Harvard Case - Does a Brand Need a Purpose? Unilever Hellmann's versus Kraft Heinz Mayonnaise
"Does a Brand Need a Purpose? Unilever Hellmann's versus Kraft Heinz Mayonnaise" Harvard business case study is written by Paulo Albuquerque, Mariana Ortega, Anne-Marie Carrick, Andrew Lee. It deals with the challenges in the field of Marketing. The case study is 9 page(s) long and it was first published on : Apr 18, 2022
At Fern Fort University, we recommend that Kraft Heinz adopt a purpose-driven marketing strategy for its mayonnaise brand. This strategy should focus on aligning the brand with consumer values and societal concerns, while also leveraging digital marketing and social media to engage with target audiences and create meaningful connections.
2. Background
This case study explores the contrasting approaches of Unilever's Hellmann's and Kraft Heinz's mayonnaise brands towards purpose-driven marketing. Hellmann's has successfully positioned itself as a brand with a strong social purpose, focusing on sustainability and food waste reduction. Conversely, Kraft Heinz has largely relied on traditional marketing tactics, emphasizing product attributes and price.
The main protagonists are the marketing teams of both companies, who are navigating the evolving consumer landscape where purpose-driven brands are gaining increasing popularity.
3. Analysis of the Case Study
To understand the strategic implications of purpose-driven marketing, we can analyze the situation through the lens of several frameworks:
a) SWOT Analysis:
Hellmann's Strengths: Strong brand equity, clear purpose-driven positioning, innovative product offerings (e.g., 'Real Mayonnaise' with fewer ingredients), strong social media presence.
Hellmann's Weaknesses: Potential for brand fatigue if not consistently delivering on its purpose, limited reach in certain markets.
Hellmann's Opportunities: Expanding into new markets, leveraging partnerships with NGOs and influencers, developing new products aligned with its purpose.
Hellmann's Threats: Competition from other purpose-driven brands, potential for negative publicity if not meeting sustainability goals.
Kraft Heinz Strengths: Well-established brand, strong distribution network, competitive pricing.
Kraft Heinz Weaknesses: Lack of clear purpose, limited engagement with social issues, reliance on traditional marketing tactics.
Kraft Heinz Opportunities: Adopting a purpose-driven marketing strategy, engaging with consumers through social media, developing innovative product offerings.
Kraft Heinz Threats: Growing consumer preference for purpose-driven brands, potential loss of market share to competitors.
b) Competitive Analysis:
- Direct Competitors: Other mayonnaise brands (e.g., Duke's, Miracle Whip), other condiment brands (e.g., ketchup, mustard).
- Indirect Competitors: Brands focusing on healthy eating, sustainability, and food waste reduction.
- Competitive Advantage: Hellmann's has established a competitive advantage through its purpose-driven positioning, attracting consumers who value sustainability and social responsibility.
c) Consumer Behavior Analysis:
- Target Market: Millennial and Gen Z consumers are increasingly concerned about social and environmental issues, making them more likely to choose brands with a purpose.
- Consumer Needs: Consumers are seeking brands that align with their values, are transparent in their practices, and contribute to a better world.
- Decision-Making Process: Consumers are more likely to choose brands that demonstrate a commitment to their purpose through actions and communication.
d) Marketing Mix (4Ps):
- Product: Kraft Heinz could develop new product offerings that align with its chosen purpose (e.g., organic mayonnaise, reduced-fat mayonnaise).
- Price: While price is a key factor for many consumers, Kraft Heinz could explore premium pricing for products that emphasize sustainability or social responsibility.
- Place: Kraft Heinz could leverage its existing distribution network to reach new target markets and expand its product availability in online channels.
- Promotion: Kraft Heinz should invest in digital marketing and social media campaigns that highlight its purpose and engage with consumers on relevant issues.
4. Recommendations
Develop a Clear Purpose-Driven Strategy: Kraft Heinz should define a clear and compelling purpose that resonates with its target audience. This purpose should be authentic, actionable, and aligned with the company's values.
