is a Star, since it has a high market share and a high market
growth. KitKat already has high market shares in western countries such as the USA or
in Europe, but it also has huge growth opportunities thanks to the development of
emergent markets, namely Brazil and Asia.

4. Market analysis

 Chocolate industry

Figures of the industry

In 2014, the global chocolate industry represented US$200 billion21. This market is
divided in five different segments: chocolate bars, tablet bars, chocolate balls, cocoa
powder, and chocolate spreads.

Chocolate tablets are the most worldwide consumed product of the market with
129,500 tablets sold in 2014. Chocolate balls sales reached the amount of 92,100.

20
http://www.nestle.co.uk/asset-library/documents/library/documents/annual_reports/2013-annual-report-
en.pdf
21
http://www.euromonitor.com/global-confectionery-overview-key-categories-countries-and-trends-to-
2019/report
Almost 52,100 chocolate powder products were sold against 70,900 chocolate spreads.
Chocolate bars were the least sold product with a sales volume of 42,60022.
The segment of chocolate bars represents a market of 80 billion Euros, with 17,3 billion
bars sold each year23. The chocolate bar segment is divided in different product
categories:
. Tender chocolate (Mars, Bounty, Kinder, Dove, Snickers…)
. Chocolate with biscuit (Lion, KitKat, Twix, Kinder, Duplo)
. Chocolate with cereal (Kinder, Balisto, Sundy, Crunch)
. All chocolates (Milka, Côte d’Or, Lindt…)
. Ice-cream (Mars, Bounty, Twix, Snickers)
. Dietetics (Gerblé, Gerlinéa, Weight Watchers, Gayelord Hauser…)
. Bio (Kalibio, Bjorg, Valibio …)
. Gluten-free (Gerblé…)

Companies
The chocolate market is a highly competitive one due to the number of companies
competing in it (which are mostly multinationals).
The following table presents the ten biggest companies that sell chocolate24.

Companies Net sales 2014 (US$ million)

Mars Inc. (USA) 18,480
Mondelēz International (USA) 14,350
Ferrero Group (Luxemburg/ Italy) 10,911
Nestlé SA (Switzerland) 10,466
Meiji Co Ltd (Japan) 9,818*
Hershey FoodsCorp (USA) 7,485
ChocoladenfabrikenLindt&Sprüngli AG
4,022
(Switzerland)
Arcor (Argentina) 3,500*
EzakiGlico Co Ltd (Japan) 3049 *
August Storck KG (Germany) 2,272
* This includes production of non-confectionery items

Some of those companies, such as the Ferrero Group or Nestlé, own several chocolate
brands and several product categories.
The following ranking classified the TOP 10 of confectionery brands in the world in
201225:
. Snickers .Milka
. M&M’s .Catbury Dairy Milk
. Trident .Orbit
. Reeses’s .Extra
. Galaxy/ Dove .KitKat

In order to differentiate themselves to attract consumers and increase consumer loyalty,

companies try to be more innovative. Those innovations can concern the packaging (like

22
http://www.lefigaro.fr/conso/2015/04/03/05007-20150403ARTFIG00002-chocolat-les-francais-ne-sont-pas-
si-gourmands-que-ca.php
23
http://www.planetoscope.com/sucre-cacao/1590-barres-de-chocolat-vendues-dans-le-monde.html
24
http://www.icco.org/about-cocoa/chocolate-industry.html
25
http://www.planetoscope.com/sucre-cacao/1590-barres-de-chocolat-vendues-dans-le-monde.html
for example the “memory wrapper” from Mars), the product design (like the partnership
between KitKat and Android), the size of the product (for example the mini format), the
distribution channel (M&M’s which open a M&M’s store) and so on.

 Competitive brands

We can see on those two diagrams that Nestlé is number 2 in terms of world chocolate
production with a market share of 13%, and number 3 in terms of world chocolate and
confectionery production with a market share of 8%26.

In 2012 in France, Ferrero had the two highest market shares with Kinder Bueno and
Kinder Maxi. KitKat is only in 3rd position27.

KitKat has two main competitors:

-one of Ferrero’s main confectionery brands: Kinder Bueno, made of two individually
wrapped chocolate wafer bars with creamy hazelnut centers in each packet, with four
pre-portioned bites on every bar ;

26
http://www.unctad.info/en/Infocomm/Beverages/Cocoa2/Companies/
27
http://www.lefigaro.fr/societes/2012/04/19/20005-20120419ARTFIG00719-l-energie-du-marche-francais-
des-barres-chocolatees.php
- and one of the main confectionery brands of Mars Incorporated: Twix, two bars made
of crispy crunchy biscuits with smooth creamy chocolate and chewy caramel.
The confectionary industry is highly competitive. Brands often introduce new lines of
products that are similar to other competitors’ products. For instance, to emphasize the
idea of sharing, the brands KitKat, Kinder Bueno and Twix sell different sizes like KitKat
balls, KitKat mini or Kinder Bueno mini, Twix mini.

All these three chocolate bars can easily be shared because of their special shapes (like
Kinder Bueno or KitKat), or because of their number (2 Twix in a package). These
products are all affordable with a diverse range of sizes. These snacks result from
impulsive purchases and are available to buy wherever and whenever the consumer
wishes to purchase it. Indeed, we can easily find them not only in supermarkets and
convenience stores, but also in vending machines, cinemas…
These three chocolate bar brands use bright colors on their packaging, like gold, red or
white. Moreover, these three brands have the same target: their core market is children,
young adults and adults until 50 years old, which is basically mass market.

To sum up, these three chocolate confectionery brands are quite similar: they all have
the same target, the same range of price, the same selling points, resembling packaging
(red, white), and they launched approximately the same products at the same time.

But what differentiates KitKat is its shape: the four-fingered KitKat bar which many
would consider synonymous with the brand. The chocolate bars allow consumers to be
able to break off a finger at a time and to break easily the chocolate into proportioned
bits.

Moreover, in Japan, KitKat encountered a great success with the KitKat Chocolatory
store-in-store concept28, and its market shares have only been increasing over the
2009-2014 period thanks to this kind of marketing initiatives. Nestlé has also
increasingly played the card of exclusivity through special editions and innovative
flavors, or through products with regional flavors or adapted to various occasions
throughout the year.
It has also become a fascinating cultural good in Japan. And KitKat boxes are
particularly popular as a gift to pupils and students29.

