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Marketing Plan For Nestle Kit Kat

Nestle is going to launch Kit Kat Nuts which is extension to the existing Nestle Kit Kat
chocolate. Kit Kat Nuts will particularly target the young adult segment between the age of
22 to 40. Kit Kat Nuts has to compete with the well established chocolate brand like
Snickers and Cadbury Fruit and Nut, Cadbury whole Nut. The quality of the products
offered by Nestle to its customers will help to drive the sales of the Kit Kat Nuts.

Kit Kat Nuts has its goal to minimize the losses in the first year with increasing the product
awareness by huge promotional and marketing activity as well. In the second year it
estimated to achieve at least break even point and thereby kick start the growth in the sales
and profits.

(1)Individual Situation Analysis report


Nestle is worlds highly efficient nutrition, health and wellness provider. With head office in
Vevey, Switzerland it was founded in 1866 by Henri Nestle. Nestle company as a whole made up
of various others brands which offers various products such as coffee, water, ice cream, chilled
products, confectionary and chocolates, frozen foods, cereals etc. Nestle is delivering its product
services to almost all over the world which is mainly possible due to thorough knowledge and
understanding of the domestic nature of tastes, preferences and health of the people. Nestls
main source of income is food and beverages, in addition it produces pharmacy product as well
like Alcon. The food industry is very competitive field which means no company can feel
relaxation at any time, therefore Nestle has to consistently evaluate its performance and search
for the new ways of satisfying the customer needs. Nestle needs to carry on with its marketing
strategy of segmenting the customers and producing the product keeping in mind the trends and
demands of the product.

(1.1) Market summary:

Since Henri Nestle started its operation in 1867 as a milk food provider, Children are one of the
main targeted segments for the Nestle. In addition it spreads its market to adult and older people
as well by targeting them their specific tastes and preferences. Kit Kat nuts will specifically
target the adult people for the reason that children do not normally like the nuts but the adult
people do prefer the chocolates with some nuts in it. The segmented market will be targeted for
the near term say first two years and then after evaluating its performance it will be spread to
other segment accordingly.
Following table 1.1 summarizes needs and corresponding features/benefits of the Kit Kat nuts.

Segment

Customer need

Customer need

Corresponding feature /benefits

Young students

Healthy chocolate

Kit kat nuts includes peanu which provides healthy options

Working class

Hunger

Kit Kat nuts satisfies hunger needs by about 25% nuts in one product

Old People

Milk chocolate with some nuts

Kit Kat Nuts includes 50% milk chocolate with option to buy dark chocolate as well.

The competition in the confectionary market is so immense that Nestle has to match its every step with its
industry rivals for continuous and long term growth of the company.

(1.2) Strength, Weaknesses, Opportunity , Threat


analysis
Nestle is a well established company and got huge experience of about 150years of providing highly
qualified products. These facts provide great strength for the functioning in the competitive market.
Nestle got weakness as lack of success in the organic food industry. Nestle got major opportunity to
exploit their brand awareness in the market by launching new lines of products. The major threat consists
of competition form the near rivals.

Strength: Nestle got following strengths.

High market share: Nestle is delivering its product to almost all countries in the world. Globally its share
in the market is quite substantial. The first quarter sales of the year 2010 for the group were 26.3 billion
with 4.8% internal growth.
Branding: Nestle got ability to consistently keep the existing product in the mind of the consumer vis a
vis extending the product line to cover additional market share. Nestle has been successful in keeping
major brands from sleeping by renovating existing product lines.

Weaknesses:
Insufficient growth in organic food: Nestls growth in organic food is not significant. In fact it was flat in
2008, even though industry grew 8.9%.

Health and safety issues The FDA have been constantly examining the breakfast and cereals industry
from quite some time. They are of a view that false claims like heart healthy and lower cholesterol
should not exist on the packaging of the cereals.

Lack of presence in retail market: Nestle is lacking in somewhat as a presence in the retailing market. The
retailing section is very vital as most of the consumer go through the traditional shop for the day to day
buying and if there is no existence or less existence of the Nestle product the sales going to be suffered.

Opportunity:
Introducing more health products: As they are market leader, it can introduce more health based products
for the health conscious society. They are more likely to be successful because it is already accepted by
the people as a health and wellbeing company and they got the successful history behind them.

New acquisitions: Nestle is integrating in the developing economies with the help of new acquisitions of
businesses which provides them opportunity to enlarge their share in the market.

Opportunity in the emerging economies: There is vast amount of market in the new emerging economy
like china and India. Nestle got significant operation in the emerging countries like India, china and
Brazil.

Threats:
Competition: Nestle is competing with some of the big market giant like Cadbury(Kraft foods),
Kelloggs, Heinz, Starbucks, Hersheys etc .These industry rivals poses all time threat to the company to
put up its substitute product in the market. The FDA regulations In 2007 findings of the FDA suggests
that certain pet food item were the cause of the death of the cat and dogs. The outcome is that tougher
norms and regulations posed by the FDA for the import of the raw material from another country.
1.3 Competition
The confectionary industry is highly competitive in nature. It comprises of other world class chocolate
maker like Cadbury (now Kraft), Mars, Kelloggs etc. Nestls nearest rivals are Cadbury and mars. They
often introduced new lines of products that are difficult to copied or produce the similar product.

