LAYS PAKISTANRESEARCH PROJECT

TABLE OF CONTENTS

The Exordium

Acknowledgement

3

4

6

6

7

8

8

10

11

12

16

22

27

28

30

31

34

Introduction

History

Slogans

Flavors

Nutritional Information

Graph

Key Objectives

Marketing Environment

SWOT Analysis

Marketing Mix

Product Planning

Price Planning

Promotion planning

Distribution planning

Recommendations

THE EXORDIUM

Nothing is deserving worship Almighty Allah, the most Merciful,

Compassionate and Gracious. All praises for him because he is the creator of

this mysterious universe and guides us with the Holy Prophet Mohammed

(Peace be upon him) and Holy Quran to explore it. We supplicate that Allahgrant us serenity to accept the things we cannot change, courage to change

the things we can, and wisdom to know the difference.

ACKNOWLEDGEMENT

Above all we are indebted to almighty Allah, lord of our life and of everything in the

universe and his HOLY PROPHET MUHAMMAD (peace be upon him) whose

blessings enabled us to perceive and pursuit higher ideas of life.

The project of FOUR P’S OF MARKETING is the result of our day and night efforts,

which we have made to, complete this extensive and informative project. Certainly wehave been able to complete this project with the help of numerous factors, which played akey role in it.

“THE PROFOUND EFFECT OF A TEACHER UPON THE STUDENTS CAN BE

DESCRIBED BY THE LIVES OF HIS STUDENTS”

(PRINYA NATALYA)

We deem it with an honor and privilege to record sense of gratitude to the respected

resource person PRO. SHAZAD ALAM for his constructive style of teaching and

maintaining very open and competitive atmosphere within the class.We really liked our respected resource person for his full command on the subject andunconventional style of teaching. This made the subject very comprehensive and

understandable.

We feel it a liability to offer heartiest thanks to all our respondents who helped us in

completing this project and all our teachers for their inputs and suggestions, which helpedus a lot.

RESEARCH PROJECT

To Prepare a project report of LAYS CHIPS

RESEARCH OBJECTIVES

To find out HISTORY OF LAYS INTERNATIONAL.

Four P’s of marketing

1. PRODUCT PLANNING

2. PRICE PLANNING

3. DISTRIBUTION PLANNING

4. PROMOTION PLANNING

INTRODUCTION

Lay's is the brand name for a number of potato chip varieties as well as the name of thecompany that founded the chip brand in 1938. Lay's chips are marketed as a division ofFrito-Lay, a company owned by PepsiCo Inc. since 1965. Other brands in the Frito-Laygroup include Fritos, Doritos, Ruffles, Cheetos and Rold Gold pretzels.

HISTORY

Native American chef George Crum invented potato chips in 1853 while working in aNew York hotel. The snack food became popular during the 1920s following themechanical potato peeler. As distribution increased, a number of small companies beganmanufacturing and selling the product.

In 1932 salesman Herman W. Lay opened a snack food operation in Nashville, Tennesseeand, in 1938; he purchased the Atlanta, Georgia potato chip manufacturer "Barrett FoodCompany," renaming it "H.W. Lay & Company." Lay criss-crossed the southern UnitedStates selling the product from the trunk of his car. In 1942, Lay introduced the firstcontinuous 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 firstsnack food manufacturer to purchase television commercials, with Bert Lahr as acelebrity spokesman. His signature line, "so crisp you can hear the freshness," became thechips' first slogan along with "de-Lay-sious!" As the popular commercials aired duringthe 1950s, Lay's went national in its marketing and was soon supplying productthroughout 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, thelargest 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 marketingassisted by a number of celebrity endorsers.

In 1965, Frito-Lay merged with the Pepsi Cola Company to form Pepsico, Inc. and abarbecue version of the chips appeared on grocery shelves. A new formulation of chipwas introduced in 1991 that was crisper and kept fresher longer. Shortly thereafter, thecompany introduced the "Wavy Lays" products to grocer shelves. In the mid to late1990s, 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 varietythat was completely fat-free (Lay's WOW chips containing the fat substitute olestra).

