The Impact of Mobile on CPG CRM Strategy

1MXM MOBILE 2012 | KRAFT CANADA CASE STUDY

THE IMPACT OF MOBILE ON CPG CRM STRATEGY:A KRAFT CANADA CASE STUDY

Published in the International Journal of Mobile Marketing, June 2012. By Diane Lee and Katrina Engelman

Abstract

Kraft Foods is the largest food and beverage company in North America and the second largest worldwide (Forbes, 2012). It has been a pioneer in the online and content publishing space, offering online branded content through its customer relationship management (CRM)—or as Kraft Foods defines it, consumer relationship marketing—activities since the nineties, launching kraftcanada.com in 1997 and what’s cooking and qu’est-ce qui mijote magazines in 2000. Kraft Canada has also had Facebook pages in French and English since 2009 and 2010 respectively, and a YouTube channel since 2011 (G. Boulanger, personal communication, March 29, 2012). It has expanded its platforms in mobile as well: As a leading consumer packaged goods (CPG) company, Kraft Foods has used the mobile channel to promote CRM since 1999. The following study explores the efficacy of mobile in promoting consumer acquisitions and cultivating loyalty through evergreen mobile programs and short-term campaigns, with a particular focus on Kraft Canada and the Canadian market from 2005 to the present.

Introduction

Kraft CRM is a centralized division within Kraft Foods supporting all of its consumer brands through key shared investments. In the Canadian market, these include kraftcanada.com, what’s cooking and qu’est-ce qui mijote; the United States market has kraftfoods.com and comidakraft.com, food&family and comida y familia magazines. Each also has an email and CRM registered subscriber database. The brand’s overall mobile marketing objective is to: “Use mobile to accelerate our vision of becoming the indispensable food resource for all consumers’ meal planning, preparation and shopping needs—making their lives easier and more delicious, anytime, anywhere.” An important part of achieving this vision is innovation, which has always been a driving force in Kraft Foods’ marketing endeavors.

Ed Kaczmarek, Director of Innovation and Consumer Experiences at Kraft Foods has said, “There’s no question that as marketers, certainly we need to depend on numbers, but we can’t forget about our gut instinct. My gut instinct as a marketer is, if I can get a consumer to engage with my content and my platform in this multitude of high-value tasks, it is going to deepen my connection with that consumer. When he or she is considering purchasing a product within a category that I offer, I think his propensity to consider a Kraft product increases because of that engagement” (Peterson, 2011).

Though Kraft Foods first looked at mobile in 1998 as a platform on which to test and learn, it began investing in mobile in earnest

in mid-2008. The brand saw what it believed to be an incredible opportunity to connect with the consumer closer to the point of purchase in a highly relevant manner, through new and extraordinary experiences. Kraft Foods’ initial motive was—and continues to be—to better connect with its consumers, with the ultimate goal of driving loyalty and bringing them value above and beyond just the Kraft product itself (E. Kaczmarek, personal communication, March 22, 2012).

Principles of CRM

CRM involves the deployment of strategies, processes and technologies to strengthen a company’s relationship with consumers through every phase of the purchase cycle, from marketing and sales to post-sales communications (Chan & Lam, 2004). It is a means by which brands can provide better service, improve and manage customer expectations and promote loyalty through customized offerings. In essence, CRM approaches are built on the concept of relationship marketing, which embraces strategies of personal and ongoing exchanges with customers for brand management, feedback, knowledge acquisition, and customer differentiation (Moon, 2002). Knowledge acquisition enables companies to gather better information about their customers through some type of self-disclosure, while customer differentiation allows companies to offer services that match different customer needs and values (Chan & Lam, 2004). Moon (2002) further states, “The relationship marketing process involves an iterative cycle of knowledge acquisition, customer differentiation, and customization of the entire marketing mix.”

The mobile channel has become an essential tool for building such consumer relationships. As Kannan et al. (2001) point out, mobile and wireless technologies enable companies to (1) personalize content and services, (2) track consumers or users across media and over time, (3) provide content and service at the point of need, and (4) provide content with highly engaging characteristics. Anckar and D’Incau (2002) further emphasize that consumers are most interested in services with high mobile value that meet spontaneous and time-critical needs.

To be clear, fundamental consumer needs have not changed; they’ve simply evolved into acute, accelerated desire in an age of on-demand delivery (Willis, 2012). Multiple studies over the last two decades show that people seek out media and content to meet the need for immediate utility and inspiration. Willis continues, “Consumers interact with content looking for task facilitation, emotional gratification or both, so a brand’s content strategy should address these requirements, which will facilitate loyalty building.” For Kraft Foods, an example of content in context would be a recipe for a consumer interested in making chicken for dinner with a limited


number of ingredients, in 30 minutes or less, delivered to his or her mobile device via Web or application.

Mobile CRM (mCRM) is most effective at targeting consumers who are frequent users with a high purchase rate and strong brand loyalty, and, as previously stated, in need of on-the-move services for spontaneous shopping (Chan & Lam, 2004). The first step toward a mCRM solution is building a consumer database. This involves (1) building a database of consumer activities, (2) analyzing the activities, (3) determining the target consumers, (4) developing a tool to reach those consumers, (5) implementing privacy issues and (6) defining metrics for measuring the success of the CRM program. After understanding the target audience’s activities, the company can proceed in creating mobile products and services (Winer, 2001).

