Table of Contents

Case Overview................................................................................................... 3
Problems ............................................................................................................ 3
Issues ................................................................................................................. 4
Market Research ................................................................................................ 4
Decision Alternatives ...................................................................................... 5
Assessment of the Solutions............................................................................... 6
Ranking of the Solutions ................................................................................. 8
Kit Kats Solution .............................................................................................. 8
Success of the Plan ......................................................................................... 9
Our Recommendation ...................................................................................... 10
Final Conclusion .............................................................................................. 10

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Case Overview
At the beginning of the timeline of the case, Kit Kat was UKs leading brand of chocolate bar,
also known as countline. Though it was situated in a strong leading position, the product had
entered into the maturity stage of the product life-cycle. For parent company Nestl, this meant
that unless some brand innovation or updating of the brands image occurred, the brand would
reach the decline stage.
Marketing data showed slowing volume sales and other worrying signs. With competing brands
reinventing themselves to capture the leading position, Kit Kats market lead was jeopardized.
It was found that customers perceived the brand to be lacking in excitement and interest. Habitdriven purchases, more than positive purchases, were the consumers main reason for buying
Kit Kat.
Despite the market lead, the general perception among the core countline consumers, aged
12-20, was that Kit Kat was no longer relevant to them. This meant increasing reliance on the
consumer group aged 25-40, and held worrying future implications.
Due to these observations, Nestl decided to act. In-depth market research was conducted,
focusing not only the product itself; but also other factors such as the packaging and PR
activities. This research was conducted under the name Project Tyson.
The result of the market research was that Nestl introduced the Kit Kat Chunky, a singlefinger chocolate bar that was mainly aimed towards the youth.
The launch of Kit Kat Chunky was a huge success across all spheres, and it helped bring a
breath of fresh life into the stagnating Kit Kat brand. The launch of this product helped solidify
Kit Kats lead in the countline market.

Problems
In the start of 90s, Kit Kat had the largest market share amongst all the confectionary brands
in the UK. It was UKs best-selling chocolate bar. However, the once dominant four finger
chocolate bar no longer seemed to be as popular. By the end of the decade, Kit Kat dropped to
8th in ranking in the UK in terms of volume of consumption, its lowest in decades. Kit Kat was
facing an image problem, mainly amongst its younger customers. Younger consumer groups
no longer felt it relevant enough in their lives. Kit Kat was gradually losing its brand value.
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Issues
From the late 80s till throughout the 90s, the UK market has seen several changes which made
it hard for Kit Kat to maintain its dominance using past strategies.

There was an increase in the level of competition. The number of competitors was
increasing. Moreover, the competitors were focusing a lot more on their marketing
strategies. Rival firms were constantly reinventing and renovating themselves and were
expending largely on advertisement. Kit Kat on the other hand put all the baggage of
its brand on their iconic four fingered chocolate bar. This led to an inadequate marketing
approach, which left them lagging behind their rivals.

Kit Kat was already in the maturity stage of its product lifecycle. In this stage, gradual
fall in demand is a very real possibility. And that is exactly what was happening to Kit
Kat in the 90s. The problem was compounded by the brand not taking ample steps to
reinvent themselves for a new generation of consumers.

Customer behavior started to change. Kit Kat was still quite popular amongst the
customers aged between 25-30 years. However, the attitude of the market segment of
age 12-20 years was quite different. They needed novelty. They needed excitement.
That is why, even though Kit Kat was still a part of their growing up, it no longer felt
relevant to them. They sought some form of novelty. Moreover, as it turned out, teens
consumed more bars per capita than any other group, and they preferred a big eat
regardless of an increase in price. Losing out sales in this segment severely hurt Kit
Kats performance in the market.

Market Research
One thing becomes apparent from the identification of problems, that Kit Kat had lost touch
with the younger generation. Younger consumer groups no longer felt it relevant enough in
their lives. The 12-20 year olds being one of the most important age groups in that industry, it
was very important for Kit Kat to reconnect with them.
The first step in providing these customers with something compelling, something they
couldnt pass up; would be to find out what it is first. Therefore, the very first solution was to
conduct extensive market research. This involved trying to find out many things, such as:

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Gathering information on how younger people view the existing four-finger Kit Kat,
and how they would feel about a new, different form of it.

