Vegemite: An Australian Icon

Australia boasts a profound and enduring connection to Vegemite. The iconic brand has not only become an obsession in the country but has also emerged as a unique symbol of the Australian populace. However, in spite of becoming synonymous with the country’s culture, it is imperative to establish whether consumers have changed their perception and attitude towards it, in particular, after Bega Cheese purchased it from Mondelez International in 2017. What is more, the paper investigates how the product can increase its market share and maintain a competitive advantage. The opportunity analysis, therefore, looks beyond Vegemite’s rich history to explore different ways in which it can command the Australian market.

Company Background

Bega Cheese is the leading cheese manufacturer in Australia. Since its formation in 1899, the company, which is located in New South Wales, has built a high reputation as one of the most successful players in the dairy sector. The firm produces and supplies high-quality processed and natural cheese to foodservice markets, wholesalers, and retailers in Australia and abroad. The firm emphasizes business acquisition to gain a competitive edge in the market by seeking to leverage broader market share. As an illustration, according to Business Chief Australia (2014), Bega Cheese bought Tatura Milk Industries and other renowned cheese manufacturing assets in the country in the period between 2008 and 2014. The corporation devotes its resources, including finances to carry out internal market research with the aim of developing a keen understanding of the Australian market and its dynamics, including the changing needs of customers, business rivalry, and distribution channels. 

Situation Analysis

Market Analysis

The Australian food spreads market is currently witnessing rapid growth because consumers are increasingly embracing the products, particularly those that have health benefits. As Euromonitor International (2017) notes, seed and nut-based spreads market grew by 3% in 2017 because in addition to their traditional spread function, buyers have discovered new ways of using the products. Unlike in past decades, consumers use seed and nut spreads to boost protein consumption or to satisfy hunger, especially in smoothies. Furthermore, Australian Food News (2015) observes that in 2014, 39% of Australians aged fourteen years and above reported consuming spreads more than once in seven days. In particular, Australian Food News (2015) claims that 85% of all people (7,550, 000) who ate spreads in 2014 in an average period of seven days were born in the country. These statistics demonstrate that the Australian populace considers spreads as integral parts of their diets. In a similar vein, the awareness of the product among the population indicates that the market can attain more growth, especially when companies operating in the sector employ effective marketing strategies, including social media and content marketing.

Macro Environment Analysis

Political Analysis

Political stability in Australia provides companies operating in the foods spreads industry a high degree of certainty.

The Australian government develops and implements policies that aim at protecting various industries that employ few or many people (Wanna, 2018). The policies include tariff assistance and budget measures.

 The Australian government supports businesses by providing grants for starting and expanding businesses or other activities, for instance, research (Australian Trade and Investment Commission, 2018). The support enables new and established companies to compete in the market and attain their goals and objectives.

Economic Analysis

Australia boasts an open market with few restrictions on local companies and imports of products (Department of Foreign Affairs and Trade, 2018).

 Australia enjoys continuous economic growth (Ong, 2016). The sustained growth indicates an increase in the economy’s productive capacity.

Australia is one of the most comfortable places individuals or companies can do business. According to World Bank (2017), the country is ranked fourteen among 190 nations in 2017, down from 15 in the previous year. 

Social Analysis

The annual population’s growth rate in Australia is 1.7% (Wilson, 2018). According to the author, the growth rate is the fastest in the developed world. The developments indicate that potential customers for Vegemite may increase.

Australia’s employment rate is 62% (Trading Economics, 2018). This implies that most households in the country can afford foods spreads.

Australian consumers are emphasizing consuming foods and ingredients that have health benefits. For that reason, most buyers may embrace Vegemite because it contains B vitamins.

Technological Analysis

The Australian government, through Commonwealth Scientific and Industrial Research Organisation, offers industrial and scientific research in different areas, including information technology. The research can help firms to learn new solutions in specific areas, for example, processing technologies.

Australia is renowned globally for rapidly adopting new technologies. The innovations not only help in reducing costs and improving quality but also enable new and existing firms to create new processes and products.