Channel Integration

Mobile can be used as a standalone solution for content delivery, though it is most effective when integrated with other media channels to enhance and bring an otherwise flat experience to life in the digital space. Understanding the strengths and weaknesses of different marketing platforms and how those platforms work together is critical to successfully delivering content. Each channel has its role to play on a continuum that might include direct mail, print, tablets, smartphones and the web, and it is a mistake to assume that one platform is interchangeable with another. Ideally, the channel mix allows the brand to tell a whole story, leveraging, for example, the emotional investment of print, the inspirational/transactional power of the tablet and the mobility of the smartphone (Willis, 2012).

According to Willis, best-practice strategy in content channel integration and optimization includes five principles:

1. Leverage and balance the relative strengths of each medium, considering dominant need state solutions—education, inspiration, entertainment, provocation, action and transaction.

2. Optimize content for the unique consumption habits of each channel—the medium must augment the message.

3. Encourage multi-channel engagement; multi-engaged consumers are almost always more valuable.

4. Create links between channels and ensure they reinforce one another—e.g., animate print; make it actionable through SMS or QR codes.

5. Continually collect and apply consumer data.

For Kraft Foods, mobile still remains a comparatively small portion of the overall marketing mix—the brand invests heavily in a variety of media channels including television, print and digital—however, the key to the company’s marketing success has been to use mobile and these other mediums in tandem for a 360-degree, immersive consumer experience. Kaczmarek also sees the role of mobile growing more prominent with time: “Suffice it to say that mobile has become more strategic and will continue to gain momentum this year and in the future” (Peterson, 2011).

Development of Kraft Canada Mobile CRM Strategy: A Six-part Methodology

Brand and Business Understanding

In 2009, Kraft Foods invested in a complete reevaluation of its mobile offering and the strategy behind it to determine the new direction in which the company and its brands were headed in the handheld space. This included looking at the overall digital and content strategy, considering updates to the company’s interactive assets and tactics and examining the relationship between the corporate CRM team and Kraft brand managers.

In addition, it was imperative to conduct a significant competitor analysis in the highly competitive food space on mobile—Nestlé, Tyson Foods Inc. and Pepsico Inc. were the other major industry players in North America at this time (Fusaro, 2009). In the U.S., Nestlé had just released a Flash-based mobile application (Butcher, 2009) and was beginning to run promotional mobile campaigns and sweepstakes around its brands (Tsirulnik, 2009). Tyson Foods started to offer mobile coupons later in the year (Butcher, 2009), while Pepsico already had an established mobile presence globally and was a finalist for the 2009 Mobile Marketing Association (MMA) Awards in six categories on multiple continents, including Best Mobile Campaign Overall (Mobile Marketing Association, 2009). Fortunately for Kraft Foods, despite the quantity of these competitive efforts, the individual campaigns were in no way connected as part of a larger story. It was, therefore, to the company’s advantage to create not just sporadic mobile initiatives, but a rolling, 24-month overarching mobile strategy.

Willis (2012) says that a robust content strategy usually includes several expected content pillars—covered by competitors—combined with proprietary features that set the brand’s offering apart. For Kraft Foods, a mobile leadership benchmarking exercise clearly established that a key area of concern was the lack of breadth of the company’s mobile offerings; Kraft Foods’ niche marketing position—limited to the iPhone at this time—was disjointed with its vision of meeting all consumers’ needs. Specific audiences—e.g., English-speaking Canadians versus French Canadians—needed to be approached differently in mobile, considering demography characteristics, ethnographies, print and email programs, as well as mass-market users of SMS and shopping tools.

Nielsen was the first third-party audience measurement company to release findings specific to the Canadian mobile market in the first quarter of 2009, stating that the country was experiencing similar trends to those driving mobile Internet growth in other markets: smartphone adoption, unlimited data plans and consumer advertising campaigns to raise awareness of mobile phone capabilities (Nielsen, 2009). Eric Puterbaugh, director of client services for Nielsen Online observed, “The mobile market in Canada has grown rapidly since we first reported on the data in Q4 2008. Every country has unique needs for mobile audience measurement driven by carriers, handset availability and media brands focused on


their market. While we see many global media properties on the list of sites, Canadian media brands are actively extending their reach into the mobile channel.”

According to the Canadian Wireless Telecommunications Association (CWTA) in 2009, there were 22 million mobile subscribers in Canada—over 66 percent of the Canadian population—expected to reach 30 million by 2014. Additionally, 75 percent of all Canadian households had a mobile phone at this time (mobiThinking, 2010). The top mobile phone models in use were the Apple iPhone 3G, BlackBerry 8100, LG Rumor Series, Motorola Razr V3 and Motorola KRZ R Series (Nielsen, 2009)—a range of high-end smartphones and lower-end feature phones, the usage habits of which Kraft Canada would have to identify, address and plan for, among other key demographic characteristics.

User Mapping

In order to successfully integrate mobile into a brand’s overall media mix, the intended users’ usage habits must first be determined. This way, the best mobile tactics can be selected to complement the key demographic’s life stage characteristics, challenges, attitudes, behaviors, preferences and content needs to deliver tools and information via the most effective means possible. For example, if a population is known to use SMS as its primary method of communication, a brand should take advantage of text messaging calls to action rather than using, for instance, an augmented reality application to market its product simply because the latter is a new and interesting technology.