 POPs and PODs

The benchmarking of KitKat’s competitors we’ve previously done gives us enough

elements to evaluate the brand’s points of parity and points of difference compared to
the other brands in the industry.

28
http://www.agro-media.fr/actualite/kitkat-developpe-son-concept-de-chocolaterie-bar-au-japon-17803.html
29
http://blog.euromonitor.com/2015/04/morinagas-flagship-dars-store-in-the-footsteps-of-nestl%C3%A9s-
kitkat.html
Points of parity
-Affordability and accessibility: although all the brands in the chocolate bar market do
not focus on price-competition, there is somehow a common agreement between them
to charge quite low prices for their products. This is why KitKat, even as a strong brand
with a fair degree of flexibility in its pricing strategy, has kept its prices remarkably
stable over the last 100 years (a classic 4-bars snack costs around 2 Euros/2.5 dollars).
This is the average price of all the standard-size chocolate snacks in the industry. The
affordability of KitKat’s products also allows it to target a very wide range of customers.
KitKat can also be found almost everywhere, just like its competitors: supermarkets, gas
stations, vending machines etc…

- Use of different chocolates: as all the other brands in the industry, KitKat developed a
variety of snacks made of different chocolates (white, dark, milk), which helps it target
different segments of consumers. Ferrero Rocher also offers milk and dark chocolate
variations, as well as M&M’s that sells dark or peanut butter sweets, or Kinder Bueno
with its white chocolate bars.

- Packaging variations: KitKat’s two-stick and four-stick snack packaging can be found in
many sizes and types. There is not only the classic square packet with 2 or 4 fingers in it,
but also boxes containing12 or 24 sticks and long packets with 6 to 9 sticks in it. Of
course, there are also numerous limited editions, such as the Chunky Peanut Butter
snack or the Toffee Treat one. It is common in the chocolate confectionary industry to
come up with new and innovative packages to meet all kinds of demands, which is why
M&M’s offers columns and boxes along with the normal packets, or why Twix snacks
come in packets of 2, 4 or 10 bars, boxes of 36 bars etc. Limited editions also allow the
brands to increase their sales without cannibalizing the original product.

Points of difference
- Format and size of the product itself: the fact that KitKat snacks can be found in many
versions, such as single stick, two-stick, four-stick or chunk packets, enhances the
peculiarity of the brand. This is the only brand that sells so many formats in this
industry, and it enables its customers to find the perfect snack anytime and anywhere,
fitted for every craving they might experience. Chunky bars, for example, were designed
for people who look for a bigger hit of chocolate, sweeter, heavier and heartier than a
simple finger. This kind of product line extension does not exist for Twix or Ferrero
Rocher, which, on the contrary, only have one standard size for their snacks, or M&M’s
and Kinder Bueno that only come in normal and mini sizes.

- Variety of flavors: In Canada and the US, KitKat snacks come in a large variety of flavors
such as peanut butter, mint, coffee, hazelnut, caramel, mint etc. In Japan, the range of
flavors is even bigger: chili pepper, raspberry, pear, green tea, wasabi, royal milk, even
pizza or sandwich-flavored KitKats can be found there. This is the only brand in the
chocolate bar market that offers so much possibilities in terms of taste.

- Wafer stick: the wafer is one of the key features associated with KitKat, although
Kinder Bueno’s products are made of wafer too and M&M’s and Ferrero Rocher also
started to include wafers in their products (not to the same extent as KitKat though).
The fact that is comes in sticks is also a differentiating attribute since it enables
consumers to break off a finger at a time and share them with their friends or their
family, an emotional appeal that is strongly associated with KitKat. The simple action of
breaking off a finger is what adds value to the product.

- Association with breaks: as opposed to the majority of its competitors, KitKat is often
associated with the word “break”. This was achieved thanks to the famous “Have a
break, have a KitKat” tagline that enabled KitKat to differentiate itself from its
competitors, which are primarily seen as plain chocolaty snacks that are consumed
whenever one is hungry or just craves for sweets, like Kinder Bueno, which defines itself
as a “Small Hunger” product.

Brands

-Price and place strategy (affordability + accessibility)

Points of -Target market (female + male, between 15-50y.o)
parity -Packaging variations
-Use of white/dark/milk chocolate

- Left bar/Right bar - Emotional appeal: -Format + size

Points of - Story telling childhood nostalgia -Variety of flavors
difference -Association with “Small -Wafer stick
Hunger” - Association with
-Lightness of the “breaks” + the action
product (not too heavy) of breaking a finger

5. Strategies (4P)

 Product Strategy

What is a KitKat?
KitKat is a hybrid product between a chocolate bar and a biscuit. It is made of three
layers of chocolate-cream filled wafer and smooth milk chocolate coating30. It is known
for his famous four-finger shape. This special shape makes it easy to share. Moreover,
that shape increases the brand Knowledge and awareness.

30
http://www.hersheys.com/kitkat/products.aspx#/KIT-KAT-Wafer-Bar
What is the product strategy?
KitKat’s strategy is targeting a wide global audience; therefore Kit Kat has to satisfy a lot
of needs in order to sell a lot. The Brand according to this strategy exists in different
sizes and flavors, in order to satisfy every customer, no matter the cultural differences
between them. Adaptation is key for KitKat. Furthermore, the brand does a lot of
product line extensions such as caramel, tea or special flavors (for KitKat fans or
prospects according to their cultural tendencies (tea in China)31. Those products are
usually sold for a short period, because the goal is to prevent any cannibalization of the
original product and extend the product life cycle (short for KitKat). Moreover, some
products are only available in some countries.
Likewise, these limited editions create uniqueness and an occasion to promote the
brand. This innovation process is really important in a tough market where products
remain the same.
The different shapes are also here for convenient reasons and for special targets (ex:
children); it’s all about segmentation and reaching everyone. In term of appearance,
KitKat always release different edition for different holidays or occasions, with some
special packaging related to the holiday or event32.

We also noticed that KitKat does some brand extension, showing that the brand is trying
to use its reputation and reduce the risks of launching a new product and entering a new
market thanks to the already established awareness and trust of the customers.

