Nestle's Kit Kat Bars Give Consumers An RtB In Japan

from the you-will-surely-win dept

Thu, Nov 5th 2009 10:44pm — Michael Ho

Techdirt reader Kathy writes in to let us know about the 200 different flavors of Kit Kat candy bars in Japan. Public Radio International describes how Nestle has developed an interesting sales strategy in Japan where the competition among retailers is apparently so great that stores benefit from constantly updating their shelves with new products. In such a marketplace, Nestle has adopted numerous varieties of its Kit Kat candy bars that can only be purchased in certain locations or at specific times of the year. So instead of trying to peddle the same merchandise to everyone, Nestle has effectively given consumers a reason to buy (RtB) -- by making limited edition flavors and targeting the local tastes and customs in Japan. Nestle caters to Japan's omiage gift-giving culture (where friends are expected to bring back unique trinkets when they travel) with regional Kit Kats. So for example, a potato-flavored version is only sold in the northern part of Japan known for its potatoes, so northerners (or traveling southerners) can give out unique treats that aren't available nationwide. And all over Japan, the candy bars have also been packaged with mailing labels -- so that the candy can be sent as "good luck" charms. Due to the ingenious connection to the Japanese words Kitto Katsu which mean "you will surely win", the "good luck" symbol for Kit Kats in Japan was also successfully manufactured and marketed and as a result, Kit Kats have been popular with exam-taking students who seem to want good luck, however they can get it.

Clearly, Nestle must be admired for its efforts to connect with candy fans. And it's particularly brilliant to see them bundle candy bars as good luck charms -- a story that adds intangible value to the otherwise ordinary snacks. Perhaps it's only a matter of time before some artists write some flavor-inspired songs/plays/films and try to sell loooots of Kit Kats, too.

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Filed Under: japan, kit kat, reason to buy, rtb
Companies: nestle

35 Comments

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keven sutton, 5 Nov 2009 @ 11:16pm

Regional Flavors
I could totally see this working in America/UK/Canada if Nestle's branches allowed regions to come up with their own flavors that they can be known for. The biggest hurdle would probably be convincing the older management that consistency doesn't necessarily equal highest sales. The amount of research and chemistry that they would be paying for would probably be quite a bit greater than what they are paying now (for the single flavor), but the pay-off would be regional loyalty and unique experiences for their customers.

you could even allow out of region special orders if you had a vendor that so desired the flavor of Texas in Maine, or Scotch flavored kit kats..... well anywhere really :)
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Michael Ho (profile), 5 Nov 2009 @ 11:51pm

Actually... I want some crazy Japanese flavors now.
Some of the flavors sound really interesting... How much would Americans pay to get limited-edition Japanese flavors? Maybe those mailing labels should offer international shipping!
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ChadBroChill (profile), 6 Nov 2009 @ 12:22am

Nestle's Kit Kat Bars Give Consumers An RtB In Japan
I read this as "an reason to buy".
I propose a swift edit! Who's with me!?!?!¿
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Chucklebutte (profile), 6 Nov 2009 @ 12:25am

As always....
North America gets shitted on. Japan always has the coolest stuff while America gets meh, its always meh! This country is based on consumerism, one would assume we would want all the cool stuff Japan gets, but I guess I am just insane.
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formulaic247, 6 Nov 2009 @ 12:48am

Re: Actually... I want some crazy Japanese flavors now.
about $2 plus shipping at jlist.com

lots of awesome flavors available
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Luci, 6 Nov 2009 @ 12:55am

Re: As always....
That's because 'meh' sells to the largest percentage of the sheeple.
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Teufel, 6 Nov 2009 @ 1:21am

Eh? This sounds like region encoding for KitKat bars...
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cc, 6 Nov 2009 @ 1:42am

that's how most things are in japan. seasonal flavors and regional specialties.
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Griff (profile), 6 Nov 2009 @ 2:17am

The great American franchise operation
An example springs to mind. The "Build a bear" stores that have opened now in the UK allow a child to construct their own bear including putting a voicebox in. Kids in Wales asked if they could get pre-recoprded phrases in Welsh. They were told no, you can't even have English without the US accent.