Content consumption has fundamentally and permanently changed—and is still evolving. It differs by gender, generation, channel and personal preference; for instance, women prefer instructional or inspirational content that is actionable for them in their daily lives—ideas that are realistic and attainable. Anything overly-aspirational may fail to engage them and can sully the brand (Willis, 2012). Furthermore, women value personalization, which, as stated earlier, is one of the fundamental achievements of mobile CRM.

Kraft Canada’s key demographic for mobile is mothers aged 25 to 35—“Millennial Moms”. Otherwise known as Generation Y, members of this generation are observed to be technologically savvy and prone to multitasking. In 2004, Apple Canada released a perspective on the Millennial Generation as teenagers, finding them to be highly goal-oriented multitaskers who pursue many goals at the same time, staying in touch with others while gathering information about various topics that interest them. They also use technology at higher rates than people from other generations: The use of cell phones rose from 40 percent to 50 percent in two years but more than doubled among teens, and 47 percent of them used interactive screens compared to 30 percent of Gen Xers. (Apple Inc., 2004). Millennials, Apple concluded, represent enormous buying power—they create, share and research things that are important to them, and they know how to get information when they need it.

Willis (2012) continues, “The Millennial generation provides the most striking example of how people consume and digest information in the digital age, and the clearest view into the future. Content consumption has met and married multi-tasking. Millennials are mavens of multi-device or transmedia consumption, often using two or three devices at a time.” Even as teenagers, Apple (2004) noted, “This most technologically advanced, collaborative, and communicative generation to date is bringing its unique sensibilities to the dinner table”—a behavior that Kraft Canada has continued to help cultivate among Millennials in their adulthood.

The target market of Millennial women is divided into English and French speakers, a factor that Kraft Canada needed to consider early on. As eMarketer (2011) points out, Canada’s status as a country with two official languages presents a significant challenge for marketers; according to Statistics Canada’s Canada Year Book 2011, 22 percent of the country’s residents—including approximately 80 percent of Quebec—were French speakers as of 2006. Using mobile to reach these Francophones can actually present a marketing conundrum, as Quebec lags behind Canada as a whole in mobile usage and digital media adoption in general (BBM Analytics, 2010). In 2011, the CWTA found that only 21 percent of Quebecers (versus 29 percent of total respondents) used a mobile Web browser or apps, 15 percent used their phones to conduct online searches (versus 25 percent of total respondents) and 26 percent were smartphone owners (versus 33 percent of the total). In addition, when asked if they would be interested in receiving mobile coupons from retailers in exchange for receiving ads on their phones, only nine percent of Quebecers (versus 12 percent of the total) responded positively. Nevertheless, this segment of the Canadian population cannot simply be ignored, and Kraft Canada made the decision to provide a dual-language mobile offering.


Strategic Framework

With the insights and understanding gleaned from the initial stages of the strategic process, Kraft Foods instituted an overarching mobile CRM strategy for its Canadian user base. The core components included:

1. No Mobile Left Behind™: Kraft Foods had previously been in the mobile space with a highly niche offering; mass, scale and reach were required. Knowing that Canadians use a wide range of handsets, the company adopted the mindset that all consumers, regardless of the devices they use, should be able to access the brand from their phones (Ahonen, 2010; The Mobile Marketing Blog, 2010). Associated tactics included:

• an SMS CRM database and brand marketing platform;• tiered mobile websites for all mobile browsers to provide the

richest experience possible;• multiple application strategies for iPhone, BlackBerry and

Java; and• multiple languages and interfaces for Canadian English and

French.

2. Cross-media integration for awareness and usage: Kraft Foods was not using its assets to cross-promote mobile or connect the dots to gain critical mass. To support the company’s core CRM strategy in content creation and distribution across all channels, integration of mobile with the other mediums, such as print, was required.

3. Delivery of valuable and accessible content: Kraft Foods’ former offering was narrow—food recipes only. There was significant room for innovation and content development, so an entire content development program was proposed to create a portfolio of compelling mobile content platforms ranging from the simple and inspiration to the deep and functional. This involved:

• Personalization of all touch-points—with such a small screen, it is critical to minimize the steps it takes for the consumer to get what he or she wants. Customization is key and could include tailored content by age, cooking skill, life stage, budget, diabetes and other health-related limitations, etc.

• Location-based content offerings (e.g., local retailer integration, couponing, etc.)

• Mobile social tools and experiences to tie together mobile and digital CRM

• Integration of mobile into loyalty and advocacy programs

4. Connecting the dots: From inspiration and planning to purchase, Kraft Foods needed to build a single mobile platform that would take users from idea to store. The results from the company’s earlier competitive analysis indicated that tying these stages together in a holistic user cycle in one location was missing and would be invaluable.

5. Placing clever bets on innovation: To stay ahead of the competition, it is necessary for Kraft Foods to always be vigilant

about next-generation technology platforms and creative campaigns.

Kraft Foods’ mobile CRM strategy brought together all that the company and its brands had as assets, as well as everything that had been done by the company in mobile to date. It capitalized on the opportunities brought to light from the preliminary research stages and provided a roadmap with which Kraft Foods could most effectively navigate the CPG mobile landscape.

Ideation

Upon establishing the above strategic framework, Kraft Foods entered into an intense period of ideation, continual research and exploration. The food marketer pinpointed the mobile web, mobile applications, SMS and two-dimensional (2D) codes as necessary channels through which to engage consumers on the go, and conducted brainstorming sessions to discuss and flesh out the varying opportunities for each. In addition, Kraft Foods periodically held what it referred to as Innovation Summits: all-day internal meetings to evaluate not only immediate, practical mobile solutions, but also “blue-sky” initiatives—campaigns and programs for the future that would push the boundaries of what had already been done in mobile by CPG brands to date. In time, the Innovation Summits also became occasions for reviewing the performance of Kraft Foods mobile properties, with conversations around how to improve or alter them to better serve users.

