Kitkat Case Study

The short product life cycle in this industry requires competitors to continuously evolve. This continual innovation is difficult for new entrants to achieve. Also, existing products, such as Apple’s iPhone, have built brand loyalty and associated switching costs for consumers, which pose as barriers to entry for new competitors.

“Every five minutes enough KitKats are manufactured to outstack the Eiffel Tower, while a year’s production would stretch around the London Underground more than 350 times and that every second, 418 KitKat fingers are consumed worldwide.” (http://www.nestleprofessional.com). The excerpt above is one of the evidence that Kit Kat is produced and consumed worldwide each day. Therefore, it is a global product. The manufacturing process is mainly associated with machine since it is used throughout the entire process in order to produce plenty of Kit Kat to distribute worldwide and to keep its standard. The process is started from the moment in which the cocoa beans are obtained, cleaned, molded into shape, to the point where the Kit Kat is in the package and later stored and awaits distribution. Human labor is only

First, Willy Wonka, the expert, states,”The inside of Kit Kats is like golf, nice and fun.” This supports my claim because the expert says that Kit Kats are nice and fun, like golf, played all around the world by many people. Another example is that the Kit Kat official website states,”When we did a worldwide survey on our website, 78% of people (1.1 Billion total) like kit kats because of the crispy inside.” This supports my answer because that out of 1.1 billion people most of them like Kit Kats because of their crispy inside. And Finally, based on the Kit Kat Survey of 2009 states,”a WHOPPING 99.99998% people would have Kit Kats because of the crispy inside” This quote supports my claim because this shows that a huge proportion of people would have a Kit Kats instead of the other choices. And this is another reason Kit Kats are the most supreme because of its crispy

In the product life cycle, All-round is found within the maturity stage. Here, sales increase at first but at a slower rate as the market introduces its competitors and increases competition. Sales and profit tend to decline towards the end of the maturity stage. In one strategy, it is important to maintain customer loyalty and satisfaction in order to maintain profitability within this stage. For example, promotional allowances and sales force relationships are essential in having this accomplished. Another strategy is reformulation of the product. All-round has not been reformulated but improvements on a routine basis to the product can help increase market growth.

This stage might be the most unpopular with companies. Sales decline and companies usually don’t spend as much on marketing for products on the decline. Companies usually make decisions to halt production, cut marketing programs and reintroduce the products. Sometimes this works, for example, Lacoste which rebounded and reinvented itself and sometimes it doesn’t, as with Circuit City.

Listed here are three different products in various stages of the product life cycle. What marketing strategies would you suggest to these companies? (a) Canon digital cameras--growth stage, (b) Hewlett Packard tablet computers--introductory stage, and (c) handheld manual can openers--decline stage.

The impact of product life cycle on marketing is that corporations must always plan products and offerings according to the life cycle. Especially in the durable goods market like motorcycles it is imperative than a manufacturer know the product life cycle in order to maintain market share or grow. In order to maximize life cycle revenues the company must maximize revenues and profits from all sources including warranties, spare parts, and accessories. Service is an integral part of a long product life cycle.

The BCG model is based on the product life cycle theory which can be used to determine which one of the product should be given the priority in the product portfolio of a business unit. It is usually based on the observations towards the company’s business units that it can be classified into four categories based on combinations of market growth and market share relative to the largest competitors that brings the name of “growth-share”. As to make sure that the long-term value creation is made, the company should have a specification of the products which contains both high-growth products in need of cash inputs and low-growth products that generate a lot of cash.

Brand building, consumer health and wellness, and advertising and promotions were all critical to success in the industry. Kraft’s ability to compete with lower priced snacks showed its ability to differentiate itself from other lower priced competitors.

However, marketers should not become complacent and they may seek to inject new life into the brand to prolong the growth stage and put off the onset of maturity. A mature product may need a facelift, and marketers must decide whether to support a declining brand or let it die a natural death.

Since an increasing number of people focus on brand names instead of product, brands become important elements for customers to choose products (Carroll, 2008). When customers trust the brand, the benefits for the manufactures are generated. In the first place, brands can be used by products as the tool to identify and differentiate themselves from various products. Secondly, brands are helpful for companies to build a competitive advantage (Bick, 2009). Therefore, organisations take more attention to branding.

Variants in the traditional chocolate bar first appeared in 1996 when "Kit Kat Orange", the first flavour variant, was introduced in the United Kingdom. Its success was followed by several varieties including mint and caramel, and in 1999 "Kit Kat Chunky" was launched and received favourably by international consumers. Variations on the traditional "Kit Kat" have continued to develop throughout the 2000s. In 2000 Nestlé acquired Fujiya’s share of the brand in Japan, and also expanded its marketplace in Japan, Russia, Turkey and Venezuela, in addition to markets in Eastern and Central Europe.[2] Throughout the decade 'Kit Kat' has introduced dozens of flavours and line extensions within specific consumer markets, and celebrated its 75th anniversary on 10th October 2009.

This report will cover the background understanding about the confectionery industry and do an in-depth analysis of the micro and macro environment. In addition, the market segmentation, market positioning and target market that Whittaker’s is concerned with is also discussed.

Marketing activities do not take place in a vacuum, and in developing the marketing mix the marketing environment must be taken into account. There may be legal/morale restrictions on advertising, for example cigarette companies are governed by huge restrictions on advertising their product, so they must find legal and morale ways of gaining consumer awareness. Also certain products have to pass health and safety standards, especially children's toys. In order to do this the design may have to be changed slightly, possibly moving away from the aim of consumer satisfaction. This suggests that it may be difficult and sometimes impossible to maintain the aim of consumer satisfaction, as there may be external factors prohibiting it. However it is the consumer who will inevitably decide the fate of a company, so a firm would do well to conduct its marketing activities as best it can with the consumer central and maintain a close and watchful eye on the dynamic nature of the macroenviroment and microenviroment.

A product form has reached this stage when it becomes clear the market is no longer able to sustain itself. Like the Maturity stage, the Decline stage may last a long time especially for products that have been adopted by a large percentage of the market who are not inclined to change how they satisfy their needs (i.e., Laggards). Since the end of the product form is seen as inevitable, there are no sub-stages here.