Vegemite-Communication-Plan.Pdf

COMMUNICATION PLAN Repositioning Vegemite as authentically Australian made and owned

Prepared by: DEBORAH IEVERS PGrad MSc (Marketing) AsBBus (Business) TACTICAL MARKETING SPECIALISTS Tel: (08) 9206 5773 Mobile: 0401 003 631 Email: [email protected] www.redivy.com.au 26th April 2018 EXECUTIVE SUMMARY

“Vegemite is home again!”

Being owned by an American company may not have affected the Vegemite brand’s market share, in which it is still the leader, however consumer trust and confidence in the brand has been affected due to the firestorm created on social media when the brand was acquired by Mondelez International in 2011. In order to re-establish Vegemite as an authentically Australian Owned product, thereby re- establishing trust and confidence in the brand, it is necessary that the Vegemite brand is once again showcased as authentically Australian made and owned and that this message is brought to the consumers attention with suitable, strong communications and marketing campaigns.

Vegemite is a “heritage” product with a history of over 90 years, popular with consumers aged over 35 years. Bega Cheese Limited now faces the problem of revitalising the product in order to increase their target market to include generation Y, who prefer a sweeter nut based spread over a yeast based spread (Jager 2016).

This communications plan is about redefining the brand as authentically Australian owned by directly interacting with internal and external stakeholders including a marketing strategy to release “The Great Australian Vegemite Cookbook” in time for Australia Day 2020. This in turn will increase sales by once again appealing to consumers who purchase a different brand in support of Australian owned products. The campaign will promote the catch phrases “Happy little Vegemite” and “You can’t get more Aussie than Vegemite” in order to showcase the fact that Vegemite is once again owned by an Australian company.

The communication plan will outline a strategic integrated strategy (Roper, 2012) that will promote product authenticity and increase brand loyalty in a competitive market place where similar Australian owned products are readily available and which will help Bega meet the short term Vegemite marketing objectives of increasing customer loyalty in the Australian millennial market by 5% within twelve months.

The primary target audience during this campaign is Australian millennial and adult market segment aged between 18 - 50 while touching on the late Baby Boomer segment aged between 50 - 60. This primary target audience is very aware of Australian brand consumer loyalty.

The secondary target audience will be internal stakeholders utilizing a behavioral tactic in Managers being trained in “storytelling” in order to engage employees in the work environment to reinforce the culture of “Australian made and owned”

The communication tactics employed will be run over a period of 12 months with regular objective evaluations. At the end of this period, results will be analysed and decisions made as to the success of the campaign.

Page 2 Product sales and authenticity loyalty will be monitored throughout the duration of the campaign to evaluate effectiveness. Advertising, surveys on ownership as Australian heritage and ROIs will be used to gauge success of the campaign as well as identify future opportunities.

Evaluation methods are built into the communications plan at regular intervals, with favourable outcomes set to determine the success of the different stages of the campaign. The evaluation plan measures the success of the communication goals and marketing plan objectives. Key members of the HR, Sales and Marketing teams are responsible for measuring and reporting on the success of the communications plan.

If implemented correctly this campaign will deepen brand loyalty as an authentic Australian heritage product and give millennials and Generation Y a sense of pride for the great Australian icon that the older generation presently has while achieving the goals set in the communication plan.

Page 3 TABLE OF CONTENTS

Executive Summary...... 2 Table of Contents...... 4 1 Introduction...... 5 2 Company Background...... 5 3 Problem identification and current position...... 6 4 Audience Response...... 6 4.1 External Stakeholders...... 6 4.2 Internal Stakeholders...... 6 5 Target Audience...... 7 Table 1 - Target Audiences Influences...... 7 5.1 Internal Target Audience...... 7 5.2 External Target Audience...... 7 Table 2 - Target Audience Characteristics...... 8 6 Communication Objectives and Evaluation...... 8 6.1 Objectives...... 8 6.2 Evaluation...... 9 Table 3 - Evaluation of Objectives...... 9 7 Communication mix and tactics...... 10 Figure 1 - The Corporate Identity Mix...... 10 Table 4 - Vegemite Communications Plan Corporate Identity Mix Breakdown...... 10 Figure 2 - Proposed Promotional Poster...... 12 Figure 3 - Proposed logo redesign...... 12 Figure 4 - Proposed packaging redesign...... 12 8 Recommendations...... 12 Table 5 - Future Recommendations...... 12 9 Conclusion...... 13 Reference List...... 14

