Marketing plan This marketing plan provides an outline of strategies of action in marketing Frito Lay.

Frito Lay refers to the division of PepsiCo Inc. which manufactures markets and sells a variety of corn chips, potato chips and other snack foods. In this paper, the four pillars of marketing such as segmentation, targeting, positioning andcommunication strategies are discussed. Moreover, the general courses of actions or activities are likewise presented.

Segmentation
Segmentation is the division of the market into various homogenous groups. Basically, Frito Lay products are generally marketed prior to targeting the general market. Frito Lay has Mexican roots which explain why the Hispanic market was the initial market segment. The attractiveness of the market is evident on the strong needs for snacks among all segments. Nevertheless, the focus of segmentation is on penetrating the teen segment. As such, while the population likes bold and spicy flavored snack, there is high influence on kids in making snack purchase decisions, emerging Y generation has purchase power and busy lifestyles demand food on the go. Further, Frito Lay is a leader in the dip market but since there are many competitors in the market the company decided to penetrate the vegetable dip segment. This is in addition to chip dips segment particularly the shelf-stable sour cream based dip and other chip dips which are already in the mature stage of its lifecycle.

Targeting
Targeting is the identification of audience to which a product will be marketed. As already noted, the population is the initial target market but now also includes the generations X and Y. Teenagers make up a considerable percentage in the marketing activities of Frito Lay especially since they are very particular with value of money.

Positioning
Positioning refers to the creation of image in the minds of the target market. Frito Lay indulgence that offers extreme taste, crunch and flavor is the value proposition. With this, it is critical that a well-developed product mix should be use wherein the loud image and the bold flavor of Frito Lay products could be highlighted

4Ps
Product
Aside from selling a wide variety of corn chips, potato chips and snack foods, Frito Lay also markets and sells several varieties of salsas, dips, crackers, nuts and seeds. These are generally under the food on the go category which could be also considered as convenience foods. Most famous brands include Lays, Fritos, Doritos, Cheetos, Tostitos and Ruffles.

Price
Prices of these products are comparable to competition and are generally inexpensive. Frito Lays also devotes it R&D to innovating wide range of chips to meet every budget. The goal is to consider the variety-seeking behaviour of the target markets hence providing good quality snack at fair prices. Frito Lay utilises some time and promotional pricing methodologies.

Place
Frito Lay products are basically sold everywhere including subway stations, gas stations, universities, groceries, supermarkets, convenience stores, amusement parks, movie houses and even universities.

Promotion
Through its integrated messages, Frito Lay are promoted to target the snack-loving people. Sporting events are the primary promotional tactic for Frito Lay including the Superbowl and NBA. Usually, Frito Lay requires spokesperson for the brand and also sponsors events of various causes. While Frito Lay employs contests, the unit also commits to tie-ins with parent company PepsiCo Inc and other companies and movie outfits. Using humor is part of the advertisements also. Further, in -store promotions are also emphasised wherein share of space is a crucial strategy. More than 50% of salty snack isles are Frito Lay products. Frito Lay involves itself in the design of the retail store thus eyecatching displays are one of the strategies apart from displays before checkout line.

What Are the Marketing Goals for Frito-Lay?

Frito-Lay uses a variety of marketing techniques to achieve its business goals.
The Frito-Lay company is a $13 billion subsidiary of PepsiCo that employs 48,000 people. This brand, filled with well-recognized products including Cheetos, Doritos, Rold Gold Pretzels and Sun Chips, is found on the store shelves of most major chains and convenience stores. The 75year-old business owes much of its success to the achievements of its marketing division.

Consumer Targeting
A prime marketing goal of Frito-Lay is attracting consumers through extensive targeting. The company gains this recognition through advertising its snack foods to parents with kids, offering products in vending machines and using brand mascots such as Chester Cheeto to appeal to its youthful demographic. Charles Larson, author of the book, "Persuasion: Reception and Responsibility," states Frito-Lay taps into the child and teen market by allocating 9 percent of its advertising resources on website advertisements. The company also engages in partnerships with other businesses known to attract kids and teens.

Product Adaptation
Companies must be willing to alter their products to suit the changing tastes of their consumers. Frito-Lay introduced its "Baked" line of potato chips to accommodate consumers desiring healthier snack options. The focus on the environment in the late 2000s compelled the company to introduce the biodegradable snack bag for its line of Sun Chips. Elizabeth Royte cites another instance in her book, "Garbage Land: Secrets of the Trash Trail," how Frito-Lay was one of several companies to offer an organic line of products in hopes of tapping into the $226 billion spent by consumers in 2000 on eco-conscious products.

