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For the Bold and Daring! Frito-Lay PowerPoint PPT Presentation


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For the Bold and Daring! Frito-Lay. Group Members: Brenda Lockwood Ingrid Rein Manoj Thomas Mary Thomas Monica Bahmata Nitin Jain. Frito-Lay’s Mission Statement. To be the world’s favorite snack and always within arm’s reach. Frito-Lay’s Mission Statement.

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For the Bold and Daring! Frito-Lay

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For the Bold andDaring!

Frito-Lay

Group Members:

Brenda Lockwood

Ingrid Rein

Manoj Thomas

Mary Thomas

Monica Bahmata

Nitin Jain


Frito-Lay’s Mission Statement

To be the world’s favorite snack

and always within arm’s reach


Frito-Lay’s Mission Statement

To be the world’sfavorite snack

and always within arm’s reach


Frito-Lay’s Mission Statement

To be the world’s favorite snack

and always within arm’s reach


Frito-Lay’s Mission Statement

To be the world’s favorite snack

and always within arm’s reach


Evolution of Frito-Lay Marketing

  • Early Days, Frito® Bandito

  • Now, Integrated Marketing Strategy….


Macro Trends For Salty Snacks

  • Emerging health conscious consumers

  • Generation Y and busy life style

  • Individual taste preferences

  • Influence of children on snack purchase

  • Increasing diversity in population


Opportunity/Threat Matrix

Probability of Occurrence

High

Low

High

Level of Impact

Low


Industry Competition

  • Low level threat of new entrants at national level

  • Relatively easier in local market

  • Forward integration Strategy – Gaining ownership

  • Weak bargaining power of buyers - Stores

Fierce rivalry among large companies – General Mills, Nabisco, P & G

  • Weak bargaining power of Suppliers – Farmers

  • Fixed amount of potatoes at a set price

  • Continuous threat from existing and new alternative snack food

  • ‘White Label’ brand of Large grocery store chains


Competitive Analysis – Frito-Lay

  • The food industry has resurged as a result of rampant merger activity among several large food processors.

  • Global food producers and multinational companies have acquired smaller food companies to gain market share, add a product line, and solidify/strengthen their current productlines.

  • In the year 2000, many mega-mergers took place:

  • - Unilever acquired Best Food

  • - Nabisco acquired Philip Morris

  • - General Mills acquired Pillsbury

  • - Kellogg’s acquired Keebler


Competitive Analysis – Frito-lay

  • Frito-Lay is the leader of chip market.

  • They have approximated $ 2.17 billion / year tortilla chips category, with Doritos and Tostitos in top. Frito-Lay sold 82 % of tortilla chips bought in the US.

  • The Frito-Lay competitors are:- Procter and Gamble - General Mills- Nabisco


Competitive Analysis - Doritos

  • Doritos is the market leader in it’s segment

  • There isn’t much direct competition. It’s closest competitor is Torengos, made by Procter and Gamble.

  • Other competition includes imitation chips made by local companies


Market Positioning – Frito-Lay

  • As market leader they set industry trends

  • They have a good positioning in the market because of their sustainable competitive advantage

  • Competitive advantage:

  • - Well-developed product mix

  • - Extensive management information system, the company uses a vast database updated daily (market share, displays, competitors pricing)

  • - Elaborate distribution channels


Market Positioning – Doritos

  • Competitive advantage:

    - Loud image

    - Bold flavor

  • Determinant Attributes:

    - Endorsements (Ali Landry, Malcolm in the Middle, MTV)

    - Psychographic usage (loud/outrageous image)

    - Popularity usage (well known/trusted brand)


I asked my son: Why do you like Doritos chips?

His answer: Because they are yummy and orange!


Loud Image

Bland Flavor

Bold Flavor

Classic Image

Perceptual Map of Doritos


Positioning Statement &

Value Proposition

Positioning Statement

For the Bold and Daring, Doritos indulgence snacks offer extreme taste, high decibel crunch and bold flavor.

Value Proposition

Target Market:Generation Y

Benefits offered:Bold flavor, Extreme Image

Price:Comparable to competition, inexpensive


So, Who Are the

???


Three Market Segments

  • MTV Teens

    2.Pigskin Enthusiasts

    3.Get-A-Life Students


Name:Kyle (in Black Shorts)Screen Name:spazzaliciousAge:19Occupation:College FreshmanInterests:Extreme Sports, Video Games (X-box), Computers, Movies, Music (MTV), Brand Name Clothes, GirlsLifestyle:Goes to Cancun for Spring Break, Likes to Party, Likes Loud Music, Lives For The DayNeeds:Tasty, Loud, Outrageous Snacks in Cool Packages Wants:Isn't It Obvious?