KitKat’s yoghurt

KitKat’s unique red and white are an important part of the brand attributes. The colors
are also very important (it makes the brand more recognizable); the red is a powerful
color that attracts the vision and shows power and passion and the white stands for
something pure and clean. The only time the brand’s packaging ever changed from its
traditional color was during World War II33.

31
http://www.buzzfeed.com/lydiah/35-kit-kat-varieties-from-around-the-world-18d7
32
http://www.latmultilingual.com/chinese-new-year-2014/
33
https://www.nestleprofessional.com/uk/en/SiteArticles/Pages/History_of_KitKat.aspx?
When it comes to the product, we have to talk about the famous and universal slogan
“Have a break, have a KitKat, indeed this slogan has two goals34:

Suggests that KitKat is a relief

action, part of taking a well-
Action of breaking the KitKat
deserved break from our
apart before eating it and
stressful lives, so we can
supposedly sharing it.
basically say that it answers
to a need

Every Kit Kat package includes Nestlé’s logo, like an endorsement, as well as information
about the product, and KitKat’s well-known slogan of course, translated in some
countries or not. Here the Nestle logo is intended to reassure the customer regarding the
quality of the product and create a connection between the Nestlé Brand portfolios.

Key elements of the product: crisp wafer covered with milk chocolate portioned in
several fingers size. Secondly, the authentic KitKat bar and some original flavors
available for limited periods (for instance, KitKat Mint), plus the different formats of the
snack (mini, ball …) and finally the packaging itself.

 Place Strategy

KitKat is a fast moving consumer good35in a highly competitive market. Indeed, there are
many other alternatives to KitKat products, which make the consumer likely to purchase
a competing product if KitKat is unavailable rather than keep looking for it in other
stores (impulse purchase), and also because the purchasing habits of customers can be
different. Intensive distribution is required in order to ensure it is available where and
when the consumer wishes to purchase it, which also means online and in KitKat’s own
stores (Japan). Additionally, KitKat uses the powerful distribution network of Nestlé
(warehouses, supply chain …)

34
http://imt.x10host.com/rachelbender/pdfs/researchproject.pdf
35
http://www.about-fmcg.com/What-is-FMCG
Where can I find KitKat products?

Supermarkets
and Movie Vending
Hypermarkets Newsagents Theatre Machines

Corner shops, Cafes, gas Internet

convenience stations
store

The brand is present in many countries (more than 70 countries)36. Most of the
customers buy these products on impulse37. To use these impulsive purchases, most of
the intermediaries place the product strategically (near the cash registers for instance).
All this has to be approved by the two companies (here, Nestlé and for instance
Carrefour, in this case the Power of negotiation of the two companies is high).
Furthermore, according to their distribution strategy, KitKat uses a Pull strategy.

KitKat next to the checkout

These strategies allow KitKat to efficiently improve their target market coverage.
Wherever somebody wants a KitKat, they will find it pretty easily.

Some large supermarket and hypermarket companies, Carrefour for instance, purchase
KitKat and other Nestlé products in large quantities (bulk order) and distribute them to
their stores in the entire country or area, on the other hand small stores uses wholesaler
channel.
By using both the wholesaler (like Metro in Europe or Nestlé own distribution centers)
and retailer channel (plus the special channel such as Internet), Nestlé maximizes KitKat
market coverage and maximum availability, making sure KitKat is available to
consumers across France and other countries.

36
http://www.nestle.com/media/newsandfeatures/happy-75th-birthday-kitkat
37
http://www.confectionerynews.com/Markets/Confectionery-still-top-for-impulse-buys-survey
 Retail Discount Special
Wholesaler
store store Store

Intensive distribution and Multichannel

 Pricing Strategy

KitKat’s price has remained more or less stable over the last years (despite the
fluctuation of the Cacao market38) thanks to the power and initiatives of Nestlé (Cocoa
Plan)39 among other things. However the pricing of KitKat snacks can vary, either
because of the product itself or the place where it is sold.
For instance, KitKat’s pricing increases as size varies: the bigger the size, the higher the
price or because of the special flavors or quantity per packaging.

Price strategy of KitKat intermediaries

Convenience stores and Special sellers such Discount stores Supermarket and
independent gas as vending machines hypermarket
stations and movies theatres,
airports …
Generally purchase small Set their own prices Those companies Generally purchase in
volumes and therefore (schools, offices…), often sell old products large volumes (bulk
tend to set their prices but with a small and only the regular order with other
higher in order to make a margin.40 Movie version of the product Nestle Products
benefit (except those who theatres or special (products with usually), allowing
belong to retail stores); places (airports) have Outdated promotions them to sell individual
however their a special pricing on the packaging, for KitKat bars at a lower
importance can change policy on the snacks example).They are price compared to
according to countries available to their able to purchase the other types of stores
(Supermarket vs audience and can product at a reduced and proposing more
Convenience stores). achieve high price and can offer it sales promotions.
markups41 of two to for less than other big
three times the cost. retailers.
Vending Machines: In
France (through the
vending machine
company “SELECTA”

38
http://www.bloomberg.com/news/articles/2014-10-05/nestle-bears-buy-ebola-cover-amid-spike-in-cocoa-
prices
39
http://www.nestle.com.au/kitkat/cocoa-plan
40
«Les écoles ne prennent pas beaucoup de bénéfices, elles majorent de 20 centimes en moyenne le prix de la
canette, ce qui leur permet de financer certaines
dépensesextraordinaires»,http://ecolesdifferentes.free.fr/DISTRIBBXL.htm
41
https://www.yahoo.com/movies/just-how-big-is-the-markup-on-movie-food-87128526582.html
 Kit Kat (45g) is sold
around 1.20€ and the
competitors around
1.30-50 for the same
size only.

Generally speaking, in most cases, KitKat keeps a close control of the prices of their
products, even though these different points of sales almost never offer the same
quantity per packaging. Some products are exclusive to some type of stores (small
quantities for small stores usually). We noticed that the price varies depending on the
country where it is sold. We noticed that competitors tend to propose different size to
avoid price competition.

