executive summary
TRANSCRIPT
OBJECTIVES OF THE REPORT
The main objectives of our research were as follows
To find out what percentage of population likes to eat snacks.
To find out which flavor of Lay’s is most preferred.
To analyze the reason for the popularity of the most preferred snack.
To know the satisfaction level of people who eat Lay’s.
To find out how much people spend on snacks weekly.
To find out the preferences of people for different brands.
EXECUTIVE SUMMARY
This study focuses on the study of the brand Lay’s Chips. We traced the brand from its
inception to its current position in India. A questionnaire methodology was followed with
a sample size of 40.. It emerged as the leader among snack food brands like Uncle
Chipps’, Kurkure, Pringles and Bingo.
We also used the Reynold and Gutman’s Laddering method. 8 individual personal
interviews were conducted. Means-End chains were explored for this segment. This
method was considered the most appropriate because it would aid in revealing
consumers’ cognitive structure related to purchase and consumption of chips. The
objective of the study is to understand how the consumers relate a distinctive attribute of
chips to obtaining higher values in life.
Results revealed that values attained by the consumption of chips are primarily Positivity,
Self-Control, Independence, Accomplishment and Belongingness. The consequences
preceding the values were saving time, socializing, experimentation, limiting the waste of
food, feel fresh, change from the regular monotonous food habits etc. these were derived
from attributes of chips, both abstract and concrete.
The study helped us understand the patterns behind purchase of chips and what
psychosocial benefits one derives from them. Also, it helped track where Lay’s stood in
the eyes of consumers.
INDIAN SNACKS INDUSTRY
Snacks are a part of Consumer Convenience/ Packaged Foods segment. Snack is
described as a Small quantity of food eaten between meals or in place of a meal. Snack
food generally comprises bakery products, ready-to-eat mixes, chips, namkeen and other
light processed foods According to the ministry of food processing, the snack food
industry is worth Rs 100 billion in value and over 4,00,000 tonnes in terms of volume.
Though very large and diverse, the snacks industry is dominated by the unorganized
sector According to an Apeda survey almost 1,000 snack items and 300 types of savories
are sold across India. The branded snacks are sold at least 25% higher than the unbranded
products Savory snacks have been a part of Indian food habit, since almost ages. Though
there is no particular time for snacks, normally they are consumed at teatime. The variety
is almost mind-boggling with specialties from all regions, which have gained national
acceptance industry. he been growing around 10% for the last three years, while the
branded segment is growing around 25% per annum to stand at Rs 5,000-Rs 5,500 crore,
due to various reasons like Multiplex culture, snacking at home while watching TV, pubs
and bars (where they are served free). AC Nielsen's retail audit shows that the large sales
volumes are due to a marked preference for ethnic foods, regional bias towards
indigenous snacks and good value-for-money perception. Of course the branded segment
is much smaller at Rs 2,200 crore, which is what makes it so attractive to food
Companies that are looking at bigger shares and in the branded snacks market, to get
down to basics, Frito Lay commands a share of 45%, followed by Haldiram at 27% and
ITC at 16%. The rest is divided between a handful of new entrants, wannabes and many
regional players. Of the wide range of snacks available, potato chips constitute a sizeable
segment of the Indian snack food industry, according to India Info line.
The potato chip market is generally an unorganized industry. Nearly all potato chip snack
products are manufactured and sold locally. There is also no uniform standard for
packaging, as there is in Europe, the United States and other more developed regions.
Many snack foods are sold loose or packaged in poly-pouches, which may only be
folded, or in some cases, stapled closed. As the Indian economy continues to grow, and
production standards improve, many snack food companies are making significant
investments into plant equipment and packaging machinery.
Pepsi Foods Ltd., now known as Frito-Lay India Ltd., produces India's largest snack food
Manufacturer’s brands, including Ruffles, Hostess, Cheetos and Uncle Chips. Frito Lay's
story is an example of how American recipes were adjusted to satisfy local tastes. Procter
& Gamble's Pringles brand of potato crisp was launched in Delhi in 1999. Pringles is also
a baked potato crisp, unlike many other potato based Indian snack foods that are fried.
P&G currently imports the Pringles product and therefore the product has been priced at a
premium and is marketed to a micro-niche
PEPSICO INDIA
PepsiCo entered India in 1989 and has grown to become the country’s largest selling food
and Beverage Company. One of the largest multinational investors in the country,
PepsiCo has established a business which aims to serve the long term dynamic needs of
consumers in India.
