lays marketing project

8/3/2019 Lays Marketing Project

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Target Market Pricing Analysis

Product Competition and LAYS Weight Price (Cost) flavour

+/'$Diff

e

Shoppers Drug Mart

Tostitos pretzels 220g $3.79

Sweet Chili

Heat ($0.3Humpty Dumpty Snack foods 300g $3.99 Mixed ($0.50)

Rold Gold 400g $4.20 Regular ($0.7

NO-Name Brand------------

----' ---------------' -------------SunChips 220g $2.49 cheddar $1.00

MS.Vickies 220g $3.99 Jalepeno ($0.50

LAYS 220g $3.49 Original

Product Competition and LAYS Weight Plrice (Cost) flavour

+/'$diffe

e

Convenience Store

Tostitos 45g $0.99Sweet Chili

Heat $Humpty Dumpty Snack foods 85g $1.29 Mixed $(0.30)

Rold Gold ----------------------------

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

-

NO-Name Brand ------------------------------

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

--

SunChips ---------------------------

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

-MS.Vickies 40g $0.99 Jalepeno $-

LAYS 60g $0.99 Original -

Product Competition and LAYS WeightPlrice(Cost) flavour

+/'$diffe

e

Wal-Mart


Heat $1.0Humpty Dumpty Snack foods 300g $3.67 Mixed ($0.

Rold Gold 400g $3.67 Regular ($0.NO-Name Brand 150 $1.37 BBQ $2.1



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SunChips 225 $3.47 cheddar $0.02MS.Vickies 220 $3.45 Jalepeno $0.04


Product Competition Aand Lays Product WeightPlrice(Cost) Flavour

+/'$diffee

Gas Station


Heat $0.0Humpty Dumpty Snack foods 90g $1.49 Mixed $0.00

Rold GoldNO-Name Brand -------------

SunChips 70g $1.49 cheddar $0.00

MS.Vickies 75g $1.49 Salt 'n' Vinegar $0.00

LAYS 75g $1.49 Original-------

-

Product Competition Aand Lays Product WeightPlrice(Cost) flavour

+/'$diffe

e

No-Frills

Tostitos 280 $3.27Sweet Chili

Heat $0.2Humpty Dumpty Snack foods 300 $2.69 Mixed $0.80

Rold Gold 400 $2.99 Regular $0.5NO-Name Brand 200 $1.09 BBQ $2.4

SunChips 225 $3.49 cheddar $0.00MS.Vickies 220 $3.77 Jalepeno ($0.




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SWOT ANALYSIS Strengths

• Excellent branding and advertising• Excellent distribution and availability• Loyal Customers• Baked from real potatoes• Good Advertising• Sold @ many retailers• Cost advantage• Effective communication• Loyal customers

Weaknesses

• Assumed High fat and cholesterol in potato wafers even after zero transfat is marketed on the packs

• Low supply in remote areas • A health risk

Opportunities

• Product and services expansion• has room for improvement

• can supply to remote areas • Leverage successful brand Pepsi• Advertise more• Buy out competition• More Brand recognition

• More Flavors as compared to Bingo Threats

• Availability of healthier products • Tostitos • Humpty Dumpty • Rolling Gold • No-Name • Sunchips • Ms.Vickies



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Target Market Analysis

Demographic Age: 2+Gender: Universal

Family size: Any sizeStage of family life cycle: Young single, young married, older single, older married.Income:Occupation: Corporate, students, athletes, professionalEducation: High school, college/university, elementaryEthnic background Multi-culturalHome ownership: Own home; rent

Psychographic Personality: Procrastinators, hard workers, competitiveLifestyle:

Behavioristic Benefits sought Energy, quick appetite fix.

Usage Rate Medium User

User Status Regular user

Loyalty Status “bet yah cant eat just one”

Geographic Region 1. P.E.I, 2. Ontario, 3. Quebec, 4. Alberta

City or census inMetropolitan 1. 145,000. Rural 2. 13,000,000 suburban 3. 7,000,000

Urban. 4. 3,000,000 RuralClimate Northern Cool wind



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Positioning StatementThe lays product has been through many trials and tribulations, but is now astrong influence in the snack food category. Not much could be said about theweak points of the product but much could be said about why target consumers

choose to continue to be life long customers. A few of the reasons why the target market continues to use the product is that, its affordable and traditional.Although it surpasses the expectations and goals of the competition, one of theadvantages it has over its competitors is that it’s a staple in the snack foodindustry giving it a comfortable familiarity that consumers can always rely on..



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Lay’s Chips – Product Analysis

Core Product

Before Lay’s chips were introduced the

company took surveys to find out what people wanted from potato chips andfound.

The Core Benefits from lay’s chips are: Eliminates hunger. Provides energy. People save time waiting at

eateries because chips are quick and easy.

Actual Product

Physical Characteristics: Very thinly sliced potatoes, which

are fried, baked, processed orkettle cooked. Depending on theformat, which they are being sold.

Flavored with any of the 20+flavors’.

Sold in five different formats first being the regular fried chips, thencame the La y’s WAVEY then thefat-free WOW brand, then camethe processed STAX, and lately thenew KETTLE COOKED.