KitKat also uses discounts, for instance when the customers try to purchase the products
in multi-packs from the supermarket instead of individual bars (8+1). Likewise, gas
stations and convenience stores frequently offer quantity discounts by offering 2-for-1
sales of KitKat snacks. Retailers also make seasonal discounts, like during a few days
before holidays or special events (Christmas, El Aid, Chinese New year) in order to
increase the sales and benefit from the momentum created by the event.

All chocolate bars of the same size and quality are sold at more or less the same price. A
regular KitKat bar is sold at the same price as other regular chocolate bars. Kit Kat
Chunky is priced the same as other special bars. KitKat is therefore a competitor-based
pricing company, except when the competitors propose different sizes to avoid direct
comparison.
Kit Kat tends to focus more on the small stores (through their communication) in order
to use those impulse purchases.

Therefore, it is important for KitKat to develop brand loyalty and ensuring that
customers will choose them over other brands by following the price strategy of Lion,
Twix, Mars and other chocolate brands. So when price cannot be a competitive
advantage, Kit Kat must have other ways to attract prospects such as sales promotions,
more effective communication or better availability.

Price Comparison between KitKat and

competitors in France through retail
stores

KitKat KinderBueno Lion Twix Snickers Bounty

450g (10x45): 250g (x6): 420g (10x42): 10x45: 3.84€ 10x40: 3.54€ 5x2 (285g):
3.85€ 3.65€ 4.02€ 2.98€
270g(x6):
2.39€
Chunky
double
Caramel
(168g): 3.04 €
4243

Carrefour (03/05/2015)

Monoprix (03/05/2015)

This chart shows a small price difference between retailers for a same product (margin).
We noticed that to avoid direct competition, companies tend to propose different
quantities, which explains the price differences. However, between two direct
competitors with the same quantity per packaging, the price is the same (KitKat and
Twix).

111.42%
Increase

France: 3.85€ Sweden: 39.90KR = Brazil: 29.90R$ = 8.85€45

4.14€44

7.53%
Increase

→ This chart shows the price differences according to countries for KitKat products
around the world. We based our analysis on the KitKat 10x45 Regular chocolate bars.

42
http://courses.monoprix.fr/searchresult/barres$0020chocolat$00e9es
43
http://www.ooshop.com/courses-en-
ligne/WebForms/Catalogue/DetailUnivers.aspx?UNI=%C3%89PICERIE&REDIRECT=/WebForms/Catalogue/Rech
ercheResult.aspx?MS=barre+chocolatees
44
https://www.kaffekapslen.se/kitkat-10-pack.html
45
http://www.americanas.com.br/produto/109905233/chocolate-kit-kat-45g-nestle-10-unidades-
  Promotion Strategy

In such a competitive market, having an effective promotional mix is a necessity. Kit Kat
obviously uses advertising, sales promotions, public relations, sponsorship and online
marketing to attract, retain, interact with and engage loyal customers, through the
enhancement of their CRM programs.

Advertising in general
Kit Kat is a very active brand when it comes to advertisement. Indeed, through the
modernization of their traditional “Have a Break” slogan, they were able to update the
concept of people needing a break in today’s society and strengthen the company in the
chocolate bars communication war. We noticed that the brand almost communicate
around the price but always around the idea of having a break and they tend to use the
latest trend around chocolate (new tastes, packaging shape)

KitKat’s advertising strategy is based on television, outdoor media (billboards, bus

stops, etc.), street marketing, sales promotions and social media. Nowadays, the
company runs several campaigns simultaneously around the world, adapted to each
country and target. Here is one of them:

- Social Break Effect on Facebook (here they share the news but through a “KitKat
analysis”46)

Today, KitKat seems to be shifting away47 from traditional advertising (TV, Radio), even
though this argument depends on the country: in some of them, they are still present on
TV (India, English speaking countries…) but in most countries they tend to focus less on
TV and radio and more on the other ways of communication.

Sales Promotions
KitKat uses sales promotions to create interest and increase the sales of the products.
These promotions are often in the form of contests aimed at the consumer (inside the
store or online) or special discounts (2 for1). Throughout the year, they have run several
major contests with cash and travel prizes. This year, to celebrate their 80th anniversary,
they created a game where you can win money. This kind of communication is usually
available on KitKat’s Facebook page and receives many comments and interest from the
23,000,000 Facebook fan database48. However, we noticed that the brand is not using its
heritage as a core advertising element. Perhaps, since the company wants to position
itself as a fun and cheerful brand, advertising on heritage may be outdated.

46
http://www.kitkat.fr/#social-break-effect
47
http://imt.x10host.com/rachelbender/pdfs/researchproject.pdf
48
https://www.facebook.com/kitkatfr?brand_redir=17452092075
Furthermore, the brand does a lot of communication inside the points of sale, mainly
through events and special employees who entertain people and offer samples for
example, again in order to raise awareness on their product range and increase sales,
directly where the prospects are.

49

Sponsorship and partnership

KitKat does a bit of sponsorship, whether it’s for special events such as the world cup of
football or directly in some football teams (see the image below). They also promote
their products through partnerships with special cultural events such as movies (latest
Fast and Furious Movie for instance). Furthermore, the company does some
partnerships too; the most famous one is probably the one with Android, the Google
system device50. This partnership offered a global visibility to the KitKat brand and the
possibility to associate the brand with another powerful and growing brand.

49
http://www.moodiereport.com/images2/android_kitkat_promo_geneva.jpg
50
http://www.theverge.com/2013/9/3/4691040/android-kitkat-the-story-behind-a-delicious-partnership
 Japanese football team: Jubilo Iwata 2006 Home shirt51

Online communication
KitKat is an active company online, indeed, the company uses online marketing to
further involve its fans (through dialogues between customers and the company), as
well as promote their various contests, events and new products or campaigns. KitKat
uses Facebook, Twitter, Pinterest and its own website to keep consumers informed of
product developments and upcoming events.

Online, the brand often asks questions to its community of followers, such as “Which is
your favorite KitKat flavor?”, which gives consumers the opportunity to share their
opinions about the brand and interact with it. They also ask other questions to their fans
on various matters (almost always around the news and in a funny way).

