Breaking up is hard to do. Has the UK fallen out of love with the KitKat? It was launched as Rowntree’s Chocolate Crisp in 1935 and renamed KitKat in 1937. The following year, it was the company’s most popular product. It first became a national favourite in the war years of the 1940s when the government endorsed it as a healthy cheap food. Ever since it has been the most popular chocolate bar in the UK. It was one of the main reasons behind the takeover of Rowntree by Nestle in 1989. It maintained its supremacy even faced with competition from Nestle’s own Smarties and Black Magic. According to the KitKat website, 47 bars are eaten every second in the UK.
However in 2003, sales fell by 5 percent from nearly $123 million in 2002 to $116 million by the end of 2003. “Saying the business is in crisis is extreme” argued consumer brands analyst, “but maintaining its position in the UK confectionery market is going to be a challenge. It’s a cutthroat market”. UK consumers eat $4 billion worth of chocolate a year. But analyst believe that saturation point has almost been reached.
Information resources statistics now suggest that KitKat has been overtaken by its rivals Diary Milk and the Mars Bar. Consumers may also be looking to healthier brands in the future. So how will the company react? To some extent it already has with the launch of KitKat Chunky in 1999 and KitKat Orange. And in the future it is considering launching lemon cheesecake KitKat, already a hit in Japan and Germany, as well as a curried flavoured version.
Using information from the article, draw and label the product life cycle for KitKat.
Identify significant periods in the product life cyle of KitKat using examples from the article.
Discuss how changes made in the future might affect the product lifecycle of KitKat.
Describe two marketing strategies that KitKat may have used during the introduction of the product.