I once hear some idiot from the music industry explaining that personalising music (ie water marking on a mail order CD as a non obtrusive form of tracking who might be uploading) would be too expensive. Put another way, they won't add 10c to the cost of what they sell for $15 however much it could be better for them in the long run.

This sort of cheapness is why the archetypal US conglomerate will be beaten by more nimble mindsets. We've all heard stories of how the marketing depts in US car companies keep trying to insist on worldwide car model names
(The Opel Corsa in mainland Europe is the Vauxhall Nova in UK. They almost launched in Spain with "Nova" = "doesn't go").

And of course GM would rather lobby for lower emission standards than just innovate and keep up with Toyota on the world stage. It's what you get when you have a single fairly homogenous market in your back yard that is so big you THINK that you can survive by ignoring the rest of the world altogether. Not something a Luxembourg based company would ever suffer from...
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formulaic247, 6 Nov 2009 @ 2:35am

Re: As always....
If you're not lucky enough to live near a boutique shop that specializes in the less mainstream consumer fodder, then use the internet. There are plenty of websites that import at pretty decent prices.
I wouldn't say we US citizens get 'shitted' on just because most retail stores cater to the mainstream. Go to any tourist trap gas station and you'll find off the wall stuff that you'd never find in Japan. I personally don't see the attraction to having access to potato flavored candy bars but I have seen foreigners go nuts over lollipops with baby scorpions inside.
The grass is always greener, I suppose...
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Anonymous Coward, 6 Nov 2009 @ 3:15am

This isn't a CwF RtB thing, it is something that has been going on in Japan for a very long time. You can get almost everything, from Tea to Beef, in regional flavors or presentations. Kobe Beef, anyone?

It's just normal business in Japan, nothing more.
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DS, 6 Nov 2009 @ 3:57am

Re: Re: As always....
By Sheeple, you mean idiots who use the words sheeple thinking that they are cool, correct?
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Anonymous Coward, 6 Nov 2009 @ 4:09am

Re: Re: Re: As always....
Shut up you sheeple
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Anonymous Coward, 6 Nov 2009 @ 5:21am

Nestle is an amazing company. In each region they have "regional" version of their products (at least in Latin America). I thought Nestle an Argentinian company (silly me) until I saw their local offerings elsewhere and I have chilean, peruvian and uruguayan friends who thought it was a chilean, peruvian or uruguayan company, respectively, because of their local offerings. Their skill imho is understanding where they are selling and being able to make you feel a part of their products, always.
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Haywood, 6 Nov 2009 @ 5:40am

Artifical scarcity?
"its Kit Kat candy bars that can only be purchased in certain locations or at specific times of the year."

Don't we sometimes rail against that?
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JEDIDIAH, 6 Nov 2009 @ 6:00am

Re: Actually... I want some crazy Japanese flavors now.
They already sell European candy in the states pretty widely. This includes British KitKats. The local Asian grocery might already have these for sale.

Dunno if there would be much demand in general for the Japanese oddball KitKat flavors though. They certainly are interesting.

Those little "ice cream" machines that are everywhere would be a far better import. They could even include the Green Tea and Sweet Potato flavors.
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JEDIDIAH, 6 Nov 2009 @ 6:05am

Re: Artifical scarcity?
The candy I bring home from Tokyo and Osaka still remains useful despite the fact that I am not in the "enforced" area any more. It's not the same thing at all. Some things are simply a matter of seasonal or local taste like eggnog or cranberry sauce.

