MARKETING ASSIGNMENT

FRITO LAY
This file shows the applications of all marketing strategies by the company named FRITO LAY under the subdivision of PEPSICO.

Marketing Plan for Frito Lay

History

In 1932, C.E. Doolin entered a small San Antonio cafe and purchased a bag of corn chips. Little did he dream this savory chip would become one of the nation's most popular snacks. Mr. Doolin learned that the manufacturer of the chips was eager to sell his small business, so he purchased the recipe, and began to sell FRITOS Corn Chips from his Model T Ford. Meanwhile, that same year, Herman W. Lay began his potato chip business in Nashville by delivering snack foods. Not long after, Mr. Lay purchased the manufacturer, and the H.W. Lay & Company was formed.

H.W. Lay & Company became one of the largest snack food companies in the Southeast, and LAY'S brand Potato Chips is still America's favorite potato chip.

Years later, in 1961, the Frito Company and the H.W. Lay Company merged to become Frito-Lay, Inc. Today, Frito-Lay brands account for 59% of the U.S. snack chip industry.

Introduction This marketing plan provides an outline of strategies of action in marketing Frito Lay. Frito Lay refers to the division of PepsiCo Inc. which manufactures markets and sells a variety of corn chips, potato chips and other snack foods. In this paper, the four pillars of marketing such as segmentation, targeting, positioning and communication strategies are discussed. Moreover, the general courses of actions or activities are likewise presented.

Marketing Program:
Segmentation Segmentation is the division of the market into various homogenous groups. Basically, Frito Lay products are generally marketed to the Hispanics prior to targeting the general market. Frito Lay has Mexican roots which explain why the Hispanic market was the initial market segment. The attractiveness of the market is evident on the strong needs for snacks among all segments. Nevertheless, the focus of segmentation is on penetrating the teen segment. As such, while the Hispanic population likes bold and spicy flavored snack, there is high influence on kids in making snack purchase decisions, emerging Y generation has purchase power and busy lifestyles demand food on the go. Further, Frito Lay is a leader in the dip market but since there are many competitors in the market the company decided to penetrate the vegetable dip segment.

This is in addition to chip dips segment particularly the shelf-stable sour cream based dip and other chip dips which are already in the mature stage of its lifecycle. Targeting Targeting is the identification of audience to which a product will be marketed. As already noted the Hispanic population is the initial target market but now also includes the generations X and Y. Teenagers make up a considerable percentage in the marketing activities of Frito Lay especially since they are very particular with value of money. Positioning Positioning refers to the creation of image in the minds of the target market. Frito Lay indulgence that offers extreme taste, crunch and flavor is the value proposition. With this, it is critical that a well-developed product mix should be use wherein the loud image and the bold flavor of Frito Lay products could be highlighted.

MARKETING MIX 4Ps

Product Aside from selling a wide variety of corn chips, potato chips and snack foods, Frito Lay also markets and sells several varieties of salsas, dips, crackers, nuts and seeds. These are generally under the food on the go category which could be also considered as convenience foods. Most famous brands include Lays, Fritos, Doritos, Cheetos, Tostitos and Ruffles. The products under his brand are: Lays (Potato chips) Cheetos

Ruffles Uncle Chips Kurkure Quaker Oats (Breakfast cereal)

Price Prices of these products are comparable to competition and are generally inexpensive. Frito Lays also devotes it R&D to innovating wide range of chips to meet every budget. The goal is to consider the variety-seeking behavior of the target markets hence providing good quality snack at fair prices. Frito Lay utilizes some time and promotional pricing methodologies.

Place Frito Lay products are basically sold everywhere including subway stations, gas stations, universities, groceries, supermarkets, convenience stores, amusement parks, movie houses and even universities.

Promotion Through its integrated messages, Frito Lay is promoted to target the snack-loving people. Sporting events are the primary promotional tactic for Frito Lay including the Super bowl and NBA. Usually, Frito Lay requires spokesperson for the brand and also sponsors events of various causes. While Frito Lay

employs contests, the unit also commits to tie-ins with parent company PepsiCo Inc. and other companies and movie outfits. Using humor is part of the advertisements also. Further, in -store promotions are also emphasized wherein share of space is a crucial strategy. More than 50% of salty snack isles are Frito Lay products. Frito Lay involves itself in the design of the retail store thus eye-catching displays are one of the strategies apart from displays before check-out line.

Co-ordinated Marketing Activities: (a) TQM Approach: Frito Lay is working on continuous improvement of
quality & conducts customer surveys to evaluate customer satisfaction.

(b) Improved designs: (both product & process) are implemented to reduce cost & fault rate.

Demographics
With the increase in population, the number of computer users are also increasing substantially. This factor is taken into account during demand forecasting.

STRATEGIES
New packs of Rs 3 and Rs 5 of kurkure and Cheetos are introduced to compete with companies like Bingo, Parle etc

MARKETING SHARE

13%

5%

14%

58%

Competition
Multinational snack maker Frito-Lay has indianised its potato chips brand Lays in the wake of competition by new entrants like ITCs Bingo.

ITC Bingo Parle Snacks Musset Bites & Stix, Smart Chips, Cheesling. Other Players Balaji Wafers, Haldiram, Yellow Diamond.

Although, FritoLay India leads the market with a share of 45 per cent, it has lost over 10 per cent share in the Rs 2,000 crore branded snacks market this year. Haldirams and ITC have a market share of 27 and 16 per cent, respectively.

Consumer Buying Decision Process: (1)NEED RECOGNITION - (a) Taste??? (b) Flavors??? (c) Cost of different products??? (2)IDENTIFICATION OF ALTERNATIVES (a) Haldirams??? (b) Bingo??? (c) Balaji??? (3)EVALUATION OF ALTERNATIVES Frito lay market share is very

high due to many differential advantages.

(4)PURCHASE & RELATED DECISIONS Brand Loyalty (5)POST- PURCHASE BEHAVIOR Customers not liking a specific flavor and not interested to try other products, or liking a specific product and interested in tasting other products.

Communication Frito Lay communicates its loud image and bold flavor through endorsements, psychographic usage and popularity usage. Advertisements are existent on TVs, radios, magazines, newspapers and other printed materials, billboards and the Internet.

Brand Breadth

Conclusion In sum, Frito Lay products are made available to the general public through various, integrated marketing initiatives. Its value proposition of bold flavor and loud

image, coupled with competitive prices, is the marketing drivers behind Frito Lay. From the Hispanic population to the mass, Frito Lay boasts for its wide array of snack foods and dips that complement the needs and lifestyle of the target segments that demand for convenience and foods on the go.