PepsiCo nourishes consumers with a range of products from treats to healthy eats that
deliver joy as well as nutrition and always, good taste. PepsiCo India’s expansive
portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew,
in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages
such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit
juices, and juice based drinks – Tropicana Nectars, Tropicana Twister and Slice, non-
carbonated beverage and a new innovation Nimbooz by 7Up.
PepsiCo’s foods company, Frito-Lay, is the leader in the branded salty snack market and
all Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s Potato Chips,
Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and
Lehar brands and the recently launched ‘Aliva’ savoury crackers. The company’s high
fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the
healthful choices available to consumers. Frito Lay’s core products, Lay’s, Kurkure,
Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated
fats and all of its products contain voluntary nutritional labeling on their packets.
The group has built an expansive beverage and foods business. To support its operations,
PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 are
franchisee owned. In addition to this, PepsiCo’s Frito Lay foods division has 3 state-of-
the-art plants. PepsiCo’s business is based on its sustainability vision of making
tomorrow better than today. PepsiCo’s commitment to living by this vision every day is
visible in its contribution to the country, consumers and farmers.
LAY’S IN INDIA
Lay’s was first known to India as Ruffles Lay’s. Subsequently known as Lay’s from
FritoLay of PepsiCo, it has become the leading brand of snack foods in the country.
FritoLay has the various other brands in India, namely:
Lays (potato chips)
Cheetos (extruded snacks)
Ruffles
Uncle Chipps
Kurkure
Quaker Oats (breakfast cereal)
There are other players like Haldiram’s and newer entrants like Amul’s Munch Time,
Parle’s Hippo and ITC’s Bingo, which are scrambling for a share of the snack pie. Yet
Frito Lay commands a remarkable market share of 45%, followed by Haldiram’s at 27%
and ITC at 16%.
Lay’s - world’s largest and favorite snack food brand, has also steadily established
itself as an indispensable part of the “snacking culture” in India since its launch in 1995.
Lay’s, with its irresistible tastes, international & Indian flavors and young imagery has
established itself as a youth brand and continues to grow in the hearts and mind of its
consumer!
Over the years, Lay's has been known for its engaging & innovative promotions and
campaigns. The brand known for its "No one can eat just once" campaign has moved it's
positioning to "what's the program?" making Lay's - the main food of every program!
Saif Ali Khan, has been the face of the brand for over 5 years. He has recently been
joined by the captain of the Indian Cricket Team M.S Dhoni - both embodying the
youthful appeal and energy of the brand.
In 2008, Lay's launched a never before "Fight for your Flavor" allowing consumers vote
for the flavor of their choice and the flavor with the maximum votes continues in the
market. The flavors have been selected by the Lay's brand ambassadors - Saif Ali Khan
and M S Dhoni - with each celebrity rooting for the flavor of their choice.
In Nov 2008, Lay's Chip-n-Sauce pack is yet another breakthrough innovation by the
Lays. The pack has been launched for cricket lovers to savor the best of the season with
this first to market innovation. Lay's Chip-n-Sauce large pack is introduced in two unique
flavors Chilli Chinese with Schezwan sauce sachet and Chatpata Indian with Tamarind
sauce sachets inside the pack.
In June 2009, Lay's launched its new positioning platform - Lay's be a little
Dillogical. The new Dillogical concept makes a strong connect with youth caught in the
divergent pressures of the desire to succeed and the desire to stay actively engaged with
those life filling moments. This friction is like a game between the heart and the head, a
struggle between what you wish to do versus what you have to do. It is all about making
things that matter to the heart, happen.
The new platform has been launched with a series of ads built around the universal
consumer truth of the struggle between what our mind asks us to do and what our heart
desires. The new TVC has been supported with a strong 360 approach and have
consumer being a little Dillogical.
In 2006, Lay's launched the first premium irresistible crisp, Lay's Stax. These perfectly
shaped bite-sized crisps come in 6 irresistible, international flavors. These crisps are
stacked in shareable tray, in a trendy can! Lay's Stax caters to the tastes of the Global
Indian citizen, who has an evolved palate. But don't just take our word for it - go grab
your Stax now!