Baskin Robbins is more than free to try and sell my neighbors Green Tea ice cream. I think it would be a real hoot actually.
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Eponymous Coward, AKA Doug (profile), 6 Nov 2009 @ 6:30am

Re: As always....
Agreed. Maybe the sheer density of population in Japan makes the niche marketing of so many unique items more feasible, maybe the Japanese are just more willing to embrace the unique. Maybe the heads of companies in the US are just so scared to try something new (new Coke, Crystal Pepsi, dog food flavored Cheetos, etc.) that they almost always defer to lowest common denominator products, ensuring that, while all you can get is vanilla, you can sure as hell get that vanilla everywhere.

Oh, and let's be a bit continental in our verbiage, and say that North America gets shat upon. It just sounds like a more erudite BM.
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azuravian (profile), 6 Nov 2009 @ 9:46am

Re: Nestle's Kit Kat Bars Give Consumers An RtB In Japan
Not according to the rules of English I learned. When using acronyms, the choice of indefinite article is determined by the sound of pronouncing the first letter.
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Matt S (profile), 6 Nov 2009 @ 9:56am

Reason to ...
To me this sounds like a reason to avoid Kit Kat, rather than a reason to buy, but to each there own. 200 different varieties is a bit of choice overload.
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hegemon13, 6 Nov 2009 @ 10:00am

Re: Re: Re: As always....
Thank you. I don't think most commentors realize how utterly arrogant and self-serving they sound when using such terms. By grouping most other humans in a category they place below themselves in worth, you don't make a point. You sound like a know-it-all, holier-than-thou asshole that instantly alienates most of your readers.
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hegemon13, 6 Nov 2009 @ 10:01am

Re: Re: Re: Re: As always....
Oops, I switched pronouns. It should read:

"...they don't make a point. They sound like...most of their readers."
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Anti-hershey, 6 Nov 2009 @ 10:20am

The real reason to buy....
...is that it's not the crappy Hershey licensed ones you get in the U.S. The chocolate is better when it's Nestle's chocolate, like you find in Canada...marginally, but enough to make a difference.
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Anonymous Coward, 6 Nov 2009 @ 12:17pm

Re: Artifical scarcity?
But it is scarce. If they don't produce it, it doesn't exist. Real scarcity.

Forced scarcity is not the same as Artificial scarcity.

Artificial scarcity is when something is when you try to pretend that supply is far lower than it really is. Music is scarce only when its not produced, but the moment a song is released, the supply becomes infinite.
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However reads this is stupid (except me), 6 Nov 2009 @ 1:16pm

Why not give away the Kit Kats and sell Kit Kat t-shirts?

Funny, I would have thought the "reason to buy" a candy bar was because one wanted a candy bar???!!!
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brandnews, 6 Nov 2009 @ 2:01pm

Re:
agree with cc. it is not only about KitKat. For instance, Pepsi is the same: seasonal Pepsi Shiso, Pepsi White with yoghurt, etc. but of course, the “kitto katsu” concept gives KitKat a good drive
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Kathy (profile), 6 Nov 2009 @ 2:42pm

Re:
I disagree (I sent in the article).
Kit Kat could do business as usual and perhaps try to create "exclusivity" arrangements with vendors (windowing arrangements) that would force out competition (as the music and movie industry has done here in the United States - take the attacks on Red Box as an example.) Instead - they have capitalized on innovating to attract attention. Mailing candy bars was a true innovation in this story that sets them apart. They have adapted to a changing market with new strategies that DON'T minimize choice.
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nasch (profile), 6 Nov 2009 @ 3:21pm

Re:
This isn't a CwF RtB thing, it is something that has been going on in Japan for a very long time.

Not new does not imply not CwF/RtB. Mike never said CwF/RtB is a new idea, it's just something a lot of businesses STILL haven't figured out.
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Kathy (profile), 6 Nov 2009 @ 4:29pm

Re: Re:
But aren't we really just talking about two of the same things. Candy bars don't change anything except flavors. Movies don't change except plot. Kit Kat is innovating and "connecting with fans" by creating a "reason to buy" such as mailing them to share with friends. The fans say "we want to be able to share them because that's our culture" - Kit Kat responds buy doing what they did and creating a mailable bar. If other bars cannot be mailed - then it gives them a "reason to buy".

