ITE 269

Advanced Computer
Applications for Accountants

Case Analysis 2: KRAFT

AUSTRALIA
Velasco, Albert John T.
Bautista, Jessica N.
Daga, Edward
De Jesus, Judy Anne T.
Euperio, Pheona
Galapon, Ben-nice Joy
Geronimo, Janet
Nicolas, Krisia
Sumawang, Maureen P.
Tamayo, Ma. Alyssa N.
Umerez, Errol

Submitted to: Ms. Prima Christina DR. Lopez

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 companys flagship brand
Vegemitehas 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. Thats
why a companys brands, as the embodiment of this bond, represent the most important
strategic asset for a consumer products companyindeed 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 promiseand thus the strength of the brandis 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 Australianssuch as those who immigrated into
Australiahad 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 messagewhich featured children as
Happy Little Vegemitesup 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 didnt 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 Krafts 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 Krafts brands and corporate reputation
Ability to increase sales and customer loyalty through more targeted advertising
campaigns

QUESTION AND ANSWER

1) What are the problems that Kraft Australia would like to address?
a. Analyze the issues and challenges in naming a brand (new brand, brand
extension, rebranding).
b. Construe the effectiveness of crowd sourcing in branding decisions.
c. Appreciate the importance of marketing research in branding decisions.
d. Construe the pros and cons of using social media as a marketing tool to
generate publicity for a product.
e. Analyze why the target segment rejected the brand name 'iSnack 2.0' for
the brand extension of the iconic Vegemite brand.
f. Explore ways in which Kraft could have made the branding campaign more
effective and also explore branding strategies that Kraft's marketing team
can adopt in the future.
2) What are the data available that can be used for analytics solution?
a. Sales Report
b. Strength and Weakness
i. Strength
1. Strong Brand Image and Product Innovation
2. Strong distribution Network
3. Focus on Research and Development
ii. Weakness
1. Declining Profitability
2. Geographic Concentration
c. Feedback
3) How can these data be used to identify the customers view and use Vegemite?
a. Sales Report can be used to monitor product standing in the market if it is
still profitable and if it is declining the management will able to make ways
how the product will be profitable again. The organization may know who are
their customers based on the sales report, those who always buy and those
who frequently buy. This will also lead to the conclusion if the customers like
the product or not.
b. Knowing the strengths and weaknesses of the product enables the
organization to determine how the customers will react on product and who
is the real market of this product and if they could innovate it, to target
other markets.
c. Feedback is the most important data in identifying the customers view and
use of the product because the organization will able to know what exactly
the customers wants on the product and what are the other factors may
affect the product.

4) What are the possible solutions that can be provided for Kraft Australia to help
them solve their problems?
a. Descriptive Analytics:
i. Kraft Australia is headquartered in Melbourne and has sales revenue of
over A$650 million.(1926)
ii. Vegemite considered an Australian national icon.(1926)
iii. The Happy Little Vegemites jingle is adapted into a television
commercial featuring famous marching band. (1950 1960).
b. Predictive Analytics:
i. Although Vegemite becomes famous and earn Australians costumers
loyalty, Vegemite should have deeper insights in immigrants like their
language, culture, hobbies, and personal backgrounds so that
vegemite will not be only patronize by local customers but also other
country.
c. Prescriptive Analytics:
i. Kraft Foods should aware where the majority of immigrants came from
and conduct analysis for what culture and food they usually eat.
ii. Based on our research 2011 Census most of the immigrants came
from New Zealand(16.2%) of totaled 158,021 (Wikipedia.com)
iii. Kraft foods may established a food systems that will enables them
know how their customers consume their products and they may also
share it to a more larger market
iv. Also they could provide recipes in the label of the product that will help
new customers know how they could use the product.
v. Kraft Foods may also use advanced algorithms (based on patented
technology) to extract insights from user generated content posted on
the Web in the form of blogs, message boards, and online news
sources. Its purpose is to monitor the online chatter associated with
their brands, and thus enable them to detect and react to content
messages that have the potential to adversely affect their brand and
reputation and has ability to:
1. Identify market opportunities at a very early stage
2. Detect and respond to threats to Kraft's brands and corporate
reputation
3. Increase sales and customer loyalty through more targeted
brand advertising campaigns.