They come in three different sizesthe smallest, which is intended forpersonal consumption. Thenthere is the regular size bag that could be shared with one or twopeople, and then there’s the familysize, which is intended to beshared with others.

Comes in a shiny foil bag that hasa different design for each of thedifferent flavours.

Lay’s regular and lay’s STAX have16 different flavours, and the L ay’sKettle Cooked have 4 different flavours.

The Branding of Lay’s Chips is asunburst with a red ribbon going



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Strengths and Weaknesses

Strengths tha t Lay’s chips have over the competitors are:

Lay’s uses 100% Canadian potatoes. These potatoes come from over 16000 acres of

farmland over 7 provinces. They cook their potatoes in 100% sunflower oil

therefore there is no trans-fat. Lays has been working with the same farmers on

average 25 years, now that’s commitment.

Weaknesses that Lay’s chips have:

Their bag is non-recyclable and non-biodegradable. They need to fill the bag all the

way; not half chips and half air. It is also one of the more expensive brands of snack

foods.

around it saying “Lay’s” The design of the bag is 2 pieces of

foil heat-crimped at the top andbottom with an easy open flap inthe middle of the back piece of foil.

Augmented Product

Addition features and benefits of Lay’sChips:

Lay’s has a website wheresomeone can go look upnutritional information

Information on the company The company’s history How to contact Lay’s Chips. They also have a “chip -tracker” if

you go online to www.lays.ca andput 3 digits that are on your bag of chips, you can find out where yourbag of chips was made!

Lay’s has a 1888 number a personcan call with comments orquestions.



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Future Recommendations

My future recommendations to Lay’s chips would be keep using 100% Canadian

potatoes because that shows loyalty, and customers love seeing their country’s

name on something they are buying it gives them a sense of pride knowing that they

are eating home grown Canadian potatoes. I would also keep cooking them in 100%

sunflower oil because people today are more and more health conscious. If they are

cooked in sunflower oil there is no trans-fat. The fact that when the bag is thrown

out it is basically helping fill up another landfill that thought doesn’t please people,

so like the brand Sun- Chips who has made a compostable biodegradable bag, Lay’s

should do the same so people can be happy when they discard the bag.



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The Marketing mix – Pricing Analysis

Pricing analysis The lays brand uses a number of different ways of selecting an approximate pricelevel. There are many ways to select a price which may include: demand orientatedapproach, cost orientated approach, profit orientated approach and competitionorientated approach.

Demand orientated approachIn the demand orientated approach, the lays brand, based on what I have seen usesthe penetration pricing approach which means that the Frito lay company initiallystarted off selling their product at a low price and then gradually increased the pricebased on the response given by consumers. As you can see tin the competitiveanalysis chart the lays brand uses odd even pricing so as to appear cheaper than theother competitors

Cost orientated approachThe Frito lay brand and other snack brands usually use the standard price markuppricing approach which means that it sells the product at a higher price tocompensate for the cost it takes to make the product to gain a profit. In the recent years there has been an increase in the price of the bag of chips because it was spent on advertising.

Profit Orientated approachBecause the lays brand and generally all snacks a re soled in supermarkets the profit orientated approach that is being used is the Target Return on sales Pricing. Thesupermarkets generally set prices that will give them a percentage of the profit garnered from the selling of lays chips

Competition Oriented Approach

B. Strengths and WeaknessesThe strengths of the lays brand is numerous. The lays brand has grown into apowerhouse of a brand hat infiltrated nearly every store and home in the world andhas now become a part of the North-American tradition. It continually raises theceiling of its brand by bringing the consumer closer to its product. It does this byintroducing the consumer to the people that actually make the poduct, the farmers.On its web page is variety of videos of the farmer form different regions of Canada

and the world detailing how the process works and the care that goes into it.



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The lays brand weaknesses are few but they might include lowering the markuppercentage of the chips thereby competing with the other brands and gainingmore profit for the company. Because it is already such a huge brand and is astaple in the snack and food market less could be used to promote the product

and more money could put to making a product that health conscious and environmentally conscious.By doing this I think it will gain the attention of more people which result in highersales.



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Marketing Communication Analysis

Public relations:

October 5, 2011 Frito- Lay Unveils “Near Net Zero” Manufacturing Facility

September 27, 2011 Doritos Challenges Fans to Crash The Super Bowl and Vie For a Once-In-A-Lifetime Opportunity to Work With The Lonely Island

September 22, 2011 Frito-Lay Has a Million Reasons to Celebrate Its Safe Drivers

December 31, 2008 Die-Hard Buckeye And Longhorn Fans Score School-Spirit Opportunity Of A Lifetime With Tostitos "Race To The Bowl"

November 17, 2008 Frito-Lay's TrueNorth Nut Brand Joins Oscar® - Winner Helen Hunt to Put the Spotlight on People Pursuing Their Life's Passions

-They also have forums and news that allow you to keep up to date with the product.

-They have a specific site for questions and they provide the answers.

