Case Study Vegemite i Snack 2 PDF

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CASE STUDY REPORT – VEGEMITE ISNACK 2.0 STRATEGIC MARKETING MANAGEMENT

The brand of Vegemite owned by Kraft Foods International, is considered one of the company's iconic products as well as one of Australia's most recognized food products, and household penetration (Keinan, Farrelly and Beverland, 2012, p1). Vegemite is a sandwich spread made from used brewer's yeast extract and various vegetable and spice additives. The salty black spread has long been a breakfast staple for Australians (Keinan, Farrelly and Beverland, 2012, p1). Following the success of “How Do You Love Your Vegemite” and “Name Me” campaign, Kraft Foods’s Australia/New Zealand (Kraft Foods ANZ) launched the new Vegemite – iSnack 2.0 which received a number of angry commentators and consumers. This report analysis the case study of iSnack 2.0 introduction – a new Vegemite of The Kraft Foods International and recommendation for the next decision of Kraft’s Director, Simon Talbot and board of executives. Vegemite is an Australian icon and has been an intrinsic part of Australian life for more than 70 years (Keinan, Farrelly and Beverland, 2012, p1). “Real Australians Eat Vegemite” is a slogan echoes a nation’s pride for what undoubtedly is the most iconic Australian food product. Kraft Foods ANZ decided the name Vegemite iSnack 2.0 this name was available for trademark and the team believed it had three advantages. First, the use of " i" suggested a personalized product experience and also leveraged the popular "i" precedent. Second, the use of " snack" was consistent with the social media market analysis and the How Do You Love Your Vegemite campaign, which had revealed that consumers used Vegemite in different ways and that some ate it as a snack. Finally, Kraft Foods ANZ deemed the use of " 2.0" as relevant because the name had been generated through the web via online voting, and the new product was the second version of Vegemite. (Keinan, Farrelly and Beverland, 2012, p8) The new Vegemite iSnack 2.0 was introduced at Australia's most iconic sports stadium-The Melbourne Cricket Ground (MCG) in front of a crowd of almost 100,000 at the stadium, and over 3 million viewers watching at home and in pubs with family and friends got the stunned silence of the MCG crowd. A number of Australian’s consumers as well as staff people was unhappy and very disappointed of this name. People even wrote “So iTried Vegemite’s new iSnack today. It’s safe to say iHate it”. (Keinan, Farrelly

and Beverland, 2012, p9). To response this situation of consumers, Kraft Foods ANZ should change the name iSnack 2.0. Since most of Australians loved to eat use Vegemite on their toast for breakfasts meanwhile some ate it as snack. Therefore, the reaction of consumer was fierce for the new name of vegemite. Moreover, the use of “i” and “2.0” sound like an iPod as technology product as well as a social networking website. This is in contrast to a traditional intrinsic part of Australian life for more than 70 years (Exhibit 1) In case Kraft Foods ANZ did not take any responses to appease this fierce angry commentators and consumers, they may create a boycott campaign of Vegemite iSnack 2.0 which bring a result in a drop of sales and effect to other products of Kraft Foods ANZ. As the same case as one of Italian fashion Dolce & Gabbana (D&G) campaign about a Chinese woman in a red D&G dress trying to use chopsticks to eat pizza, spaghetti and a giant version of the Italian pastry cannoli. This campaign was racist to Chinese culture. As result, Dolce & Gabbana cancelled the biggest promotional event of the year in China and a number of Chinese fashion lover boycott the products of Dolce & Gabbana (Torre, 2019). People believed that The How Do You Love Your Vegemite campaign was the most successful campaign in the history of Kraft’s Australia and New Zealand. The campaign would not only make people think about, debate and reappraise their past and present consumption but also inspire influencers to connect to other consumer to share how they love their vegemite. According to Schudson (1998) and Norris (2001) document as mentioned by Deuze in his article (2006), entails a notion of citizens who have become increasingly willing and able to voice their concerns and claim their place in society—but do so (and often only) whenever they feel their personal (including familial, communal, and sometimes regional or global single-issue) interests are at stake. The How Do You Love Your Vegemite campaign was reflect to each consumer’s personality. Vegemite lovers joined in the campaign by sharing with public the way they vegemite. The personality reflection is not only taking advantages but also taking disadvantages for marketing campaign if company apply inappropriate way. At the early