Content and Engagement Plan

Willis (2012) emphasizes, high-potency content is a strategic asset that both enhances and differentiates a brand. Content that encompasses a range of value-added services—information, tools, connections and entertainment, for example—fulfills human needs and enriches the brand experience. Kraft Foods determined that its consumers most want mobilized recipes, customized text message alerts and utilitarian tools with which to bookmark favorites and create shopping lists, for example. To meet these consumer demands, Kraft Foods needed to delineate which functions and features would be most appropriate for each mobile property, in order to provide content in context. The Recipe Box and Shopping List features, for instance, would be made available on both the mobile site and application, and would, in fact, be synchronized with user login. The application, however, would also have to boast other unique, native features to distinguish the experience from that of the mobile site—to complement rather than replicate.

Moreover, interactive content, especially on mobile, must be dynamically updated to remain relevant, accurate and engaging. Content that provides immediate and/or ongoing utility and is one of the most prized content types, Willis (2012) says, and tools can be as simple as a recipe finder or as complex as a personalized health plan generator. It must be instantly accessible (via search and multiple channels) and quickly digestible—that is, scannable, visual and direct. A new mom does not have time, or even two free hands, to read a long content segment, but she is hungry for information.


Whatever media or devices are on hand must suffice, and the interface and interaction must be easy and intuitive.

Measurement

According to Willis (2012), in order to measure content engagements accurately, a brand must (1) identify and track all content attributes, (2) track the contextual attributes in which the content is presented, (3) record the resulting consumer engagement and, where possible, (4) capture related consumer expenditure information. During the strategic process, Kraft Foods established a set of metrics with which to measure results. This included:

• consumer acquisition—the number of new CRM registrants, unique visitors, downloads, repeat use and time-spent rates;

• technology performance—load times, crash ratio, consumer ratings;

• achievement of “high-value tasks”—the types of tasks Kraft Foods wanted users to perform (e.g., view recipes, add to Shopping List, send to friends); and

• ROI—dollar value returned, media value to the brands.

These benchmarks continue to allow Kraft Foods to assess, adjust and improve upon its mobile experience. In order to stay relevant with consumers, the brand must always be evaluating and updating such components as the user interface, user journey, copy and images, while also considering the use of new technologies in future activations.

Kraft Canada Properties

Kraft Canada Mobile Site: m.kraftcanada.com

When Kraft Foods updated its mobile strategy in 2009, it already had a limited mobile website in the U.S. based on the Yahoo! Blueprint platform, inaccessible on many handsets. To reach the rapidly-growing 66.4 million North American mobile web users (eMarketer, 2011), Kraft Foods needed to strengthen its overall mobile web presence and rebuild the site to render to all devices, in all territories, according to No Mobile Left Behind™. In Canada specifically, 21.3 percent of mobile consumers (or 3.9 million Canadians) used their mobile phones to browse the Web in the first quarter of 2009, having increased from 16 percent penetration in the fourth quarter of 2008 (Nielsen, 2009). Kraft Canada, with learnings from the U.S. mobile site’s limitations, implemented a

two-phased mobile Web approach: (1) achieve speed to market by first creating a basic and highly functional site; (2) add advanced browser interactivity for ultimate usability.

The former U.S. mobile website offering had performed sub-optimally; tracking numbers were below goal and did not deliver acceptable returns on investment. The key objectives of building Kraft Canada’s mobile web presence were to (1) attain maximum traffic to the site and (2) promote user engagement. To achieve these aims, m.kraftcanada.com was designed to render in both English and French and included a variety of content. Complementing the Kraft Canada desktop site, the mobile version offered a full catalog of recipes with overview, directions and nutritional information, integration with Recipe Box and Shopping List, a home screen Recipe of the Day feature and search capabilities. Consumers who are already familiar with the interface and services provided on a company’s Web site are likely to benefit more from its mobile site, say Chan & Lam (2004).

The Kraft Canada mobile site continues to experience healthy traffic volumes, which, since December 2009, average over 68,000 visitors per month, 45,000 of which are unique and nearly 33,000 are new. The mean return rate of visitors each month was 30 percent in 2010, rising to 46 percent in 2011, and spikes in the number of user visits have been observed to occur during the Canadian holiday months of September and December, with 53 percent and 66 percent growth in session activity respectively.

Application Evolution: Kraft Kitchens to iFood Assistant

Consumers now expect to see device-tailored content rather than the same content replicated across multiple devices or channels—but, taken together, the channels must reinforce a single storytelling arc. Consumers also expect a brand to have something unique to offer versus their competitors, or to provide the content in a superior fashion (Willis, 2012). It is also important to provide variegated mobile experiences for consumers in order to avoid stagnancy and encourage repeat engagements. If companies want consumers to notice and remember branded content, Doug Rohrer, a psychologist at the University of South Florida, advises, “Mixing things up is something we know is scientifically supported as something that boosts attention”—and when people pay closer attention, they learn better (Neighmond, 2011). To achieve this dynamic, Willis says, a multi-channel content strategy can be used to present key content differently. Smartphone applications became just one of the platforms Kraft Foods chose to incorporate into its mobile channel plan.

iFood Assistant

When iFood Assistant was launched in North America in December 2008, it was a paid, iPhone-only application. Through successive iterations, it evolved into a free application available also on BlackBerry in Canada—as well as on Android (as an app and Recipe of the Day widget) and Windows Phone 7 in the United States. It quickly became one of the top 100 paid apps in the iTunes Store and was lauded by Apple for bringing an innovative approach


to mobile CRM: “By making the most of the groundbreaking features and capabilities of iPhone, Kraft shows its commitment to expanding its business through mobility and innovation” (Apple Inc., 2012).

