Introducing iSnack 2.

0: The New
Vegemite
GROUP-6
Abhigyanjit | Gwendoline | Leonore | Mahesh | Manorama | Monika | Sushmita
Case Overview
 Vegemite is the bread spread product of
Kraft’s.
Penetration of 80% in the households
They came up with a new name iSnack
2.0
Sells over 22 million jars per year
In 2008, they sold over 1 billion jars
In Australia they are present for last 70
years
People are close to this brand
In 2007, Business started to decline with falling profits
and reduced revenue
Social media research done to help with the causes of
fall
Research Analyzed 1.5 billion posts on social network
sites
Following results came out:
75% people use the product on toast for breakfast
Limiting effect on the volume of usage
They use the product on bread
Limited number of usage occasion
Ran a successful campaign HDYLYV
 PROBLEM STATEMENT

How should the

team respond to the
criticism: Defend or
Pushback?

Other questions to Ponder upon:

How could Kraft get If they changed the

the HDYLYV campaign name, how should the
so right and iSnack 2.0 Kraft team approach
so wrong? this?
The new Vegemite
Insights from “HDYLYV” Campaign revealed different uses (as mixes) and
combinations of Vegemite. This led to development of a new product
New Vegemite-cheese combination (brand extension) was smoother, milder,
easier to spread and “dipable”. Was in lower-in-fat alternative
It was developed with the hope that the new product would complement
the other
This product was targeted at non-traditional consumers (young adults,
families without children & new immigrants)
New concept: has lower shelf-life. Needs refrigeration. A concept
deviating from what existed for the current, loyal Vegemite consumers
Initial results were promising: Sales of 2 million jars, 12% household
penetration in the first 2 months of launch
Inference: Consumers were not only initially curious about the new
Vegemite, but were enjoying the taste & accepted the product
Naming the New Vegemite
Competition based campaign- “Name Me campaign”- a strategy similar
to the one followed to name Vegemite
“Cheesymite” (spelled in a number of ways) was the most popular suggestion.
Problems associated: a.)already trademarked b.)Team wanted a “different &
clever” name including element of “snacking”
Named “iSnack 2.0” with the aim of personalizing product experience,
leverage the popular “i” precedent, signify snacking & 2nd version of Vegemite

Grand launch of Name during Australian Rules Football at Melbourne Cricket

Ground (marked by the presence of mainly non-traditional users of Vegemite)
RESULTS AND REASONS
Immediate backlash both online and offline

Sales of iSnack 2.0 had risen 47% since the launch, nor was the sales of
the original damaged (growing at 6%)
This rise in sales may be because: a.) loyalty to original brand, b.) good
taste of the new product c.)Any publicity is a good publicity
How could Kraft get the HDYLYV campaign so right and iSnack 2.0 so wrong?
HDYLYV Campaign was to promote & capture the past & present consumption
patterns of the consumers
HDYLYV was to discuss the experiences about the legendary, well established and
penetrated (72%) Vegemite that Aussies associated so close to themselves
“iSnack 2.0” was a clever name decided by the team, not resonating with passionate
Vegemite lovers’ choice identified in the social market research and the team
wondered whether anger was from non-targeted customers
There had been no broad consultation on consumer testing of new name due to
fear of leaks
The team failed to communicate the reason behind their name choice

Choice of where to launch the new product’s name

The new name seems robotic, mechanical, lifeless, duplicate, copied, fake
Would the anger eventually dissipate or would the outrage grow and result in a drop of sales of both the
products?
 Anger may dissipate, but belongingness to the product will be very hard to achieve
 The initial increase in sales may be due to the flooded publicity (“Any publicity is a good publicity”)
 Since the 2 months of launch of the new product, people welcomed it in good terms because of its desirable
taste derived out of consumers’ discussions, however because of its name people would shy away from
purchasing (social stigma & disapproval)
 Vegemite is a brand and taste of the Aussies, they are proud of it. Its sales might not be affected.

Was there anything that Talbot could do to respond to the criticism?

 In the near short-term, to deal with the situation, Talbot must release a consolatory statement across social
media
 Buy some time to review the brand, analyze their mistakes and come with an action, meanwhile keeping its
consumers updated
 Pros and cons of retaining the name
Pros
•The company has already invested a lot of
money to promote the new name (huge
campaign during a major public event)
•The company made a mistake by involving the
consumer only in the first part of the process :
they should have involved them either in the
whole process or not at all (consistence in the
process and legitimacy for the customer who
do not feel trusted if their first choice is not
kept
•The sales are still doing well (risen 47% since
the launch)
Cons
• Admitting their fault might be a sign strength as you’re
facing it and may be an opportunity to create an affective
link with the brand of well handled (but it’s hard to
anticipate the audience reaction, meaning that the
communication has to be very consistent and well thought
to face bad feedbacks if there’re some)
• The disappointed audience is not the one targeted by the
product
• The audience feeling betrayed may boycott the brand if
this one doesn’t listen to their complaints
Should they change the name iSnack 2.0 to appease angry commentators &
consumers?
Yes, given the backlash received they must change the name as this shows
responsiveness
Ownership of tweaked name will send out the message that they value their customers more
With a positive flair of customer satisfaction, sales might increase even more, as the
taste was anyway accepted
Maintenance of consistency in the campaign in which lot of money & time has been invested
If they changed the name, how should the Kraft team approach this & handle
the launch?
Issue a PR statement, stating the reason of coming up with this name which was in
no way meant to neglect the customers’ suggestions.
Reconsider the most popular name from the campaign, host traditional tests & FGDs
to let rumors spread that Kraft has heard the voice of its valuable customers.
Rename it to “VegeLite” and give out redemption coupons as part of a promotion
campaign, along with Vegemite
Too much of consumer involvement is unhealthy. Do not re-attempt this stunt. If you
involve them, respect them otherwise let executives take crucial decisions
PR Statement

“We understand your frustration regarding the name of a so dear brand. We have never
let you down nor will let this name dilute the loved taste of Vegemite as well as the new
product. iSnack 2.0 was derived from a related name suggested by one among you and
we thought that “i” would mark a personalized product experience of the new product
that also leveraged the popular “i” precedent. We wanted to take your experience
beyond breakfast to snacking that gave the second part of the name and this being the
second version of Vegemite generated via online voting gave the last part.
However, we have sensed how perturbed you are. You’ll soon see the taste with a name
so relatable.”
- Simon Talbot/ PR Head
Kraft Foods International
THANK YOU!