Page 4 1. INTRODUCTION

After spending most of its near-century existence in foreign hands, Vegemite was returned to Australian ownership in 2017 when the brand was purchased by Bega Cheese Limited from US Company Mondelez International Inc, an American confectionery, food and beverage company based in IL, USA, who in turn had acquired it from Kraft in 2011 (News Corp Australia Network, 2017).

Even though the Vegemite brand had been US owned for almost a century, the acquisition of the brand by US company Modelez International caused a firestorm (Pfeffer, Zorback, Riley, 2013) on social media highlighting the fact that the brand was in US hands. Prior to this, it had been assumed by most consumers that Vegemite was Australian owned and on learning that this was not the case through the online firestorm there are concerns that consumer perceptions of Vegemite, traditionally being an Australian icon, have changed due to the now very public response to past US ownership.

In addition, it has been found that consumers tend to lean towards the consumption of authentic foods and are motivated to focus on what is genuine, real, and/or true and that this decision-making process is driven by a desire to draw on different identity benefits from authentic foods like control, connection and origin. (Beverland, Farrelly, 2010)

This corporate communications strategy will review what Bega Cheese Ltd needs to communicate to consumers to reestablish Vegemite into the Australian market as an authentically Australian brand and confirm its footprint as fully owned and made here in Australia.

2. COMPANY BACKGROUND

The Vegemite brand has a history spanning back to 1922 when it was founded by the Fred Walker Company, which would become Kraft Food Company in 1925 when Fred Walker went into partnership with American businessman James L. Kraft, manufacturing processed cheese (The Fred Society).

In 1939 Vegemite gained official product endorsement from the British Medical Association and began advertising as a Vitamin B rich, nutritionally balanced food to their patients (Vegemite Story). By 1942, exactly twenty years after it was first developed, the Vegemite brand had become a staple food in most Australian households.

During World War II the company had to limit local sales to enable supplies to Australian Armed Forces which was buying Vegemite spread in bulk due to the product’s nutritional value, after which Vegemite spread was well and truly a part of Australia’s history – and created a special place in Australian hearts, even leading to a jingle ‘Happy Little Vegemites’. (Trinca, 2018)

Kraft became involved in a complex series of take-overs, mergers and sell-offs and at the end of 1988, Philip Morris purchased Kraft for US$12.9 billion. The following year Kraft merged with Philip Morris’s General Foods unit. Further corporate deals ensued and in 2011 the company split into two divisions, one being the newly named Mondelez International Inc who became proprietors of several Australian brands, including Vegemite. (Trinca, 2018)

Bega Cheese Limited purchased the Vegemite brand in January 2017. Bega Cheese Limited is a wholly Australia owned and operated cheese and dairy company located in Bega Valley, in New South Wales. Bega Cheese Limited was founded as an agricultural cooperative owned by their dairy suppliers in 1899 as the Bega Co-operative Creamery Company. It became a public company in 2011 when it listed on the Australian Securities Exchange. (Binstead, 2016)

Page 5 Its Bio-nutrients division is involved in the development and supply of bio-nutrient ingredients for the health and nutrition markets. (Reuters)

Even though Bega Cheese Limited realizes there is a need to reposition Vegemite as an authentic Australian owned and manufactured product in the consumers minds, Bega Cheese’s reputation is riding high after buying back the Australian icon. When asked about the public’s response to the purchase of the Vegemite brand by Bega Cheese Limited, Bega Cheese chairman Barry Irvin was quoted as saying that public’s overwhelming positive reception to the deal took him by surprise. (Hemphill, 2017).

