Introduction:

Most of us love chocolate in one form or another and every week a typical UK
citizenspends around 1.80 on it. Amazingly, UK consumershave a choi ce of over
5, 000chocol at e l i nes avai l abl e f r om 150, 000 out l et s . Becaus e i t i s s o
wi del y and r eadi l yavailable, i tend to take chocolate for granted, and few of us probably ever consider
what isinvolved in producing it. .The UK has long been a major manufacturer (and consumer) of
chocolate products. Allover the world you will find prominent brandsfirst developed in the UK
e.g. Smarties,Dairy Milk, Aero and of cmyse Kit Kat (the UK's Number 1 selling confectionery
brandsince 1985).Three producers dominate the chocolatemarket. Cadbury with around 28% while Mars
and Nestl each have around 24%.Salesof milk chocolate (96%) predominate, with plain andwhite
chocolate accounting for about 2% each. Boxed chocolates such asQualityStreetmake up 15% of
the confectionery market. Blocks and bars like Kit Kat and Yorkieaccount for 65% and
bitesize chocolates e.g. Smarties and Rolo make up 10%. Easter eggsare another big seller, accounting for 5% of
the market.The UK's chocolate industry is over 150 years old. Chocolate manufacture provides
steadyempl oyment and j ob s ecur i t y f or t ens of t hous ands of empl oyees i n
manuf act ur i nglocations like York and Birmingham. The industry also generates
jobs inmarketing,administration, transport and storage. Chocolate sales are an important smyce of income
for many retailersKit Kat was launched in 1937. Since then, it has consistently been one of the best
sellingchocolate bars on themarketand has acquired an instantly recognizablebrandname and identity. In 1997,
Britishsalesof Kit Kat amounted to some 227 million, which made iteasily the most popular confectionery
product on the market. Forty-fmy Kit Kats areconsumed every second in the UK T h e UK
c o n f e c t i o n e r y ma r k e t i s wo r t h o v e r 5 b i l l i o n p e r a n n u m a n d i s
h i g h l y competitive. It continues to be dominated by large, well-established names -
highlightingthe importance to firms of creating brand identities for their products.
Once created,however, a brand name needs constant maintenance. Kit Kat's ability to remain
a brand leader over sixty years is no accident. The longtermmaintenance of a brand name requires continuous
monitoring andinvestment. Brand image must be seen as a dynamic, not a1




















Developing and Implementing Product StrategiesKit Kat
static factor; the same consumer perceptions that createbrand loyaltycan also turn againsta product that fails to
adjust and adapt to changingattitudes.This case study focuses on Nestl's Kit Kat and the long-term brand name
maintenancestrategies, which have sustained Kit Kat'spositionas amarket leader for over sixty years. The major
stakeholders
in are:

shareholders, who want adividendfrom profits

employees, who want job security and the necessarytraininganddevelopmentto allow them to further their careers
with Nestl

consumers,who want products that better meet their needs, that are available in theright places and at the rightprice

business partners, who want long-termand trusted relationships

local and national economies within which Nestl operates.
Kit Kat corporate objectives:
It is vital to any firm that itsmarketing objectivesare compatible with the overallcorporate objectives. In
selecting corporate objectives andstrategy,a firm might wish to refer to the Boston Matrix,Ansoff 's
Matrix or use a simpleSWOT analysisto establish where the companyis and in which direction
it wishes to head. For example, a company planningto consolidate its positionwithin a national
market might set very different objectives for themarketing of its products to a company wishing
to expand into international markets. Thisin turn would affect the marketing tactics each company might
employ. Nestle corporate objective is to be the world's largest and best branded food
manufacturer,whilst ensuring that the Nestl name issynonymouswith products of the highestquality. In recent
years, the company has pursued a policyof expansion anddiversificationthrough
acquisitionanddivestmentto achieve a more balanced structure to the business. Global brandnames can achieve
substantial production and purchasingeconomies of scale and, as world travel increases, so does the
importance of instantly recognizable products.With a product portfoliowhich includes eight of the
thirty top selling confectionery brands, such as Quality Street, Aero, Smarties, Polo and Rowntree's Fruit
Pastilles, Milky Bar andAfter Eight, it is extremely important that themarketing objectivesfor each
product lineare fully compatible with the overall objectives of the company as a whole. Like any groupof
i ndi vi dual s , each pr oduct has i t s own char ac t er , s t r engt hs and weaknes s es
andconsequently, the marketing objectives of each product need to be specifically
tailored. C o r p o r a t e L e v e l No Longer Just Chocolate
Acquisitions B u s i n e s s L e v e l Differentiation F u n c t i o n a l L e v e l











Kit Kat , slender crispy wafer fingers covered with creamy milk chocolate. In January 2010,
Kit Kat, Nestlsleading confectionery brand and the UKs favorite chocolate biscuit bar, was
certified by Fairtrade in the UK and Ireland.

TheKit Kat range

Kit KatPop Choc : Kit Kat Pop Choc are delicious bitesize pieces of famous Kit Kat wafer
coated in milkchocolate. Containing no artificial colours, flavours or preservatives, the new
sharing bag also features LOVE TO SHARE branding in keeping with the refreshed Nestl
chocolate sharing bag range.


Kit Kat 2 Finger : Two Finger Kit Kat is the UK's number one biscuit. The 2 Finger Kit Kat was
launchedin the 1930s alongside the 4 Finger variant, and has remained a best selling biscuit
brand ever since. Inthe beginning, the 2 Finger Kit Kat was only produced as a milk variant, but
is now available in Milk, Mint,Orange, Dark and Cookies and Cream. Annually we sell enough 2
Finger Kit Kat to go round the worldmore than one and a half times! Have a break with two
crispy wafer fingers covered with milk chocolate,Kit Kat contains 107 Calories and no artificial
colours, flavours or preservatives - a great lunchbox treat

Within the KIT KAT range you can also find the following:

Kit Kat 2 finger Milk, Orange, Mint, Dark and Cookies and Cream

Kit Kat 4 Finger Milk and 70% Dark

Kit Kat Chunky Milk and Peanut Butter

Kit Kat Chunky Duo Milk


















Marketing Cost:

Cadbury - 18% of total cost of production.Nestle- 12% of total cost of production.
Nestle is the world's leading Nutrition, Health and Wellness Company. The Company is
committedto increasing the nutritional value of its products while improving the taste.
Nestls corporate objective is to be the worlds largest and best branded food manufacturer,
Nestles Kit Kat aspires to be a leading global confectionery brand. Kit Kat is produced within
21 countries few of them are : US, Canada, UK, Germany, Bulgaria, Russia, Turkey, Dubai,
South Africa,India, Malaysia, Japan and Australia.