Lays

Introduction:
Frito-Lay North America is the $13 billion convenient foods business unit of PepsiCo. For more
than 75 years, Frito Lay has enjoyed growing the best snacks on earth starting with simple, farm-
grown ingredients.
To continue growing the best snacks on earth, they are working to reduce their impact on the
environment by improving how they make their snacks.
Frito-Lay is also dedicated to giving consumers a wider range of healthier choices. They offer
great-tasting chips with less fat through their Baked! line and snacks made only from natural
ingredients, which contain no artificial colors, flavors or preservatives with their Natural line. All
of their snack chips contain 0 grams of trans fat.
2.0 COMPANY
2.0.1 Mission Statement:

Excite world with the taste of potato while loving earth.

2.0.2 What you are selling:

The Products/ Brands of Lays that we see in the international market,

1. Lays
2. Corn Chips
3. Potato Chips
4. Variety Packs
5. Baked
6. Snack Foods
7. 100 Calorie Mini Bites
8. Baken-ets
9. Chester's
10. Frito-lay, Nuts and Seeds
11. Gamesa
12. Frito Lay Dips
13. Snack Mix
14. Doritos
15. Tositos
16. Cheetos
 17. Fritos
18. Grandma's
19. Matador
20. Maui style
21. Miss vickie's
22. Munchies, Snack Mix And Crackers
23. Munchos
24. Nut Harvest
25. Quaker (Snack Mix)
26. Rold Gold
27. Ruffles
28. Sabritones
29. Santitas
30. Sun Chips
31. Cracker Jack
32. Funyuns
33. Spitz
34. Stacys
In Pakistan, Lay's have a number of taste combinations, in addition to the classic chips due to the
crispy taste of subcontinent people. Flavored products in the conventional potatoes fried varieties
include
1. Barbeque
2. Salted
3. French cheese

4. Magic Masala

2.0.3 Competitors:

Today is the world of competition, so we also very much careful about the competitors to remain
in the business. Lays also have some competitors. Major Competitors are
 1. Pringles
2. Kolson and
3. Golden,
4. Tripple Em
5. Smit
Because these products contain 55% of the market share. And also these products don not match
the standards of Quality like Lays. So, Lays is outstanding in all ways to the competitors in terms of
quality, quantity, price and differentiation in the products.

2.0.4 Keys to Success:

1. Strong Product Diversification

2. Customer Focus
3. Quick Response(PIG fat-oil conspiracy)
4. Effective Marketing Strategies
5. Product Availability
6. Diversify target market

2.1 Market Analysis

2.1.1 Market Demographics:

In Market demographics, we actually see the segmentation. The Lays main segmentation is Girls,
Families and Youth. They also segmented housewives because they have the experienced of high
Product consumption. Lays also targeting to the kids, it is not concerned with any race, life cycle,
sex.
2.1.2 Market Needs:

In the Lays market people are free to choose any brand as they like more. In a research we have
found some results that the demand for the lays is more than the other (Companies) brands like
Kurkure, Bingo and Prigles. So the Lays market is very Demandable and the Company needs to
take more positive steps in the future.

2.1.3 Market Trends:

As for as the high market share, the company do its best for its customers. The company also
introduced the products for the health Conscious consumers. Everyone has different taste so
different products match the different consumer demands.

Lays marketers keep eyes on each and every change in market like they effectively overcome Pig
fats oil conspiracy by using Junaid-Jamshaid in their Ad.
2.1.4 Market Growth:

Lays have about 45% share of potato chips market and it is expected to increase day by day.
They are expanding their market worldwide by targeting under development countries.

There are many other competitors like Kolson have 15%,Golden 8%, Smit 5%,Tripple Em 15%
and 12% others but lays have highest market share of 45%. Lays are taking advantage of being
market leaders.