Market Penetration
Another marketing goal is gaining market share from different ethnic groups or by going overseas. The company meets this goal by introducing products with flavors and a packaging design that appeals to a specific region. Ken Black, in "Business Statistics," says Frito-Lay offered the Hispanic community Chile and tomato chips, fried corn strips and lime-seasoned chips. The company also included a smiley-face on the packaging to remind these consumers of a Mexican sister brand that used a similar image. Frito Lay engages in similar marketing efforts with the Chinese and Indian markets.

Overcoming Obstacles
Frito-Lay uses marketing efforts to overcome stigmas related to its products. The health movement and the Atkins diet posed significant threats to a company that purveys high-carb, highcalorie snack foods. In some cases, Frito-Lay piggybacks on health trends such as locally grown food by offering chips from potatoes grown in the U.S. The company also uses advertising techniques to make women feel less guilty about their eating habits by touting healthier ingredients.

Segmenting and Targeting Markets

LAYS 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. LAYS 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 have experienced high product consumption level. But they are also targeting families, as they understand this influence factor in this region. Except lower classes of our society, every social class and income level is favorable for the company. LAYS 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. LAYS is expecting the positive response from the customers. Lay's Chip targeted high schools, knowing that children were driving Frito-Lay's growth in US. One of the major target market of Lays is children and young audiences of sports and entertainments such as consumers in theaters or stadiums even at home. "Most businesses today use a massmarketing approach designed to increase market share by selling their products to the greatest number of people". They know the benefit of market segmentation strategy which is much better than a formal marketing strategy. Its major distribution is within teens and generation Y. They produce different style for different group..For example, women who dont want the fatthey make Baked ones.

As we all know Lays Potato Chip is known for one of the best snack in the world. The Company has 33 different snacks already and 4 new products have introduced in 2012. The products have an amazing taste . The most important factor in successful new product introduction is a good match between the product and market needs- as the marketing concept would predict.

Developing new products goes through many stages before going to the market.
The first stage is new product strategy that is the roadmap of future product. The second stage is generation of ideas coming from customers, distributors, competitors, research and development.. then product goes to another stage Business analysis. Lays does research of competition and market to determine future profitability. The next stage is development when Lays tested of the product performance and safety. Then its products are introduced in test market to evaluate consumers response. Finally Lays brings the product to commercialization. Lays has experienced sales force that presents new product to the market.

Integrated Marketing Communication

One of the major target markets of Lays is children and young audiences of sports and entertainments such as consumers in theaters or stadiums even at home. Lay's uses product advertising to stimulate primary demand for primary product such as Lay's classics. The promotion plan then becomes an integral part of the marketing strategy for reaching the target market. Lays has many ways of communicating with their consumers. This is very important for sales and product popularity. Lays makes sure their communication starts in retail stores. A major way of Lays communicating with their consumers is through internet sites such as blogs. These blogs are used for finding out information about Lays products and finding out consumers needs through letting them post what products they would like to taste. Also if any customers have any question a Lays consumer care team can help answer it. This form of communication is an advantage for Lays for the fact that everyone uses the internet and email so their consumers have easy access to communicate with the company.

Frito-Lays New Marketing Plan Targets Both Haves and Have-Nots

Healthy food advocates have been pushing hard to get consumers out of the supermarket snack aisles and into the produce section as a way to address our nations serious obesity epidemic. Not surprisingly, snack-food companies have launched a counter-offensive, reshaping their marketing plans to lure eaters back. In fact, Frito-Lay might have been taking notes at the occupy movements around the country. According to a recent story in The New York Times, the company is readying plans to entice the palate of the countrys elite one percent by introducing new products and renewing existing brands . But theyre not leaving lower-income consumers alone. Company execs hope to lure the remaining 99 percent with dollar-store checkout displays packed with products like crispy, but not exactly nutritionally dense, Taqueros. But most companies follow the money. While the overall $22 billion salty snacks market is losing sales, its $2 billion premium end has grown on average about 7 percent over the last two years, according to Goldman Sachs, writes Strom. The low-end market expects 4 percent growth. Over at the Public Library of Science (PLoS), a series on Big Food shows the growing influence and agenda of multinational food companies. Food, unlike tobacco and drugs, is necessary to live and is central to health and disease. And yet the big multinational food companies control what people everywhere eat, resulting in a stark and sick irony: one billion people on the planet are hungry while two billion are obese or overweight, write the editors.

SEE Product

Concepts

As a convenience product, Lays potato chip is available everywhere, including, gas station, grocery chains, newsstands and vending machines. Convenience products are usually inexpensive and require little shopping effort and planning. Lays has a product line extension, trying to make their company larger and provide more than just potato chip to the world although it remains on top. It produces other products to keep the company successful, with achievements of manufacturing FRITO-LAY Almonds Roasted Salted, Cashews Salted, Peanuts Salted, Sunflower Seeds, Trail Mix Nut and Chocolate, etc.This is what you would also call a product mix because the company does not just only sell one product. Lays tries to provide the best for its consumer so today they are working on packaging chips with attractive color, healthy, safety and informational labeling.