MTV Teen


Name:Eddie (in Orange Sweater)Age:27Occupation:Public Relations Rep.Income:$45,000Interests:Sports (on TV), Happy Hour, Trading Stocks OnlineLifestyle:Single, Has Girlfriend, Hosts Football-Sunday Parties for the GuysNeeds:Quick/easy (no cooking required) Snacks, Food that tastes good with BeerWants:A Dog That Fetches Beer

Pigskin Enthusiast


Name:Brenda (me)Age:31Occupation:Web Producer, Grad. StudentInterests:Movies, Water Skiing, TravelingLifestyle:Work by Day – School by Night, Very BusyNeeds:Convenient, Small Packaged Snacks to Eat During Class, “Food On the Move”, Crunchy Fix for Late Night StudyingWants:A Vacation

Get-A-Life Student


Three Market Segments

  • MTV Teens

  • Pigskin Enthusiasts

    3.Get-A-Life Students

Targeted segment


Online Marketing

  • Digital investment up to 9% overall budget

  • Revamping Doritos.com

  • Viral-marketing – underground site


Online Marketing

" The teen target has a lot of skepticism toward

marketing activities online, but if we align with the

content they're interested in – entertainment, music,

games – it allows us to engage them in a more

meaningful way." – Jonathan Glicksberg, Atmosphere


Market Attractiveness Factors

  • Need for snacks are strong among all segments

  • Teen segment is growing through online efforts

  • Macro tends are favorable: high influence on kids making snack purchase decisions, emerging Y generation has purchase power, busy lifestyles demand food on the go, growing Hispanic population likes bold, spicy flavor


Competitive Position Factors

  • Doritos has most Extreme flavor of any competitor, trend is in that favor

  • Frito-Lay is strong company with other complementary products to Doritos

  • Favorable forces: low threat of entrants due to forward integration, excellent distribution channels, economies of scale, product differentiation

  • Unfavorable forces: threat of substitutes


Market Attractiveness/Competitive Position Matrix

Market Attractiveness

Pigskin Enthusiasts

MTV Teens

High

Get-A-Life Students

Medium

Low

Competitive Position

High

Low

Medium


Frito-Lay Business Strategy

  • Analyzer Strategy

  • Global Strategy


Convenience Foods

  • Maximum Distribution

  • Consumer Advertising

  • Merchandising


Frito-Lay Product Line

Full line designed to meet all needs of consumer segments


Product Decisions

  • Size of Bag

  • Shape of Chip

  • Packaging

  • Flavor


Shape

  • 3Ds ®

  • Tostitos ® and Fritos ® Scoops


Packaging

  • Bags

  • Snack Packs

  • To Go ® Packs


Flavor

  • U.S. Flavoring Choices

  • Global Flavors


Some International Flavors


Interesting Tastes


Cuttlefish !!!!!!!!


Brands and Chip Flavors

  • Hidden Valley Ranch®

  • Cracker Barrel® Cheddar

  • KC Masterpiece® Barbecue


Healthy Chips

  • With aging population, increasing market segment, i.e. snack like a kid again

  • Need similar flavors and textures


Price

  • Convenience Product - Low Price

  • Variety-Seeking Behavior

  • “Good Quality Snack at Fair Price”

  • Wide Range of Chips to Meet Every Budget


Frito-Lay Product Price


Price

  • New Products - Market Penetration

  • Some Time Pricing

  • Promotional Pricing


Distribution

Where are Frito-Lay Products Sold?

…..Everywhere…..


Distribution


A. Sales people input store info into handheld

B. Handheld loaded into national database

Product Planning

Purchasing

C. Database generates vital market info

Manufacturing

D. Market info gives up-to-the-minute sales info to...

Distribution


Distribution

  • Core Competency

  • Advantages of Frito-Lay System

  • Global Distribution


Distribution


Promotional Mix

  • Aims at target groups

  • Integrated message


Promotional Mix

Sporting Events


Spokesperson

Ali Landry - 2001 Super Bowl

Frankie Muniz - 3 Ds Commercials


Promotional Mix

Contests, Tie-in with other companies,

Movie tie-ins


Promotional Mix

Use of Humor


Promotional Mix

In-Store Promotions


More than 50% of Salty Snack Aisle is Frito-Lay


Doritos Section


Frito-Lay Uses Tie-ins With Parent Co., Pepsico


Frito-Lay Involvement In Design of Retail Stores


Eye-catching Displays


Displays Before Check-Out Line


Promotional Mix

  • Sponsorship - Frito-Lay does research to determine best Sponsorships

    • i.e Operation Bass

  • Global Approaches - Indulgence


  • Conclusion

    • Frito-Lay Balancing Act

    • PlusPotential Minus

    • • Good segmentation • Large company could

    • Market-oriented loose touch with Public

    • Diverse product mixneeds

    • • Good distribution system • Needs to pay attention

    • • Good partnerships all its products


    Innovative Recommendations

    • Advertising at Blockbuster on video tapes or DVD

    • Different packaging ideas sphere

    • Cartoon shaped chips in safe package

    • Contests at school for new products, flavor, package

    • Contest at school awarded with company’s products

    • School sales of chips -like candy bars

    • Fluorescent packages- glow in the dark chips

    • Package tie with Pepsi -small can of Pepsi with small plastic can of chips wrapped together


    Innovative Recommendations

    • Musical package- hear a funny music or a distinctive sound while opening the package

    • Packaging chips bag with wet- napkins to clean hands

    • Popup advertisement on Internet, especially on sites visited by teenagers

    • Zip package

    • Two different chips in same packaging

    • Package tie - two different kind of chips in different small plastic can wrapped together


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