Following are the nearest competitors of the Nestle.

Cadbury: Cadbury is one of the strongest competitors which got tremendous variety of products with
significant market share. With the takeover of the Cadbury by Kraft which American base company, it
has been stronger than before. Cadbury got presence in almost each country in the world with the various
lines of products.

Mars: One more US based company which produces various lines like mars, snickers, galaxy, bounty etc.
Mars is not that much stronger competition as compared to Cadbury, but still it is starting to concentrate
on the growing market like India and China. With our product of Kit Kat Nuts the first rival is Snickers
which is being produced by Mars. As they got successful history behind providing the nuts product, it is
going to be challenging for the Nestle to enter into the market with the new line.

Kelloggs: Kelloggs is mainly competitive in the breakfast and cereal products and they are targeting the
customers by variety of nutritional products. Nestle has been competing with Kelloggs by its cereal line
like Cheerios, Minis, Choc Pic ets. Following table suggest the various competitor of the current product
under study and their pricing.

1.4 Product Offerings


Nestle kit kat which is the existing product of the company and one of the highly selling chocolate in the
world. Extending it to include the nuts to the chocolate will provide great additional feature to the existing
product. Following are the main features which will be offered by the Kit Kat Nuts.

New feature of nuts in the chocolate.

The nuts will be roasted and will be fresh.

Presence of caramel in between as well.

Extention of the both normal and dark chocolate.

Low amount of flavourings and maximum use of milk in the chocolate.


1.5 Distribution Channel
Mostly retailers are the main channel of distribution for the Nestle .Nestle is using other forms of
distribution like Supermarket Tesco and Asda for covering large market at one time.

While it is worthwhile to think out of the box here that is it not the good idea to open Nestls own chain
of stores around the market which will give company direct interaction with the consumer, decrease the
presence of the middleman and increase efficiency in delivering those products.

(2)Marketing Plan

(2.1) Marketing Strategy:


The marketing strategy of the product under study describes the objective of the product, what are the
target markets and how the target market is going to be targeted? Positioning and pricing strategy, how
the product is going to be distributed and advertising of the product.

Objectives:
As nestle is comparatively known to the market and already got healthiest brand in the market, following
objectives has been set for the new product line Kit Kat Nuts.

First year objective is to put maximum efforts towards familiarizing customers with the new line and try
to cover at least 5% of the market covered by the other rivals.

In the second year it is likely to introduce with new lines like kit Kat ginger. It is likely to show negligible
profit or even loss in the first year, but in the second year equilibrium or significant profit may be
achieved.

(B)Target Segments
*Market Segmentation is the process of dividing a market into subsections based on specific needs and
wants. These people will have similar reactions to products.

This will help marketers design their marketing mix (4 Ps!) (Kate Notes)

Nestls main targeted segment will be the working class adult because nuts can provide for hunger needs
with sufficient amount of calories in one chocolate. The secondary target will be older people as it can
prove worth for the older people to have some nuts with the chocolates. Other markets that may be
targeted are the young students studying in colleges and in universities. These segments then can be
targeted for the advertisements and promotional activity of the product.

It is important to note here that the segment created should be targeted using appropriate channel of
advertisements otherwise it can lead to unexpected results for the future.

It is vital to develop different strategy for the different group of persons for success of the new product
line.

(C)Positioning
Positioning means creating the position in the mind of the cusotomers. Positioning may be done mainly in
two ways.

(1)Differentiation: Differentiating current product with the other product on the bases of superior quality.

(2)Pricing: Setting competitive prices of the product so that creating position in the mind of the customer
e.g Reynar has created themselves as a cheap air service provider in the mind of customer.

For the product under review we will use differentiation strategy because Nestle got the image in the
market as nutrition, health and wellness provider so there is no need to compete on the bases of prices.

(D)Strategies
Product: Product strategy will particularly emphasized on how many lines of product to be introduced,
how the product should be packaged?, what kind of guarantee to be offered to the customer .

Kit Kat nuts will be packaged similar to the normal Kit Kat but additional feature of picture of almond on
the wrapper will be shown to pass the message to the customers that kit kat got nuts. In addition on the
back side of that there will be short questionnaire to be complete so that gathering the views form the
customers about the new product line.

Each packet will contain returned information if customer is not satisfied with the product.

Particularly Nuts word on the packaging will be highlighted in different colour to build up product
awareness and brand awareness among the customers to easily locate the Nestle Kit Kat brand.

For the first 6 months only Kit Kat 4 fingers will be extended to the new line, after assessing this short
term outcome it will be spread to the other lines of Kit Kat.
Pricing :
Pricing strategy highlights the various pricing strategy at various time of the product in the near term.

