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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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slide1

For the Bold andDaring!

Frito-Lay

Group Members:

Brenda Lockwood

Ingrid Rein

Manoj Thomas

Mary Thomas

Monica Bahmata

Nitin Jain

slide2

Frito-Lay’s Mission Statement

To be the world’s favorite snack

and always within arm’s reach

slide3

Frito-Lay’s Mission Statement

To be the world’sfavorite snack

and always within arm’s reach

slide4

Frito-Lay’s Mission Statement

To be the world’s favorite snack

and always within arm’s reach

slide5

Frito-Lay’s Mission Statement

To be the world’s favorite snack

and always within arm’s reach

slide6

Evolution of Frito-Lay Marketing

  • Early Days, Frito® Bandito
  • Now, Integrated Marketing Strategy….
slide7

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
Opportunity/Threat Matrix

Probability of Occurrence

High

Low

High

Level of Impact

Low

industry competition
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
slide10

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
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
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
slide13

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
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)

slide15

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

His answer: Because they are yummy and orange!

perceptual map of doritos

Loud Image

Bland Flavor

Bold Flavor

Classic Image

Perceptual Map of Doritos
slide17

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

three market segments
Three Market Segments
  • MTV Teens

2. Pigskin Enthusiasts

3. Get-A-Life Students

slide20

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

slide21

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

slide22

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 segments23
Three Market Segments
  • MTV Teens
  • Pigskin Enthusiasts

3. Get-A-Life Students

Targeted segment

online marketing
Online Marketing
  • Digital investment up to 9% overall budget
  • Revamping Doritos.com
  • Viral-marketing – underground site
slide26

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
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
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/Competitive Position Matrix

Market Attractiveness

Pigskin Enthusiasts

MTV Teens

High

Get-A-Life Students

Medium

Low

Competitive Position

High

Low

Medium

slide30

Frito-Lay Business Strategy

  • Analyzer Strategy
  • Global Strategy
slide31

Convenience Foods

  • Maximum Distribution
  • Consumer Advertising
  • Merchandising
slide32

Frito-Lay Product Line

Full line designed to meet all needs of consumer segments

slide33

Product Decisions

  • Size of Bag
  • Shape of Chip
  • Packaging
  • Flavor
slide34

Shape

  • 3Ds ®
  • Tostitos ® and Fritos ® Scoops
slide36

Packaging

  • Bags
  • Snack Packs
  • To Go ® Packs
slide38

Flavor

  • U.S. Flavoring Choices
  • Global Flavors
slide42

Brands and Chip Flavors

  • Hidden Valley Ranch®
  • Cracker Barrel® Cheddar
  • KC Masterpiece® Barbecue
slide43

Healthy Chips

  • With aging population, increasing market segment, i.e. snack like a kid again
  • Need similar flavors and textures
slide44

Price

  • Convenience Product - Low Price
  • Variety-Seeking Behavior
  • “Good Quality Snack at Fair Price”
  • Wide Range of Chips to Meet Every Budget
slide46

Price

  • New Products - Market Penetration
  • Some Time Pricing
  • Promotional Pricing
slide47

Distribution

Where are Frito-Lay Products Sold?

…..Everywhere…..

slide49

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

slide50

Distribution

  • Core Competency
  • Advantages of Frito-Lay System
  • Global Distribution
slide52

Promotional Mix

  • Aims at target groups
  • Integrated message
slide53

Promotional Mix

Sporting Events

slide54

Spokesperson

Ali Landry - 2001 Super Bowl

Frankie Muniz - 3 Ds Commercials

slide55

Promotional Mix

Contests, Tie-in with other companies,

Movie tie-ins

slide56

Promotional Mix

Use of Humor

slide57

Promotional Mix

In-Store Promotions

slide64

Promotional Mix

  • Sponsorship - Frito-Lay does research to determine best Sponsorships
      • i.e Operation Bass
  • Global Approaches - Indulgence
slide65

Conclusion

  • Frito-Lay Balancing Act
  • Plus Potential Minus
  • • Good segmentation • Large company could
  • Market-oriented loose touch with Public
  • Diverse product mix needs
  • • Good distribution system • Needs to pay attention
  • • Good partnerships all its products
slide66

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
slide67

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