'How Do You Like Your Vegemite' Campaign

Vegemite has been a staple in the average Australian’s diet for decades. When Simon Talbot stepped in as Kraft’s Director of Corporate Affairs in 2007, Vegemite sales were at an all time high. Household penetration was at 80% and in 2008, the billionth jar of Vegemite was made (Keinan, A., Farrelly, F., Beverland, M., 2012). However, because of little change made to the brand in its 80 year history, the product was going out of style. It was clear that Vegemite needed some kind of new-age makeover, but it was hard for Talbot to mess with a product that had seen national success on such a huge scale. Talbot eventually decided to contemporize the brand, first by launching the ‘How Do You Like Your Vegemite’ campaign into massive success

and then by following up with a whole new product. But this new product may be the downfall of the entire brand.
This case analysis looks at what Vegemite’s brand equity looked like before and after the big PR campaigns, highlighting what went wrong when the company received huge amounts of negative media. With all eyes on Vegemite, it will look at how the brand can use this huge media opportunity to reposition the brand and hopefully bring it back to the record-breaking sales it was having in 2008.

1:
In the Sinclair reading, he discusses five different aspects that brand equity is composed of which includes brand loyalty, familiarity, perceived quality of the product, associations, and other proprietary brand assets (Sinclair, 2008).

Over the years, Vegemite has kept building upon their brand equity and has achieved a status that many brands only dream of achieving: a national icon.

As a cultural brand, Vegemite has reached national fame which coincides with an increase in their familiarity and brand loyalty. Pop culture references are plentiful including mentions in songs and Australian celebrities advertising the way they think is best to use the product. These associations have helped keep Vegemite as a product that Australians will always have a special place in their heart for.

Sinclair goes on to say, “A certain kind of image cannot be arbitrarily imposed upon a brand by manipulative brand managers, for they must work with what is already in the culture,” (Sinclair, 2008). Vegemite has become a definitive part of Australian culture, something that Australians consider a part of who they are. “Vegemite has been described as the ‘best predictor of national identity of any food in the world’ because it represents the ‘union of thought, acceptance of ownership and a coming together by means of food to define ‘us’ as opposed to ‘them’” ((Beverland, Dobele and Farrelly, 2015). Australians aren’t just “familiar” with Vegemite, they’ve known the brand for years. Since it’s inception after World War II, users have been actively part of the brand’s history and transformed it into their own

history.

2:
When Kraft Food International decided that they wanted to bring Vegemite sales up back to where they had been in years prior, they used two different marketing campaigns to do it. The first was the ‘How Do You Like Your Vegemite’ (HDYLYV) campaign in which users of Vegemite were encouraged to show others the best way to eat vegemite. The campaign was incredibly successful leading to a 5% sales increase “over the previous best year in the history of the brand…” (Keinan, A., Farrelly, F., Beverland, M., 2012). This led to the second campaign, the “iSnack 2.0” campaign, in which users could vote on a new name for Vegemite’s new product. However, instead of using the consumer’s top voted choice, Vegemite chose to name the product “iSnack 2.0” which may have been the worst decision in company history.
Although the outcome of the two campaigns were opposites, the campaigns themselves had a few similarities. Kraft did a good job at making consumers feel like they were contributing to a unique part of the brand in both campaigns. According to John Sinclair, “…consumers claim to be doing their own thing while doing it with thousands of like-minded others,” (Sinclair, 2008). In both scenarios, users were able to showcase their unique way of what they think of the product allowing them to become reconnected with it. Aside from increasing individual usage with the product, these two campaigns also successfully raised brand awareness for Vegemite. Before the HDYLYV campaign, there was very little advertisement for Vegemite and many consumers had forgotten about the nostalgia of the brand and what Vegemite meant to them. The two situations reminded consumers about how much Vegemite played a role in their lives, and recreated that sense of pride that Australians have for the brand. The campaigns also both took advantage of the growing digital world, encouraging a two-way conversation between users and the brand. “Each visit encouraged further action or response, perhaps to comment on a recipe they had tried or to debate the merits of one spreading type over another.” (Beverland, Dobele and Farrelly, 2015). The two advertisements not only got people to go to the website once, but kept them repeatedly coming back.
Even though there were some similarities between the campaigns, there are a few different reasons why HDYLYV had so much massive success over the “iSnack 2.0” naming campaign. First of all, the HDYLYV campaign involved much more research that was done before they actually launched the advertisements. Kraft had hired IBM to use software to find out more about Vegemite users and what their interests in the products and main forms of communication were. This research brought back huge amounts of data ranging from the 3 core ways people use Vegemite to how social media was affecting the brand. Because of this background knowledge, Kraft was able to “encourage Vegemite users to discuss their idiosyncratic habits and rituals when using the product” on social media (Beverland, Dobele and Farrelly, 2015). Kraft had gotten so caught up in the amazing success of their first campaign that they didn’t do the same amount of research for the next campaign. Very little time was taken to research if people would be interested in a new product, and there was only “some evidence that moms tried mixing Vegemite with Kraft’s other star brand, Philadelphia Cream Cheese” (Keinan, A., Farrelly, F., Beverland, M., 2012).
Even during the campaign when Kraft decided to pick the “iSnack 2.0” name, there was absolutely no research done to see if users would respond positively to the name. The name was not similar to any of the names users had voted on, and had no similarity to Vegemite which users had showed they wanted. When Kraft eventually did choose to use their own name for the product instead of following through with what consumers had voted on, Kraft sent a message that consumers were “wrong” in the name they picked. Kraft had made a promise to involve consumers in this huge decision for the brand, and then completely broke this promise causing users to lose trust in the brand.
The amount of PR done for the two projects also seemed to differ. THE HDYLYV campaign involved numerous amounts of printed advertisements, television commercials, and social media sponsorships while the “iSnack 2.0” campaign was done on a smaller scale. From the case, it seems like there was a considerable amount of money spent on media for the HDYLYV campaign, but not as much for the “iSnack 2.0” campaign, probably because the brand was already getting a lot of attention from the previous launch.
It is clear that Kraft was perhaps blinded by the massive success of the HDYLYV campaign that they didn’t think about the “iSnack 2.0” campaign as carefully.