The Kit Kat worldwide website allows users to choose their region and therefore
languages for their whole visit on the website. It also displays real-time results of
current Facebook polls and the number of KitKat sold around the world52.
Furthermore, we noticed that the website proposes a lot of recipes around the usage of
KitKat chocolate bars (cakes, candy, ice cream53…) but only in some countries.
Moreover, the brand does a lot of riddles to generate comments and activity on their
official Facebook page and others social networks.

Public Relations
ToKitKat and especially Nestlé,public relations are a tool to improve customer
perception and brand image of the company54. For instance, press releases informing
and reminding the public of how The Cocoa Plan improves the lives of small farmer
families in developing countries improve the company’s image, and are available on
KitKat’s website55. This information was mentioned on every KitKat packaging. Nestlé
also partnered up with organizations such as Fair-trade56, and by doing this, they were
able to enhance the credibility of the group. It’s a win-win relationship, for both
companies.

51
http://risingfootball.blogspot.fr/2009/09/jubilo-iwata.html
52
https://www.kitkat.com/
53
http://www.hersheys.com/kitkat/recipes.aspx
54
http://imt.x10host.com/rachelbender/pdfs/researchproject.pdf
55
http://www.nestlecocoaplan.com/
56
http://www.confectionerynews.com/Markets/Nestle-UK-goes-Fairtrade-with-Kit-Kat-two-finger
 Partnership with
FairTrade (on the
packaging)

Conclusion
KitKat’s situation is complicated because of the similarity of its price and distribution
strategies tothe ones of its competitors in the market. KitKat has to rely on product and
promotion strategies to distinguish itself in the minds of customers since it is impossible
to do so with the price. KitKat is one of the most popular chocolate snack brands around
the world, and it partly owes to the marketing strategy it has put in place all over the
years. Its trademark ─ red and white colors and the distinct “KitKat” logo- makes it one
of the most recognizable brands ever and one of the leaders in this segment of the
market.

With today’s frenetic pace and issues, we can consider the slogan “Have a break, have a
KitKat” as extremely relevant and coherent, as well as legitimate and powerful now
more than ever. By adding an effective use of social media and appealing sales
promotions in their promotional mix, KitKat has done an excellent job of positioning
itself (in that “have a break” need) and appeal to the new generation.
The marketing strategies of KitKat snacks are efficient, but like every other product,
there is always room for improvement and it might become mandatory due to the
constantly evolving competition. Product line extensions have expanded its appeal to
new market segments and countries while sticking to the core purpose and target of the
traditional red Kit Kat.
 PART II - BRAND EXPLORATORY (demand side)

1. Brand positioning analysis

 Target market

Consumers
KitKat targets consumers all around the world, and more precisely in the following
countries: Australia, Brazil, Botswana, Bulgaria, Canada, Colombia, Ecuador, Egypt,
France, Georgia, Germany, Indonesia, Italy, Japan, Lesotho, Libya, Malta, Mexico, Middle
East, Namibia, New Zealand, Philippines, Poland, Portugal, Spain, South Africa, Sudan,
Swaziland, The Nederland’s, the United Kingdom, and the United States57.
KitKat’s target market is a mass audience, since the brand’s customers are both men and
women. According to the product, the targeted age bracket changes: the four-finger
KitKat is offered to men and women aged from 15 to 40 years old58. KitKat chunk is
designed for teenagers and young adults, from 12 to 2459. KitKat mini is intended to
children60 and KitKat Single to all adults.
The customers are chocolate lovers and people who want to indulge themselves with a
well-deserved treat, for example during a break at work, as the slogan suggests. We can
observe that for some products consumers have specific characteristics: for KitKat
Single, they are indulging themselves while watching their waistline61, and KitKat balls is
for people who like to share things with their friends or family62.
Concerning the consumer lifestyle, the main target is employed men and women.

Buying situation
- Benefit sought
In general, people buy KitKat for its taste and flavours. In the majority of the countries
KitKat sells only three flavours: milk, black and white chocolate. However in some
countries consumers are demanding more flavours. In UK there are mint, cookie and
cream, toffee treat, and orange flavours, and in Japan there are more than 200 flavours,
as mentioned previously.
Other features that buyers take into account are the different formats of KitKat products.
They will choose the format according to who will consume the product, adults or
children.

- Usage
In the world, around 650 KitKat fingers are consumed every second63.

57
https://www.kitkat.com/
58
http://businesscasestudies.co.uk/nestle/kit-kat-revitalising-a-brand-leader/why-kit-kat-needed-
revitalising.html#axzz3YpsJ9yEV
59
http://imt.x10host.com/rachelbender/pdfs/researchproject.pdf
60
http://businesscasestudies.co.uk/nestle/kit-kat-revitalising-a-brand-leader/why-kit-kat-needed-
revitalising.html#axzz3YpsJ9yEV
61
http://www.kitkat.fr/
62
http://www.nestle.fr/nosmarques/chocolatconfiseries/kitkat
63
http://www.nestle.com/media/newsandfeatures/japan-kitkat-boutique
- Awareness and intention
The relationship between KitKat and customers is very special in Japan. The brand has
created some features to its products, which makes Kit Kat the ultimate favourite brand
of the Japanese since 201264. For instance, in the Japanese culture, the gift-giving process
is very important, which is why Kit Kat included a blank space on the packaging where
consumers can write messages to their friends or family and then offer it.

On a global level, in 2014, KitKat had around 23 million likes on its Facebook page and
over 200 000 followers on Twitter65. It allows people to interact with the brand and post
pictures of their Kit Kat experience, as well as complain about it.

 Anatomy of brand positioning

Brand Domain Men and women of all ages between 15-40 years old66 at a worldwide
level. Chocolate lovers more particularly.

Brand Heritage Dark chocolate, packaging being changed to blue during WWII, KitKat bar
was called a Chocolate Crisp. Heritage is outdated for younger generations.

Brand Values Slogan in itself “have a break, have a KitKat”, fun, original, universal
symbol of break, quirky spirit, sharing.

Brand Assets Packaging, red color, shape, message (specific one), many variants.

Brand If Kit Kat was a person, it would have a good sense of humor and it would
Personality be dynamic and fun.

Brand Reflection KitKat means coolness; break (relief) from whatever, tasty, easy to share
and fun. A youthful brand and affordable.