3. PROBLEM IDENTIFICATION AND CURRENT POSITION The Vegemite brand had not been fully Australian owned for almost a century before it’s very public acquisition by the US company Mondolez in 2011 (Mohdin, 2017), resulting in Vegemite losing it’s market position as Australia’s leading yeast based spread. Due to the effect of the online firestorm caused by the acquisition of the Vegemite brand by Monelez International, the Vegemite brand was no longer seen as being authentically Australian, which has had an adverse effect on consumer loyalty. Currently consumers are facing an increasing variety of food choices and are reducing their consumption of the more mature packaged food products, including yeast-based spreads like Vegemite (Euromonitor, 2017) in favour of sweeter chocolate based spreads, such as Nutella and other healthier nut or grain spreads. In analyzing the current state of the company and consumer market it is apparent that while more Australians are trending toward purchasing Australian Made products (Elliot, 1994) and that the traditional Vegemite branding as authentically Australian is popular with those aged over 35 years, consumer confidence in the product has diminished due to the brand belonging to a US company leaving the need for Vegemite to once again reposition itself as an authentic Australian made and owned brand that is both nutritious and offers healthy varieties, especially among the new generation of millennials. (Robins, 2017)

4. AUDIENCE RESPONSE 4.1 External Stakeholders The general response from the Australian market was : “While we didn’t really think about the fact Vegemite was formerly owned by US-based company Mondelez International, it’s fair to say we’re excited that the spread we eat for breakfast, lunch and tea is back in Aussie hands”. (McDonald, 2017) In determining consumer response relative to sales, Mr Irvin from Bega said : “sales of Vegemite had increased incrementally last year, but over recent years sales had been softening as the breakfast habits - particularly of younger people - changed. The older generation grew up with Vegemite and see it as authentically Australian but the younger millennial generation are lacking the cultural connection, tending to favour Nutella and cheese products.” (The West Australian 2017) 4.2 Internal Stakeholders Employees and shareholders are pleased that the reimplementation of Vegemite, focusing on local growth, has lead to the creation of 200 jobs in Melbourne, with plans to expand the Asian market. (Stefanovic, 2017)

Retailer

Consumers Retailers Employees

Page 6 5. TARGET AUDIENCE

Determining who can influence and who is interested will identify the target audience and whether they are supportive or opposed to the Corporate communications, as well as those who’s future is tied to the outcome or success of the communication strategy.

Table 1 – Target Audience influences

Influential Interested Supportive Opposed Method of addressing

Employees Yes Yes Yes No Seen as partners

Shareholders Yes Yes Yes No Will act as partners

Employees Yes Yes Use persuasion

5.1 Internal Target Audience

Employees working at the Vegemite plant are all stewards of the brand name in their social environments. It would be more difficult to achieve our goals if our own employees did not believe in the product brand and what the company is trying to achieve.

5.2 External Target Audience

The Vegemite Corporate communications strategy will approach it’s external market segmentation (Dickson, 1998) focusing on the Australian adult and millenial market (Kiersz, 2015) aged between 18 - 50 while touching on the late Baby Boomer segment aged between 50 - 60 in order to re-kindle the feeling of pride in purchasing an authentically Australian made product. (Trinca, 2018)

More specifically, as detailed in the tabe below, the external target audience will focus on individuals that have an interest in healthy, home cooking especially amongst parents with young families with an interest in making food for their young children. (Earle, 2017)

Page 7 Table 2 – Target Audience characteristics

Market Segment Characteristics

Geographic Characteristics Australians living locally and abroad with families.

Demographic characteristics • Literate, creative consumers aged between with 18 – 50 with families. • Generation X and Y touching on late Baby boomer and early generation Z segments. (Kiersz 2015)

Psychographic characteristics • Motivated by a patriotic sense of duty to purchase Australian products • Health conscious with a preference for vitamin enriched produce over processed foods • An interest in creating and preparing healthy home cooked meals with Australian ingredients • A preference for home made meals rather than fast food • Collectors of cookbooks and kitchen products

Behavioural characteristics • A feeling of pride when purchasing Australian products (Mccrindle 2013) • Regular purchasers of spreads • A requirement to provide healthy snacks and meals to young children and families

6. COMMUNICATION OBJECTIVES AND EVALUATION

6.1 Objectives

Objective 1 • Increase customer sales in the Australian millennial market (17 to 35 year olds) by 5% within the next 12 months.