3:
Since Vegemite’s peak of 80% household penetration, Australia has been evolving in ways that are going to have an effect on sales. The biggest trend that is happening right now is the move toward a healthier lifestyle, which includes a growth in the amount of nutritional information people have. According to a study on consumer trends by Mintel, one in five Australians participate in a low-sugar diet and 25% of shoppers are buying products free of fat, sugar, and preservatives (Mintel, 2015). Vegemite has very little sugar and fat, which is an advantage in this changing market toward healthier foods (Vegemite, 2016).
A possible reasoning for this shift toward a healthier lifestyle is the fact that the average Australian is getting older. In 2011, the average Australian was 37 years old and has probably increased even more in recent years according the the growth rate (Australian Bureau of Statistics, 2013). Older adults usually have more health issues than younger people, which may be leading to the increase in the want to be healthy. In 2013, the leading cause of death for adults over 44 was coronary heart disease affecting 11,016 males and 8,750 females (Australian Institute of Health and Welfare, 2013). Coronary heart disease is an illness that can be prevented by a change in lifestyle including changing diet habits. In a study done by Deutsches Aerzteblatt International, scientists found that patients that participated in Mind-Body Medicine (which includes interventions with nutritional information) had less cardiac incidents than patients who didn’t use this method (Cramer et al., 2015). Vegemite includes B1, B2, B3, and B9 vitamins and while these are all healthy, B2 is particularly helpful in preventing cardiac related diseases including heart disease (McDermott and McDermott, 2014). The next leading cause of death in Australians in 2013 was Dementia and Alzheimer’s, which both affect memory in the brain. The B9 vitamin in Vegemite has been shown to reduce memory loss and depression, which could be used as a marketing point for the brand.
Aside from health trends, Australia is moving toward the new digital age along with the rest of the world. The use of wearable devices and synched technology is increasing along with digital retail. Users of technology expect to have whatever they want, whenever they want at the click of a button. Online spending in 2013-2014 was at a record breaking $15.6 billion, and companies like Amazon have made it increasingly easier and faster to get products delivered to your doorstep. Currently Vegemite has a large distribution network, but does not have a big online-ordering presence (Mintel, 2015).
In recent years the amount of immigrants in Australia has shot up. In the past 10 years the amount of people from India increased from 95,000-295,000 and the amount of people from China increased from 143,000-319,000 (Australian Bureau of Statistics, 2013). In 2013, 78% of the Sydney suburb was composed of people who were born overseas. If the number of immigrants continue to increase, Vegemite might have to look at ways to market the brand toward this emerging population.
With these emerging trends, I would target these new health-conscious consumers particularly in the snack market. According to Mintel’s ANZ consumer trends, “The [snack] market is expected to be worth an estimated AU$1366.9 million in 2018” (Mintel, 2015). By positioning the brand to appear as a healthy choice, Vegemite could capitalize on this market. Vegemite has the nutritional value in place already, and by changing things like the packaging to highlight the vitamins in the product the brand could transform into a healthy choice. Using different forms of PR like Vegemite did with the HDYLYV campaign could also help the company move toward being the healthy spread to buy.

4):
Currently, Talbot and Kraft are in a very tough position after receiving huge criticism for the “iSnack 2.0” name. Consumers are so angry because Kraft went against their word and chose a name that didn’t involve their input at all. This is an especially sensitive issue because naming the original Vegemite was done in a similar fashion. With this decision, consumers have lost trust with the company and felt a sense of betrayal. However, with so much public attention this could prove to be an ideal time to right the wrong. With the increasing trends of technology usage and consumer rights, users will make sure their opinions are heard on social media if the company doesn’t fix this issue quickly (Mintel, 2015). I would recommend that Talbot publicly apologize for the name, and repeal the use of it. The naming ad campaign should be re-opened for users to vote for the new name of the product, with the clear indication that Cheesymite is unavailable for trademark reasons. By re-opening the poll, Kraft shows consumers that it is able to admit when mistakes have been made. Hopefully this would restore any trust loss in the long run.
After the dust settles, I would suggest that Kraft start targeting this new “health conscious consumer.” The Vegemite brand should begin highlighting the health benefits that come in Vegemite, perhaps by partnering with a heart disease association to really prove to consumers hidden health perks of the product. The company could do a follow up to the HDYLYV campaign where users show how to make a healthy meal incorporating the product. According to the research already done by IBM, the two things users love doing most with the brand is talking about how they use it on social media. Creating a variation of the HDYLYV campaign would be cost-effective since the research is already done. Kraft could introduce this new campaign when they pick the winner of the new poll, especially since this cream-cheese Vegemite hybrid is healthier than normal cream cheese.
Since this new hybrid product does not have as strong as a taste as Vegemite, it might appeal to people that are not Australian but are living in Australia. Kraft should highlight the distinct, different taste of the new product which would encourage immigrants to try the product. This new addition to the Vegemite product line could prove to be the way to finally enter a market outside of the Australian demographic.
While the company is currently facing negative publicity, Kraft has a big chance to capitalize on the spotlight that is currently shining on them. I believe the best way to win back the public is by admitting to their wrong, and following through on the promise of letting the consumers pick the name for the new product. Along with this, they can use this media attention to reposition the product as a healthy opportunity for users. In the long run, this should help get Vegemite back to 80% household penetration as well as hopefully increased sales for Kraft.