Case Analysis 2: 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?
