This week’s launch of the new Google Android 4.4 Kit Kat and Nestlé’s tie-in chocolate Android robots is a marketing move worth millions and could help the Kit Kat name grow in emerging markets like China, says Euromonitor International.
Nestlé will make 50 million of the Android mascot bars, while Kit Kat will be the first codename to feature a branded product after a run of generic food names including Ice Cream Sandwich and Jelly Bean.
“The launch represents a major marketing coup for Google and Nestlé,” Lamine Lahouasnia, head of packaged food at Euromonitor International, wrote in the Analyst Insight blog.
“Google’s choice to name their next Android platform release Kit Kat brings together two well-known icons from pop culture and technology,” said Jennifer Podhajsky, vice president of US chocolate at The Hershey Company which own the rights to the Kit Kat name in the US. The name comes as a surprise to many since the project had been referred to as Key Lime Pie in both the press and internally.
Lahouasnia said that considering the popularity of Android in emerging markets such as China, this tie-in could raise Kit Kat’s global profile and cement the snack’s place within these burgeoning economies.
“Kit Kat’s presence in the Chinese market is relatively sizeable although its 1.3% share of chocolate confectionery market looks paltry compared to Galaxy/Dove’s 34.6% domination of the category,” he explained.
“However, with 70% of Chinese smartphones sold using the Android operating system, Kit Kat is likely to see a surge in sales, particularly in rural areas where Nestlé’s distribution may be weaker compared to local brands,” he added.
Lahouasnia said that we are likely to see this also in India, Russia and Brazil. In its Q2 conference call earlier this year, Hershey hinted that Mexico and Brazil were high on its expansion agenda, along with China which had already been identified as a "number one international priority".
China has been tipped as a market withgreat potential, with the country's chocolate market climbing 16% last year to $4.6bn in 2012, according to data from Mintel. Yet data from Leatherhead Food Research showed that Chinese chocolate consumption remains relatively low in comparison to Europe and the US.
Strength in association
With over a billion new tablet and smartphone devices being sold in 2013, Lahouasnia said this launch was a marketing ploy "worth millions and yet payment to Google is non-financial”.
“Every time a new Android device is sold over the next 6-12 months, sales people will educate consumers on the benefits of Kit Kat, the operating system’s latest version. Even existing users will upgrade their devices in their millions as the Kit Kat becomes available on their devices,” he explained.
Yet the cross branding exercise has been laughed at by some. Nokia’s German Twitter account posted a photo of a Samsung Galaxy S4 broken in two and a caption telling readers they can “have a break”. Nestlé themselves have seen the funny side with their mock-serious advertisement , said to be poking fun at Apple.
“Whilst many may ridicule the marketing initiative as a gimmick, both Android and Kit Kat are likely to grow off the back of this exercise in co-branding with chocolate covered Android robots building brand loyalty across the world and Kit Kat becoming permanently associated with the world’s fastest growing operating system,” Lahouasnia said.
What are the risks?
According to analyst the two companies may experience backlash. “Tech warriors the world over may cry that Google has ‘sold out’ the open source Android system. Similarly, Nestlé may be accused of being too aggressive with its advertising, particularly given the popularity of tablets among young children.”
However, he felt overall these risks would be outweighed by the benefits and in the case of success may inspire others to do the same. “With so many potential matches to be made across food and non-food industries, many eyes will be watching this experiment to see just how Nestlé managed to put Kit Kat in a billion hands.”