...Case Analysis：Frito-Lay, Inc. Problem Definition In mid-1990, Frito-Lay, Inc. makes a new chips brand called Sun Chips Multigrain Snacks. The product had been in test market for 10 months in the Mineapolis-St. Paul, Minnesota, and metropolitan area. The senior Frito-Lay executives need to decide it they would launch this new product to market officially after the test period. Objectives: (1) Extend its product to attract the customers who always look for new and variety product. (2) Update healthier recipe to meet the current trend of healthy eating. (3) Pioneer a new snack chip category to maximize profit in the new market. Concerns: (1) Whether the premarket test results can correctly reflect the market performance when it introduced to nationwide market. (2) There are many competitors in national market or local market. It's easy for them to make similar products. (3) The advertising and merchandising budget will rise. (4) The new product will cannibalize volume from its previous products. The Situation of the Company Frito-Lay, Inc. is a division of PepsiCo, Inc. It is a worldwide leader in the manufacturing and marketing of snack chips. It is capturing nearly one-half of the retail sales in the United States snack chips market. Well-known brands include Lay's brand Lay's brand and Ruffles brand potato chips, Fritos brand corn chips, diorites brand, Tostitos brand, and Santitas brand tortilla chips, Cheetos brand cheese-flavored snacks, and Rold...
Words: 1275 - Pages: 6
...Savor Restaurant and Catering Heshan Abeywickrema Bellevue University MBA 652: Marketing Strategy Prof. Adrianne Agulla 04/20/2014 1. Case recap In 1997 the Frito-Lay Company, part of the PepsiCo, Inc. was looking at a possible acquisition of Cracker Jack from the Borden Foods Corporation. Cracker Jack is one of the oldest and one of the most well known trademarks in the United States, and the company has been under the Borden name since 1964. Frito-Lays interest to buy Cracker Jack came around when its parent company Borden announced the possible sale of the Cracker Jack brand. The executives at Frito-Lay wanted to know the potential of Cracker Jack and designated a team to consolidate the findings, create a plan of action on how to market Cracker Jack as a subsidiary of Frito-Lay, and finally to estimate fair market value of Cracker Jack as a entity. 2. Problem Identification The ready to eat caramel popcorn product category had decreased sales from the year 1995 to 1996. In 1995 there were sales totaling $205 million, and in 1996 it dropped down to $192 million. Besides the drop in sales there is also severe completion in the ready to eat caramel popcorn category that include national brand firms, seasonal/specialty firms, regional firms, and private label firms. Another alarming fact about the ready to eat caramel is that only about 12% of the total U.S. households consume the product. Only 2% of typical U.S. households would consume the ready to eat...
Words: 856 - Pages: 4
...Problem Definition In mid-1990, Frito-Lay, Inc. makes a new chips brand called Sun Chips Multigrain Snacks. The product had been in test market for 10 months in the Mineapolis-St. Paul, Minnesota, and metropolitan area. The senior Frito-Lay executives need to decide it they would launch this new product to market officially after the test period. Objectives: (1) Extend its product to attract the customers who always look for new and variety product. (2) Update healthier recipe to meet the current trend of healthy eating. (3) Pioneer a new snack chip category to maximize profit in the new market. Concerns: (1) Whether the premarket test results can correctly reflect the market performance when it introduced to nationwide market. (2) There are many competitors in national market or local market. It's easy for them to make similar products. (3) The advertising and merchandising budget will rise. (4) The new product will cannibalize volume from its previous products. The Situation of the Company Frito-Lay, Inc. is a division of PepsiCo, Inc. It is a worldwide leader in the manufacturing and marketing of snack chips. It is capturing nearly one-half of the retail sales in the United States snack chips market. Well-known brands include Lay's brand Lay's brand and Ruffles brand potato chips, Fritos brand corn chips, diorites brand, Tostitos brand, and Santitas brand tortilla chips, Cheetos brand cheese-flavored snacks, and Rold Gold brand pretzels. Eight of them...