Lays Chips Product Analysis

Before Lays chips were introduced the company took surveys to find out what people wanted from potato chips and found. Core Product The Core Benefits from lays 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 or kettle cooked. Depending on the format, which they are being sold. Flavored with any of the 20+ flavors. Sold in five different formats first being the regular fried chips, then came the Lays WAVEY then the fat-free WOW brand, then came the processed STAX, and lately the new KETTLE COOKED. They come in three different sizes the smallest, which is intended for personal consumption. Then there is the regular size bag that could be shared with one or two people, and then theres the family size, which is intended to be shared with others. Comes in a shiny foil bag that has a different design for each of the different flavours. Lays regular and lays STAX have 16 different flavours, and the Lays Kettle Cooked have 4 different flavours. The Branding of Lays Chips is a sunburst with a red ribbon going

Augmented Product

around it saying Lays The design of the bag is 2 pieces of foil heat-crimped at the top and bottom with an easy open flap in the middle of the back piece of foil. Addition features and benefits of Lays Chips: Lays has a website where someone can go look up nutritional information Information on the company The companys history How to contact Lays Chips. They also have a chip-tracker if you go online to www.lays.ca and put 3 digits that are on your bag of chips, you can find out where your bag of chips was made! Lays has a 1888 number a person can call with comments or questions.

The Marketing Mix

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

Demand orientated approach

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

Cost orientated approach

The Frito lay brand and other snack brands usually use the standard price markup pricing approach which means that it sells the product at a higher price to compensate 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 approach

Because the lays brand and generally all snacks are sold in supermarkets the profit orientated approach that is being used is the Target Return on sales Pricing. The supermarkets generally set prices that will give them a percentage of the profit garnered from the selling of lays chips.

Pricing Strategies:
The pricing strategy which is LAYS is following, 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 because in the FMCGs product market their will be affluence of competitors based pricing along with a bit affect of customer value. 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 by keeping in view the quality of the product and the prices which are being offered by the competitors.

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

Consumer Satisfaction:
There is a balance in consumers mind between the price they pay and the quality of the product they purchase.

Affordable Price:
The price of Lays is affordable for middle level income groups. The price is adjusted according to the demand of the product.

Advertisement
The Lays chips started advertising through commercials in 1950. Since then they have succeeded and now have a unique way of promoting their product by having an outdoor advertisement and by using a hand carved billboard. They also have a website which helps them handle the customer service and they even appeared on harpers magazine. This allowed them to become more aware of customer complaints, which in result would make their product better.

Lays : No One Can Eat Just One

Company: Frito Lay ( Pepsico Group ) Agency: JWT If you believe that it is not possible to brand a commodity that too a food product and sell it at a premium, think again. You are mistaken. Ask any youngster what would he like as a snack food.Chances are that he will say Lays.. Lays from Fritolay : a group company of Pepsico India is the only money making machine for this global giant in India. Indian snack food business is a huge market to the tune of 17000tonnes out of which the branded foods contribute around 6500 tonne. In revenue terms, Indian snack food business is worth around Rs 2500 crore and growing. Lays commands a monopoly sort of position in the Potato chips category which is around 85% of the snack food market. Lays is competing head on with the unbranded players in the market and if you look at the broader levels of competition , this brand is competing even with the snacks from our own kitchen. It is interesting to see how this brand has succeeded in the commodity business. It followed all the rules to perfection. 1. Quality: the brand offered superior quality compared to the other unbranded snacks there by reducing the risk to the customer . The crisp and beautifully packed chips were a new experience for the Indian consumer. 2. Value addition: the brand offers unimaginable range of potato chips with many flavors made especially for India. Together with many new international flavors, it easily caught the imagination of Indian consumer 3. Aggressive brand building: No one needs to teach Pepsico How to build a brand! Lays spent lot of money on brands building and once established were able to charge a premium for the brand. Although initially Indian consumer were pissed off by the high price, slowly the brand established its credentials. The so called "Liberation child' and the software yuppies caught hold of this brand. These trend setters made this brand a must for looking cool in campuses. " Lays with Cola" began to take its toll on "Samosa and Tea". Lays lavishly spent money on brand building. The ads were catchy and was positioning the product on the platform of "Taste" .The baseline ' No one can eat just one " is one of the most successful baseline in Indian advertising. The baseline is true also since the taste is

compelling that no one can eat just one. The brand ambassadors Saif and Priety gave a cool attitude to this brand making it more interesting for the new generation. Lays have always tried to excite its fans by launching new flavors frequently. This ensured that the brand is never boring. The latest flavor is the Latino style. The company is going to focus on Music as a base for building this brand. With ITC foraying into this business will see the market expanding . But Lays have put itself in a formidable position that is difficult to match. For now , No one can eat just one ..

