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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 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 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
Caution: He loves cronchy Frito corn chips
so much he'll stop at nothing to get yours. What's more, he's cunning, clever -- and sneaky! Advertisement, c. 1970.
• 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
Demand for Private Local
High Convenience Food Brands Level of Impact
Increasing Health Government
Low Consciousness Regulations Industry Competition
• Low level threat of new entrants
at national level • Relatively easier in local market
• Forward integration • Weak bargaining power Fierce rivalry among Strategy – Gaining of Suppliers – Farmers large companies – ownership General Mills, • Fixed amount of potatoes Nabisco, P & G • Weak bargaining power at a set price of buyers - Stores
• 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 product lines. • 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! Perceptual Map of Doritos Loud Image
Bland Flavor Bold Flavor
Classic Image 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
1. MTV Teens
2. Pigskin Enthusiasts
3. Get-A-Life Students MTV Teen Name: Kyle (in Black Shorts) Screen Name: spazzalicious Age: 19 Occupation: College Freshman Interests: Extreme Sports, Video Games (X-box), Computers, Movies, Music (MTV), Brand Name Clothes, Girls Lifestyle: Goes to Cancun for Spring Break, Likes to Party, Likes Loud Music, Lives For The Day Needs: Tasty, Loud, Outrageous Snacks in Cool Packages Wants: Isn't It Obvious? Pigskin Enthusiast Name: Eddie (in Orange Sweater) Age: 27 Occupation: Public Relations Rep. Income: $45,000 Interests: Sports (on TV), Happy Hour, Trading Stocks Online Lifestyle: Single, Has Girlfriend, Hosts Football-Sunday Parties for the Guys Needs: Quick/easy (no cooking required) Snacks, Food that tastes good with Beer Wants: A Dog That Fetches Beer Get-A-Life Student Name: Brenda (me) Age: 31 Occupation: Web Producer, Grad. Student Interests: Movies, Water Skiing, Traveling Lifestyle: Work by Day – School by Night, Very Busy Needs: Convenient, Small Packaged Snacks to Eat During Class, “Food On the Move”, Crunchy Fix for Late Night Studying Wants: A Vacation Three Market Segments
1. MTV Teens
2. 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 Medium Students
Low
Competitive High Position 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 United States Great Britain Switzerland Sour Cream & Onion Roast Beef & Mustard Paprika Barbeque Mature Cheddar & Onion India Salt Smoked Ham & Pickle Salt Ranch Roast Chicken & Stuffing Masala Salt & Vinegar Tomato Cheddar & Salsa
A. Sales people input store info into handheld B. Handheld loaded into national database Product Planning
Purchasing
C. Database generates vital Manufacturing market info D. Market info gives up-to-the- minute sales info to... 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 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 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
