Harvard Case - Nestle KITKAT in Japan (A): Sparking a Cultural Revolution
"Nestle KITKAT in Japan (A): Sparking a Cultural Revolution" Harvard business case study is written by Philip Sugai, Adrian Sossna. It deals with the challenges in the field of Marketing. The case study is 12 page(s) long and it was first published on : Jul 14, 2017
At Fern Fort University, we recommend Nestl' leverage its existing brand equity and cultural relevance in Japan to further solidify its position as a leader in the confectionery market. This can be achieved by implementing a multi-pronged strategy focused on innovation, digital marketing, and consumer engagement, while maintaining a strong commitment to corporate social responsibility.
2. Background
The case study focuses on Nestl''s efforts to revitalize the KITKAT brand in Japan, a market where it had previously struggled to gain traction. Despite being a global success, KITKAT faced challenges in Japan due to a perception of being a 'foreign' product and a lack of cultural relevance. The case highlights Nestl''s successful strategy of re-positioning KITKAT as a culturally relevant brand through innovative product launches, targeted marketing campaigns, and strategic partnerships.
The main protagonists of the case are:
- Nestl' Japan: The subsidiary responsible for implementing the KITKAT revitalization strategy.
- The Japanese consumer: The target audience for the re-positioning effort.
- The KITKAT team: The internal team responsible for developing and executing the new marketing strategy.
3. Analysis of the Case Study
To analyze the case, we utilize the Marketing Mix (4Ps) framework and consider the impact of the following factors:
Product:
- Innovation: Nestl' successfully leveraged product innovation to create culturally relevant KITKAT variations, such as matcha, wasabi, and seasonal flavors. This approach appealed to Japanese consumer preferences and created a sense of novelty.
- Product Lifecycle Management: Recognizing the importance of maintaining consumer interest, Nestl' implemented a strategy of continuous product launches and limited-edition variations, ensuring a constant stream of new offerings.
Price:
- Pricing Strategy: Nestl' adopted a premium pricing strategy for its unique and innovative KITKAT flavors. This positioned the brand as a desirable and high-quality product, further enhancing its appeal.
Place:
- Distribution Channels: Nestl' leveraged a wide range of distribution channels, including convenience stores, supermarkets, and online retailers, ensuring widespread accessibility for consumers.
Promotion:
- Marketing Strategy: Nestl' implemented a multi-faceted marketing strategy, utilizing digital marketing, social media, advertising campaigns, and consumer engagement initiatives to connect with the target audience.
- Branding: The 'Have a Break, Have a KITKAT' slogan was adapted to resonate with Japanese culture, using phrases like 'Have a Break, Have a KITKAT with your loved ones.' This localized approach further strengthened the brand's connection with consumers.
- Consumer Behavior Analysis: Nestl' conducted extensive market research to understand Japanese consumer preferences and cultural nuances, informing their product development and marketing strategies.
- Competitive Analysis: Nestl' carefully analyzed the competitive landscape, identifying opportunities to differentiate KITKAT from other confectionery brands.
Other Key Factors:
- Corporate Social Responsibility: Nestl''s commitment to supporting local communities and promoting sustainability further enhanced the brand's image and fostered positive consumer sentiment.
- Technology and Analytics: Nestl' utilized data analytics to track consumer behavior, optimize marketing campaigns, and inform product development decisions.
4. Recommendations
Based on the case study analysis, we recommend the following actions for Nestl' to further strengthen its position in the Japanese confectionery market:
- Continue product innovation: Focus on developing new and exciting flavors, leveraging local ingredients and cultural trends. Explore collaborations with Japanese artisans and food companies to create unique and limited-edition offerings.
- Enhance digital marketing efforts: Leverage social media platforms, influencer marketing, and online advertising to reach a wider audience and engage with consumers. Develop interactive campaigns that encourage user-generated content and foster a sense of community around the KITKAT brand.
- Strengthen customer relationship management: Develop loyalty programs and personalized marketing initiatives to reward repeat customers and build stronger relationships. Utilize data analytics to understand customer preferences and tailor marketing messages accordingly.
- Expand into new market segments: Explore opportunities to introduce KITKAT to new target groups, such as health-conscious consumers or those seeking premium chocolate experiences. This could involve developing new product lines or partnerships with complementary businesses.
- Maintain a strong commitment to corporate social responsibility: Continue supporting local communities and promoting sustainable practices. This will further enhance the brand's image and attract consumers who value ethical and responsible businesses.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: Nestl''s core competencies in product development, marketing, and distribution, combined with its commitment to innovation and consumer satisfaction, make these recommendations aligned with its overall mission.
- External customers and internal clients: The recommendations address the needs and preferences of Japanese consumers, while also providing clear direction for internal teams to execute the strategy.
- Competitors: The recommendations aim to differentiate KITKAT from competitors by focusing on innovation, digital marketing, and customer engagement, creating a competitive advantage in the Japanese market.
- Attractiveness ' quantitative measures: The recommendations are expected to drive increased sales, market share, and brand loyalty, leading to a positive return on investment.
6. Conclusion
By embracing innovation, leveraging digital marketing, and fostering strong customer relationships, Nestl' can solidify its position as a leading confectionery brand in Japan. The company's commitment to corporate social responsibility will further enhance its image and attract a loyal customer base.
7. Discussion
Other Alternatives:
- Focus solely on traditional marketing channels: This approach may be less effective in reaching younger generations and engaging with digitally-savvy consumers.
- Adopt a lower price point: This could lead to a perception of lower quality and undermine the brand's premium positioning.
Risks and Key Assumptions:
- Consumer preferences may shift: Nestl' must constantly monitor consumer trends and adapt its product offerings and marketing strategies accordingly.
- Competition may intensify: Nestl' must remain vigilant about competitor activities and proactively respond to any threats.
8. Next Steps
- Develop a detailed implementation plan: Outline specific actions, timelines, and responsible parties for each recommendation.
- Allocate resources: Secure the necessary budget and personnel to execute the strategy.
- Monitor progress and adjust as needed: Track key performance indicators and make adjustments to the strategy based on data and market feedback.
By taking these steps, Nestl' can ensure the continued success of the KITKAT brand in Japan and solidify its position as a leader in the confectionery market.
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Case Description
In 2008, the marketing manager for Nestle Japan's confectionery business and his team were struggling to redefine the KITKAT brand within the Japanese market. KITKAT as a brand faced a real threat as the retail environment rapidly shifted toward increasingly powerful convenience store chains and consumer preferences shifted toward more novel consumable products. With more than 200 companies competing within Japan's crowded and relatively stable confectionery market, Nestle Japan was facing the harsh realities of Japan's famed position as the world's toughest consumer market. To address these challenges, Nestle Japan worked over 15 years to instill deep meaning in the KITKAT brand and then, based upon this foundation, created a comprehensive product portfolio. How can KITKAT capitalize on its past success as it moves forward?
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