Introduction
The report was commissioned by the Marketing Principles teacher. The goal of the study is to explore the opportunities for rebranding one of Nestlé’s products (the Kit Kat bar). The scope of the report includes the marketing mix and recommendations. The method of analysis involves the scrutiny of the current situation faced by Nestle.
Nestle has been known as the company of a massive influence that has cemented its position in the global market since the 19th century. The company has been enjoying wildly high popularity among customers from a range of cultural and ethnic backgrounds. Furthermore, Nestle has managed to adjust to the ever-changing realm of the global market once the process of globalization was launched (Nestle). Despite minor issues in the organization’s development, Nestle has been experiencing systemic economic growth, a significant amount of which the firm owes to its marketing strategy.
Among all of its products, the Kit Kat bar is the most interesting to consider. Although it has not received the giant corporate support to represent the organization, it is still easily recognizable, which can be attributed to the subtlety of changes made to the product’s image, i.e., the branding and marketing approaches.
KitKat Target Market Analysis
Product Strategy
Having been invented in 1935, Kit Kat has changed an array of images that were supposed to represent it in the target market. When considering what made Nestlé’s approach toward promoting the product, one must mention the fact that the company has been extraordinarily faithful to the original design of the candy. Instead of revamping it entirely in order to meet the tastes of new audiences, the organization introduced slight changes to the logo to make it look both contemporary and nostalgic. The specified decision allows Nestle to target two types of crowd at the same time, i.e., its devoted, loyal customers and a new audience that is unaware of the product.
For instance, one must mention that the color scheme of the product has remained the same throughout its existence. While the colors have been flipped several times, red and white remain the essential elements of the design. In a similar way, the font has also experienced very few changes. The specified decision allows Nestle to maintain its brand awareness levels high.
The flavor of Kit Kat has not changed significantly over the years of the product’s existence, and neither has its shape or size. On the one hand, the specified faithfulness to the original design makes the product easily recognizable. On the other hand, opportunities for introducing innovations to it are lost. The product can be placed in the category of shopping items since it cannot be regarded as irreplaceable, yet I actively bought it by target audiences.
The gastronomical experience and the brand image attached to Kit Kat (i.e., its broad appeal and the ostensibly invigorating effect) can be viewed as its core level. The candy bar itself is the tangible product, whereas the augmented part seems to be absent from it. Therefore, additional opportunities for expanding the specified part should be considered.
Target Market
The current approach used by |nestle to promote Kit Kat is admittedly successful, yet it might require further elaboration due to the issues in target audience segmentation. As stressed above, because of the need to retain loyal customers and acquire new ones, Nestle currently deploys the approach that primarily targets two audiences, i.e., the existing customer base and Millennials. As a result, Nestle omits a significant part of its target demographic. Thus, a better approach toward customer segmentation is required when reintroducing the product to the global market.
At present, the target market of the product consists of the people that have been loyal to the brand for decades and children. Other types of customers seem to choose other types of snacks, which implies that Kit Kat may need to rebrand itself to have a wider appeal. The specified characteristics of the target demographic do not align with Kit Kat’s current approach toward marketing itself since the bar is represented as a snack for men and women of all ages. Therefore, there is a strong need to incorporate the framework that could attract other customers.
The idea of Kit Kat being a snack that could be eaten during a break allows widening the target audience significantly. However, the limitations set by the current image and the range of tastes that the product offers make the target population rather narrow. Therefore, to meet the company’s statement, Nestle will need to alter its product slightly. Embracing the needs of larger audiences will require a profound analysis of the multicultural society in the global market.
Positioning Strategy
The current positioning strategy deployed by Nestle could use a significant improvement. Because of the comparatively small audience that it reaches present, new variations of Kit Kat will have to be introduced into the specified market. Exotic flavors that will appear to a broader range of consumers, including customers from diverse backgrounds, people of the different age range, etc., will have to be created. The specified alteration will have to be deemed as a crucial change since the current range of buyers is comparatively small and is largely driven by nostalgia.