Words: 305 - Pages: 2
...Factual Summary： Frito-Lay, Inc. is a division of PepsiCo, Inc., a New York-based diversified consumer goods and services firm. PepsiCo, Inc. includes Pizza Hut, Inc., Taco Bell Corporation, Pepsi-Cola Company, Kentucky Fried Chicken, and PepsiCo foods international. PepsiCo, Inc. recorded net income of $ 1.077 billion on net sales of $ 17.8 billion in 1990. Frito-Lay, Inc is a worldwide leader in the manufacturing and marketing of snack chips. In 1960, the Frito Company and the H.W. Lay Company merged to become Frito-Lay, Inc. The company is the leading manufacturer of snack chips in the United States, capturing about 50% of the retail sales in this category. During 1990, the company has 39 manufacturing plants, more than 1,600 distribution facilities, and a 10,000-person route-sales team that calls on more than 400,000 retail store customers in the United States. Today, Frito-Lay brands account for 59% of the U.S. snack chip industry. Sun Chips Multigrain Snacks resulted from Frito-Lay’s ongoing marketing research and product development program. In the early 1970s, corporate marketing research indicated that consumers were looking for nutritious snacks. In the early 1980s, Frito-Lay marketing R&D instituted the “Harvest” project with the multigrain snack to appeal to consumers. The “Harvest” project also emphasizes on flavor line extension and low-fat versions. In the beginning, Frito-Lay faced some problems for increasing its sales volumes. Later, Frito-Lay uses different...
Words: 267 - Pages: 2
...Frito- Lay Case Frito-Lay, Inc is a worldwide leader in the manufacturing and marketing of snack chips. In 1960, the Frito Company and the H.W. Lay Company merged to become Frito-Lay, Inc. The company is the leading manufacturer of snack chips in the United States, capturing about 50% of the retail sales in this category. Frito-Lay, Inc has been developing multigrain chips since the early 1970s after marketing research found that consumers wanted nutritious snacks, consequently in 1974 the company launched to the market Prontos, a multigrain chip that was not really a great success, hence withdrawn from the national market in 1978. People concluded the product was not introduced in the right time. The Sun Chips was introduced in the early 1970s, and the name was assigned to a line of corn chips, potato chips, and puffed corn snacks. Six years later, the name was given to a line of corn chips, but unfortunately in 1985, this line was also withdrawn from distribution due to poor sales performance. However, in the early 1980 Frito-Lay executives started worrying about the health of the baby boomers. They were getting older and healthier conscious, so snack companies had to develop newer, healthier snacks for people trying to stay away from the salty, fried chips. Product research and development continued during the 1980s with The Harvest but in the early 1980s several market tests failed. Nevertheless, in 1988 with the idea still of multigrain products, marketing research studies...
Words: 379 - Pages: 2
...1. Using resources, regulation and reputation as a basis, what are the sources of pressure on firms such as Frito-lay to reduce their environmental footprint? The effect of industrialization and the increasing population of humanity are the reasons why natural resources are being overly consumed, outstripping the resource base on an unprecedented scale. The use of resources and subsequently a reduction in operational costs is the primary reason why several companies are going into environmental footprint reduction. Companies like frito-lay, Walmart, Sabaru, Pepsi and Ritz-Carlton would have an increase in OPEX parallel to expansion. Sustainable business spending would also increase rapidly because it is seen as a catalyst for more productive improvements Thus, it is a win-win solution for both humanity, the company and mother earth to reduce resources and lower cost and at the same time, be sustainable. Government agencies are also becoming stricter as more and more studies show that the consumption of men is at an alarming stage. As science advances, there are now several ways to tell how humanity as whole affects the environment. With this, more progressive economies are setting stricter laws that regulate transportation, waste and noise. Lastly, company reputation is also a big factor why companies wanted to reduce environmental footprint as more investors are becoming increasingly interested in the environmental performance of a company where they put their money into...
