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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


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Frito-Lay’s Mission Statement

To be the world’s favorite snack

and always within arm’s reach


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Frito-Lay’s Mission Statement

To be the world’sfavorite snack

and always within arm’s reach


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Frito-Lay’s Mission Statement

To be the world’s favorite snack

and always within arm’s reach


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Frito-Lay’s Mission Statement

To be the world’s favorite snack

and always within arm’s reach


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Evolution of Frito-Lay Marketing

  • Early Days, Frito® Bandito

  • Now, Integrated Marketing Strategy….


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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


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Opportunity/Threat Matrix

Probability of Occurrence

High

Low

High

Level of Impact

Low


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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


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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


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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


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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


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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


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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)


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

His answer: Because they are yummy and orange!


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Loud Image

Bland Flavor

Bold Flavor

Classic Image

Perceptual Map of Doritos


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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


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So, Who Are the

???


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Three Market Segments

  • MTV Teens

    2.Pigskin Enthusiasts

    3.Get-A-Life Students


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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


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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


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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


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Three Market Segments

  • MTV Teens

  • Pigskin Enthusiasts

    3.Get-A-Life Students

Targeted segment


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Online Marketing

  • Digital investment up to 9% overall budget

  • Revamping Doritos.com

  • Viral-marketing – underground site


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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


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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


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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


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Market Attractiveness/Competitive Position Matrix

Market Attractiveness

Pigskin Enthusiasts

MTV Teens

High

Get-A-Life Students

Medium

Low

Competitive Position

High

Low

Medium


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Frito-Lay Business Strategy

  • Analyzer Strategy

  • Global Strategy


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Convenience Foods

  • Maximum Distribution

  • Consumer Advertising

  • Merchandising


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Frito-Lay Product Line

Full line designed to meet all needs of consumer segments


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Product Decisions

  • Size of Bag

  • Shape of Chip

  • Packaging

  • Flavor


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Shape

  • 3Ds ®

  • Tostitos ® and Fritos ® Scoops


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Packaging

  • Bags

  • Snack Packs

  • To Go ® Packs


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Flavor

  • U.S. Flavoring Choices

  • Global Flavors


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Some International Flavors


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Interesting Tastes


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Cuttlefish !!!!!!!!


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Brands and Chip Flavors

  • Hidden Valley Ranch®

  • Cracker Barrel® Cheddar

  • KC Masterpiece® Barbecue


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Healthy Chips

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

  • Need similar flavors and textures


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Price

  • Convenience Product - Low Price

  • Variety-Seeking Behavior

  • “Good Quality Snack at Fair Price”

  • Wide Range of Chips to Meet Every Budget


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Frito-Lay Product Price


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Price

  • New Products - Market Penetration

  • Some Time Pricing

  • Promotional Pricing


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Distribution

Where are Frito-Lay Products Sold?

…..Everywhere…..


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Distribution


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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


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Distribution

  • Core Competency

  • Advantages of Frito-Lay System

  • Global Distribution


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Distribution


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Promotional Mix

  • Aims at target groups

  • Integrated message


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Promotional Mix

Sporting Events


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Spokesperson

Ali Landry - 2001 Super Bowl

Frankie Muniz - 3 Ds Commercials


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Promotional Mix

Contests, Tie-in with other companies,

Movie tie-ins


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Promotional Mix

Use of Humor


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Promotional Mix

In-Store Promotions


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


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Doritos Section


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


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Frito-Lay Involvement In Design of Retail Stores


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Eye-catching Displays


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Displays Before Check-Out Line


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Promotional Mix

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

    • i.e Operation Bass

  • Global Approaches - Indulgence


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    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


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    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


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    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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