HISTORY
Lay's is the brand name for a number of potato chip varieties as well as the name of the
company that founded the chip brand in 1938. Lay's chips are marketed as a division of
Frito-Lay, a company owned by PepsiCo Inc. since 1965. Other brands in the Frito-Lay
group include Fritos, Doritos, Ruffles, Cheetos and Rold Gold pretzels. Contents
In 1932 salesman Herman W. Lay opened a snack food operation in Nashville, Tennessee
and, in 1938, he purchased the Atlanta, Georgia potato chip manufacturer "Barrett Food
Company," renaming it "H.W. Lay & Company." Lay criss-crossed the Southern United
States selling the product from the trunk of his car. In 1942, Lay introduced the first
continuous potato processor, resulting in the first large-scale production of the product.
The business shortened its name to "the Lay's Company" in 1944 and became the first
Snack food manufacturer to purchase television commercials, with Bert Lahr as a
celebrity spokesman. His signature line, "so crisp you can hear the freshness," became the
chips' first slogan along with "de-Lay-sious!" As the popular commercials aired during
the 1950s, Lay's went national in its marketing and was soon supplying product
throughout the United States.
In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to form Frito-
Lay Inc., a snack food giant with combined sales of over $127 million annually, the
largest of any manufacturer. Shortly thereafter, Lays introduced its best-known slogan
"betcha you can't eat just one." Sales of the chips became international, with marketing
assisted by a number of celebrity endorsers.
In 1965, Frito-Lay merged with the Pepsi Cola Company to form PepsiCo, Inc. and a
barbecue version of the chips appeared on grocery shelves. A new formulation of chip
was introduced in 1991 that was crisper and kept fresher longer. Shortly thereafter, the
company introduced the "Wavy Lays" products to grocer shelves. In the mid to late
1990s, Lay's modified its barbecue chips formula and rebranded it as "K.C. Masterpiece,"
named after a popular sauce, and introduced a lower calorie baked version and a variety
that was completely fat-free (Lay's WOW chips containing the fat substitute olestra).
FLAVOURS
SWOT ANALYSIS OF LAY’S
Strengths
"Cost advantage
Asset leverage
Effective communication
High R&D
Innovation
Online growth
Loyal customers
Market share leadership
Strong management team
Strong brand equity
Strong financial position
Supply chain
Pricing
Real estate
Reputation management
Unique products
Weaknesses
Bad communication
No online presence
Not innovative
Not diversified
Poor supply chain
Weak management team
Weak real estate
Weak, damaged brand
Ubiquitiouegory, products, services
Opportunities
Acquisitions
Asset leverage
Financial markets (raise money through debt, etc)
Emerging markets and expansion abroad
Innovation
Online
Product and services expansion
Takeovers
Threats
Cheaper technology
Economic slowdown
External changes (government, politics, taxes, etc)
Exchange rate fluctuations
Lower cost competitors or imports
Maturing categories, products, or services
Price wars
Product substitution
VARIABLES STUDIED IN THE QUESTIONNAIRE
DIFFERENTIATION
Differentiation is the ability for a brand to be distinguished from its competitors. A brand
should be as unique as possible. Brand health is built and maintained by offering a set of
differentiating promises to consumers and by delivering those promises to leverage value.
Differentiation is a measure of how distinct the consumers perceive a particular brand to
be. It is this difference that enables the brands to charge a premium.
RELEVANCE
Relevance is a measure of the actual and perceived importance of the brand to a large
consumer market segment. This gauges the personal appropriateness of a brand to
consumers and is strongly tied to household penetration. Relevance is simply a measure
of how well suited the brand’s offering is to the consumer’s life.
ESTEEM
Esteem is the perceived quality and consumer perceptions about the growing or declining
popularity of a brand. Does the brand keep its promises? The consumer’s response to a
marketer’s brand building activity is driven by his perception of factors like quality and
popularity. Both vary by country and culture. It is a function of positive brand
communication and brand experience. It shows us the regard that the consumer has for
the brand.
KNOWLEDGE
Knowledge is the extent of the consumer’s awareness of the brand and understanding its
identity. The awareness levels about the brand, and what it means, shows the intimacy
that consumers share with the brand. True knowledge of the brand comes through
building of the brand.
Together, these factors give us the two major aspects on which a brand is judged. They
are brand stature and brand strength.
BRAND STRENGTH
This is a combination of Differentiation and Relevance. As these pillars are indicators of
where the brand is likely to shape out in the future, Brand Strength is a leading
Indicator.
BRAND STATURE
This is a combination of Esteem and Knowledge. It gives a sense of the brand’s present
and past. Brand stature tends to, over time, mimic brand strength and is thus a lagging
indicator.
Brand strength and brand stature are then plotted against each other on a high-low matrix
called the Power Grid. The position of the brand on the Power Grid shows the current
status of the brand as well as its future potential. The BAV theory can, with this
construct, map out the typical life cycle of brands.