Kraft Foods initially entered the mobile application space in 1999 with an app called Kraft Kitchens for the Palm Tungsten W, i705 and Palm VII series handheld and web-enabled devices. Kaczmarek notes, “It was purely a test-and-learn—there were no hard objectives set. Some of the core features were very simple and telegraphic and are as relevant and meaningful to the consumer today as they were back then—Recipe of the Day, Shopping List, search” (E. Kaczmarek, personal communication, March 22, 2012). Indeed, thirteen years later, the current format of iFood Assistant, version 4.1, still shares the core features of its early Palm predecessor: Make It Now (“Use ingredients you have on hand”), Recipe of the Day, and Monthly Best Bets (“Recipes for every occasion”).

Frank Perkins, Technology Specialist in Kraft Foods’ Global Digital Marketing Solutions group, drove the Palm VII application project. He recounts, “I would say that we were ahead of our time in leveraging the scale and functionality of kraftfoods.com and extending it to mobile. The app was really just a mobile version of the kraftfoods.com website that was simplified to be used on the Palm devices. That design pattern of leveraging a set of business services from the Web on a mobile device remains the same; you need to: (1) scale down the service to fit the device type—both from a functionality point of view as well as screen real estate, (2) ensure that the site will run efficiently on a slower connection and (3) consider how many consumers are using the device you are targeting and consider the ROI” (F. Perkins, personal communication, March 29, 2012).

New versions of iFood Assistant have been released every year since its launch. The version 2.0 update in December 2009 brought users enhanced content and was made available in Canada for the first time; added features included offline access to Shopping List and Recipe Box, the ability to set recipe and offer alerts, and new content sections such as Holidays & Entertaining and Budget Wise. Kraft Foods also released a free, limited version of the application called iFood Assistant LITE, available for the iPhone and BlackBerry devices. Version 3.0, out nine months later, improved the application even further, supplementing existing functionality with mobile coupons and barcode scanning (U.S. only), What’s on Hand, the ability to share recipes on Facebook, and a new home screen design with access to more categories.

High-performing content is often layered, highly visual, intuitively organized and/or tangible, Willis (2012) says. Online digital media, quizzes, slide shows and recipe databases generate high page counts, outperforming flat content types such as articles. Additionally, an increasing number of consumers want experts to curate content for them: to select, organize and archive it in an expert fashion, only presenting the most relevant, valuable and

enjoyable content worthy of consumer interaction. iFood Assistant contains no articles; rather, any extended content is displayed in video format, such as how-to videos and basic kitchen tips—practical for the busy mom. With regard to curation, Kraft Foods’ recipe database consists of over 30,000 recipes; iFood Assistant contains around 7,000. Considering the varying preferences of its consumer groups, it is very important for Kraft brands to choose the most pertinent and appropriate recipes to showcase on mobile. Knowing such demographic disparities as eating and cooking habits, as well as dietary needs and preferences, helps Kraft Canada tailor its offering.

iFood Assistant 4.1, released in December 2011, presents users with the most advanced functionality the app has had to date, with the addition of voice-activated controls and in-application purchase of exclusive recipes from celebrity chef Marcus Samuelsson. The voice activation component, currently a U.S.-only feature, allows for easier search, Shopping List management and hands-free recipe instructions. This newest version of iFood Assistant is also free; Kraft Foods made the decision to offer the formerly paid app at no cost in order to increase reach, instead charging 99 cents for the optional Samuelsson recipe content pack. In response, the number of downloads the app saw in Canada for just the month of December 2011 was nearly 300 percent of the number of downloads for all of 2010 (MXM Mobile, 2011). This may have also been facilitated by the fact that Canadian mobile usage is on the rise; the CWTA (2011) found that 58 percent of smartphone users had downloaded apps to their devices as of March 2011.

Evolution of iFood Assistant in Canada, clockwise from top: versions 2.0 (in French), 3.0 and 4.1


In the United States, iFood Assistant is integrated with Coupons.com and the Grocery IQ database: Consumers can scan Kraft products to access printable coupons or sign up for SMS coupon alerts that drive to the mobile site for downloadable coupons. Coupons can also be applied automatically to a selection of retailer loyalty cards. Canadian retailers, unfortunately, do not offer support for Coupons.com and Grocery IQ, so the feature was omitted from the Canadian edition of the app. However, this is not to suggest that the desire for location-based mobile coupons is not there; the CWTA (2011) reported that 29 percent of mobile phone users expressed a significant degree of interest in receiving mobile information or coupons based on their current location. As an alternative, Kraft Canada has experimented with other methods of presenting mobile offers to consumers, such as through scannable codes in stores.