What flavors these people prefer?

What sort of packaging is most attractive to them?

The market research involved holding group discussions with younger people who were regular
customers of chocolate bars. The survey groups had both male and female members who were:

17, 18, 19 or 20 years old,

Of different ethnic origins,

From different parts of the UK and

A mix of students and non-students.

Based on the findings of the research, Kit Kat had enough knowledge on what to do next in
terms of product modification, packaging, communications, marketing and PR, etc. Based on
all the information that were gathered, Kit Kat had to find the best possible way to rekindle
their relationship with younger customers. In a sense, the market research was the constant
(since it is certainly going to have to happen) and the findings were the variables (as they will
dictate what happens next) for Kit Kats plan on revitalization.

Decision Alternatives
Based on the research findings, Kit Kat had to choose a solution from these possible next steps:
1. Introduce a new product created solely based on the research findings which will be
targeted towards 12-20 year olds.
2. Introduce different variants of the four-finger Kit Kat such as new flavors, new sizes,
etc.
3. Replace existing strategy for four-finger Kit Kat with a new strategy that targets the
youth.
4. Lower the price point to compete in value.

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Assessment of the Solutions

In this section, the potential reasons and results of choosing an option from the solutions will
be explored:

Introduce a new youth-focused product based on market research: This alternative mainly
focuses on the research finding that the 12-20 demographic did not find the Kit Kat brand to
be relevant to them.
This demographic was considered to be the main consumer segment for the countline products,
and not generating interest in this group could be extremely dangerous for any brand.
Moreover, with Kit Kats main consumer base being the 25-40 demographic, this also held
implications for the future. An aging consumer base carries with it the risk of future insecurity.
For a product already on the maturity stage, this was extremely dangerous.
A very logical solution to this problem was introducing a new Kit Kat product that is youthfocused. The exact specifications of the product could be determined through additional
research.
This alternative had the potential for long term success, due to its youth-oriented focus. This
could result in the brand gaining a large influx of new consumers in the 12-20 demographic.
On the other hand, this would probably not cannibalize Kit Kats existing customers in the 2540 demographic.
This translates to retaining the old sales that had made Kit Kat the market leader, and gaining
a large number of new, young consumers.

Introduce different variants of the four-finger Kit Kat: This alternative stems from one
particular finding of the market research. Consumers perceived the Kit Kat brand to be lacking
in excitement and interest.
By introducing different variants of the traditional, and highly successful, four-finger Kit Kat,
the brand could bring an exciting and interesting element back for the consumers. Variants
could be based on elements such as size and flavour.

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This solution had a great chance of short-term success, with long-term success being more
doubtful.
The introduction of numerous new variants can cause excitement among potential consumers
and bring about new sales in the short term.
But if there is no proper focus, this approach would not work in the long term. Too many
variants could result in the brand image being diluted, and that would affect the brand
negatively on the long term. Also, if the variants are very similar to each other, instead of
bringing in new sales, this approach could result in the variants cannibalizing each others sales.

Target the youth with the four-finger Kit Kat with new strategy: This alternative also aims
to focus on the younger customer segments.
Targeting the youth while maintaining the existing four-finger Kit Kat format would require
strategic adaptations in elements such as packaging and promotion.
This strategy would mostly depend on adapting the marketing strategy to focus on the youth.
As per the findings of the market research, the youth did not find Kit Kat relevant to their
lifestyles. Without significant innovation, a strategic shift has a low probability of success.

Lower the price point to compete in value: As the market leader, Kit Kat has a level of
premium added to its pricing. Competing brands have used this to their advantage by offering
more affordable choices in the countline market.
Reducing the price could be an obvious step to counter the growth of the competitors.
But this strategy would probably not be successful. As we have seen, Kit Kat was mostly
suffering from a perception problem. Though reduced pricing would lead to additional sales
and encourage repeat purchases, it would not be very effective in bringing in new customers,
especially in the younger age segments.