Brand domain
When it comes to Kit Kat’s regular product, the target is men and women between 15
and 40 years all around the world, with a core target aged between 18 and 24 years old,
as said Magdalene Tan, Group Brand Manager at Nestle Singapore: “KitKat is constantly
looking for innovative ways to reach out to our core target audience, which are youths
aged between 18 – 24”. Moreover, as stated previously, Kit Kat’s other products target
different segments of consumers, such as Kit Kat Chunky, which aims at tweens and
young adults between 12 and 24 years old.
Regarding the market place, the brand competes in the confectionary industry and more
precisely in the chocolate bar market.

64
http://www.nestle.com/media/newsandfeatures/japan-kitkat-boutique
65
https://www.facebook.com/kitkatfr/likes + https://twitter.com/(KITKAT)
Brand heritage
KitKat’s history, as far as consumers can remember, is composed of two things: the
packaging used to be blue during World War II and it was called “Rowntree’s Chocolate
Crisp” instead of KitKat67. However, it seems that KitKat is not using his heritage at all
(except for the know-how argument) in advertising, and is always striving to modernize
itself instead of focusing on its past. We noticed that the heritage is something
completely outdated for most generations of KitKat’s customers.

Brand values
The values of the brand are, first of all, the slogan in itself and above all, the idea behind
it. The “break” is something that strongly defines the company and we can see it through
their communication: the “break” concept has become a symbol for the brand, a timeless
and universal symbol. The idea of fun also defines the brand; the company’s
communication around their products is never too serious and that leads us to their
quirky spirit, which is always present and goes along with the idea of break.
We can also talk about the originality of the brand, always trying to create new products
(new flavors) in their different market areas.

Brand assets
KitKat is different from many of its competitors for various reasons. First, the packaging
and especially the color are pretty much unique and attract the eyes of customers. Then
there is the shape, which is also unique (four bars) in the market, so unique that KitKat
uses the shape of the product in its communication strategy very often. There is also the
message: KitKat was the first brand to advertise around this idea of “having a break”,
although they’ve recently been copied by Kinder Maxi68in their latest ads. This idea is
still strongly associated with the KitKat brand though. KitKat is also defined as the
company with many variations in its products (flavors), packaging or formats.

Brand personality
According to Aaker’s brand personality framework, if Kit Kat was a person, it would
have the following characteristics: cheerful (sincerity), daring and spirited (excitement),
and most of all it would have a fine sense of humor, as Nestlé’s Global Head of KitKat,
Stewart Dryburgh, explains: “Part of our brand essence is having a sense of humor – an
empathetic, laugh with you, not laugh at you, sense of humor.” In general, Kit Kat’s
personality is a fun, dynamic and empathetic one, as their main purpose is to give
consumers a break in their stressful lives, creating a feeling of thankfulness and
complicity towards Kit Kat.

Brand reflection
The customer, after having bought one of Kit Kat’s products, feels different things. The
first one is a feeling of coolness, related to the communication used by the brand and
also the values of the brand (fun, sharing aspects). Then there is the feeling of relief and
satisfaction, created by the “have a break” tagline and marketing activities of Kit Kat,

67
https://www.nestleprofessional.com/uk/en/SiteArticles/Pages/History_of_KitKat.aspx
68
https://www.youtube.com/watch?v=QOKWv7eJ2Qc
which has established itself as a break time food in consumer’s minds. Finally, there is
the “youth” factor, Kit Kat being a positive and dynamic brand.
2. Consumer perception analysis

 Perceptual map

Our perceptual map is composed of two attributes: price and quality. We noticed three
groups in this market. The first one (lower left corner) is composed of our main
competitors; the prices are more or less the same (the brands play on having different
kilograms per packaging, 270g for one and 290g69 for another), from 10 to 40 cents of
difference. The second one (upper left corner) is formed with fewer brands but the price
and the quality are higher (0.50-2€ / per bar). Finally, the high end products, they are
not numerous and usually have strong brand heritage (Swiss made, luxury products
etc…).
We noticed an empty space (few competitors) in the affordable and high quality square.
The creation of such a product could be a threat to Nestlé but also might represent an
opportunity if the company acknowledges this gap.

69
http://courses.monoprix.fr/searchresult/kit$0020kat
  Brand associations

Questionnaire results
In order to understand how KitKat is perceived by its customers, we made a survey with
15 questions (see the annex).
(Survey stopped on 1stMay 2015 at 11 a.m., 147 responses in total).

The survey started with three filters which were the gender, the age and the situation
(student, worker, unemployed or other). The respondents were mostly students (86%)
between 21 to 30 years old (79%).

After this, we asked them about the first chocolate snack brand that came to their minds
and which chocolate brand is their favorite: the majority of respondents said that Kinder
Bueno, Mars and Milka were the first brands that came to their mind.
Their favorite chocolate snack brands were also Kinder Bueno and Mars.

We also wanted to know people’s perceptions of Kit Kat compared to their competitors
in terms of satisfaction, so we made a comparison table between KitKat, Lion, Cadbury,
Kinder Bueno, Hershey's, Mars, M&M's, Snickers, Nuts and Twix.

The results showed that Kinder Bueno was the most appreciated brand (with 70/147
responses saying it was “really satisfying”), followed by M&M’s with 62/147 answers.
Kit Kat was judged as “satisfying” with 58/147 responses, and Nuts, Hershey’s and Twix
were the least appreciated brands and were judged as either “average” or “unsatisfying”.

About Kit Kat’s brand awareness, to the question “do you know KitKat”, we obtained
100% of “yes” responses, which means that KitKat is a well-known brand with a high
brand awareness.

We then asked people about the features of the KitKat: 56.5% of respondents judged
KitKat's packaging as highly recognizable, especially thanks to its red color, its logo and
the shape of the chocolate.

Furthermore, we put a brand association question in the questionnaire, asking

respondents the first 3 words that came to their minds when they heard the word
“KitKat”: most of them answered chocolate, red, bar, sharing, crunchy, and break.
We also wondered about what drove the consumers' purchase decision: the vast
majority of responses showed that people bought or will buy KitKat for its taste (78,1%),
followed by its format (39%).

Concerning the international penetration of the brand, 50% of the respondents had
already eaten a Kit Kat snack abroad, but only 35,6% have already tried new flavors
such as green tea, wasabi, peanuts or cookie cream.