For Kraft Foods, the intention behind the development of iFood Assistant was to enable the company to deepen consumer relationships and implement new revenue streams. Its main objectives were to add users to the CRM database, convert engagement to purchase and improve perceptions of Kraft Foods’ ability to be innovative. In addition to recipe content, iFood Assistant includes CRM registration options, fully integrated with kraftcanada.com, for users to create, share and save their best recipes. Since its initial release, iFood Assistant has performed exceptionally well, increasing the CRM database to include new users and incurring strong user engagement with high return rates. Downloads of the app from 2010 to 2011 saw a 43 percent increase annually, and downloads for the first quarter of 2012 have seen a 37 percent increase year over year.

In 2010, iFood Assistant received a Bronze Edison Award for innovation in Media & Visual Communications in the Best New Product category (Edison Awards, 2010).

Personalization and Social Media Integration

The four most powerful loyalty drivers are a personalized brand experience, socialized brand experience, universal brand access and consumer recognition/reward. Brands seeking to build consumer loyalty must offer high-value and high-potential consumers personalized brand experiences and socialized brand experiences (Willis, 2012). The very first personalized feature Kraft CRM incorporated into any platform was Recipe Box, which debuted on the Kraft Interactive Kitchen website in 1996. In 1999, the functionality of Recipe Box was extended so users could not only add Kraft recipes, but also share their own (F. Perkins, & R. Moda, personal communication, March 29, 2012). Today, Recipe Box remains an important element of the desktop and mobile sites as well as iFood Assistant. Julie Fleischer, Director of Content Strategy & Integration at Kraft Foods, says, “About two thirds of our recipes come from our member community. We’re thrilled that they share their best recipes with us and each other and they view our site as their own food community” (Gutman, 2012).

Humans are driven by emotion, especially feelings linked to social or family relationships (Willis, 2012). According to Marcel Just, director of the Center for Cognitive Brain Imaging at Carnegie Mellon University, “One of the biggest contributions of brain imaging is to reveal how intensely social and emotional the human brain is. There is a constant tendency to be processing social and emotional information. It’s there and it’s ubiquitous” (Ludtke, 2010). As a result, social media has become the natural companion for mobile activations, fulfilling consumers’ innate desire to share information and events in real time, wherever they are. A 2011 survey by Ipsos Reid found that the most drastic rise in Canadian smartphone usage involved social networks; 48 percent of owners used their devices to access social sites, up 20 percent from the previous year (Ipsos, 2011). In iFood Assistant, users can share recipes and grocery lists through Facebook, Twitter, SMS and email; Kraft CRM tracks the click-through rate of shared links via a URL shortener.

SMS

Kraft Kitchen Concierge

Kraft CRM began exploring the capabilities of SMS in the United States in 2005 with Kraft Kitchen Concierge, a CRM mobile recipe and ingredient list program. It was determined that SMS was a universal, unique and powerful medium that would tap into the power of an always-on, personal mobile device while leveraging the assets of the recipe database with incremental gain for Recipes By Email (RBE) and kraftfoods.com efforts. In a preliminary competitive analysis, the brand also found that SMS was largely untapped by competitors in the CPG category, though other food content providers were beginning to provide such offerings on cable and in magazines (Kraft Foods, 2005). From this early effort, the company would apply its learnings to future SMS campaigns in its Canadian territories.

The Kitchen Concierge program objective was to create a mobile consumer experience that Kraft permission-household individuals—those in the CRM database that have given permission to contact them via different communications vehicles, sometimes referred to as CRM consumers versus general population in research (G. Boulanger, personal communication, March 21, 2012)—could interact with while shopping at the grocery store or on the go. The resultant text messages would service those consumers in the mindset to buy items or get recipe ideas to complete their meal-planning needs. Research indicated that the estimated size of opportunity on a 7,000,000-person permission household base was roughly 350,000 users and that a new service extension would have niche appeal. Further justifications for the program included the calculation that it would pay for itself while offering Kraft Foods additional revenue potential, and the belief that SMS was the only CRM service that could reduce product substitution in store.

At this time, the U.S. mobile marketplace was scaling up; mobile usage and penetration were seen to be on the rise, and 22 percent of moms were texting once a week or more (Forrester, 2004). Forrester projected that, by the end of 2005, there would be 179


million mobile subscribers, 32 percent of which would be active (sending or receiving) SMS users. Kraft Foods’ own proprietary research aligned with these projections, showing that 20 percent of permission households were using text messaging in February 2005, and 35 percent of those would “definitely or probably use a Kraft SMS service” (Kraft Foods, 2005).

Kitchen Concierge was essentially a SMS dinner search tool designed to provide Kraft consumers with last-minute dinner ideas with corresponding lists of necessary ingredients. By sending Kraft a dinner request text message, users received a response from the brand with a choice of dinner options. The consumer would then select the dinner option that suited her and her family’s needs best and receive the associated ingredient list. Twenty-five ingredient lists were offered for five main categories—chicken, beef, pork, side dishes and desserts—and all recipes contained roughly five main ingredients and took approximately 30 minutes or less to make.

Recipe Alerts

In 2007, Kraft Canada began a test-and-learn SMS project to find out how best to engage consumers around food and provide inspiration via mobile (E. Kaczmarek, personal communication, March 22, 2012). The company created a website for consumers to sign up for daily or weekly text messages—they could choose what day(s) and time to receive the texts—which would then connect them to mobile versions of Kraft recipes. Kaczmarek relates, “We learned a lot over usage patterns, engagement and consumer preferences—all that learning went into our impetus for developing iFood Assistant. You could say it was our first inspiration to create something bigger and better. Ultimately, we were not pleased with the consumer experience around SMS and providing inspiration—we knew we had to do better if we wanted deeper engagement.”