Leverage Digital Marketing and Social Media: Kraft Heinz should invest in digital marketing and social media campaigns that highlight its purpose and engage with consumers on relevant issues. This could include partnering with influencers, creating engaging content, and using social media to build community and foster dialogue.
Focus on Transparency and Authenticity: Kraft Heinz should be transparent about its practices and demonstrate its commitment to its purpose through concrete actions. This could include sourcing ingredients sustainably, reducing its environmental footprint, or supporting social causes.
Develop Innovative Products: Kraft Heinz should explore developing new products that align with its purpose. This could include products made with organic ingredients, reduced-fat options, or products designed to minimize food waste.
Engage with Stakeholders: Kraft Heinz should engage with stakeholders, including consumers, employees, and partners, to build trust and transparency around its purpose-driven initiatives.
5. Basis of Recommendations
These recommendations consider the following:
Core Competencies and Consistency with Mission: Kraft Heinz has a strong brand and distribution network, which can be leveraged to implement a purpose-driven strategy. The company's mission of providing affordable and accessible food can be aligned with a purpose that focuses on sustainability and social responsibility.
External Customers and Internal Clients: These recommendations are designed to appeal to consumers who value purpose-driven brands and to engage employees who are passionate about making a positive impact.
Competitors: By adopting a purpose-driven approach, Kraft Heinz can differentiate itself from competitors and attract consumers who are increasingly seeking brands with a social conscience.
Attractiveness ' Quantitative Measures: While quantifying the impact of purpose-driven marketing can be challenging, research suggests that brands with a strong purpose can achieve higher brand equity, customer loyalty, and financial performance.
6. Conclusion
Adopting a purpose-driven marketing strategy is crucial for Kraft Heinz to remain competitive in the evolving consumer landscape. By aligning its brand with consumer values and societal concerns, engaging with target audiences through digital marketing and social media, and developing innovative products, Kraft Heinz can build a strong brand that resonates with consumers and contributes to a more sustainable future.
7. Discussion
Alternatives:
- Maintaining the status quo: This would likely lead to a decline in market share as consumers increasingly prefer purpose-driven brands.
- Focusing solely on price: While this might attract price-sensitive consumers, it would not address the growing demand for brands with a social conscience.
Risks and Key Assumptions:
- Authenticity: The success of a purpose-driven strategy depends on the authenticity of the brand's commitment to its purpose.
- Consumer Perception: The effectiveness of the strategy depends on the consumer's perception of the brand's purpose and its actions.
- Competition: Other brands may adopt similar strategies, leading to increased competition in the purpose-driven space.
8. Next Steps
- Develop a detailed purpose-driven marketing plan: This plan should outline the brand's purpose, target audience, marketing channels, and key performance indicators.
- Conduct market research: This research should assess consumer perceptions of the brand's purpose and identify potential areas for improvement.
- Pilot test new products and marketing campaigns: This will allow the company to gather feedback and refine its strategy before launching on a wider scale.
- Monitor and evaluate results: The company should regularly monitor the performance of its purpose-driven initiatives and make adjustments as needed.
By taking these steps, Kraft Heinz can successfully transition to a purpose-driven marketing strategy and position itself for long-term success in the evolving consumer landscape.
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Case Description
This short case describes how Ana L. Mamede, Hellmann's brand manager at Unilever Portugal, responds to an aggressive campaign by rival Kraft Heinz by developing a brand "purpose" for Hellman's mayonnaise focused on reducing food waste. When Heinz, the ketchup king, sought to increase its market share by offering high discounts and enhanced distribution, it threatened Hellmann's lead in Portugal and throughout Europe. Ana pushes promotional activities in the short term, which yield good results, but realises a new plan is needed for Hellman's in the long term. She considers three options: (i) further promotional activities, (ii) innovation - developing the product line by launching new products and flavours), (iii) branding and communication - enhancing the brand's identity by developing a purpose - to inspire consumers to waste less food.
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