An Evaluation of the Vegemite Brand - Case Study Example

VEGEMITE: BRAND EVALUATION BUSINESS PLAN NAME INSTITUTION DATE EXECUTIVE SUMMARY This report is an evaluation of the Vegemite brand under different subheadings including its history from the 1920s when the product was developed to date when it has established itself as a market leader. The challenges that the brand has faced from the time it was introduced in the market. The report explains the context of the brand, its equity, values and personality. There is a further attempt to see how the brand communicates to stakeholders. From this entire analysis the report also provides recommendations on how best to move forward in light of the current challenges and opportunities VEGEMITE BRAND EVALUATION INTRODUCTION The purpose of this report is to consider and examine the Vegemite brand in order to give a judgment of its value, its quality and the extent to which it has been accepted in the market. The report will base its judgment on different parameters that are generally used in examining the entire ensemble of indicators portrayed to different interested parties as defining features on how a product is promoted to the contemporary consumer. The report would be useful in management of the Vegemite brand in order to develop an effective marketing strategy for the brand. The parameters examined in the report include history of the brand and brand equity. The report also seeks to explain what brand values are and the brand values of the subject brand. Personality of the brand is also examined in the report as will the brand communication to stakeholders. The report will also look at the major challenges currently facing the brand. After considering all the above issues, the report will make recommendations on how best the brand can be improved to increase customer loyalty and also encourage other customers to take up the brand. The proposed improvements will be as per the weaknesses found in the evaluation of different aspects of the Vegemite brand. BRAND BACKGROUND History Vegemite was invented in 1922 by Cyril Callister; this was after importation of Marmite, from New Zealand was disrupted after the First World War. Callister developed Vegemite for his then employer Fred Walker & Co after it was developed; it was registered as a trademark in Australia. The new product was given a name following a nationwide competition in Australia and introduced in the market for the first time in 1923. Vegemite was renamed Parwill in 1928 in an attempt to change the market its fortunes in the market, since it was not doing well against marmite whose importation had resumed. This strategy did not yield the desired results and it reverted back to the original name, Vegemite, in 1935. From 1935, Vegemite was marketed alongside processed cheese made by Kraft Walker Cheese Co; this company was a joint venture between Fred Walker, the chairman of Fred Walker & Co, and J.L. Kraft & Bros. For a period of two years Vegemite was promoted through being given away for free with the Kraft Walker cheese and other products made by the company. Its main selling point was its medicinal value as a major source of Vitamin B which was packaged as a healthy food for children. Other strategies adopted in its promotion included nationwide competitions of poetry and prizes to promote it. Vegemite started receiving wide acceptance with the Government of Australia including it in Army rations. The British Medical Association endorsed Vegemite as a source of Vitamin B and by 1940, 90% of Australian homes used it. In 1998, Kosher Vegemite was introduced into the market but its production stopped in 2004. The Jewish community protested its withdrawal leading to its reintroduction in 2010. In October 2008, the 1 billionth jar of vegemite was manufactured (Tan, 2008). In 1929 production of Vegemite started in New Zealand but that production has stopped. 22 million jars of vegemite are produced every year (Wilson, 2009). Brand Context Vegemite is made from brewer’s yeast extract, it is very low on fat, has low sugar spread with a delicious flavour, it has no artificial colour. Its Kosher and Halal certification makes it acceptable across the religious divide. Vegemite is deeply intertwined in Australian popular culture and her history. It is acknowledged in many places as a key component of the Australian national brand with many works of art making reference to it, these include reference from the song ‘Down Under’ by the Australian rock band Men at Work and in a song by John Williamson entitled ‘True Blue’. Vegemite is also referred to by Terry Prachett in his novel, The Last Continent. Its place in Australian culture and history was shown when a limited edition was produced on Australia National Day and given the name Australia; it is also shown by the display of different Vegemite jars in the National Museum of Australia. Simply put; Vegemite is one of Australia’s staple foods. The brand is one of the richest sources of Vitamin B known in the world. Vegemite is still very popular in Australia with it being found in over 80% of all homes in Australia the product is particularly popular among Australian born parents who give it to their children almost like a rite of passage. This product is mainly used in families with small children and this market share is threatened as the population of Australia becomes more and more diverse as more and more immigrants come from other countries especially in Asia and they do not have brand loyalty for Vegemite as the people born in Australia. Vegemite is also targeting Australians living in other parts of the world and the diverse up market global market which consists of people with a high level of interest in healthy food, owing to its high concentration of Vitamin B. Apart from being used as a toast spread, Vegemite can also be incorporated in other meals of the day. These include scrambled eggs, pizza, pies, quiches etc. Recommendation by medical associations around the world as a source of Vitamin B makes its consumption a medical necessity when a patient needs a healthy dose of Vitamin B supplements (The Eureka Council, 2008). BRAND EQUITY Brand equity is the basic concept that the value of a product to its customers and the firm producing it is enhanced due to association, over time with unique elements that define that brand’s concept. It has also been defined as a set of brand