Still, in 2009, SMS remained an important part of the Kraft CRM strategy to go beyond its previously limited mobile marketing reach and speak to the audiences it needed to target—and not only those using iPhones. Through text message alerts, the brand hoped to increase traffic to the mobile site and increase registrations to the Kraft CRM database. To achieve this, the brand utilized a custom-built SMS platform with secured short codes for the entire company to use across all of its North American brands (United States and Canada).

Kraft Canada implemented another test-and-learn SMS program for Canadian consumers in 2010 called Make Tonight Delicious, in market for approximately one year. In Canada at this time, 29 percent of mobile users reported using SMS on a daily basis (Forrester, 2010). Like the previous recipe alerts program, consumers customized the day(s) on which they would receive the text messages—either five, three or one day per week. Users who had opted into the program received season-appropriate recipe ideas that were pertinent to their daily dinner needs and quick and easy to make. Joy Henderson, Kraft Foods’ Digital Marketing Manager, says, “We know it is important to be there with a relevant message when the consumer needs it. Overall, the key is to keep

her needs at the heart of the content” (J. Henderson, personal communication, March 29, 2012).

Scannable Codes

During 2011, QR codes and Microsoft Tags became an increasingly popular way for brands to bridge mobile and various traditional marketing mediums such as print publications, product packaging, outdoor signage and more. According to comScore (2012), more than 1.4 million Canadian smartphone subscribers scanned QR codes with their mobile devices at least once in December 2011; 329,000 Canadian smartphone subscribers scanned a QR code at least once a week during that month.

In Print

Kraft Canada uses Microsoft Tags in addition to SMS calls to action in both of its quarterly magazines, what’s cooking and qu’est-ce qui mijote. In 2011, each issue featured an average of four Microsoft Tags and six SMS calls to action, the Tags outperforming SMS by an average of 84 percent for the year in what’s cooking and 85 percent in qu’est-ce qui mijote. Tagged content has included extensions of recipes on m.kraftcanada.com (including seasonal and holiday-themed menu items), cooking videos and recipes for specific brand products on branded mobile landing pages (e.g., Triscuit bouchées au brie et aux noix).

In the CWTA’s 2011 survey, 23 percent of mobile users said they would be interested in using their mobile devices to scan 2D barcodes for additional information about a product or service (eMarketer, 2011). eMarketer interpreted the numbers thus: “As with usage of location-based services, this reflects mobile consumers’ desire to interact with companies in ways that extend beyond passive recipients of ads.”


In Store

Marketers presenting compelling content in the right contexts provide maximum consumer utility, enable deeper content enjoyment and facilitate consumer content exchange (Willis, 2012). Kraft Foods’ individual brands are encouraged to leverage the Kraft CRM platform to further their messaging and create richer consumer engagements at no additional cost; for example, Cool Whip may be featured in an interstitial banner within iFood Assistant, allowing users to add the associated product to Shopping List instantly. Similarly, Kraft brands can also run QR code campaigns in stores, in conjunction with promotional shelf talkers or at the point of purchase, taking consumers to a mobile site where they can access exclusive information or offers and sign up for SMS or email alerts.

During the summer of 2011, Kraft Canada ran a nationwide in-store mobile program with Sobeys, a leading chain of grocery stores, the purpose of which was to engage consumers at point of sale by offering value-added content associated with Kraft products. A mobile call to action at the register encouraged consumers to either text a keyword to the designated Kraft Foods short code or scan a QR code for the same result—both drove to a campaign mobile site that was segmented into geographical regions, West and Ontario, for customized content and offerings in those locations. The QR codes were displayed in one region—the West—only as a test. These performed slightly better than SMS, with 54 percent of participants scanning the code and 46 percent following the SMS call to action.

Summary and Evaluation

The overall effect of mobile on Kraft CRM has been to provide another touch point with which to develop and deepen its relationship with consumers (J. Henderson, personal communication, March 30, 2012). As a result of its achievements in the mobile space, Kraft Foods received the Mobile Marketing Association’s Award for Overall Excellence in the Best Use of Mobile Marketing in 2010. The brand was also ranked second in Fast Company’s list of the 10 most innovative people in food for 2011, for “recognizing and targeting an underestimated demographic. The company pioneered marketing to moms with some of the most inventive and effective digital marketing campaigns” (Fast Company, 2011).

Industry Implications

The nature of mobile usage is shifting significantly in Canada: Though overall mobile phone penetration has risen modestly, smartphone adoption has grown rapidly in recent years and, along with it, the consumer’s receptiveness to brands’ mobile offers (eMarketer, 2011). Kaczmarek’s recommendation for other CPG companies is to invest in making mobile activations more engaging and interactive (Peterson, 2011). “That does not mean the answer has to be an app. There is a lot you can do with the mobile Web and even push into HTML5. As marketers, we try to make things perfect, but with mobile, you have to get out there and try it. There

is no question that Near Field Communication (NFC) is going to play a future role in the whole mobile ecosystem. Something that’s also interesting to Kraft is mobile gaming and augmented reality.”