Kit Kat Nuts will be first sold to the wholesaler at the price of 13pound per box of 48 pieces and
estimated 50p price per unit by the retailer.

There will be promotional offers e.g get 48 for the price of 44 to be offered to the retailer to encourage
them to buy and stock the Kit Kat Nuts so that to increase the availability of the product for the
customers.

Distribution
Distribution strategy refers to determining the chain by which the product is going to be delivered to the
end user. We can choose from available two options (1) Direct distribution or (2) Indirect Distribution.

Indirect distribution is the only better option here as it is possible to reach wider market with the use of
retailers and Supermarket than having specialized stores at one location.

Most of the competitor is also using the indirect channel of distribution for the better service and
availability of the product. Wholesalers and Supermarket will also be able to put the order online on the
companys website.

Marketing Communications
The Communication with the targeted market is vital element of the strategy part. By the proper
communication with the targeted segment and with the distributing channels better results and partnership
can be buildup with agents or middle people.

communication with the targeted segment and with the distributing channels better results and partnership
can be buildup with agents or middle people.

The retailers and other middle persons will be using push strategy by employing personal sale through the
specialists sales persons. Further sales promotion activity like camp gathering and stall activity to actively
communicate with the customers directly and bring there views and advises.

By delivering messages through media and available communications resources, differentiation will be
made between Kit Kat Nuts and the rivals product.
Advertisement: There will be huge investment on the advertisement by Nestle.e.g The product is going to
be launched in the moth of july which come across with the Football World cup, so advertisement will be
made showing Football stars eating chocolates for hunger needs when one of the footballer being hungry
form playing long football.

(E)Marketing mix:
Nestle Kit Kat Nuts will be introduced in July. Research outcomes will be gathered and accordingly the
following various actions at various times will be taken.

Initial set-up: It is going to be huge sales and promotional activities to be carried out in the months of
May and June. Personal distribution of the template showing introduction of the Kit Kat Nuts will be
introduced. Sample distribution will be undertaken to educate dealers and wholesalers to set-up the
product launch in the july

of May and June. Personal distribution of the template showing introduction of the Kit Kat Nuts will be
introduced. Sample distribution will be undertaken to educate dealers and wholesalers to set-up the
product launch in the july

1st quarter (July-sept): We will immediately start advertising our new product mainly through TV/ media.
We will use other print media as well e.g Big Hoardings on the main roads showing new Kit Kat Nuts.

2nd quarter (Oct-Dec): As customers get familiar with Kit Kat Nuts, more sales promotion activity will be
done by putting prizes under the wrapper, thereby encouraging the customers to buy more of the product.
Christmas offers will be made to boost sales and brand awareness among the customers.

3rd quarter (Jan-March): We will introduce New Year sales for quick generating of the sales turnover and
increasing market share and brand awareness.

Last quarter(April-June):

For the first ending year there will be special offers to be made to wholesalers and collaboration will be
made with the Supermarket to kick start the new promotional activity for last gasp increase in the sales for
the first year ending.

(F)Marketing Research:
By using a well designed, well executed form of marketing research and data
collection, decision makers will have the best quality information at hand and will
be able to make informed decisions for the product and the company. (Kate Notes)
(2.2)Financial matters
Financial matters are the estimated forecast of the sales and expenditure of the company using suitable
method of statistics.

In the starting year of operation sales revenue is expected 30million pound, with an average wholesale
price of 40p and variable cost per unit 20p for units sale of 7.5million and with the fixed cost of 20million
pound. It is anticipated to show a net loss of 5million pound in the first year. The Net loss in the first year
is mainly due to the higher material cost and heavy advertisement expenses for the promotion and
distribution of the new product in the market. But the situation is expected to improve in the second year
because of fewer expenses on the advertisement and increase in the sales revenue.

At the end of the second year it is expected to achieve break even point or to achieve better than expected
result by showing Net profit. The estimated sales for the second year is expected to 40million pound at
the wholesale price of 40p with the variable cost at18p and fixed cost similar to the previous year at 20
million pound by selling 100 million units so that to show net profit of 2 million.

(2.3) Controls:
There may be time when company does not achieve the desired results in the near term, but that is not the
end of the world. The actual result will be compared with the budgeted or expected results and the
difference may be put forward in the meeting of the senior executives or marketing department.

Controls are being performed for the better implementation and organization of the marketing activities.

Implementation: Control measures have been monitored to effectively understand any deviation from the
planned action, to efficiently locate the causes for the difference in the action and actual outcome and to
take corrective steps. These will ensure that customer satisfaction is being given due importance and that
quality standards have been maintained.

Marketing Organization Marketing organization may be created for the effective implementation of the
action plan. Marketing department may be organized by function or by geography, product, and customer.
Deanship of Graduate Studies
Department Of Business Administration

MARKETING Management
Dr. Salah Odeh

Student Name Muammar Farhanah


Student No. 111532
Marketing Plan For Nestle Kit Kat

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