The results of our questionnaire showed that Kit Kat had a high degree of awareness
among consumers (assisted awareness), who mostly recognize it thanks to its packaging
and its slogan (spontaneous awareness).

 Customer based brand equity analysis and sources of KitKat’s brand

equity
To evaluate Kit Kat’s sources of brand equity, we have conducted 3 types of researches:
- Questionnaires to evaluate brand salience
- In depth interviews by phone with 6 participants to evaluate Brand performance, imagery,
judgments, feelings and resonance
- Field research on social media and Internet pages

Brand salience
Depth of brand awareness:
- Recall: top of mind: 10% (15/147)
- Recognition: assisted awareness: 100% (147/147)

Breadth of brand awareness:

- Association with break: 15,6% (23/147)

Performance
1) Primary characteristics: ingredients’ quality is perceived as “good”. The four fingers
format is very popular and consumers like the idea of sharing their snack.

2) Product reliability: KitKat is perceived as an average-quality chocolate bar.

3) Style and design: according to respondents, the packaging exudes a good quality product.
The colors show energy, dynamism and vivacity. The four fingers format is for sharing with
friends.

4) Price: the price is affordable to very affordable for most of the respondents.

Imagery
1) User profile: the mental image of the typical consumer is a child or teen who needs energy
to start the day and a student who needs a break (according to the respondents).

2) Purchase and Usage situations:

-Purchase situations: it is very easy to purchase KitKat, it can be found in every supermarket
and vending machine. In addition, consumers buy a lot on impulse; it’s a way to indulge
themselves.
-Usage situations: most of the consumers eat their KitKat in the afternoon, during breaks at
school or work place. The idea of break is strongly associated with KitKat.

3) Personality and Values: we used Aakers brand personality test and found that the traits
below best describe KitKat:
- Sincerity (honest, wholesome, cheerful)
- Excitement (daring, spirited, imaginative, up-to-date)

4) History, Heritage and Experiences.

This year the brand is celebrating its 80-years anniversary and promotes its heritage and
know how as a chocolate bar producer. In addition, the brand is also selling itself as a “break
re-inventor”: «Il y a 80 ans, Kit Kat voyait le jour et réinventait le break.» (KitKat Facebook
page)

Judgements
1) Credibility: we used 3 dimensions to evaluate Kit Kat’s brand credibility:

-Expertise: Competent, innovative, market leader

-Trustworthiness: Dependable
-Likeability: Fun, interesting
We found most respondents agreed on likeability and trustworthiness, as at least two of the
three dimensions were chosen, we can assume that KitKat is a credible brand. The source of
Kitkat’s brand credibility comes from its parent company Nestlé, seen as a very reliable and
credible group.

2) Superiority: is the brand unique and better than the other brands? What are the brand’s
unique associations?
Kit Kat’s taste itself doesn’t differentiate it from its competitors; however, consumers love its
four fingers size. They find it easy to eat, and like the idea that they can share it with their
friends.

Feelings
Using Kahle and colleagues’ six types of feelings, we found that consumers have feelings of
warmth and fun towards the brand.
Thanks to its numerous marketing efforts as a stress-reliever, consumers have a feeling of
relief and peace when they think about KitKat.
For some respondents, the feeling of warmth comes from childhood nostalgia. “It’s like coca
cola, it’s my childhood and it’s deeply rooted in our minds”, said Gun Park.
The feeling of fun is the result of the advertisements’ playful and lighthearted themes,
starring animals or even mocking Apple products launching videos.
(https://www.youtube.com/watch?v=OKOrkLxOBoY)

1) Warmth: the brand makes consumers feel peaceful, sentimental and affectionate
2) Fun: upbeat, amusing, lighthearted, joyous, playful and cheerful
3) Excitement: feeling energized, experiencing something special, “brand is cool or sexy”
4) Security: safety, comfort, self-assurance,
5) Social approval: feeling that others look favorably on the fact that they eat a KitKat,
6) Self respect: consumers feel better about themselves, sense of fulfillment, accomplishment
and pride after having eaten a KitKat

Resonance
1) Behavioral loyalty: according to our survey, 50% of consumers buy KitKat three or four
times a month and 66.6% buy three or four individual packets a month.

2) Sense of community and Active engagement:

KitKat is very active on social networks. For example, on KitKat’s Facebook page,
“#Recettedumois”has a huge success. Every month, KitKat posts a picture of a dessert made
of Kit Kat bars and its recipe. Fans have 2 days to cook this desert and post their pictures.
KitKat always comments the fans’ posts and answers to them. The brand does everything to
be in a constant interaction with its fans in order to create a sense of community. These fans
are in an active engagement; they invest time, energy and money, therefore we can assume
they are real brand ambassadors.

 Do the desired and perceived match?

Kit Kat wants to convey the image of a fun, trendy, stress-relieving brand that people can rely
on and interact with. We found out, thanks to the multiple surveys we conducted, that isis
exactly what people think about Kit Kat; they mostly associate it with breaks, warm and fun
times and with childhood. They like to interact with it on social networks and play an
important part in its marketing activities by being active and engaged customers. The desired
and perceived positioning do match: in the eyes of customers, Kit Kat is exactly what is wants
to be.

 KitKat, a lovemark?

In order to evaluate whether KitKat is a Lovemark or not, we submitted the Lovemarker

scale to a quite large number of people. We then divided the results by the number of
respondents (147) to be able to have an exact figure.

KitKat obtained 38 points on the scale, which means that it is considered as a Brand
rather than a Lovemark. To be considered as a Lovemark, a brand has to score at least
25 “respect” points, which Kit Kat did not get (21 points). However, the Lovemarker
revealed that on “taste”, “sight”, “identity”, “innovation” and “openness” levels, KitKat got
“hot” results, and many of the respondents gave it lots of points in the “leadership
category”, meaning that KitKat is perceived as the (or one of the) leaders in its industry.
Yet, KitKat apparently has to improve on telling great stories and on tapping into myths
and icons (basically, KitKat’s Mystery appeal has to be focused on).
PART III – CONCLUSION and RECOMMENDATIONS

1. Conclusion

This brand audit has allowed us to fully understand how KitKat operates in the
chocolate confectionery industry and most importantly, how it is positioned on the
market and what are its sources of equity. We discovered that it is one of the leaders in
the market mostly thanks to the strength of the brand, which is highly appreciated by
consumers, although not enough to be a Love Brand. Still, Kit Kat’s brand promise
(offering a sweet break to every chocolate lover who needs it) is largely accomplished
and consumers are aware of that, which is why they reward Kit Kat by becoming true
ambassadors of the brand on social networks.
Kit Kat managed and still manages to have a strong and clear position in the customers’
minds, and we can even say that it has created kind of a behavior pattern in their
lifestyle thanks to a universal message, “Have a Break, Have a Kit Kat”.