In the 2000s, kettle cooked brands appeared as did a processed version called Lay's Staxthat was intended to compete with Pringles, and the company began introducing a varietyof additional flavor variations.

Frito-Lay products presently control 55% of the United States salty foods marketplace.

SLOGANS

That's another reason to smile! Lay's Potato Chips (2007)

Food for the fun of it! (2007)

Lay's, get your smile on! (2006-)

Lay's. Want some?

Betcha can't eat just one (1960s-present)

Lays ka mazaa lo(Lay's Pakistan)meaning-Have fun with Lay's

You can't eat just one....Lagi bet! (Lay's India)

Har programme ka main food (Lay's India)meaning- The main food for

every programmme

No one can eat just one (Lay's India)

FLAVOURS

Except for barbecue-flavor potato chips, which were introduced no later than 1958, upuntil the last 20 years, the only flavor of potato chips had been the conventional one.Despite an explosion of new flavors, the unadorned original is still the selection of 81%of consumers.

In the Pakistan, Lay's offers a number of flavor combinations, in addition to the classicchips. Flavored products in the traditional fried varieties include

Barbeque

Salted

French cheese

Magic Masala

Nutritional information

Bag of Lays Baked Chips

As a snack food, the Lay's brands contain very few vitamins and minerals in any variety.At ten percent of the daily requirement per serving, vitamin C is the highest. Salt contentis particularly high, with a serving containing as much as 380 mg of salt.A one ounce (28 gram) serving of Lay's regular potato chips has 130 calories andcontains ten grams of fat, with three grams of saturated fat. Kettle cooked brands haveseven to eight grams of fat and one gram of saturated fat but are 140 calories. LaysNatural has nine grams of fat, two grams of saturated fat and 150 calories. Stax typicallycontain ten grams of fat, 2.5 grams saturated fat and are 160 calories per serving. WavyLays are identical to the regular brand except for a half-gram less of saturated fat in somecombinations. The various brands do not contain any trans fats.The baked variety feature 1.5 grams of fat per one ounce serving, and have no saturatedfat. Each serving has 110 to 120 calories. Lay's Light servings are 75 calories per ounceand have no fat.

Lays Classic Potato chips are cooked in 100% pure sunflower oil (originallyhydrogenated oil until January 1st, 2007). A one ounce serving has 150 calories, 90 ofwhich are from fat, 10 grams of fat, and 1 gram of saturated fat.

They have many flavors in the baked lays as well. Baked lays are produced in cheddar,barbecue, and original.

Level and Type of Competition:

Their competition strategies are based on the competitor’s strategy. They don’t follow theprice war competitive strategy. They follow the standard of product and quality incompetition. Their competition type is oligopoly.

Competitors:

One can’t imagine about a business without competition. Lays has also some competitors.Major threats to Lays are Pringles, Kolson and Golden, Tripple Em which has almost45% of the market share. But as quality of the product play an important role that is notup to the standard by the competitors. So, Lays is outstanding in all ways to thecompetitors like quality, quantity, price and variety of the products etc.

Competitors Products & Activities:

Following Competitor’s products are being sold in the market but their productavailability is not that good. The only reason for their presence is the Credit facility andhigh margins.

Niralla

Smith

Bunny

Sherry

Sadiq Dry Fruit

PACE (Rancher)

Golden

Pak Food (Maxo)

100%

80%

60%

40%

20%

0%

GRAPH

Lays 45%

Kolson 15%

Golden 8%

Sm ith 5%

TrippleEm 15%

Others 12%

LaysKolsonGoldenSmitTripple EmOthers

= 45%= 15%= 8%= 5%= 15%= 12%

NATURE OF THE BUSINESS

Snacks are of two types, Extruded and Potato Chips. “KURKURE” lies in the extruded

item which comes under FMCG Products (fast moving consumer goods).