APPLICATIONS
It can be used to study:
The health of a brand in comparison to the category health
Future direction that a brand is likely to take
Key image drivers of the category
Specific image and personality perceptions across consumer segments
Definition of the problematic, key and future opportunity target audience for the
brand
Power brands
Brand portfolios
Feasibility studies for new markets and segments
Positioning / Repositioning exercises
Archetypes
Understanding target audience landscape
QUESTIONNAIRE
I am Shikha Maan, pursuing my BBA from Trinity Institute of Professional Studies,
Dwarka, affiliated to GGSIPU
Please fill up the form for a market survey on “Frito Lay’s”.
Name ……………………………
Age ……………………………
Gender ……………………………
Income ……………………………
Q1. Do you prefer snacks?
Yes No
Q2. When do you prefer snacks in a day time?
Morning Afternoon
Evening Night
Q3. Do you like Lays chips?
Yes No
Q4. Which flavors do you like the most?
Plain salt American Flavor
Tangy Tomato Magic Masala
Q5.What compels you to consume it?
Brand name Quality
Variants Price
Any other
Q6. What size do you prefer most?
Rs. 5 Rs.10
Rs.20
Q7. How often do you consume it?
Very often sometimes
Often Rarely
Q8. Who all in your family prefer Lays?
Children Parents
Grandparents All
Q9. Do you think it has acquired a good name in the market?
Yes No
Can’t say
Q10. Would you suggest other person to buy lays chips?
Yes No
Can’t say
Q11. Are you satisfied with the number of flavors it has provided?
Yes No
Q12. What is your source of information regarding the purchase of it?
Advertising Live demo Retail outlet
Home shopping
Q13. Lays comes in a junk food. Do you think it’s healthy to consume?
Yes No
Q14. Why do you prefer lays chips over other alternatives?
Superior taste Variety of flavors
Inexpensive Others
Q15. If lays is not available at a shop would you go to another shop to purchase it?
Yes No
Q16. Do you like the packing of chips?
Yes No
Q17. How much do you spend weekly on snacks?
Below 50 50-100
100-150 150 or more
Q18. Are you satisfied with the price?
Yes No
Q19. Are you satisfied with the Quantity of lays?
Yes No
Q20. How would you rate it as a product?
Excellent Good
Average Poor
Q21. Before switching on to lays, which snack did you prefer?
Kurkure Uncle Chips
Pringles Haldiram chips
Q22. Compared to other snacks (such as kurkure, bingo, Pringles, etc) that are available,
would you say that Lays is
Much Better Somewhat Better
About the same somewhat worse
Much worse
Q23. For the following parameters, please rank each brand in order of how it stands (1
being highest and 5 being the lowest)
CHARACTERISTICS LAYS KURKURE BINGO UNCLE
CHIPS
Crispy
Variety
Quantity
Taste
Availability
Q24. Name the brand which you would associate with the following attribute. You can
tick more than one brand?
CHARACTERISTICS LAYS KURKURE BINGO UNCLE
CHIPS
Classy
Cool
Imaginative
Trustworthy
Mischievous
Q25. Identify from the tag line
Bole mere lips, I love____________________________
No confusion, great combination __________________
Tedha hai par mera hai __________________________
No one can eat just one __________________________
Once you pop, you can’t stop ______________________
Q26. How would you rate lays as a product on a scale of 1-10?
DATA ANALYSIS AND INTERPRETATION
Q1. Do you prefer snacks?
The first objective of the research project is concerned with finding out what
Percentage of people likes to eat snacks. The pie chart given below is clear
on the percentage of people who like to eat snacks. Out of 50 respondents 49
like to While 1 don’t.
Q2. When do you prefer snacks in a day time?
Second objective was to find out how which time of the day you prefer the
Most.
The above pie chart shows that chips are eaten by the respondent mainly at
evening.
Q3. Do you like lays chips?
The third objective was to analyze the preference of chips by the people.
From the above pie chart we can say that most of the people like lay’s chips.
Q4. Which flavors do you like the most?
Fourth objective was to find out how which flavor of lay’s chips people like
the Most.
This shows that more people like Magic Masala of lay’s.
Q5. What compel you to consume lay’s chips.
This shows that the quality of lay’s chips is best as people buy lay’s chips because of its quality.
Q6. What size do you prefer most?
Most people like to consume medium size of lay’s chips i.e. Rs. 10
Q7. How often do you consume it?