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Ranking of the Solutions

Based on our assessment, we have arranged the solutions from the one we believe the most
likely to succeed to the least likely:
1. Introduce a new product created solely based on the research findings which will be
targeted towards 12-20 year olds.
2. Introduce different variants of the four-finger Kit Kat such as new flavors, new sizes
etc.
3. Replace existing strategy for four-finger Kit Kat with a new strategy that targets the
youth.
4. Lower the price point to compete in value.

Kit Kats Solution

Kit Kat went with the first option and decided to develop a new format of Kit Kat while still
retaining the four-finger variety with which consumers are so familiar. This decision gave birth
to what would be known as Project Tyson.
Project Tyson involved doing market research for finding out what 12-20 year olds wanted and
giving them just that. It resulted in the launch of Kit Kat Chunky, a super-size Kit Kat finger
with a real mouthful of chunky milk chocolate. This 'heavyweight' idea assumes that younger
consumers are looking for novelty, interest and even excitement when they buy a chocolate
bar.
After using focus groups, researchers were able to compile data on the views and feelings of
representative samples of the targeted groups of consumers.
The research provided clear evidence that:

The targeted population of 12-20 year olds were attracted to the idea of the single
Chunky finger

Kit Kat Chunky could inject new interest in Kit Kat across a broad range of consumers,
including younger children and older adults

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The research also identified the type of packaging with the greatest appeal - a mainly red and
silver flow wrap. The research examined different types of wrappings and formats. In
particular, it compared two-finger and single-finger variants of Kit Kat Chunky.
The single-finger proved to be most popular with the 12-20 year old group, and was also the
most distinctive form that the new product could take. The research also indicated that a twofinger variety would, in some ways, compete with the four-finger variety. This would lead to
Kit Kat competing against itself. By contrast, the single-finger Kit Kat Chunky provided a
promising line extension.
The next part involved taking all necessary steps to make Kit Kat Chunky a success. Through
campaigns, advertising etc. Kit Kat had to grab public attention quickly. To facilitate this, the
launch of Kit Kat Chunky was supported by:
1. Two dedicated television adverts and a phone site campaign.
2. Advertising that was a big departure from previous campaigns. It focused on the
targeted age group and concentrated on 17-18 year olds in order to capitalize on
aspirational identification from the younger groups, without alienating older
consumers.
3. Nestls investment in a range of public relations activities through radio and the
national press.
4. A detailed point-of-sale campaign with attractive dump-bins in stores, and posters for
shop windows.
5. Field sales staff that were involved in a detailed communication exercise to raise
awareness in all forms of distribution channels.

Success of the Plan

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

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Within 6 months, more than 20 percent of the population of the UK had tried the product, and
repeat rates have been very high.
Both the quantitative and the qualitative objectives for the launch were quickly met. The most
successful aspect of the launch and subsequent marketing activity was that of revitalizing
interest in the Kit Kat line, particularly among the 12-20 year old age group. There was a clear
knock-on effect into other age groups and only a limited number of negative effects on the sale
of the traditional four-finger Kit Kat.

Our Recommendation
Kit Kat had a choice among four possible solutions (launch a new youth-oriented product/
introduce new variants/ new youth-based marketing activity/ lower price point). These choices
werent one or the other, meaning that the solutions could be combined in any manner for a
greater chance of success. Though Kit Kat was immensely successful following the first
solution, we would also recommend introducing different variants of Kit Kat Chunky. The
reasons behind this are as follows:
1. The success of the initial form of Kit Kat Chunky will help the new variants get greater
acceptance as well as generate more hype.
2. The target group of Kit Kat Chunky are more likely to try newer flavors and variants.
This also makes this solution better than introducing new variants of four-finger Kit
Kat as that is more popular with older customers.
3. This can aid in further revitalizing the Kit Kat brand to the 12-20 year old age group.

Final Conclusion
Proper market research and proceeding with a clear objective can rejuvenate a brand. The Kit
Kat Chunky success story provides one of the brightest recent examples of that.

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