Industries in Australia enjoy effective collaboration and communication with the government and university business researchers and experts. The partnership may help companies to identify and leverage technological innovation to boost their businesses.

Legal Analysis

 Bega Cheese must comply with Australia’s food safety standards that require companies operating in the food industry to produce food that is not only safe but also suitable to consume.  The primary purpose of the standards is to reduce the prevalence of food-borne diseases.

 The company must adhere to Competition and Consumer Act 2010, which requires businesses to engage in fair competition activities and protect the consumer, particularly when advertising and setting the prices of products.

The corporation must familiarize itself with Privacy Act 1988, which controls the way companies handle personal information about other people, especially consumers.

Environmental Analysis

Australia emphasizes environmental regulations, ensuring that firms operating in the country play a central role in the preservation of the environment, for instance, by reducing pollution.

 Bega Cheese must adhere to all standards set by Australian Competition and Consumer Commission, which ensure that companies engage in practices that are environmentally safe.

The firm must accentuate eco-friendly business models and sustainable practices to attract and retain customers who focus on the impact a product has on the environment.

Micro Environment Analysis

Company Analysis

Positive aspects of Vegemite

 Vegemite is the leading brand of foods spreads and has been accepted by most consumers in Australia.

The product boasts a positive image in Australia and has established its branding and high-quality levels.

Most Australians consider the product as a part of the country’s heritage.

Negative aspects of Vegemite

 The brand has been owned by non-Australians for nine decades, denying Australians an opportunity to claim guardianship of a brand they consider an obsession.

Some people use Vegemite to produce home-made alcohol. For that reason, Australia is proposing limiting the sales of the product in some communities to control alcohol abuse (Pearlman, 2015).

 Although most Australians love and adore Vegemite, the product has not been accepted in the global market. Markedly, while Australia produces and sells over 22 million jars every year, only 3% is exported outside the country (Arnold, 2016).

Bega Cheese is an established company that has gained the reputation of satisfying customers and producing and marketing products that succeed in the market. However, the company faces challenges in ensuring that Vegemite remains important to the Australian culture.

Competitor Analysis

Vegemite faces stiff direct competition from Promite, Nutella, and Marmite. The companies compete in the market to create and leverage a large market share. The brands target the Australian market with the aim of attracting new potential consumers and retaining the existing ones. Although the companies provide similar products, they offer different flavours and packaging.

Competitor

Point of Similarity

Point of Difference

Marmite

It is made of brewers’ yeast extract.

It has a salty flavour.

It is packaged in a glass jar

It is dark in colour.

It has a smooth and silky texture.

It is slightly sweet.

Nutella

It targets the same audience.

It is a chocolate hazelnut spread.

It is significantly more popular with consumers aged 25 years and below, especially teen girls aged between 14 and 17 (Jager, 2016).

Promite

It is rich in Vitamin B.

It targets the same market.

It is dark in colour.

It is also made from yeast extract.

It is a vegetable extract.

It contains more sodium and sugar.

It has fewer nutritional benefits.

Competitive Market Analysis

Competitor

Target Market

Product

Price

Promotional

Distribution

Strength/

Weakness

Marmite

People of different ages, gender, income level, education, and occupation.

A yeast extract in 600g jar.

$14 for 500g.

Television advertising and content marketing.

Intensive distribution, retail shops.

Strengths: A strong brand, sweet, source of folate.

Weakness: relatively expensive.

Promite

People of different ages, gender, income level, education, and occupation.

A vegetable and yeast extract in 290g jar.

$ 9 for 290g

Television and online advertising.

Intensive distribution and online selling.

Strength: A delicious spread.

Weakness: small market share.

Nutella

People of different ages, gender, income level, education, and occupation.

A chocolate hazelnut spread in 220g jar.

$7 for 220g.

Television advertising and social media marketing.

Intensive distribution and online retailers.

Strengths: A strong brand image, present in many countries.