Therefore, the new positioning approach will have to focus on not only viewing Kit Kat as an energy bar for all customers but also why it is enjoyed by any buyer. Particularly, the wide range of new flavors will need to be emphasized in the promotion campaign. Furthermore, low to medium prices will also have to be mentioned as one of the primary advantages of the product.
Price Strategy
The current price per bar is approximately $0.7. However, seeing that Kit Kat is sold in packages, the price per item ranges from $2.00 to $8.00. Although the identified approach toward setting prices seems quite legitimate, it will have to be reconsidered once new products are released. For instance, the bars that will include exotic ingredients may be sold at a higher price (e.g., $0.9-1.2 per bar), whereas the price for the standard bars may remain at the same level or be dropped slightly. As a result, the company’s revenues will boost since people will be eager to try new and exotic flavors first.
The approach to the pricing strategy will have to be twofold. A value-based framework will be utilized to sell new products that include exotic tastes. Traditional Kit Kat bars, in turn, will be sold at slightly lower prices, i.e., a competition-based framework will be integrated. The resulting rise in the firm’s profit margins is expected.
Promotion Strategy
When considering the appeals that will have to be used to encourage new audiences to buy the sweets, one will have to reconsider the types of appeals that are used to attract target populations. The combination of humor and the appeal to people’s common sense, which is currently adopted by the company, seems a legitimate tool to help people relate to the product. However, one must admit that, when attempting to attract as wider an audience as possible, one must use the language to which every potential buyer will relate.
Seeing that humor used by the company may seem hilarious to some buyers yet entirely mediocre and lackluster to others, it is best to avoid using the specified element as the primary tool for driving the audience’s attention to the product. Instead, one may consider placing a rational approach that will stress the unique characteristics of the bar at the forefront of the promotion campaign and adding several elements of humor in it so that the product does not seem devoid of fun.
For this purpose, a combination of traditional and modern media will have to be used. The use of social media as the means of promoting Kit Kat to a wider range of customers will have to be regarded as a necessity. Social networks such as Facebook, Twitter, Instagram, etc., will have to be utilized to make the product easily recognizable among new audiences. Furthermore, the use of social media will open a plethora of opportunities for communicating with customers more efficiently. Nestle will be able to collect information about people’s impressions, thus, learning what they liked or did not like about the bar. As a result, changes can be made to the product at the earliest stages of its development. The placement program will have to start with Facebook, then moving to Twitter and Instagram.
It will be a sensible idea to advertise the product at a medium frequency. Making commercials too obtrusive may lead to alienating them from more sensitive customers. Therefore, daily reminders of the product’s existence will suffice.
Place Strategy
Last but not least, the issue of product placing will have to be considered. As stressed above, it is important to demonstrate that Nestle values its innovative decisions high and expects customers to like the rebranded Kit Kat. The use of wholesale outlets as the areas where customers will be able to purchase the product seems to be the most sensible step to take.
Moreover, one may have to consider retaining the approach that has been used to sell Kit Kat over the past few years. The combination of a wholesaler- and retailer-based approach as the means of distributing the product and delivering it to the end customer is likely to produce the expected effect. However, when it comes to pushing the envelope of the company’s current place strategy, one will need to consider e-channel options.
The use of digital tools to deliver the product to target buyers may be deemed comparatively risky since it will imply breaking the connection that Nestle has established with its distributors. Nevertheless, it will be necessary to embrace new opportunities and incorporate e-selling into the current range of place strategies used by the firm. The identified approach will allow reducing costs for transportation since Kit Kats will be delivered to end customers without any intermediaries. Furthermore, a range of logistics-related issues, such as delays, difficulties in transportation such as damages made to the product, etc., will be avoided successfully.
To deliver Kit Kats to the end customer, one will have to use regional transportation services. Particularly, Nestle will have to search for the services of companies delivering food. After the product is delivered, it will be sold in local outlets. However, Nestle will also have to use the services of outlets such as Costco warehouses. Thus, a wide range of audiences will be targeted.
References
Nestle. Sharing Our Vision. 2009. Web.