2. Recommendations

For the recommendations, we focused on the French market.

Thanks to the questionnaires, in-depth interviews and also our researches we’ve
concluded that Kitkat has very strong brand recognition, but a weak brand recall.
The brand has been successful in implementing the idea of “break” and “fun” in
consumers’ minds, however Kitkat is mostly consumed during breaks and needs
broader usage situations.
The thing that makes it special is not the taste itself but its 4-finger format and
convenience to eat.
In France, Kitkat has launched different flavors, such as Kitkat chunky caramel, Kitkat
ball white chocolate etc.. but the main problem lies in the communication strategy. A big
part of the consumers are not even aware that those products exist.

In order to enhance customers’ brand equity we suggest:

 Launch of new flavors

In Japan, KitKat is having a huge success
thanks to its diversity of flavors. We suggest
that Kitkat launches new flavors tailored to
French tastes. 57% of the French prefer dark
chocolate better than milk chocolate70, so
launching “KitKat Noir” would be a smart
move since it will also bring older age groups
such as the 50 years old and more.

70
http://www.lsa-conso.fr/les-francais-et-le-chocolat-etude-exclusive,204667
2
http://www.tns-sofres.com/etudes-et-points-de-vue/les-desserts-preferes-des-francais
 Co branding (ingredient co-branding)

The traditional “fondant au chocolat”

had been elected as the favorite dessert
among French people2, therefore we
suggest to launch a new chocolate
fondant filled KitKat. As KitKat doesn’t
have the expertise of “Chocolate
fondant” making, we suggest to co
brand this new product with GÜ
Dessert. For KitKat the benefits will be
reduced investment and operational
costs. GÜ will give Kitkat the necessary
know how of dessert making and bring customers to the dessert segment. This
partnership is a way for KitKat to ensure that its new chocolate bar will have a
genuine Chocolate fondant taste. This also will bring to KitKat broader usages
situations; the consumers will not only see the brand as a snack but also as a dessert.
In return, Gü will gain brand awareness and take advantages from KitKat’s large
customers base.

 Social media campaign

To further enforce its social media coverage, we suggest launching a Selfie campaign
on Facebook. The rules of this game would be for participants to take a selfie during
break times and the picture with the highest number of “likes” or “retweets” would
win the contest. The prize could be break related and with a stress relief purpose, for
instance, trips, concerts tickets, cinema tickets etc..

 Communication strategy to enhance brand awareness of existing flavors

Campus promotion: We recommend

Kitkat to promote its chocolate bars on
campuses, the purpose of this
campaign would be not only to
increase brand recall but also increase
its flavors awareness. As we said, the
main problem is that consumers are
mostly not aware of the flavors. The
young are the segment that is the most
sensitive and curious about new tastes
and flavors, that’s why we are choosing
campus as a promotion vector.
Naturally, the theme of these campaigns will respect the theme of fun and break: in
Brazil, Kitkat gave out “Pillow books” to students.
Appendix
SWOT

Strengths Weaknesses

. Strong parent company: Nestlé . Not enough flavors in some countries

. Low price . In some countries or rural areas in
. 80 years old brand = authentic brand developing countries, the price is still too
. Good visibility and advertising
high
. Available in a variety of packaging
. Easily reachable (distribution)
. Nestlé’s highly efficient global supply
chain

Opportunities Threats

. Emerging markets . Competition with other chocolate bars

. More flavors in European countries
. Growth of health consciousness= = chocolate industry
creating gluten/palm oil free products
. Cocoa Plan (enhancement of
product quality)71
. FairTrade and other partnerships
(Android)
. Rise in raw materials cost can impact the
. Consumers’ increasing preferences for
healthy food (palm oil awareness, calories)
. High buyer power (importance) due to a
multiple choice of chocolateconfectionery
brands
. Many substitutes

71
http://www.nestlecocoaplan.com/
 Porter’s Five Forces
Global chocolate confectionery industry – NESTLE
Supplier power
- Cocoa, milk and coffee
producing countries (ex: Ivory
Coast)
- Selling cocoa accounts for a
large part of their economy
- Agricultural goods aren’t
unique, Nestlé can choose to
switch suppliers whenever
they want (which they don’t
do because seek to have long
term relationships w/ them)
→ Low supplier power
because they have to sell their
raw materials to the few
companies that hold the
market
Conclusion: a moderately attractive industry because high entry barriers and very intense rivalry.
72
http://www.forbes.com/sites/bethhoffman/2013/03/26/mars-nestle-commit-to-better-chocolate-for-all/
73
http://www.bloomberg.com/bw/magazine/content/10_04/b4164036499160.htm
New entrants = low threat
- Access to distribution
channels + product
differentiation not easy
because of the competitors
already in the industry
- Economy of scale entry
barrier because new
companies would have to
produce huge quantities at the
same low price as already
established companies
=impossible
Rivalry Buyer power
- Mars, Nestlé &Mondelez = - The large variety of product
40% global market shares offerings in this industry gives
201372 end consumers the possibility
- Ferrero, Cadbury, Hershey =
to switch brands endlessly
20,9% global market shares - Companies have to invest a
201073 lot in marketing and CRM
programs to retain the
→ Oligopolistic, mature and customer
saturated industry
→ High buyer power
→ Intense rivalry among the
competitors
Threat of substitutes
- Hundreds of products could
be substitutes for Nestlé
products (ice cream, candies,
potato chips etc.)
- BUT Nestlé strives to
innovate and always be a step
ahead + responded well to
health and environmental
concerns
→ Low threat of substitutes
Industry analysis

Questionnaire
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