Key Objectives

Like every business the primary objective of LAY’S Company is to be flourishing andearn more profits. But it’s possible only when the company understand the environmentof the market, where:

1. Different types of customer in this region who consider low price but still want for high quality.

2. Currently weak competition for a multinational company regarding quality with price.

3. A handsome share of the market is still vacant.

4. Company’s own profit orientation by producing in bulk quantity and reducing cost.

5. Strong distribution channels are helpful to distribute and sale quickly and can generate high turnover.

Therefore they pursue following objectives:

1. Produce high quality product at reasonable low price.

2. Facilitate as maximum share of market as they can.

3. Customer satisfaction is the top priority.

4. Acquire the strong distribution channel so the product is made available on the shelf.

MARKETING ENVIRONMENT

MICROENVIRONMENT

Research & Development

Company has established their own plant at plot no 413, Sunder industrial Estate,

Raiwind Road, Lahore. Its working and efficiency is under consideration. Experts are

there to watch out and examined the machinery as well as production unit. They are alsoensuring that its production is fulfilling the requirements in due time. Experts make it

sure that they are producing Quality products. (Maintaining their quality standards)

Production

Company was importing “KURKURE” from China and Lays chips from “Saudi Arab”

through its supplier “Saudi Snack Food” Company has started its production at its NewPlant at Raiwind road Lahore on 14th August 2006. That improves the performance of

the company. The time period of importing the product is eliminated. Raw material canbe available in local market, so it would reduce the budget for raw material. The time

span right from the production to distribution will squeeze and efficiency will be

enhanced.

Suppliers

Company was importing Lays chips from “Saudi Arab” from 1st June 2005 through its

supplier “Saudi Snack Food” and has a strong bond with them but now LAY’S CHIP’S isproduced in Pakistan.

Marketing Intermediaries

To execute an assortment of necessary functions to get the product to the final customerslay’s has one major distributor, Shahbaz brothers in Pakistan.Shahbaz brothers having maximum of their targets and maximum margins which is 14 %are their major distributors they are covering area of Gulberg, Defence, Cant, Sadar, TajBagh, Taj Pura and Jalo etc.

Order placement to Main Depot which is situated at Gulberg II, Pepsi office is weekly

based and within 48 hours supplies arrives from Main Depot to Distributors Depot fromwhere they distribute them to different retailers. Distributors are covering 70 to100 shopsdaily to fulfill their target in the end of the month period. For distribution available

vehicles are vans, Suzuki and shahzors (only for Shahbaz Brothers).

Customers

The strategic focus of a business or a marketing plan of lay’s Company is that they aretargeting Youth, Girls and housewives (opinion leaders).

The company needs to study five types of customers like consumers, business, resellers,International and government. But in the case of lay’s only consumers are exist.

Public

All the public groups has an impact on lay’s, banks from they have obtained loan,

advertising agencies from whom they have run their advertising campaigns, govt. will

also because they have an opportunity to collect tax and employees also because theyhave to earn from this.

MACRO ENVIRONMENT

Demographic

Lay’s are not specifically concerned with any religion, race, occupation, family life cycleor sex and has a target market in every societal group. Main concerned segment is girls,housewives and youth. Who have experienced high product consumption level? But theyare also targeting families, as they understand this influence factor in this region.

Economic

All income groups are favorable for the business of Lay’s although those are not who areworking class (labors).

Increased government intervention (political)

“KURKURE” is a legally registered company and applying labor laws and market laws

of Pakistan. But it is known to them that Government interaction got much importance inevery business and if there are some restrictions on them then it may be a hurdle in theirway to success. That’s why some harsh Government rules may influence a wrong impacton company’s goals and achievements in future.

Natural

Lay’s as an extruded item, made of vegetables, although these are natural resources butstill there are not harmful to the nature. And there is rare chance of shortage of raw

material in this case.

Cultural

Lay’s is not as such a product which can be affected by the culture and tradition (primary& secondary) changes. Infect, it is based upon the culture of South Asia (Sub-continent)and Pakistan

Technological

Lay’s being the product of PEPSI International and having a good repute in internationalmarket are already using modern technology to enhance the production and the quality.Marketing Objective

Company is having very clear perception about the target market which is

explained as follows:

Company want to capture as many share of the market so that the company

maximize its market share.

Customer attraction towards the product is very important and without this

phenomena company can’t fulfil its targets.

Strong distribution channel is the foremost element and is required more when theneed increases, so the company should also focus on them and will give them

certain benefits as well as the retailers.