2.1.5 Market Analysis:

2005 2006 2007 2008 2009 2010
lays 31% 34% 37% 38% 40% 45%
Kolson 8% 9% 11% 12% 12% 15%
Tripple Em 10% 11% 12% 12% 14% 15%
Golden 4% 5% 5% 6% 6% 8%
Smit 3% 4% 4% 4% 5% 5%

2.2 SWOT ANALYSIS

2.2.1 Strengths:
Frito-Lay introduced the first sour cream-based, shelf-stable dip (1986). They also introduced
French onion flavored chips. Easily available to all super stores in different kinds at low price.
Now we have some strengths in the product due to we can differentiate from the competitors.
1. It is economical, so that all income level individuals can buy.
 2. It is a multinational Company.
3. It provides Maximum satisfaction at Minimum price.
4. It is the product of Pepsi and have strong Brand image.
5. The people who are Brand conscious, like it the most.
2.2.2 Weaknesses:
Lays have the following weaknesses in it,
1. Only middle class and others buy their products, and Elite class is not consume too much
because of the status problem.
2. Offers limited Flavors.
3. Most of the rural areas are lack behind in the availability of the product.
4. Not Offer Extra benefits to the Customers.
5. Product differentiation is very slow.

2.2.3 Opportunities:
Some of the following Opportunities are,
1. With the passage of time, Improvement in the Quality.
2. Major events are sponsored by the Company; due to this the image is going to be
improved.
3. Try to segment in Rural Areas, where product requirement is not fully satisfied.
4. To increase the relationship with the customers, Lays introduce light Flavors.
2.2.4 Threats:
We have the following Threats to our Product:
1. The big threat to our product is our Competitors in the market, because they contain 55%
share of the market.
2. The coming of new brands like Slanty, that introduced by Kolson became a big challenge
for Lays.
3. Different flavored Nimko and Buscuits create hurdles in the growth of the Product.
4. Local chips that distributed without packing are also a big threat to our product.
5. In future Limited flavors in Lays divert the attention of customers to other products.
2.2.5 Critical Issues:
Through expanding product availability in rural areas by enhancing distribution system and make
effective campaigns for approaching the people of rural areas, market share can be expand.
Competitors packaging similar to lays can grab attention of the old customer so lays should
focus on this issue by making their packaging unique.
3.0 STRATEGIES
3.1 Marketing Objectives:
The marketing Objective is based on the Share that how much share the company capture in the
market. The target market objectives is explained as follows,
1. To Maximize the market share, company needs to capture the maximum share in the
market.
2. Company should be focus on the Attraction and satisfaction level of the customers to
fulfill its targets.
3. For Profit Maximization the company needs to reduce the cost of Production.
4. Need to emphasis on the customer relationships, and also try to give extra benefits to the
customers by additional features in the product.

3.2 Financial Objectives:

Sales 2012 2013

Expected Sale $16,665 $18,300

Other $0 $0

Total Sales $16,665 $18,300

Direct Cost of Sales 2012 2013

R.M Cost $12,360 $13,446

Other $0 $0

Subtotal Direct Cost of Sales $12,360 $13,446

3.3 Target Marketing:

Lays try to target a very vast market which includes Mostly the kids, teenagers, and adults after
that they are also targeted to the families (Housewives). In Pakistan they are targeting almost
60% approx. of the Population. No doubt they have their competitors in the market but they still
have 45% share in the market, or in other words we can say that they are leading with their
products/ Brands in the market.
3.4 Positioning:
It is the Creation of Good image in the minds of People belonging to different Categories(Target
Market). Frito lays has Spicy taste, crunch, and good flavors that developed in different minds,
and this is the value proposition. In positioning we will discuss about the following:
1. Product:
We have different 24 kinds of our products, that we sell in the market. Lays has high mrket share
as compared to the others, Because mostly people use it as a food. Mostly Lays, Fritos, Doritos,
and Cheetos are the most popular brands.
2. Price:
This is very Inexpensive product so that everyone can buy that belong to Middle class. Frito
Lays market itself for a wide range chips to meet every budget. The basic objective of the
company is to sell product with good quality at a fair price.
3. Placement:
They are trying to approach mostly in urban areas but they need to focus on the availability in
rural areas also, and also it is very inexpensive.

4. Promotion:
As for as the promotion is concerned, mostly entertainment events are the primary Promotional
ways for Frito lays. The placement in stores and Good packing also play a vital role in the
Promotion of Frito Lays.