Objective 2 • Increase product loyalty and authenticity recognition by 5% in the target audience (18 to 50 year olds) by end of 2019.

These objectives were chosen because in analyzing the current state of the company and consumer market it is apparent that more Australians are trending toward purchasing authentically Australian Made products and with Vegemite, even though the name is entrenched in Australian culture, consumer confidence in the product was diminished due to the acquisition of the brand by a US company in 2011 and subsequent online firestorm amongst the social media platforms, leaving the need to once again reposition itself as authentically Australian made and owned.

Page 8 6.2 Evaluation

To evaluate the success of this communication plan in line with the stated objectives, it is crucial to monitor the effectiveness of the campaign in progress using the measures below.

Return on Investment (ROI) will be measured by reviewing sales results in Australia on a quarterly basis. Brand awareness and consideration will be reviewed in 12 months from Communication Strategy implementation as perceptions take time to change.

Repeat business will be reviewed pre-launch followed by regular reviews in April 2019, July 2019, October 2019 and January 2020 to confirm if pricing, availability or promotion strategies need to be re-evaluated. The year-end report will include a final evaluation as to the success of the Communications strategy.

Table 3 – Evaluation of Objectives Metric Method of Timing Responsibility Outcome Measure

Return on Sales Monthly Reporting Sales Manager Sales are expected to maintain Investment (ROI) slow growth into 2020.

Brand Recognition Surveys Quarterly Marketing Manager Favourable outcome = A positive and Consideration brand image with a high level of consumer engagement. (Aim for a 5% increase in brand awareness to pre-promotion surveys)

Drive customer Surveys Pre communications Marketing Manger Favourable outcome = A loyalty through plan implementation consistent increase in repeat repeat business business with a 5% increase in Post campaign 12 months post Sales Manager Vegemite spread sales by 31st sales communications January 2020. plan implementation

Where tasks are not achieved, these are to be discussed between the Marketing Manager, HR Manager and the Communications Manager to determine if there alternate methods of delivery or implementation, engaging appropriate stakeholders as required.

Page 9 7. COMMUNICATION MIX AND TACTICS Communications will involve symbolism, communications mix and tactics, behaviour and corporate personality involving both internal and external stakeholders

Figure 1 – The Corporate Identity Mix (Roper, 2014)

Table 4 – Vegemite Communications Plan Corporate Identity Mix breakdown

Tactic Promotion Details of promotion Objective

Symbolism Logo redesign What: Logo to include “Australian made Reinforce the authenticity of and owned” on all corporate and marketing Vegemite being Australian communications made and owned on all communications both When: Amended logo to be used on all internal and external internal and external communications for a minimum period of 12 months. To be re- assessed after 12 months.

Product label redesign What: Product logo to include “Australian made Reinforce the authenticity of and owned” and full or part Australian flag. Vegemite being Australian made and owned to the When: Amended logo to be used on all consumer products for a minimum period of 12 months. To be re-assessed after 12 months.

Communication Television Commercials What: A 15 - 20 second advert showcasing Maintaining campaign the product as authentically Australian awareness, informing of utilizing iconically Australian symbols in the target audience and keeping background. brand awareness linked to the objective. When: Commercials will run during times identified by the Marketing manager as best suited to capture the target audience.

Bus shelter advertising What: Simple poster that links to media and Maintaining campaign TV commercials, product packaging and awareness and informing brand awareness. target audience.

Page 10 Tactic Promotion Details of promotion Objective

Communication Print Advertising What: Campaign advertising reinforcing the Reinforce brand and (Cont...) Australian made and owned message campaign awareness, benefits, ease of use and the “happy little Vegemites” and “There’s nothing more Aussie than Vegemite” slogans.

Social Media What: Vegemite’s Facebook, Twitter and To further develop the Campaigns Instagram campaigns will promote “Happy brand’s personality as little Vegemites” and “There’s nothing authentically Australian, more Aussie than Vegemite”. The Vegemite in line with a positioning Marketing Manager will allocate a resource to strategy to be able to monitor and update these channels, and to communicate one to one ensure customer feedback is acknowledged with customers and build and conflicts resolved to align with the relationships. campaign.

