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Introducing the iSnack 2.0

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Katie Eales

on 19 May 2014

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Transcript of Introducing the iSnack 2.0

Concrete Product Attributes:

Extended Product Benefits: More intangible than attributes

Emotional Benefits: Values that are meaningful to Customers

Brand Value Association Hierarchy
Kraft ANZ business faced adverse conditions

Increased cost
Declining sales
Household penetration was dropped by 8%
Revenues and profits had been on the decline

Social Media Research Results

Introducing the iSnack 2.0
The New Vegemite
Consumer response was bad; but outcome…
Ultimately good!

Was it on purpose?
(I think yes)

Regardless of purposeful or not, the response still needs to be the same

Was it a ‘mistake’?
Social Media Research
Brand Extension
The components of this definition of brand extension:
New vegemite
New product used vegemite to rise to fame
New product was made for nontraditional users (softer, smoother, low-in-fat with product, different usage).
why Revitalized the brand
Boost company profits.

For brand, protect Australian food culture and history.

“How Do You Like Your Vegemite?”

Usage variety
Complimentary food and drink
HDYLYV integrated campaign
Success: 5% above record sales

Areas of Concern

Narrow brand association
Needs to relate with consumers
Unusual taste and ingredients

So what went wrong?
Little pre-launch consumer consultation or consumer testing

Failed to communicate reasoning behind the choice post-launch
NO Talbott should not ignore backlash.
People who complain represent only 50% of those dissatisfied
Hence extremely large number of customers upset
Service Recovery Paradox
Brand Communities
Positive brand affinity
Iconic and novel
Active in social media

Quick spread of WOM
Strong attachment to brand
Significant impact on brand image

1 Week
2 Weeks
Near Future Recommendations
Secondary naming competition,
“Chosen By You” public vote system:
Link through social media as direct response to complaints
6 possible choices for votes each devised by marketing team
Choices generated with customer complaints and brand associations in mind

Longer-Term Recommendations
“Longer-Term” not that long term because complaining customers value quick responses
Announcement of name via PR release and social media
Communicate “You asked, we listened”

Positively affect relationship marketing of brand by achieving a mutual exchange and fulfilment of promises

Recovery Strategy Timeline
Immediate Recommendations
Moved factories to overseas, and left the useless infrastructures in Australia.
Surplus production capacity
Bureaucratic corporate culture
Lack of connection passion to customers.
Reward system.

Why this
situation happened?

More options for breakfast.
Australian lifestyle was changing, no time to eat breakfast.
Size of family is smaller.
Important customers segment were ignored
Overlook global consumption.
Potential demands (baby and retirees).

3. Internal Reasons
Limited use
Strong taste, low usage.
High capacity, long storage time, repurchase rate was low.

Benefits and risks of extending a brand
The cost savings
Easier to succeed
Customers will be more loyal to the parent brand.

Damage the parent brand
Lose the loyal customers

Brand Extension
needs to fit consumers’ perceptions
Target market of Vegemite and new Vegemite are different
Vegemite is certainly a trustworthy brand.
There are no negative feelings for customers with Vegemite.
There are market demands with new Vegemite.

"A good idea badly communicated becomes a bad idea"
co-creation approach
launched it as a “no name” product
Naming campaign increased the customer involvement in the
"the most
effective means of averting a crises is communicating with the consumer before decisions are made"
Brand extension Strategy
Kraft foods used line extension and a centralized brand extension strategy to launch new Vegemite.
The new Vegemite was introduced under Vegemite; If successful, it gives companies the cost savings ,and it will benefit for the parent brand.

Brand Personality
National Campaigns
Vegemite needed to change its
aging brand image.
1 Enterprise management
2. External Reasons
Pros and Cons of Strong Affinity
“A good recovery can turn angry, frustrated customers
into loyal ones. It can,
in fact, create more
goodwill than if things
had gone smoothly in
the first place”
Press release apology
Directly address complaints
That Vegemite is classic, not to be associated with modern fads
Evidence of listened to customers feelings
Keep ‘hype’ alive, renew customer with hope and excitement

“The team at Kraft would like to formally apologise to our fiercely loyal and highly valued customers. We understand the iSnack2.0 name did not fully do justice to the Australian classic that is Vegemite and we are working on remedying this problem. Watch this space”
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