3.5 Strategy Pyramid:

 laysStrategy

Target markeet

Subcontinent
IndiaPakistan

promotional planning

attractiveoffers
BUY1get 1free

Avertisment
Bilboaerd, media

Salepromotion

product strategy

Corebenifit
Surveyabout quality

actual product
conver corebenifit intoproduct

Augm entedproduct
offer benifit toretailar

Pricingstrategy

Set pricewithcompetitors

Involingcompetitors

Affordableprice
middlelevel income

profit maxim ization

Certainam ount of return

3.6 Marketing Research:

The marketing research process includes the organized identification, assortment, examination
and allocation of information for the purpose of knowing market trend and development. Purpose
of research remain through same it can’t be change where as reasons and time for research is also
varies with the need of the research. There are six steps of doing weather ad-hoc marketing
research program or continuing existing.
Six step of conducting marketing research are given below:
• Defining and Identifying research problem
• Establishing and brainstorm your research approach
• Set up your research design and strategy
• Collecting the research data
• Applying different data analysis tools
• Organize finding and make proper presentation.

3.7 MARKETING MIX

The market in which it deals is near to pure competition but due to certain factors it lies in the
monopolistic competition. The main reason is that every company of this taste is charging the
different prices according to their quality and product features and as well as target market. Lay’s
is charging comparatively high prices from other ones in potato chips.
If we talk about the Pringles they serve the elite class with quality and style that’s why they are
getting too high prices which is not near to any company which deals with snacks.
3.7.1 Marketing Mix Strategies:
Pricing Strategies:
The pricing strategy which is LAY’S should follow, cannot be easily evaluate because from
company has not mentioned clearly about any system. However most of the companies including
this are following the Cost-Based Pricing. But a company cannot follow a single strategy
straightly They made the agreement that their prices will remain the same.

They also decide the price of their packaging; they also set their strategy on Cost Price
Their cost includes:
1. Gentleman supremacy
2. Technology
3. Electrical energy
4. Raw material
5. Human resources
Setting the right price is the most important thing, and Lays is doing well. Price is set by keeping
in view the quality of the product and the prices which are being offered by the competitors.
Profit Maximization:
The price of Lays is affordable for middle level income groups. The price is adjusted according
to the demand of the product. When Lays Jumbo pack was launched, its price was high as Rs. 25
now they reduced it @ Rs.20, causing an increase in demand of the product.
PROMOTION PLANNING:
1. Advertising: Lays advertises through various channels
2. Media (Fm media, TV channels, Internet links etc.)
3. News Papers & Magazines
4. Sponsoring various Shows and Matches
Sales Promotion:
Lays made sale promotion in the following ways:
1. By launching any new product like Aquafina they get sale promotion in their business.
2. When Lays lauched they offered a package of “Buy 2 and get 1 free”.
3. When Mountain Dew was launched they offered free drinks to people to develope the
taste.
4. They have a deal’with KFC and Pizza Hut where they offer drinks to their customers.
5. They decrease their prices to increase the sales to capture the market.They also decrease
their prices in winter too
Promotion is one of the four aspects of marketing. Promotion comprises four subcategories:
1. Advertising
2. Personal selling
3. Sales promotion
4. Publicity and public relations
Product:
Product life cycle (PLC) has to do with the life of a product in the market with respect to
business/commercial costs and sales measures. To say that a product has a life cycle is to assert
four things:
1. Lays different tastes like Salted, Masala, Frencheese may distinct in the future so have a
limited life,
2. Lays sales pass through distinct stages, each posing different challenges, opportunities,
and problems to the seller,
3. Lays Profits rise and fall at different stages of product life cycle, and
4. Lays require different marketing, financial, manufacturing, purchasing, and human
resource strategies in each life cycle stage

