Mondelez Australia Foods produces 22 million jars of Vegemite every year, and is a staple item in 80% of Australian households.
Such market power has attracted a substantial number of imitator brands, such as OzEmite (Dick Smith), AussieMite (Roger Ramsey), and BrekkieMite (Aldi).
A number of trademark infringement disputes have arisen between competitors in the yeast paste market. For a trademark claim to be successful, a brand must show that the infringement has directly lead to a loss of sales. It is difficult for brands to provide such evidence to the court because of confounding factors, such as advertising, price, and shelf placement.
A series of Discrete Choice Experiments (DCEs) were designed to mimic the in-store availability of original yeast paste brands (e.g. Vegemite) and imitation brands (e.g. OzEmite and AussieMite) across a range of price points. DCEs ask decision makers to select their preferred option from a set of competing alternatives. The alternatives vary in their attributes e.g. price and brand.
Choice models can be used to quantify the trade diversion from the original brand to imitator brands. Choice models provide the evidence to demonstrate if a loss of market share has occurred while controlling for other factors like price.
Using choice models, we show that the Vegemite brand is resilient to trademark attacks. Vegemite’s market share increases when imitators enter the market. The presence of imitators strengthens consumers’ willingness to pay for Vegemite.
High clout brands like Vegemite may benefit from imitators because their imitation reinforces to consumers that the brand is a market leader.
Contact us to find out more information about this project.