When: Campaigns will be live and monitored for the full 12 months of the campaign.

Online Advertising What: Simple commercial banners using the To reinforce brand Ad Remarketing method (Barton, 2013) that authenticity and link to link to media and print commercials, product website. packaging and brand awaremenss.

Where: On relevant websites that are frequesnted by the target market

Corporate Website What: Website to incorporate wording and To reinforce brand awareness culture shift to demonstrate “Australian made to both internal and external and owned” including automatic 15 to 20 stakeholders. second TV video focusing on Australian made and owned.

Annual report What: Announcements of communications To inform shareholders and strategy to reclaim the top position as reinforce brand authenticity. authentically Australian.

Behaviour “Story telling” What: Managers to be trained in “storytelling” Employee engagement in order to engage employees in the work supporting the campaign environment to reinforce the culture of message of being an “Australian made and owned” authentically Australian brand.

What: Managers to actively participate with Employee stewardship employee engagement discussion to reinforce encouraging employees vegemite as an Australian icon, Australian to spread the word in their made & owned, environment. social circles.

Product Positioning What: Retailers to position Vegemite To reinforce brand promotions and product in favorable positions. authenticity awareness to consumers at the point of purchase.

Page 11 Figure 3 – Proposed logo design

Figure 2 – Proposed promotional poster Figure 4 – Proposed packaging design

8. RECOMMENDATIONS Following a successful communications plan product authenticity campaign over the 12 month period, the following recommendations should be considered by Bega Cheese Limited, along with product specific communication plans, to ensure a continued growth of the Vegemite brand.

Table 5 – Future Recommendations

Recommendation Reasoning

Introduce a Gluten The gluten-free industry is expected to be worth almost $100m in a few years, with Free option more people cutting out wheat and other grains. (Baker, 2016). In order for Vegemite to maintain it’s current market share position, the brand will need to adjust to include the requirements of consumers living a gluten free lifestyle due to preferences or necessity.

Introduce a Even though Vegemite is enjoyed by many Australians, there is a segment of the market ‘Vegemite Light” that prefers a milder flavour which is currently catered for by Promite, which has a option slightly sweeter flavour, and Mighty Mite which has a less intense flavour. In order to capture this additional market segment, the introduction of a less intensely flavoured product should be considered. This can be achieved by rebranding the current salt reduced option as Vegemite Light.

Page 12 9. CONCLUSION

In Australia, being able to support Australian business and products is important to the majority of consumers, we know this by reactions of the general public when a new overseas company opens it’s doors in Australia, especially in the fast moving consumer goods industry. Vegemite may not have previously lost much market share in not being Australian owned, however consumer trust and confidence in the brand has been affected. In order to re-establish Vegemite as an Australian owned product, thereby re-establishing trust and confidence in the brand, it is necessary that Vegemite is once again “Australian owned” be brought to the consumers attention with a suitable, strong campaign. In order to achieve this Bega should hone in on the Australian aspect of the Vegemite brand, which will be achieved with this communication plan.

