From that mandate, J. Walter Thompson in Tokyo has created a program in conjunction with the Swiss confectioner that takes a page out of BMW's marketing playbook. On March 24, "Hana & Alice," the first in a series of Nestle-financed short digital films called Kit Kat Break Town Cinema, will make its debut. It's aimed at reviving Kit Kat's image in Japan with the country's trendsetting teenagers.
The year-long campaign, which commemorates Kit Kat's 30th anniversary in Japan, was developed by JWT both to build the brand and revitalize impulse consumption in retail outlets such as 7-Eleven.
The film, bowing March 24, will be 15 minutes long, to be followed by installments in July and October, all written and directed by Shunji Iwai, a well-known Japanese filmmaker.
The films will be shown on Nestle's Japanese-language Kit Kat site (www.breaktown.com), which was launched last year, and on DVDs sold with Kit Kats for $2.55, about $1.70 more than a standard 85¢ package.
Although Kit Kat is an established brand in Japan, the Swiss company admits its global marketing message—"Have a break, have a Kit Kat"—was not working in Japan.
"Japanese consumers don't understand what the Kit Kat break means for them, so we decided to use new media to efficiently and effectively communicate its real meaning," explains Kozo Takaoka, Nestle's marketing director, total confectionary, in Tokyo.
"Historically, if you look at Kit Kat's non-U.S. advertising created by JWT, London, it involves a humorous look at taking a break," says Ambar Brahmachary, JWT's Tokyo-based CEO, Japan.
Nestle and its previous agency in Japan, Hakuhodo, attempted to localize the global message by remaking Western ads with local actors or creating more local scenarios.
"Either way, it wasn't successful, because Japanese didn't understand what taking a break meant," Brahmachary recalls.
When JWT took over the business 14 months ago, it dispatched planners with cameras to document different ways Japanese take a break.
%%PULLQUOTE_LEFT%% They came back with photographs of people relaxing in public baths, having a drink with co-workers at the end of the day or going on vacation.
"We learned the Western concept of taking a break from a routine is more what Japanese regard as an interruption. Japanese take a break only when they've finished work, that's why the message wasn't grabbing people before," says Brahmachary.
At the same time, Nestle is pushing its agencies around the world to maximize effectiveness. "They want better quality interaction with our target group, more integrated communication and less reliance on mass media," Brahmachary says.
So JWT moved away from the silly antics of past TV spots, opting for an online "cyber cinema" approach with a story line about lovesick teenage friends.
"We are very much inspired by BMW Films, but we [don't] know if online films will also work for an emotionally driven category like chocolate," says Takashi Takeda, JWT's management account director.
Brahmachary agrees. "It works on different levels, but it's still an experiment. No client in Japan has ever focused its entire annual marketing budget on an idea like this."
The new-media approach is uniquely suited to Japan's tech-savvy population. Broadband penetration has dramatically increased over the past few years. About half of Japanese homes now have computers, and a quarter, or 10 million, now have broadband.
The youth market "is an extremely fad-driven target. In six months, they can dramatically change the way they look at a brand. It's a challenge to make them think about Kit Kat differently, but if there is any market to do it in a mass way, it's Japan," says Brahmachary.
Nestle has dedicated the bulk of this year's Kit Kat marketing budget, about $12.7 million in total, to produce and market the films. Nestle's contribution is limited to financing and marketing; the films do not incorporate product placement.
Although it will invest in limited TV advertising to build awareness for the series, Nestle is relying more on viral marketing, promotions tied in with portal sites such as Yahoo! and general chat-room buzz.
Takeda expects the first film will generate at least 500,000 hits in the first two months and all three episodes will garner more than 1.5 million hits through the year.
Kit Kat is the second-largest chocolate brand in Japan with 5% market share, trailing Pocky, a local chocolate made by Glico, with a 7% share. Nestle hopes to overtake Pocky by 2005, largely by expanding impulse sales to teenage consumers.
About two-thirds of Kit Kat sales now take place in supermarkets, with just 30% of sales coming from impulse purchases. "With the popularity of the films, we want to raise that number to 50%,"says Takeda.
If successful, the program will be extended next year. "We are going to continue this kind of new-media investment. We have relied too much on TV commercials for brand communication so far."