Sales promotion
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 a vacation.

Create a Potato Chip Flavor, Win $1 Million

Think you have taste buds worth $1 million? Lays announced a new flavor contest that offers the winner $1 million or 1 percent of the chips net sales for 2013. Facebook votes will determine the ultimate potato chip champion. The company will select three finalists. Instead of hitting a Like button, users will hit a Id Eat That button to cast their vote. Ram Krishnan, vice president of marketing at Frito-Lay told India today I fully expect this to get us into a different flavor category. The company ran a similar contest in Spain that a 21-year-old student won with his Spanish-tapas inspired chip. The chip, flavored to taste like prawns, garlic and peppers, won the student 20,000 euros ($25,000) and 1 percent of the chips sales for 2012. Lays also held similar contests around the world in Australia, Poland and Egypt. Companies including Ben & Jerrys and Baskin-Robbins have done flavor contests in the past.

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

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.

Distribution Analysis
There are many distribution channels to Lays chips. A few of those distribution channels are with vending machines, Lays factory, and Lays chips website itself. A direct channel to the consumer would be with a vending machine because the consumer is able to receive the item within ones hands. The rest of the three channels are considered indirect channeling because there are other intermediaries involved between the producer and consumer. With Seven Eleven the consumer comes only in contact with the retailer that works there. The consumer is able to purchase as much of the product as he/she really wanted to. With Lays factory, they are able to sell low cost and unit values that are frequently purchased in case quantities to the wholesaler. The whole seller then can sort the products in smaller quantities for consumers to purchase. Lastly, on the internet with Lays.ca, an agent is appointed to handle the many different manufacturers and wholesalers that may want to purchase from the company. After the product going through the wholesaler, it then follows by the retailer that tries to sell it to the consumer.

Distribution Channel

A. Producer
Vending Machines

B.Producer
Seven El even

C.Producer
Lay's Factory

D.Producer
Lays .ca Agent

Wholesaler Retailer Consumer Consumer Retailer Consumer

Wholesaler Retailer Consumer

Strengths

Lays distribution is pretty widely spread. It covers the internet which majority consumers 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 purchase necessities, and also convenient stores when people go to purchase minor needs/wants. Having Lays chips seen in such a variety of places allow the product to have a higher chance of being purchased. The more the consumer sees the product compared to another brand, the more the product will be known. Lays numerous wholesalers, agents, and also retailers allow it to be a successful company known worldwide.

Weakness
There arent many weaknesses that Lays chips distribution has. Adding a couple more producers would greatly increase the profit within the company because its another way for the product to be purchased by the consumer. It is also another way for more consumers to know about the product.

Future Recommendations
Lays chips is running a very successful business as seen in the many advertisement they have already. Lays should keep everything they have now but just add on a few more things to have a better outcome with the product. One way to increase sales and profit to the company could be having an electronic marketing channel which allows intermediaries to make a time, place, flavor, and possession utility for consumers. Having more web sales allows Lays to double their sales opportunities and also allows the consumer to have an easier access to the product. Lays should keep the website they have that allows agents to organize the products to wholesalers 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 interaction with the producer. This should only happen if the consumer is purchasing a large amount to reduce any minor conflicts that may occur with small purchases.

Factors that determine Lays demand

Brand name: lays is a very popular brand name and trusted among most of the people. This influences its demand on a huge scale.

Quality product: Lays is a product of standard quality having registered itself with the Indian health standards and thus is trusted by all.

Taste and preferences: the taste and preferences of a consumer affects the demand of a product hugely. Since the lays potato chips come in a huge variety of flavors it covers the demand of a huge percentage of the population

Price: lays has a nominal price ( Rs. 10 ) , and thus is affordable by a huge range of people . It also follows the law of demand because of which its demand is more since its price is less. Population: lays is a form of potato chips which is consumed by the people of all ages , be it senior citizens or students. Government policy : there are no government restrictions imposed on lays as such because of which it can produce in order to meet the demands.

Advertisements:

of all the factors mentioned advertisements are the most important determinant. Since potato chips are a homogenous product by increasing the ads, its polpularity can be increased .

Positioning Statement
The lays product has been through many trials and tribulations, but is now a strong influence in the snack food category. Not much could be said about the weak 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 the advantages it has over its competitors is that its a staple in the snack food industry giving it a comfortable familiarity that consumers can always rely on..

MARKETING SHARE

13%
14%

5%
58%