What a difference a dollar can make.
Kraft Foods has been discovering exactly the difference over the past few months. In December, the brand changed the price of its iFood Assistant mobile app from 99 cents to free. Total downloads of the app tripled.
“The one thing our marketers always want is greater scale,” says Ed Kaczmarek, director of innovation and new assets for the company. “We felt we had hit a plateau in terms of numbers of consumers engaging with the iFood Assistant for 99 cents, so we changed the business model.”
But the change doesn’t mean the app won’t generate revenue for Kraft. The app itself is free, but the company has introduced premium content—recipes from a celebrity chef—that retains the 99-cent price tag. The gamble is paying off, Kaczmarek says.
Birth of an app
In 2008, Kraft became the first consumer packaged goods company to create an app for the iPhone.
“Our goal at the time—and it still remains the goal—is essentially to produce something that makes consumers’ lives easier and more delicious,” Kaczmarek says. “We created an app where the heart of it was to provide utility.”