assets and liabilities linked to a brand, its name, and symbol that add to or subtract from the value of provided by a product or service to a firm and/or to the firm customers (Aaker, 1991). Keller (1993)’ definition was from a cognitive psychology perspective and it provides that customer based brand equity is the differential effect that knowledge of the brand has on consumer response to the marketing of the brand in question. A more general definition is by McQueen (1991) who defines brand equity as the difference between the value of the branded product to the consumer and the value of the product without the said branding. These definitions show that brand equity is estimated according to the brand’s effects on the consumers. Brand equity accrues over a period of time as consumers continue to learn and make choices and by these choices influence branding of the products (Chu et al., 2006). Sources of Brand Equity Brand equity comes from brand awareness and brand image, it also comes from emotional connect and the consumers Emotional connect as well as consumers taste and preferences (Lassar, 1995). Brand Image This is a unique ensemble of associations with in the minds of the targeted customers. Brand image is a set of believes concerning a particular product signifying what the brand stands for. It depends greatly with how a product is positioned in the market. It conveys both the mental image of a product as well as the emotional value consumers attach to the product in question. Brand image makes a customer buy not only the product but also the image associated with the product. The image sets the product apart from its competitors it leads to certain associations in the customer’s mind these associations may include benefits to be got from the product and attributes of the product. Brand image allows consumers from having to analyse a product on a feature by feature basis and allow a faster evaluation. The equity of a brand is therefore driven by brand image this is because equity deals with the financial valuation placed on a brand and the valuation is doubtlessly controlled by the amount of sales which are based on how consumers perceive the brand (Biel 1996). Brand Awareness This is the extent to which potential customers recognize a brand and correctly associate it with a certain product. Brand awareness promotes brand recall which is what enables a customer to remember a product to promote continuous buying and also allow the customer recall information on the brand should they come across the brand image. There are different types of brand awareness which include: Aided Awareness: - This is the awareness portrayed by the consumer when aided with a list of companies and they recognize a particular brand. Top of Mind Awareness: - This is when the name of the brand is recognized automatically because the customer can automatically associate it with a product. Brand awareness promotes brand equity since greater brand recognition leads to more and more consumers purchase the product (Gilles et al 1995). Sources of Vegemite Brand Equity Brand Image Vegemite is seen as a national brand in Australia, complete with iconic status. Australians all over the world associate it with nationhood and homeliness. Vegemite is a staple food for the Australian nation and feeding it to children has often been seen as a rite of passage in the country. This has given the brand great equity in Australia and among Australians all over the world. Brand Awareness Vegemite is literally a household name in Australia with 80% of the houses having it at any one given time. This is a result of the longevity of the period in which Vegemite has been in the market in Australia and aggressive marketing on the part of the company. This awareness has contributed greatly to increasing Vegemite’s market share thus boosting its brand equity. BRAND VALUES Brand values are a unique set of characteristics that contribute to how a brand is or will be positioned in the market. Vegemite Brand Values The values that set Vegemite apart and dictate its position in the market seem to be tradition and authenticity. This is because, apart from minor changes in the formula to make it more palatable to younger children, Vegemite has largely stayed true to its original make up. The brand has also been marketed for its health, thus making it not only a recreational paste but also a bona fide health product. Vegemite is also characterized as an Australian patriotic product which is seen from the display of packages that have been used for Vegemite throughout its existence. BRAND PERSONALITY These are human characteristics associated with a brand name. Customers can relate to personality, a brand increases its equity by having consistent personality traits. Consumers are more likely to purchase brands whose personalities are similar to theirs. A brand personality may be: Excitement: carefree, spirited, youthful Sincerity: genuine, kind, family-oriented, thoughtful Ruggedness: rough, tough, outdoors, athletic Competence: successful, accomplished, influential, a leader Sophistication: elegant, prestigious, pretentious (Franzen, 2008). Vegemite’s Brand Personality Vegemite has developed consistent traits as a brand over time. A look at its advertisements from 1920s to the ones being used currently shows that Vegemite spread is a family product. It portrays genuineness, sincerity, kindness and thoughtful. It is also portrayed a youthful and energetic brand. There has also been attempts to give Vegemite an Australian personality which have been largely successful. Brand Communication to Stakeholders This is a combination of activities which influence the opinion of consumers making them positively disposed towards the product. Some of the strategies used in brand communication is the presence of brand champion who is to be on the forefront in promotion of the product, there may also be people designated as brand ambassadors, whose role is complementary to that of brand champion. The other strategy is repeated communication of brand values to the customers and also the conduct of regular trainings to staff associated with the brand. Communication to customers should be through different media which may include print media, posters, television and radio adverts. Effective brand communication should be clear, consistent and constant (Schultz & Bernes, 1999). Vegemite Brand Communication Vegemite