A Nestlé case study
Page 1: Introduction
All products have a life-cycle. It starts with preparations for the product's launch, followed by the launch itself. Some products are an immediate success; they capture public imagination. Often this results from well targeted, exciting promotional and 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, and soon disappear from sale. The growth stage comes next. Growth can take weeks or months (e.g. the latest fashion clothes) or years (e.g. 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.
Page 2: 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 product's benefits. This case study provides a classic example of how to put new life into a favourite, leading brand: Kit Kat. Page 3: Why Kit Kat needed revitalising
Kit Kat is the UK's 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 Nestlé introduced blue Smarties
·1991 Printing on sweets was introduced
·1992 Green chocolate arrived
·1995 The standard range of Smarties was relaunched with colourful new packets ·1997 Giant Smarties were launched
·1999 Smarties ice cream was launched
·2000 Mini Smarties came on the scene
·2001 Tetrahedon pack for Mini Smarties
Every alert, market-focused producer recognises the need for regular change. This is required because: ·consumers want and demand change
·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 12-20 year olds. In this important age group, while Kit Kat had been part...