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Vegemite: Original vs Blend 17

March 15, 2018

VegemiteBusinesses are constantly looking for that next growth opportunity or new revenue stream, and coming up with marketing strategies to deliver on that goal. That’s an easy thing to achieve if you are a start-up, but not so simple if you are an established brand with a deeply entrenched product or service.

Take Vegemite as an example. “A thick, black Australian food spread made from leftover brewers’ yeast extract” (from Wikipedia), Vegemite has been an institution here for the best part of a century (and a mystery as to why we like it so much for people from other countries). In 2009, a  new version of Vegemite was released, mixed with cream cheese. It made news for being a massive branding failure (“iSnack 2.0“) but it was pretty clear to see it was an attempt to make people use more of the product. You see, most people spread Vegemite very thinly. In my house, the amount I put on my toast is considered excessive (see above), which should give you an idea.

With its intensity diluted by the cream cheese, what was ultimately called Vegemite Cheesybite seemed to be all about increasing the spread amount and therefore consumption volume.

If your target market doesn’t perceive that you are adding value, they will see your strategy for what it ultimately is – an attempt to influence overall consumption levels for revenue and profit growth.

Which brings us to Blend 17. Hot on the heels of the return of Vegemite to Australian hands (by Bega Cheese last year), this new boutique variety was launched, retailing for more than double the price of the ordinary Vegemite.

So, instead of a strategy that increases consumption volumes, this one is about convincing people to pay more for the same quantity. Does that strategy work? Only if the consumer perceives they are getting added value.

With Blend 17 finally on sale for the same per weight price as normal Vegemite, I bought a jar.

The verdict?

Maybe a slightly smoother, more intense flavour, but only marginally better than the original and certainly not worth paying double for it. Which probably explains why it was 50% off when I bought it.

So what’s the answer? How can you generate more revenue and profit from one of your flagship brands? Keep innovating, but whatever you do don’t jeopardise the brand equity and consumer loyalty built up in your core product (think BBQ Shapes).

Come up with new packaging and bundling ideas using the original product. Look for new markets – Vegemite managed to win over Australians, so why not the Dutch? They like salted liquorice, after all.

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