Words: 285 - Pages: 2
...Running Header: Frito-Lay Frito-Lay Capella University MBA 6118 TO: Frito Lays Executive DATE: January 24, 2015 SUBJECT: International Marketing Multinational corporations are transforming themselves by repositioning and rethinking their goods and services to tap into and capture the new global middle-class market. This worldwide economic phenomenon encompasses a huge customer base (International Marketing, 2012). Market research and analysis show that the proposed advertising media for Frito Lays line need to be reprioritized and changed for international expansions. Findings from focus groups and surveys have made it apparent that we need to update our advertising efforts to align them with the international markets of today. Also, it is has become increasingly important to use the Internet as a tool to communicate with our target audience to show our dominance in the snack industry. In attempts to attack the market and the fight against entrance into a new market and the newly fade of health food snacks. One idea that has come up during discussions is for Frito Lay’s to changing the name before entering into newer international markets. Donald Yacktman of Yacktman Funds, has suggested that PepsiCo rename itself Frito-Lay to reflect the growing importance of that business, and others like Nelson Peltz and Relational Investors have agitated for it to uncouple the snacks business from the drag of its beverage operations, has slowed as consumer tastes migrate to...
Words: 970 - Pages: 4
...CRACKER JACK An analysis of potential brand acquisition by Diversified Products Corporation John Bry Sonja Gessling Phil Mark Sara Meinke Jordan Schulz Som Thamma Cindy Tsai Cohort C ‐ Team 4 CURRENT SITUATION ANALYSIS: Cracker Jack (CJ) is a classic American caramel-coated popcorn and peanut snack that was acquired by Frito-Lay (FL) in 1997.1,2 Sales peaked in 1998 to $100M but soon sank back to $30M per year and has remained at that level since.3 Several factors are attributed to this sales slump. FL incorporated CJ into its existing distribution model that utilizes Direct Store Delivery and packaged CJ in Mylar bags (as opposed to the classic boxes).They also shelved CJ with other Frito-Lay salty snack products such as Lays Potato Chips, despite 98% of consumers rating CJ as a sweet snack and not a salty one. 4 Although priced lower than the leading caramel corn brands, CJ still appears expensive when merchandised next to inexpensive potato chips. Consequently CJ has numerous misalignments and a comparatively low profit margin (8.2% compared to snack average of 20.5%).5,6 The low price point combined with rising commodity prices has forced FL to substantially cut the quality of the prizes found inside each box to control costs, angering long time consumers.7 CJ, having stagnant sales for the past ten years, has not received the support required for brand revitalization, instead relying on steady baseball stadium sales to survive.8 Overall...
Words: 2595 - Pages: 11
...Case 2 Position Paper Fito Lays Frito-Lays should pursue the vegetable dip market to remain a leader in the chips in dip Industry. I believe that some of the executives are stuck in a conventional logically way of thinking while others are focused on value Innovation. The conventional thinking executives are happy with the progress they have made with the cheddar dips and newer sour cream dips and they feel that they should concentrate on developing more brands to continue to be competitive. The problem with this strategy is that the competition is doing exactly the same thing. Frito-Lays and its competitors are continually trying to introduce new dips in hopes of securing more market share. In 1985, statistics show that 620 million dollars of dip was sold through supermarkets. In the same year 207 million dollars of the total dip sales where linked to vegetable usage. This translates to 33% of all dip sales in 1985 where linked to vegetable dip. Since Frito-Lays in the shelf stable dip market and total sales in this market where 185 million. Frito-Lays shelf stable dips contribute to 73% of this market with sales of close to 135 million. This means that there is only 27% of the market left to capture if they put a strategy together to remain in the chips in dip market. Common business knowledge should tell these conventional thinking managers that they already dominate the shelf stable dips market. It would not be a good marketing decision to try to expand...