has had aggressive marketing campaigns right from the beginning using all types of media including new media as they emerge. The brand has been promoted in Australia as a legacy with the name of Cyril Callister being deliberately mentioned throughout making him sort of a folk hero for formulating Vegemite and making him the perpetual brand champion. Vegemite has ensured that advertisements have been constant and repeated over the years even after it became a household name in Australia. The advertisements have also been refined to a high degree of clarity making Vegemite’s story closely intertwined with the Australian story. CHALLENGES THAT HAVE FACED VEGEMITE Vegemite has faced many challenges over its long history, after the product was launched in the market, it failed to get a good market share occasioning the change of its name to Parwill in an attempt to help the product compete effectively with its then main competitor Marmite, this approach was however not effective and the product reverted to its original name. The challenge was overcome through aggressive marketing making it one of the household brands in Australia. The product has also recently faced backlash from Jewish users for the withdrawal of Kosher Vegemite which forced the company to resume production. The company also faced criticism from the public after it sought and acquired Halal certification for Vegemite, some members of the public saw this as politically correct stunt. Currently, Vegemite is facing the possibility of a reduction of its market share. This is because the vast majority of households using it are the ones with young children whose parents also had Vegemite given to them by their own Parents. Once children grow up they stop using it and seem to prefer other brands. This puts the product in a dangerous positions regarding future market share because as the children who abandon it as they grow may not be as inclined as their parents to give Vegemite to their children. The other challenge is the continued diversification of Australian population with more and more people coming from other parts of the world, these people do not have attachment to Vegemite as the people who grew on it this also eats into its market share (White 1994). RECOMMENDATIONS Although Vegemite is a strong brand, there is need for steps to be taken to ensure it stays relevant. While it is important to keep the original product, the trend is clearly moving away from it in as far as the younger Australians are concerned. This is the bigger and increasing part of the population. The vegemite brand should diversify the flavours to come up with ones that would be more appealing to them. The same strategy should also be adopted to target the increasing Asian population. The brand awareness that Vegemite has would make it easy for the new products associated with it to be marketed. The new flavours should also be marketed internationally to reduce the over reliance on the Australian market. The original Vegemite may also be marketed among the health conscious foodies across the world. This is an area where brand equity may be greatly increased since this section of the market tends to ready to pay more for products they consider healthy. REFERENCES Aaker, D. A. (1991) Managing Brand Equity. New York: The Free Press. Biel, Alexander (1992) How brand image drives brand equity. Journal of Research Advertising Volume: 32, Issue: 6, Publisher: World Advertising Research Center Limited, Pages: 6-12. Chu, Singfat and Hean Tat Keh (2006). “Brand Value Creation: Analysis of the Interbrand-Business Week Brand Value Rankings,” Marketing Letters, 17, 323-331. Franzen (2008). The Science and Art of Branding. M.E. Sharpe Inc. Keller, Kevin L. (1993) ``Conceptualizing, measuring, and managing consumer-based brand equity'' Journal of Marketing 57:1-22. Laurent, Gilles, Jean-Noel Kapferer, and Francoise Roussel (1995), "The Underlying Structure of Brand Awareness Scores," Marketing Science, 14 (No. 3, Part 2), G170-G79. Lassar, W., B. Mittal and A. Sharma (1995). “Measuring Customer-Based Brand Equity,” Journal of Consumer Marketing, 12 (4), 11-19 McQueen, J (1991), ``Leveraging the Power of Emotion in Building Brand Equity,'' ARF Third Annual Advertising and Promotion Workshop, February 5-6. Parameswaran, M.G (2006). Building Brand Value: Five Steps to Building Powerful Brands. Tata McGraw-Hill Education. Schultz, D.E& Bernes, B.E(1999). Strategic brand communication campaigns. NTC Business Books. White, R (1994). "A Brief Cultural History of Vegemite". In Craven, Ian; Gray, Martin; Stoneham, Geraldine. Australian Popular Culture. Cambridge, United Kingdom: Cambridge University Press. pp. 19–20. ISBN 0-521-46667-9. Retrieved 12 November 2011. Tan, Winston (5 October 2008). "Vegemite produces billionth jar". AAP. The Eureka Council (2008) "History of Vegemite – 1922". http://web.archive.org/web/20080723130242/www.eurekacouncil.com.au/5-Australia-History/History-Pages/1922-vegemite.htm. Retrieved 6 April 2013. Wilson, J ( 2009). "New Zealanders take to Vegemite". Te Ara: The Encyclopedia of New Zealand. New Zealand Government. Retrieved 7 April 2013. Appendix REFLECTION The analysis helped the writer understand the history of Vegemite the product giving the writer an understanding of the process through which the brand has been developed to attain its current stature. In the assignment also revealed the visionaries who believed in the brand and campaigned for it even in the face of seemingly insurmountable odds. The early name change and the fact that the product was given for free for two years and a high cost of advertising at that time without returns was an indication of the faith they had in the product. The use of cross marketing with the cheese product was a good way of giving the product prominence. Seeking certification from religious bodies was also a good strategy in widening acceptability of the product across the board and increasing the appeal of the brand. The foundation set by the brand so far is strong enough to allow for the brand to be built up at a massive scale. However, the very close association the brand has with Australia at the era of globalization may be a handicap in making it acceptable with the rest of the world. While this association was a sound strategy at the time the brand was launched in the 1920s, it is better to launch an international brand at this time. Read More