Weakness: it is expensive, possible health risks.

Consumer Analysis

Foods spreads companies market their products to all people regardless of their ages, gender, income level, education, and occupation. In other words, unlike in other industry, the foods spreads sector does target a particular demographic, for instance, age group or gender. The main reason for the strategy is that an entire family can use the products. The customers buy spreads from supermarkets, wholesalers, retailers and online shops at any given time of the year. Before making purchasing decisions, the consumers consider the health benefits, taste, and price of the competing products. The buyers learn about the spreads from marketing campaigns, including social media marketing, content marketing, word-of-mouth and print and broadcast advertising. Most consumers are knowledgeable of the latest trends and emerging issues in the industry. Therefore, they buy products that offer value.

SWOT Analysis for Bega Cheese

Objectives

Marketing Objectives    

To increase online sales by 10%

                   As many consumers in Australia and across the globe embrace making online purchases, the firm expects to boost its sales by engaging website visitors and social media followers to sell their products online. To achieve success, the firm ought to ensure that it meets customers’ needs and encourage them to review their products and services positively.

To increase the market share by 5%.

                   Bega Cheese is devoted to increasing the market share of its products by increasing brand awareness among the prospective consumers. The firm may attain the objective by accentuating aggressive advertising, effective public relations campaigns and personal selling.

References

Arnold, A. (2016). Nine in 10 Australians Stock Vegemite in Their Cupboards. But Americans like President Obama Find the Somehow-edible Saste Horrible. We had to know why. Retrieved from https://broadly.vice.com/en_us/article/nejwa7/why-everyone-hates-vegemite-except-australians

Australian Food News. (2015). Australia’s Favourite Spreads, Market Findings. Retrieved from http://www.ausfoodnews.com.au/2015/02/09/australias-favourite-spreads-market-findings.html

Australian Trade and Investment Commission. (2018). Understanding Government Support Programs in Australia. Retrieved from https://www.austrade.gov.au/International/Invest/Guide-to-investing/Australian-Government-support-programs

Business Chief Australia. (2014). Bega Cheese Tastes Victory. Retrieved from https://anz.businesschief.com/Bega-Cheese-Ltd/profiles/14/Bega-Cheese-Tastes-Victory

Department of Foreign Affairs and Trade. (2018). Trade. Retrieved from http://dfat.gov.au/about-australia/australia-world/Pages/trade.aspx

Euromonitor International. (2017). Spreads in Australia. Retrieved from http://www.euromonitor.com/spreads-in-australia/report

Jager, C. (2016). Nutella Versus Vegemite: Which Spread Is Australia’s Favourite?

Retrieved from https://www.lifehacker.com.au/2016/02/which-australians-age-group-consumes-the-most-nutella/

Ong, T. (2016). GDP: Happy 25th birthday to Australia’s Economic Growth. Retrieved from http://www.abc.net.au/news/2016-09-07/gdp-australia-goes-25-years-without-recession/7823988

Pearlman, J. (2015). Australia proposes limiting Vegemite sales to prevent alcohol abuse. Retrieved from https://www.telegraph.co.uk/news/worldnews/australiaandthepacific/australia/11792977/Australia-proposes-limiting-Vegemite-sales-to-prevent-alcohol-abuse.html

Trading Economics. (2018). Australia Employment Rate. Retrieved from https://tradingeconomics.com/australia/employment-rate

Wanna, J. (2018). The government is backing the wrong industries, as our economy changes: Productivity Commission. Retrieved from https://theconversation.com/the-government-is-backing-the-wrong-industries-as-our-economy-changes-productivity-commission-81703

Wilson, T. (2018). Bloom And Boom: How Babies and Migrants Have Contributed To Australia’s Population Growth. Retrieved from https://theconversation.com/bloom-and-boom-how-babies-and-migrants-have-contributed-to-australias-population-growth-78097

World Bank. (2017). Ease of Doing Business in Australia. Retrieved from http://www.doingbusiness.org/data/exploreeconomies/australia