Page 13 REFERENCE LIST

• AAP The Western Australian (Thursday, 19 January 2017) Vegemite comes back home to Australia. https://thewest.com.au/business/markets/vegemite-comes-back-home-to-oz-ng-b88359948z • Baker, F. (2016) Is going gluten free healthy? Body and Soul. Retrieved from http://www. bodyandsoul.com.au/ nutrition/nutrition-tips/is-going-glutenfree-healthy/news-story/ fcc6597af861f392bbb62d88844beddc • Beverland, M., & Farrelly, F. (2010) The Quest for Authenticity in Consumption: Consumers’ Purposive Choice of Authentic Cues to Shape Experienced Outcomes. Journal of Consumer Research, Volume 36, Issue 5, 1 February 2010, Pages 838–856. https://doi.org/10.1086/615047 • Binstead, T. (26 January 2016) Bega Cheese goes from sleepy dairy co-op to $1b business. Retrieved from https://www.smh.com.au/business/bega-cheese-goes-from-sleepy-diary-coop-to-1b-business- 20160105-glzfo5.html • Dickson, P. & Ginter, J. (1987) Market Segmentation, Product Differentiation, and Marketing Strategy. Journal of Marketing, 51(2), 1-10. doi:10.2307/1251125 • Earle, L. (2017). Commercial Foods. Baby and Toddler: Nutritious recipes your baby or toddler will love (Chapter 6 paragraph 1) • Elliott, G. & Cameron, R. (1994) Consumer Perception of Product Quality and the Country-of- Origin Effect. Journal of International Marketing, 2(2), 49-62. Retrieved from http://www.jstor.org/ stable/25048542 • Euromonitor, (2017) Spreads in Australia, Country Report. Retrieved from http://www.euromonitor. com/spreads-in-australia/report • Hemphill, P. (2017) Agribusiness reputations: Brand building and protection should be priority. The Weekly Times. Retrieved from https://www.weeklytimesnow.com.au/agribusiness/decisionag/ agribusiness-reputations-brand-building-and-protection-should-be-priority/news-story/5883130d5bd 81027e5def90ea1c904fe • Jager, C. (2016) Nutella Versus Vegemite: Which Spread Is Australia’s Favourite? Life Hacker. Retrieved from https://www.lifehacker.com.au/2016/02/which-australians-age-group-consumes-the- most-nutella/ • Kiersz, A. (2015) How different age groups identify with generational labels. World Economic Forum. Retrieved from https://www.weforum.org/agenda/2015/09/how-different-age-groups-identify-with- their-generational-labels/ • McCrindle (2013) Aussie pride : what Australians love about their country. Retrieved from http://www. mccrindle.com.au/themccrindleblog/aussie_pride_what_australians_love_about_their_ country • McDonald, E. (2017) Vegemite returns to Australia. Womans Weekly. Retrieved from https://www. nowtolove.com.au/news/latest-news/vegemite-returns-to-australia-33359 • Mohdon, A. (2017) Vegemite is finally Australian again. Retrieved from https://www.qz.com/890777/ vegemite-is-finally-australian-again/ • Newscorp Australia Network (19 January 2017) Vegemite back in Australian hands after Bega Cheese strikes $460 million deal. Retrieved from http://www.news.com.au/finance/business/ retail/vegemite-back-in-australian-hands-after-bega-cheese-strikes-460-million-deal/news-story/ a77efb34159bc06bbdae8dbcce393f6f • Pfeffer, J., Zorback, T. & Carley, K.M. (2013) Understanding online firestorms: Negative word-of-mouth dynamics in social media networks. Journal of Marketing Communication, Volume 20, Special Issue, Word of Mouth and Social Media, 10 June 2013, Pages 117-128. https://doi.org/10.1080/13527266.2 013.797778

Page 14 REFERENCE LIST (Cont...)

• Reuters (https://www.in.reuters.com/finance/stocks/company-profile/BGA.AX) • Robins, B. (2017) Bega Cheese snaps up Vegemite. The Sunday Herald. Retrieved from www.smh. com.au/business/bega-snaps-up- vegemite-as-part-of-460m-deal-20170118- gtu7wk.html • Roper, S. & Fill, C. (2012) Integrated marketing communications. Corporate Reputation: Brand and Communication. (Page 228) • Roper, S. & Fill, C. (2012) The Corporate Identity Mix. Corporate Reputation: Brand and Communication. (Page 250) • Solomon, M. R. (2014) Segmentation . Marketing : Real people real choices Marketing. 3rd edition. (page 213 – 215) • Stefanovic, S. (2017) Manufacturer’s monthly. Vegemite back in Australian ownership. Retrieved from http://www.manmonthly.com.au/vegemite-australian-ownership • The Fred Society – Fred Walker, Creator of Vegemite (https://www.thefredsociety.com) • Trinca, M. (2018) Symbols of Australia. Retrieved from https://www.nma.gov.au/exibitions/symbols_of_ australia/vegemite • Vegemite story (https://vegemite.com.au/heritage/the-vegemite-story/)

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