This is the detailed analysis of Kit Kat by applying the Ansoff matrix framework which has been used to identify the opportunities in the industry by growing existing market share, exploiting untapped markets, develop new products/services and diversification.
Ansoff Matrix was introduced by the well-known American mathematician“Igor Ansoff”. It is a tool used by the companies which ensure the managers that the company can expand its business through the production of new goods and services in fresh or existing markets. This tool helps to determine the level of risk involved in the implementation of growth strategies.
Ansoff matrix is based on four promotional plans that focus on the production of new and existing products in new or existing markets.
Market Penetration
The process of increasing market share through the distribution of various goods and services among existing customers of the same market or by attracting new customers in the current market. Market penetration may be adapted in terms of price, design or quality. For instance, KitKat is planning to reposition its product in perspective of its design and presentation to penetrate in the market. KitKat has launched its new wraps campaign to present its product in a different or new manner that may give a refreshing look to the product and grabs the eye of the customer. According to Alexander Von Maillot, the net sales of KitKat chocolate bars are continue to grow more than one billion Swiss Francs. Due to9 percent expansion of sales in 2018, KitKat is strongly leading the competitive market. It has been observed that last year the company had sales of 8.123billion Swiss francs that mean 2.7percent of sales growth. The reason behind this extensive growth is the selling of good products at a low price. The chocolate company is selling a good quality product at a very reasonable price as compared to other industrial rivals (Reuters, 2019).
Market Development
This plan focuses on the introduction of existing products in fresh markets to increase sales and profitability. Companies may easily discover new customer base through market segmentation and market research. By considering the geographical distribution, KitKat is selling its product in Europe, the Middle East, China and many other parts of the world. However, the marketing campaign of the company that involves promotion through YouTube videos or other digital methods to promote is only present in Europe (Zayan, 2016).
Product Development
The plan to launch new goods and services in the current market to provide new variety to the customers. It is a fact that customers are always concerned about variety so product development helps the firm to retain its existing customers. Establishment of new plans to meet the customer’s requirements as well as to maintain a strong market position among the competitors. Product development through the production of fresh goods and services gives a refreshing touch to every business. The marketing campaign of KitKat is always based on product development strategy. Two new products have been introduced by KitKat to a limited extent, which contains KitKat 4 finger vanilla and KitKat chunky extra chocolate. The purpose of developing these two new varieties is to promote the business to expand sales and to offer something new to the buyers. Product development is the most effective strategy to promote and enhance business (Zayan, 2016).
Diversification
Introduction of the latest products and services in a very new market. The level of risk involved in diversification strategy is slightly higher than the others because the firm may have a chance to deal with certain hardships. Although, diversification is successful if all current activities are managed appropriately. KitKat has successfully introduced its chocolate bars in the Japanese market with the name of “Kitto Katsu”, however, it will always be written as KitKat which means ” Surely Win”. The logic behind this expression is to indicate someone that, success is due. A few years ago, the management of the company decided to enter into the Japanese market by adapting diversification strategy to expand its net income, and entered into the post office of japan and presented KitKat boxes ready to deliver and senders were able to write a message of good luck to receivers. The plan got successful and Japanese customers purchased those KitKat boxes to send to their loved ones. Recently, the company has announced to introduce green tea matcha flavored KitKat bars in Japan to offer a unique and different product to attract Japanese customers. However, it has decided to launch this variety in Europe in late February. This diversification strategy has helped the company to increase its sales (Pouret, 2015).
References
Kit Kat Marketing Strategy. (2016). Retrieved from http://www.selectmytutor.co.uk/article/159/kit-kat-marketing-strategy.html
Nestle says it is now well positioned in confectionery. (2019).
Pouret, M. (2015). KITKAT IN JAPAN, AN UNPRECEDENTED SUCCESS:. Retrieved from https://www.google.com/amp/s/fpsconnexion.wordpress.com/2014/11/05/kitkat-in-japan-an-unprecedented-success/amp/