Kraft CRM brings value to its numerous brands through integrated communications platforms, utilizing the collective power of kraftcanada.com, direct mail and custom publishing to create and distribute content. Mobile has become an essential tool for driving innovation and scale of user engagement for Kraft Canada on those various platforms, using such tactics as push notifications and ad-serving modules, for example. Kraft CRM’s push notification strategy in particular is aimed at driving repeat usage of iFood Assistant by delivering daily content to users’ home screens. This is achieved through two separate messaging streams—Recipe of the Day and Dinner Tonight—with content that changes daily. Users can set the frequency and delivery times of the push notifications, specifying which day(s) of the week they would prefer to receive them; the company currently sends over half a million push notifications throughout North America per month.

The future of content consumption lies in several intertwined areas: new media devices, changing expectations and consumption habits, and how consumer behavior and even human biology adapt to these changes (Willis, 2012). Content categorizations are changing as quickly as new content-consumption devices appear; the web and mobile communications have truly converged. Further convergence is ahead, Willis adds. “Consumers will access content nearly exclusively via a set of two to three devices; likely a tablet-type device complemented by a smartphone. There will likely be a third, large, in-home screen completing the device portfolio. Consumers will want universal, seamless access across channels and devices.”

What brands and mobile marketers now need to address is not simply mobile, but mobility. For a CPG company like Kraft Foods, a truly effective CRM engagement in the near future might incorporate many screens in multiple locations. A hypothetical scenario might include a Recipe By Email delivered to the consumer’s device while at work, which she could then share via SMS with each member of her family for collective input. The required ingredients would automatically populate in her Shopping List, accessible on either the Kraft Canada mobile site or in iFood Assistant, along with directions to the nearest grocery store. These directions would be synchronized with an in-car display with turn-by-turn navigation. Once at the store, the consumer might check in with Foursquare and receive a location-based coupon. Meanwhile, a store map in iFood Assistant would allow her to find the ingredients with ease and efficiency, and, at checkout, any applicable coupons clipped to her loyalty card from within the app would automatically be discounted from her total, which she would pay by mobile wallet. At home, the recipe would appear on touch-screen displays around the consumer’s kitchen, providing step-by-step cooking instructions and, finally, at the end of the meal, she would be able to rate the recipe in iFood Assistant and/or share it with friends on her social networks.


Certain components of the above vision, which is purely anecdotal, are not yet a reality, but the potential for such a deeply connected engagement is there and not very far from coming into fruition. As mobile and wireless technologies become more advanced, CPG brands should think about ways to enhance every aspect of the consumer journey in this way—and sooner rather than later.

Recommendations for Future Research

As Millennials grow older and the next generation enters the marketplace, brands must think about the disparities between the two segments and how to adjust their CRM strategies to cater to a new audience. Following Generation Y, Generation Z—or “Digital Natives”, as individuals of this group are sometimes called—is highly connected, having had lifelong use of communications and media technologies such as the Internet, instant messaging, text messaging, MP3 players, mobile phones, smartphones, touch-screen displays, tablets, Facebook, Twitter and YouTube (Grail Research, 2011). One marked difference between Generation Y and Generation Z is that members of the former remember life before the takeoff of mass technology, while the latter have been born completely within it.

As the introduction of these new technologies has changed the way consumers receive and process information, recent neuroscience proffers an interesting theory: Our memories are being eroded by incessant interruptions like texting, social networking and emails. Some neuroscientists believe our brains are actually changing in response to these environmental factors. In a study commissioned by Time Inc., neuroscientists wired two groups—Millennials and Boomers—with a battery of biometric technologies that tracked how subjects’ brains responded to media, both consciously and unconsciously. Early results from the study suggest that there are profound differences in the way generations process media; Dr. Carl Marci, CEO and Chief Science Officer of Boston-based Innerscope Research, central to the study, believes the brains of Millennials are actually wired differently than those of preceding generations. For example, Millennials cannot live without their smartphones, incessantly switch between media options and are indifferent to television. They average more emotional engagement, but fewer peaks and valleys of intensity compared to Boomers. Boomers, on the other hand, are “digital immigrants” who are indifferent to their smartphones, love television and are not as prone to media multitasking (Willis, 2012).

Companies that expect Generation Z to be loyal based on a carefully crafted brand image and marketing message will find that their effort is wasted; Generation Z simply doesn’t buy it. Instead, the product itself is what is important, regardless of marketing campaigns (Savitt, 2011). They not only discover brands and products but they evaluate them with brilliant objectivity, sift through them and share the results. There is no hiding from Generation Z, Savitt continues. They are extreme curators, sharing their thoughts and observations about everything online, from movies to books to clothes (and eventually, cars, home furnishings and health care).

The science of engagement will remain an important, dynamic enterprise for content strategists and marketers, says Willis. It has already been shown that younger generations consume media profoundly differently as a result of the technology they’ve grown up with—and that their brains appear to operate differently. There is no reason to think this evolution won’t continue (Willis, 2012). Looking toward the future, mobile will undoubtedly continue to play a pivotal role in reaching consumers as an always-on, ever-present communications platform that ties seamlessly with social media—but brands will have to further explore the changing relationship between different digital channels. For instance, as more people read magazines on tablets, what will the effect be on scannable code usage? How will the growing placement of touch-screen interfaces in automobiles and home appliances influence consumer engagement and CRM?

The bottom line, Savitt (2011) suggests, is that “Marketers need to make it easy to share what their Gen Z consumers love. Don’t stifle conversation, nor attempt to control conversation about your products—encourage it. There will be bad along with the good, but it will be authentic. This transparency will ultimately contribute to the long-term success of your brand.”


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The Impact of Mobile on CPG CRM Strategy

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