Skittles: Brand and Consumer Understanding

Creating the Brand Experience Skittles Case Study August 23, 2005 SAATCHI & SAATCHI

Objectives • Why and how did Skittles change its brand positioning and creative strategies? • What exactly did Skittles change? • What is the roadmap for developing insightful and impactful communications?

Skittles Background • A European favorite, Skittles was launched in the USA in 1981 • A bite-sized candy with a coated hard shell and chewy center • Competitive set: Fruit-flavored confectionaries, primarily non-chocolate candy and gum

Confectionary Market Dynamics (USA) • Non-chocolate candy sector value is $5.3B – Chewy candy: $659MM for 2003, 1.4% YOY – Gum: $309MM for 2003, (4.8%) YOY • 427 new candy products were launched in 2004 • Per capita consumption of candy and chocolate is 22.3lbs for 2003 vs 18.9lbs in 1984 • Mature and consolidating sector w/ increased competition from other vertical “players” Source: USDA; National Confectioners Association; Convenience Store News, 2005

Confectionary Trends • Novelty – Part candy, part toy • Licensing and entertainment partnerships and tie-ins • Transformers – Candy changes into gum • Extreme mints – Liquid mint blasts and capsules • Mash Ups – Unorthodox flavor, texture, and taste combinations Source: candyindustry.com, 2005

Make me Feel “It” Intensity of Experience Concoctions & The Usual Wizardry Creativity Sweeten Up Not inclusive of broader competitive set eg, macrosnacks

“Taste the Rainbow” A Functional Benefit Strategy Pre 2005

Skittles: Product Truths • Hard, shiny, colorful shells • Fruit-inspired soft, chewy center • Round/disc-like • Fruity and floral aromas • Noisy and crunchy • Signature “S” badge Base Brand (Original Skittles), does not include line extensions

Taste Messaging…Simple but Limiting • Skittles previous communications (pre 2005) focused solely on taste and flavor messaging – “Taste the Rainbow” – Target: Gender Agnostic teens, ages 13-17 who frequently consume macrosnacks – User Benefit: Combination of fruity, tropical, and colorful flavors; multi-sensory (hard & chewy) - Rational – Reason to Believe: Only Skittles brand is the color of the rainbow

A Literal & Undifferentiated Positioning Brand Message “Taste the Rainbow” Product Offering Experience the different hues, flavors of Skittles Consumer Motivation When I want a fruit-flavored candy

Only 1/2 of the Story “Taste the Rainbow” (Product)

Diagnosis • Messaging taste and flavor in a commoditized and undifferentiated category, where rational elements are the “price of entry” is not a strategy • Product has become king, trumping the actual brand; once consumption is finished, the brand has no extraneous role for the user – No emotional dialogue or relationship with user/audience

Implications [Young] consumers value relationships with brands that have a clear POV, stand for something, and are different. Brands that do not strategically sound brand promise, defined essence, and positioning, run the risk of consumer disinterest – Low awareness – Infrequent consumption – Ambiguous perceptions – Negative equity measures (eg, regard, recognition) – Weak brand loyalty

“Believe the Rainbow. Taste the Rainbow.” An Evolved Experiential Brand Strategy 2005

Skittles: Target (Lifestyle) • 13-17year olds; sweet spot 16 • Full time students (junior to high school) • Responsibilities: Part time gig, community service, familial duties • Living life to the fullest (active) • Social creatures powered by positive energy • Vibrant and dynamic personalities • Multi-cultural/ethnic • Self expressive and experimental • “On the Go” but not sure how to get “There” yet… Source: LSI, 2005

Skittles: What/When is it for? • Functional – Gives me a boost – Lets me focus – Satisfies my indulgence – Flavor rush – Allows me to feel • Emotional – Makes me excited – Brings out positivity – Changes my perspective – Makes me happy – Engages all of my senses – Affirms my good mood

The Solution [Young] consumers value relationships with brands that have a clear POV, stand for something “real”, and are freshly different. The experience can be greater than the product. Develop natural product extensions that organically create occasions/moments for the desired and intended experience and/or solution to an unmet need.

Skittles Smoothie Mix Skittles Bubble Gum Skittles: Original, Sour, Tropical, “Blend the Rainbow” “Inflate the Rainbow” “Hear, See, Touch, Smell, Taste… the Rainbow” Multi-sensory Experience

Consumer Brand Product “As Real As It Gets”

FROM TO CANDY EXPERIENCE IRRELEVANT IRREVERENT COLOR PASSION EXPECTED UNPREDICTABLE 13-17 LIFESTYLE

To users ages 13-17, sweet spot 16, who use candy and macrosnacks, only Skittles delivers a fruit-inspired multi-sensory experience to color your world… Brand Essence EXPERIENCE LIFE IN COLOR Emotional “LIVE W/IN RAINBOW” Functional “TASTE THE RAINBOW” Assumed brand positioning and benefits

“Believe the Rainbow.” (Brand) The Skittles Experience + “Taste the Rainbow.” (Product)

Results • June 2005 sales have increased 10% (IRI)to approx. $80MM for the 52 weeks ending July 10, 2005 • Unaided Awareness increased 3% (Ipsos-ASI) • June 2005, Skittles.com had 318K visitors vs 11K for the same period in 2004 Source: Adweek, August 8, 2005

Advantages of a Prescient Strategy • Inspiration and development for revenue-building brand extensions - both flavors and new products • A Skittles differentiated brand in the non-chocolate candy and gum sectors, and the MasterFoods/Mars portfolio • Resonation with the target audience - credible and “future proof”

Skittles: Brand and Consumer Understanding

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Skittles: Brand and Consumer Understanding — Presentation Transcript