Case Analysis: Kraft Australia
Company Background
Kraft Foods Australia is a subsidiary of Kraft Foods, the second largest branded food and beverage company in the world. Established in 1926, Kraft Australia is headquartered in Melbourne and has sales revenue of over A$650 million. The company's flagship brand-Vegemite-has long been considered an Australian national icon.
For all the diversity in the worldwide consumer products market, the most successful companies tend to have an important thing in common. They focus on continually improving the business functions that are critical to the consumer products business model, from maintaining vibrant and market-driven product development to having efficient manufacturing and a lean and flexible supply chain. Even more fundamental to consumer-products success, however, is the strength of the relationships companies form with their customers. That's why a company's brands, as the embodiment of this bond, represent the most important strategic asset for a consumer products company-indeed the backbone of its success. In a business built on customer loyalty, brands also serve to convey the promise of a consistent and high-quality experience that customers can count on. Maintaining the integrity of this promise-and thus the strength of the brand-is a first level priority for consumer products companies and a key to maintaining and growing market share.
The billions of dollars companies spend every year on brand research and advertising attests to the continuous nature of this challenge. With demographics constantly changing and new market opportunities opening up, consumer products companies need to not only strengthen their brands,but also ensure that they are in sync with marketplace trends. It was through such an exercise that Kraft Australia (www.kraftfoods.com.au) made an important discovery. Its hero brand, Vegemite, has been a beloved fixture in Australian households since it was introduced half a century ago. While its brand remained strong, Kraft found that a large portion of "new" Australians-such as those who immigrated into Australia-had no relationship with the Vegemite brand. Seeking to tap into this market potential, Kraft was determined to gain a comprehensive understanding of this group, and more specifically its beliefs and attitudes toward Vegemite. At the same time, Kraft was also looking to bring its longtime brand message-which featured children as "Happy Little Vegemites"-up to date with changing lifestyles, demographics and usage patterns. Kraft also understood that there were many lapsed users who had grown up on the spread who needed to be reminded of their affinity for the brand. Kraft didn't take such change lightly. It was determined to get the deepest possible insights into what consumers were thinking and saying about the Vegemite brand and to tailor a message that would resonate most strongly with those themes.
The web offers a wealth of the insights from consumers through web content. There are half a million mentions of Vegemite out of 1.5 billion posts of user generated content across 38 languages. These can provide Kraft the answer that they may need. One of Kraft's goals going into the research was to test certain hypotheses about the kind of issues it would address in its upcoming advertising campaign. An example was whether or not customers were looking for variations to the "classic" Vegemite product, and if so what they should be (e.g., new flavors, different jar sizes).
Business Objectives
- Change the branding campaign based on how the consumers view and used Vegemite
- Identify market opportunities at a very early stage
- Detect and respond to threats to Kraft's brands and corporate reputation
- Ability to increase sales and customer loyalty through more targeted advertising campaigns
Questions
1. What are the problems that Kraft Australia would like to address?
2. What are the data available that can be used for an analytics solution?
3. How can these data be used to identify how the customers view and use Vegemite?
4. What are the possible solutions that can be provided for Kraft Australia to help them solve their problems?