Nestle SA Reg Shs. Ser. B Spons (ADR) (NSRGY): Snack on Google Inc (GOOG)’s Latest Android OS

Page 1 of 2

You can’t be blamed if you feel a bit hungry every time Google Inc (NASDAQ:GOOG) unveils a new operating system for its Android platform. Since 2009, the tech giant has used a food item to brand its operating system: Cupcake, Donut, Eclair, Honeycomb, and Jelly Bean have all made appearances. Google has made made good use of the opportunity to whet consumer appetites. Now the latest iteration of Android version 4.4 is taking it one step further, actually branding the OS after a real snack food, Nestle SA Reg Shs. Ser. B Spons (ADR) (OTCBB:NSRGY)‘s Kit Kat chocolate bar.

Source: Kit Kat.

According to the U.K.’s BBC, this is not a financial transaction between the two companies, per se, but rather a co-branding effort that allows the OS maker to use the Kit Kat name while the chocolatier sells some 50 million candy bars featuring the Android logo. To highlight the announcement, they’ll also be giving away Nexus 7 tablets, Google Inc (NASDAQ:GOOG) Play credits, and enough free Kit Kat minis to keep dentists busy for months.

It also allows Google Inc (NASDAQ:GOOG) to keep stepping up its OS naming process by one letter of the alphabet each time. The original name was supposed to be Key Lime Pie, but the tech company thought not enough people knew what that tasted like.

Co-branding is not exactly new, not even in the tech field: Nike and Apple developed the Sports Kit to allow users to exercise while listening to their iPod through a wireless system that allows shoes to talk to the device; Garmin and computer maker Asus joined forces to create the Nuvifone that focuses on location-based services; and some might even say that Intel‘s ubiquitous presence inside Microsoft’s PCs was a bit of marketing magic that led to the creation of the term “Wintel.”

But the Google Inc (NASDAQ:GOOG)-Nestle SA Reg Shs. Ser. B Spons (ADR) (OTCBB:NSRGY) partnership might start a whole new naming rights  trend, just like cities have with their sports complexes, where Staples, Citigroup, and Izod all have their names adorning stadiums and arenas.

Co-branding may seem like a marketer’s dream come true, as it can expand the consumer base of both products, strengthen both brands’ competitive positions, and create new perceived value for the customer, yet the move is not without risk. Think of the Facebook phone from HTC that AT&T quickly abandoned. If something goes awry with the Android system or Kit Kat bars face a recall, both brands can be damaged by the fallout.

Page 1 of 2