stage of the new product development, Kraft Foods ANZ had decided that it would initially launch the new product without a name and create a competition-based campaign which called the "Name Me Campaign" so the people of Australia and New Zealand could suggest the name and consisted of voting via online, SMS, and regular mail. This campaign was again allowed consumers to join in it. This decision was well received, especially by the media. Kraft Foods ANZ received around 48,000 name suggestion especially “Cheesymite” was the most popular suggestion. However, the introduction of new Vegemite was at Australia's most iconic sports stadium MCG named “iSnack 2.0” which made most of Australian disappointed of the new name. The new iSnack 2.0 Vegemite made not only vegemite lover but also Kraft Foods ANZ staff were unhappy after having worked on such an exciting project over the past year. The international newspaper The Guardian and the New York Times ran full-page stories ridiculing the decision. "What do you get when you take an iconic food product, change its ingredients and release it under a kitschy new name, prompting cries of outrage and a storm of media coverage: A marketing failure or a publicity coup?" (Keinan, Farrelly and Beverland, 2012, p9). The name did not resonate with passionate Vegemite lovers identified in the social media market research. Kraft Foods ANZ engaged their consumers in their marketing campaign “How Do You Love Your Vegemite” showed that they listened to their consumers as well as respected to consumer’s opinions. However, Kraft Foods ANZ let consumer decide the name of new Vegemite product extension in the next campaign “Name Me” but they did not listen to consumers and their suggestions. Kraft Foods ANZ chose iSnack 2.0 to reflect the fact that the product had been developed using information gleaned from thousands of online surveys indicating that customers wanted a more portable, spreadable, snack-able version of Vegemite. (Meraiah, 2009). But a marketing concept that lives by the Internet can also die by the Internet. (Meraiah, 2009). The worst possible scenario for an extension is not only to fail, but to harm the parent brand image in the process. Unfortunately, these negative feedback effects can sometimes happen. (Keller 2013).

Since Australian considers Vegemite is as an

important part of their lives and they have many different ways to use Vegemite in their

daily cooking Therefore, Kraft Foods ANZ as well as Talbot should respond to this criticism by changing the name of iSnack 2.0 to appease the angry of consumers to let consumers know that they have listened to consumer’s opinion. Since there were two problems with the most popular name “Cheesymite” (1) a competitor had trademarked the name both locally and internationally; (2) the Vegemite team believed the name should be "different" and "clever" and include an element of "snacking" to reflect the differentiated use of the new product. (Keinan, Farrelly and Beverland, 2012, p6). Kraft Foods ANZ should prepare a list of five or six suitable names for consumers to vote which name was the best solutions for new version of Vegemite through social media platforms along with online polls and phone surveys. Then, Kraft Food ANA should public the results of the contest and chose the most popular name votes. Kraft Foods ANZ should have conducted this stage before the introduction of new Vegemite iSnack 2.0 to avoid facing with criticism. Although the sales of new Vegemite iSnack 2.0 of Kraft Food ANZ had risen 47% since the launch but the sales could not save the long history image of brand for this product extension. The Vegemite iSnack 2.0 shows the power of consumer engagement: listening and more importantly understanding consumers can have a hugely positive impact on new product launches (Amanda, n.d). Kraft Food ANZ let their consumer engage their product development from beginning of the stage but they do not listen to them until the end by choosing the name not their suggestion. Moreover, the company should have analyzed potential consumer response to any brand extension and the most important thing that the company should listen consumer opinion until the end in case company let them to join in the campaign. It made consumer feel that company listened and respected them.

References Amanada (n.d) How not to re-create another Vegemite iSnack 2.0 branding disaster. Retrieved

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https://www.thebrandingjournal.com/2016/05/vegemite-isnack-2-0-

branding-disaster/

Deuze, M 2006, Participation, Remediation, Bricolage: Considering Principal Components

Foley,

M.

(2009).

Vegemite

Contest

Draws

Protests.

Retrieved

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https://www.nytimes.com/2009/11/03/business/global/03vegemite.html

La Torre, V. (2019). Chinese boycott of Dolce & Gabbana continues at Milan Fashion Week.

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https://www.scmp.com/lifestyle/fashion-

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Kevin Lane Keller and Vanitha Swaminathan (2013), Strategic brand management – building, measuring, and managing brand equity, 4th edn, Pearson.

Keinan, A., Farrely, F. and Beverland, M. (2012) ‘Introducing iSnack 2.0: The New Vegemite’, Harvard Business School 9-512020 (Academic Article)...