This is a TEXTBOOK example of using a societal aspect we all have now (the need to share things like our music and media) and applying it to candy bars. It's beautiful in it's application. What if modern media in America did the same thing and provided us a reason to want to buy their product? They don't - they keep trying to limit it's use.
Give me a reason to buy a CD and I will. Set it apart. Make it different from an online download. KitKat = CWFRTB all the way.
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Suzanne Lainson (profile), 6 Nov 2009 @ 10:37pm

Re: Re: Re:
What if modern media in America did the same thing and provided us a reason to want to buy their product? They don't - they keep trying to limit it's use.

Give me a reason to buy a CD and I will. Set it apart. Make it different from an online download. KitKat = CWFRTB all the way.

I'm curious. If a CD came in a variety of different designs to reflect different regions, and it was easily mailable, would you buy it? Or does the concept just work for you if it's a candy bar?
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brandnews, 7 Nov 2009 @ 12:55am

Re: Re:
sure, the “kitto katsu” application to mailing or to special products for students (which make possible to check, if they will be lucky passing their exams) are really brilliant. of course, it has the huge meaning. but, writing about brands’ news, I often notice, that many brands in Japan have a high frequency of introducing seasonal, regional or limited edition products. may be, not so high, as KitKat, but it is a feature of this market.
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Kathy (profile), 7 Nov 2009 @ 6:05am

Re: Re: Re: Re:
It's connecting and innovation that matter - not the specific characteristics or any hypothetical attribute in a given market. You are transposing candy bars and CD's in your example - not a good one. Look at the overall theme of making your product stand out by giving people incentives to choose your product, or BUY your product (such as a digital download purchases instead of torrenting).
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Suzanne Lainson (profile), 7 Nov 2009 @ 10:22am

Re: Re: Re: Re: Re:
Look at the overall theme of making your product stand out by giving people incentives to choose your product,

Well, we're all looking for that.

The challenge is figuring out what people will buy and why. That's why I try to explore the examples in far more depth.

So what about the KitKat example works and what wouldn't. Probably the closest success story I can think of would be Beanie Babies. In the beginning people bought them because they thought they were cute and collectible. After awhile an investment mania took over, but eventually that bubble burst.

Japan seems to be good with the "cuteness" factor. I follow someone on Twitter who sells very cute erasers made in Japan in a variety of shapes -- like ones that look like sushi.

So I am asking, what makes regional limited edition KitKat's more intriguing than regional CDs? Is that there is such a glut in CDs, even ones that might be cleverly packaged, that we can't even give them away?
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Suzanne Lainson (profile), 7 Nov 2009 @ 12:36pm

Incremental sales
I'll toss this out.

I asked why making limited edition regional KitKat's might be more effective than limited edition regional CDs in clever packages.

One answer, of course, is that we are talking about candy versus CDs. People may like candy more than CDs.

So candy may be inherently more salable than CDs.

Therefore, to judge the effectiveness of the KitKat concept, we'd need to look at sales rates of KitKats in a standard variety versus sales of the limited edition variety. It may turn out that in some markets, like the US, the additional cost for making the varieties may not be justified. On the other hand, if the promotional value of the varieties increases overall sales of KitKats even if the limited editions have a lower profitability margin, then they may be worth doing.

Another factor to consider, as some have pointed out, is that creating regional varieties of products in Japan is the norm, so perhaps KitKats had to do that there, but doesn't need to do it here to be competitive.

Something that is done in the US is custom printed M&Ms. You can pay a bit extra and have your company name or logo printed on them.
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Anonymous Coward, 10 Jan 2010 @ 5:32pm

Well.... In America Kit Kat is made by Hersheys, not Nestle.... The nestle version of kit kat sold in Asia ia much better
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