It seems that people eat lay’s chips very often. It appears as if they eat lay’s on alternate days.
Q8. Who all in your family prefer lay’s?
It has been clear from the above pie chart that not only children but the whole family prefers lays chips.
Q9. Do you think it has acquired a good name in the market?
It has been clear from the above pie chart according to the respondents lays has acquired a good name in the market.
Q10. Would you suggest other person to buy lay’s chips?
From the above pie-chart we can say that most of them would suggest others to buy lay’s as they like that the most.
Q11. Are you satisfied with the number of flavors it has provided?
It has been clear from the above pie chart that 35 out of 38 respondents are satisfied with the flavors of lays. 3 of them said no.
Q12. What is your source of information regarding purchase of it?
Here in the above pie chart advertisement is having lion share while live demonstration is having the least share.
Q13. Lays comes in a junk food. Do you think its healthy to consume?
This pie diagram shows that although people consume lay’s chips around
44% People think it is a junk food and bad for health. They also specified
that consuming very often may lead to health problem.
Q14. Why do you prefer lays chips over other alternatives?
It has been observed that people prefer lays over other alternatives because of superior taste. While other 26% prefer lays because of flavors.
Q15. If lays is not available at a shop would you go to another shop to purchase it?
Above pie chart shows that respondents like lays so much that they would go to another shop to buy it if s not available on another shop.
Q16. Do you like the packaging of chips?
34 out of 38 respondents like the packaging of lays. While other 4 are not satisfied.
Q17. How much do you spend weekly on snacks?
It has been observed from the above pie-chart that 10 out of 38 people spend below 50 and 100-150. While 14 people spend around 50-100 & 4 people spend 150 & above on lays weekly.
Q18. Are you satisfied with the price?
The above pie-chart shows that 33 out of 38 people are satisfied with the price of lays while other 5 are not.
Q19. Are you satisfied with the quantity of lays?
It has been clear from the above pie chart that most of the respondents are not satisfied with the quantity of lays.
Q20. How would you rate it as a product?
It has been clear from the pie chart that most of the people rate it as a good product. Only few people rate it as poor product.
CONCLUSION
Lay’s as a brand was consistently ranked high on a large number of parameters. Its
crispness, variety and availability were found to be quite strong. Also, it enjoys a
significant top-of-mind recall among consumers.
It enjoys a score of 800 on differentiation, as compared to the next best competitor
Kurkure scoring 718. Pringles scored the lowest at 446, though very close to Uncle
Chipps’ scoring 462.
In terms of relevance also, Lay’s has the highest relevance at a response score of 42.
Relevance scores are in the range of 0-50 as compared to scores of the other three pillars
whose scores are in the range of hundreds. This is because the questions pertaining to
relevance were direct and the number of responses was simply counted. The other
questions were ranking questions where weights were assigned to each rank to arrive at
an appropriate score. Uncle Chipps’ scored the lowest at 3.
Knowledge also is revealed to be quite high in the case of Lay’s. It scored an astounding
468, where Kurkure which is second to it scores almost 150 points lower at 327. Pringles
saw the lowest score of 83.
Esteem also saw Lay’s ranking the highest at 231 where Kurkure stood at a score of 185.
Pringles scored the lowest at 71, in spite of it being a product priced higher than its
competitors and positioned as a premium snack.
The ranks assigned to each factor, namely differentiation, relevance, knowledge and
esteem, were then converted to percentiles to arrive at brand strength and stature.
When it comes to brand strength (also called brand vitality), Lay’s scored the highest.
Kurkure came second while Bingo was third, Uncle Chipps’ and Pringles ranked equally
on brand strength. This shows that they are both not differentiated much in spite of
dissimilar positioning platforms. Relevance to the Indian palate, which is characterized
by spice and variety, is where Pringles scores low while most respondents were of the
perception that Uncle Chipps’ is no longer a player in the snack food market.
When it came to brand stature also, similar results were observed. Lay’s ranked on top,
followed by Kurkure and Bingo. Here, Uncle Chipps’ was found to have better brand
stature than Pringles. Knowledge is quite high for Lay’s, Kurkure and Bingo, especially
because they have been introducing new flavours in regular intervals. Uncle Chipps’ was
found to have better knowledge and esteem as it is an old and trusted Indian brand.
Pringles did not seem to have succeeded in connecting with the Indian consumer. This
could also be due to the fact that P&G’s Pringles has minimal advertising in the Indian
market and does not invest in promotional activities. The brand also does not tinker with
its positioning.