- Chances to win a trip to CMA music festival in Nashville, May 17 th , 2011

http://www.fritolay.com/about-us/press-release-20111005.html




















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Advertisement:

- http://harpers.org/archive/2009/04/hbc-90004702- - The Lays chips started advertising through commercials in 1950. Since than

they have succeeded and now have a unique way of promoting their product by having an outdoor advertisement located in San Francisco and by using a

hand carved billboard. They also have a website which helps them handle thecustomer service and they even appeared on harpers magazine. This allowedthem to become more aware of customer complaints, which in result wouldmake their product better.

Sales promotion:

http://harpers.org/archive/2009/04/hbc-90004702

http://www.trendhunter.com/photos/85158

http://harpers.org/archive/2009/04/hbc-90004702



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- When the customer buys the product they are eligible to enter in a code that is included with the product. Than you can save points to use later on avacation.

Strengths and weaknesses:

Advertisement:PROS: - used to sell the product/service

-Allows the customer to know about the product -Gets the companies name and product in the market -Allows customer to see the product in a positive light.

CONS:- Expensive

Public Relations:

PROS:

- Allows customers to know that the producers care about them- Creates relationship between the company and the buyers- Possibly attract new customers- Allows customers to be more involved in the product

CONS:

- Time consuming-

Pricey- Dealing with more complaints/people

Sale Promotion:

PROS:-

Returning customers- Customer purchasing more- Possibly attracting customers

CONS:

- Dealing with more complaints- Stressful



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Direct response:

PROS:

- Interact directly- Quick access information- Customer appreciation

CONS:

- Requires a response

- Pricey because there has to be employees that are ready with a response.

Part C:

Our product to differentiate from the rest of the competition will put toys andrewards with our chips.

b) The strengths are that they control 59% of the United States snack market. Thisshows that they are able to compete and distribute amongst there competitors. Thedistribution of the product is like any other distribution of foods.



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Distribution AnalysisThere are many distribution channels to Lay’s chips. A few of those distributionchannels are with vending machines, Wal-mart, Lay’s factory, and Lay’s chipswebsite itself. A direct channel to the consumer would be with a vending machine

because the consumer is able to receive the item within one’s hands. The rest of thethree channels are considered indirect channeling because there are otherintermediaries involved between the producer and consumer. With Seven Eleventhe consumer comes only in contact with the retailer that works there. Theconsumer is able to purchase as much of the product as he/she really wanted to.With Lay’ s factory, they are able to sell low cost and unit values that are frequentlypurchased in case quantities to the wholesaler. The whole seller then can sort theproducts in smaller quantities for consumers to purchase. Lastly, on the internet with Lays.ca, an agent is appointed to handle the many different manufacturers andwholesalers that may want to purchase from the company. Some of the manylocations that are to purchase are Wal-mart, Costco, Fortinos, and etc. After the

product going through the wholesaler, it then follows by the retailer that tries to sellit to the consumer.

Distribution Channel

Retailer

Consumer Consumer

Wholesaler

Retailer

ConsumerConsumer

Retailer

D.ProducerVending Machines Seven Eleven Lay's Factory

B.ProducerA.Producer C.ProducerLays.ca

Agent

Wholesaler



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StrengthLay’s distribution is pretty widely spread. It covers the internet which majorityconsumers are using, appears in gas stations which many people go in and out of multiple times, seen in well-known grocery stores when people need to purchasenecessities, and also convenient stores when people go to purchase minorneeds/wants. Having Lay’s chips seen in such a variety of places allow the product to have a higher chance of being purchased. The more the consumer sees theproduct compared to another brand, the m ore the product will be known. Lay’snumerous wholesalers, agents, and also retailers allow it to be a successful companyknown worldwide.

WeaknessesThere aren’t many weaknesses that Lay’s chips distribution has. Adding a couplemore producers would gre atly increase the profit within the company because it’sanother way for the product to be purchased by the consumer. It is also another wayfor more consumers to know about the product.

Future RecommendationsLay’s chips is running a very successful bus iness as seen in the many advertisement they have already. Lay’s should keep everything they have now but just add on a fewmore things to have a better outcome with the product. One way to increase salesand profit to the company could be having an electronic marketing channel whichallows intermediaries to make a time, place, flavor, and possession utility for

consumers. Having more web sales allows Lays to double their sales opportunitiesand also allows the consumer to have an easier access to the product. Lays shouldkeep the website they have that allows agents to organize the products towholesalers but also have a part where it allows consumer to purchase the product themselves. With this done, it allows the consumer to have more of an interactionwith the producer. This should only happen if the consumer is purchasing a largeamount to reduce any minor conflicts that may occur with small purchases.



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Table of ContentsRecommendations ........................................................................................................... Pg.1

Business Report ................................................................................................................ Pg.3

Competitive Analysis ...................................................................................................... Pg.4

S.W.O.T ................................................................................................................................. Pg.6

Target Market Analysis .................................................................................................. Pg.7

Positioning Statement and Positioning Map ......................................................... Pg.8

Product Analysis ............................................................................................................... Pg.9

Pricing Analysis ................................................................................................................ Pg.12

Marketing Communication Analysis ........................................................................ Pg.14

Distribution Analysis ...................................................................................................... Pg.17

lays marketing project

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