Profit maximization is always prior magnitudes for every company for that

purpose they reduce the cost of production to enhance the turnover of the

company.

SWOT Analysis

Strengths

Almost all income level especially below 5000 and even above 10000 can buy

and consume LAY’S.

Brand conscious people like it most.

LAY’S being the multi national company having the huge investment spending

massive amount on advertising campaigns to aware the customer towards LAY’S

People are comfortable with the Price of LAY’S.

Placement is becoming a plus point it means company is emphasizing on its

distribution and placement strategies.

LAY’S chips have a strong brand image at their back like Lay’s and also PEPSI

International.

LAY’S is the blend of maximum satisfaction at minimum price that’s why

customers are much satisfied by LAY’S chips. We can say it that

Value = Satisfaction

LAY’S chip is such kind of product which has no any restriction of age or gender.

LAY’S being a new product in snacks which is also useful for health conscious

people because it is made of grains (wheat, rice and many others).

LAY’S chip is such type of snacks which is always ready to consume.

They also give incentives to retailers

Human Capital is the main strength of LAY’S.

Weaknesses

Facing the enormous competitors prevailing in the market.

Competitors like Kolson and Triple M are investing heavily in branding.

Although they are trying to make their efforts best to make their supply excellentbut still they are not reached to the rural areas of Pakistan.

Some areas like Highways (especially on Motorway) and many others exist in

Pakistan where still LAY’S cannot manage to fulfill their requirements and wherethe products of competitors are available.

Elite class of your society are not consuming too much as compared to the

middle and others due to the price as we can say the status problem

At that time LAY’S only offering four flavors.

LAY’S are not providing any extra facility or benefit to the customer.

Opportunities

Supply of this product in the remote areas of Pakistan.

Improvement in its Quality as there is always room for the improvements in

anything.

Addition of new local flavors helps a lot to sustain in the market.

Sponsoring major events and festivals for huge awareness campaigns.

Try to make supply in all the areas where the other competitors are existing

already.

Design such strategies and advance planning to become the market leader in thesmallest span of time.

Introduce the family and economy pack to serve the large families which also costyou cheaper and ultimately will accepted by the consumer.

Try to serve the elite class according to their status and requirement.

Make advertisement in suburban and rural areas and give incentives to the shoppersonals so that also motivate towards it. LAY’S has an opportunity to introduce a less spicy or light flavor to increasetheir consumer ship and target market.

Threats

Competitors like kolson and Tripple M are the biggest threats to our product.

Indirect competitors are also contributing in the same way.

BUSCUITS and NIMKO hold major share of Market.

New entrants can also the threat for the LAY’S chips and may create hurdles in

the growth.

Small companies that are not a problem at that time may become the main

competitors or threats to LAY’S chips.

On arrival of LAY’S Kolson introduced a new flavor in their brand Slanty which

may divert the attention of consumer towards them from LAY’S chips.

There are many substitutions in the case of snacks which is the great threat for

LAY’S chip’s.

People usually like variety in flavors which is the up coming threat to the LAY’S

because they have only four flavor .

Govt. policies may affect the growth of the lay’s chips.

MARKETING STRATEGY

LAY’S Target Markets

LAY’S is such kind of product which is designed for the region of south Asia specially

the sub-continent (Pakistan and India) where the people like spicy kinds of food and

snacks including urban and suburban areas.

LAY’S is not concerned with any religion, race, occupation, family life cycle or gender

and has a target market in every social class. Main concerned segment is youth who haveexperienced high product consumption level. But they are also targeting families, as theyunderstand this influence factor in this region.

Except lower classes of our society, every social class and income level is favorable forthe company.

LAY’S is usually consumed on occasionally basis, providing the better quality at

economical price along with the convenience to consume. We deeply focus on non users,potential users and first time users in readiness stage they are unaware, desirous,

interested and intending to buy. LAY’S is expecting the positive response from the

customers.

Product

LAY’S as an extruded item which lies in the snacks category is offered to market for

consumption and it is much satisfying the consumer’s needs and wants.

Levels of Products

For every product there are basically three levels of product.