4.0 WEB PLAN SUMMARY

The lays Pakistan website will be virtual display center and portfolio for of the whole company.
Website should contain all the product categories of lays with new promotion campaign.
 1. There should be some online blogs for the customer discussion about the feedback and
product development.
2. like if you want to change packet design of the lays there should be some kind of
customer vote for available packet samples and company should implement
highest voting sample.
3. Website should contain information about lays upcoming product and new taste.
4. At website there should be some kind of packing design competition about the product
and best idea will be awarded through prize.
4.1 Website Marketing Strategy
Search Engine Optimization help user to find out their required information abiout any product,
promotion, price easily.
Advertisement about new offers should be place on the website or any upcoming flavor our
update should be placed at website.
Encourage web based Competitions by offering some attractive prices.
Web base competitions can be advertise on electronic or print media.
Customer suggestions and feedback can be encouraged on website by providing customer based
blog on websites.
4.2 Development Requirement:
In the website development plan requires technical staff to maintain the website, a logo related to
the product, design a web portal and some space required to run the portal, Time required to
develop the website, need to design the graphics according to the website, require proper
information from the marketing managers about the new products and their developments to
update the website.
5.0 Sales Forecast
In the first step we need to identify the Market demand of the product, which means we need to
know about the volume that a particular group will buy. After that the average selling price per
day of lays, then we can calculate the market demand.
After that we have to estimate the company demand, the company demand can be calculated by
multiplying the market demand with the company’s market share. And in the last we have to
develop the sales forecast. It is the expected level of future sale in the market.
Percentage change in Profit and Revenue in Lays Market:

5.1 Sales Forecast:

 Monthly Sales Forecast

$2,500

$2,000

$1,500
Expected Sale

$1,000 Other

$500

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1.2 Table: Sales Forecast

Sales 2011 2012 2013

Expected Sale $15,184 $16,665 $18,300

Other $0 $0 $0

Total Sales $15,184 $16,665 $18,300

Direct Cost of Sales 2011 2012 2013

R.M Cost $11,251 $12,360 $13,446

Other $0 $0 $0

Subtotal Direct Cost of Sales $11,251 $12,360 $13,446

5.3 Expense Forecast

 Monthly Expense Budget

$400

$350

$300

$250
Advertizing Expense
$200
Website Desighn Expense
$150 Other

$100

$50

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

6.0 Table: Marketing Expense Budget:

Marketing Expense Budget 2011 2012 2013

Advertizing Expense $1,850 $1,700 $1,600
Website Design Expense $1,200 $1,200 $1,200
Other $475 $520 $600
Total Sales and Marketing Expenses $3,525 $3,420 $3,400
Percent of Sales 23.22% 20.52% 18.58%
Contribution Margin $408 $885 $1,454
Contribution Margin / Sales 2.69% 5.31% 7.95%

5.2.1 Table: Sales Forecast:

Sales Forecast
Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Expected Sale $0 $0 $1,200 $1,280 $1,300 $1,400 $1,450 $1,470 $1,500 $1,634 $1,800 $2,150
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Sales $0 $0 $1,200 $1,280 $1,300 $1,400 $1,450 $1,470 $1,500 $1,634 $1,800 $2,150

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

R.M Cost $0 $0 $930 $964 $995 $1,025 $1,060 $1,125 $1,180 $1,225 $1,322 $1,425

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct Cost $0 $0 $930 $964 $995 $1,025 $1,060 $1,125 $1,180 $1,225 $1,322 $1,425
of Sales

6.0.1 Table: Marketing Expense Budget

Marketing Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Expense Budget

Advertizing $125 $140 $150 $155 $145 $150 $150 $160 $170 $135 $200 $170
Expense

Website $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Desighn
Expense

Other $50 $60 $0 $20 $30 $35 $25 $30 $40 $43 $52 $90

-------- --------- --------- -------- --------- ----------- --------- ----------- --------- ------- --------- -----------
---- --- --- ---- --- - --- - --- ----- --- -

Total Sales and $275 $300 $250 $275 $275 $285 $275 $290 $310 $278 $352 $360
Marketing
Expenses
0.00% 0.00% 20.83% 21.48% 21.15% 20.36% 18.97% 19.73% 20.67% 17.01% 19.56% 16.74%
Percent of Sales

Contribution ($275) ($300) $20 $41 $30 $90 $115 $55 $10 $131 $126 $365
Margin

Contribution 0.00% 0.00% 1.67% 3.20% 2.31% 6.43% 7.93% 3.74% 0.67% 8.02% 7.00% 16.98%
Margin / Sales

Bibliography:
1) http://pepsico.com/Brands/Frito_Lay-Brands.html (Introduction)
2) http://www.scribd.com/doc/36169623/Frito-Lays
3) http://www.scribd.com/doc/29517049/Jasmine-Hood-SWOT-Analysis
4) www.Google.com
5) Annual Report (Pepsi)