Core Benefit

Before introducing the brand the LAY’S Company conduct different surveys to get the

perception of the consumer about features, design and quality level. Public want to buythe potato chips to remove their hunger with little bit crunch and unique taste.But mostly people are not ready to compromise on quality. In fact there is no any basicnecessity regarding snacks however it plays a vital role to fulfill that need.

Actual product

After a complete research LAY’S Company turns the core benefits into the actual

product and introduces the LAY’S CHIPS which is unique in Quality, Flavor, taste and

quantity. It’s totally fulfilling the need of the people.

Augmented Product

As we know that LAY’S is the convenience good at the consumer level so they are not

offering any services directly to consumer i.e. after sale service, user manual but they areoffering benefits to the retailers in the form of more profit. LAY’S stands etc.

Consumer Product

Consumer products are those products which consumer buy or purchase for their personaluse or consumption. So LAY’S are the consumer product because it basically use at theconsumer end.

Convenience Type of Product

LAY’S snacks is the Convenience type of product in which consumer buying behavior isfrequent purchase, little planning and little comparison and has a low price. And LAY’Sis believed on wide distribution channel.

Product Attributes

Quality

LAY’S CHIPS are following the concept of Siemens (Quality is when customer come

back and our product don’t) as far as the quality is concerned. They also not neglect thetwo dimensions of quality (performance & conformance) to gain the satisfaction of

consumer.

Features

All the features (like spiciness) and characteristics of LAY’S is compiled by the companyon the need and want of the consumer.

Style & Design

Style and design matter a lot on the outcome and response of the product. LAY’S as theproduct (inside the pack and out side wrapper) has much attractive and catchy colors styleand design which attracts the customers a lot.

Branding

The brand name came from India from a Hindi word Kurkura/Kurkuri means brittleor crispy and to avoid that particular anti-patriotism they have decided to choose thatparticular pack color.

French Cheese

Barbeque

Masala

Salted

With the time being this brand is so familiar so its capture the mind of every person as aunique, quality, and tasty extruded with LAY’S Brand.

Market of LAY’S

As far as the LAY’S is concerned with the market in which it deals is near to purecompetition but due to certain factors it lies in the monopolistic competition becauseevery company is charging the different prices according to their quality and productfeatures and as well as target market. Lay’s is charging comparatively high prices fromother ones in potato chips. And if we talk about the Pringles they serve the elite class withquality and style that’s why they are getting too high prices which is not near to anycompany which deals with snacks.

Pricing Strategies

The pricing strategy which is LAY’S is following, cannot be easily evaluate becausefrom company has not mentioned clearly about any system. However most of thecompanies including this are following the Cost-Based Pricing. But a company cannotfollow a single strategy straightly because in the FMCG’s product market their will be

fluence of competitors based pricing along with a bit affect of customer value.

It is already decided between kolson and Lays about their price strategy.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:

Man Power

Machinery

Electricity

Raw material

Employees

Setting the right price is the most important thing, and Lays is doing well. Price is set bykeeping in view the quality of the product and the prices which are being offered by thecompetitors.

Profit Maximization:

Pepsi has priced its products to achieve a certain percentage return on its sales. It hassettled the price of its products so that it can earns a net profit on its net sales.

Consumer Satisfaction:

There is a balance in consumer’s mind between the price they pay and the quality of theproduct they purchase.

Affordable Price:

The price of Lays is affordable for middle level income groups. The price is adjustedaccording to the demand of the product. When Lays Jumbo pack was launched, its pricewas high as Rs. 25 now they reduced it @ Rs.20, causing an increase in demand of theproduct.

PROMOTION PLANNING

1. Advertising:

Lays advertises through various channels

Media (Fm media, TV channels, Internet links etc.)

News Papers & Magazines

Billboards & Banners

Sponsoring various Shows and Matches

Free samples

2. Sales Promotion:

Lays made sale promotion in the following ways:

By launching any new product like Aquafina they get sale promotion intheir business.

When Lays lauched they offered a package of “Buy 2 and get 1 free”.When Mountain Dew was launched they offered free drinks to people to

develope the taste.

They have a deal with KFC and Pizza Hut where they offer drinks to their

customers.

They decrease their prices to increase the sales to capture the market.They also decrease their prices in winter too.