Words: 523 - Pages: 3
...Strategies – MKT 500 | |Instructor: |Jeannemarie Thorpe | |Due Date: |Monday, January 26, 2004 | |Submission Date: |Monday, January 26, 2004 | |Type of Assignment: |Case Analysis (Final Review) | |Title of Assignment: |Frito-Lay’s Dips – 3rd Case Study (Selection of Best Alternative) | |Student Name: |Cevdet KIZIL | | | | |Student Phone #s: |(603) 626 9302 | |Student E-mail: |cevdetkizil@yahoo.com...
Words: 1119 - Pages: 5
...Green Manufacturing and Sustainability at Frito-Lay Case Study 3 Questions 1. What are the sources of pressure on a firm such as Frito-Lay to reduce its environmental footprint? 2. Identify the specific techniques that Frito-Lay is using to become a green manufacturer. 3. Select another company and compare its green policies to those of Frito-Lay. Each Case Study paper is to consist of the following components: 1. Title page and two written pages with no more than 500 words. 2. Answers to individual questions (as assigned) Each assignment will have specific questions you need to address. You should create a sub headed section for each one. 3. References/Appendix (if required) These are not research papers per se, so you may not have the need to cite outside sources. If you do, however, they should be identified on a proper reference page. Similarly, if you are required to do calculations and choose to perform them on a separate page, you should include them in an appendix. Weekly Case Paper Grading Rubric | Category | Points | Weighting | Description | Content | 24 | 80% | * Required questions are answered in an accurate and appropriate manner. * Adequate support is given for recommendations. * Calculations (where required) are performed correctly | Grammar and Spelling | 3 | 10% | * Paper is well written and reflects college level writing. * Rules of grammar, usage, and punctuation are followed and spelling is correct. * Sentences...
Words: 872 - Pages: 4
...GREEN MANUFACTURING AND SUSTAINABILITY AT FRITO-LAY 1. Using resources, regulation and reputation as a basis, what are the sources of pressure on firms such as Frito-lay to reduce their environmental footprint? The effect of industrialization and the increasing population of humanity are the reasons why natural resources are being overly consumed, outstripping the resource base on an unprecedented scale. The use of resources and subsequently a reduction in operational costs is the primary reason why several companies are going into environmental footprint reduction. Companies like frito-lay, Walmart, Sabaru, Pepsi and Ritz-Carlton would have an increase in OPEX parallel to expansion. Sustainable business spending would also increase rapidly because it is seen as a catalyst for more productive improvements Thus, it is a win-win solution for both humanity, the company and mother earth to reduce resources and lower cost and at the same time, be sustainable. Government agencies are also becoming stricter as more and more studies show that the consumption of men is at an alarming stage. As science advances, there are now several ways to tell how humanity as whole affects the environment. With this, more progressive economies are setting stricter laws that regulate transportation, waste and noise. Lastly, company reputation is also a big factor why companies wanted to reduce environmental footprint as more investors are becoming increasingly interested in the environmental performance...
Words: 857 - Pages: 4
...1.1 Background Frito –Lay, Inc. Frito-Lay, Inc is a division of PepsiCo, Inc, a New-York-based diversified consumer goods and services firm. Besides PepsiCo, Inc. divisions include Pizza Hut, Inc, Taco Bell Corporation, PepsiCola Company, Kentucky Fried Chicken and PepsiCo Foods International. PepsiCo, Inc recorded net income of $1.077 billion on net sales of $17.8 billion in 1990. Company Frito Lay, Inc is a worldwide leader in the manufacturing and marketing of snack chips Well-known brands include Lay’s brand and Ruffles brand potato chips, Fritos brand corn chips, Doritos brand, Tostitos brand and Sanitas brand tortilla chips, Cheetos brand cheese-flavored snacks, and Rold Gold brand pretzels. The snack chips industry accounts for approximately 26% of the snack food industry. Doritos brand tortilla chips and Ruffles brand potato chips have the distinction of being the only snack chips worth $1 billion in retail sales in the world. Frito-Lay, Inc accounts for 13 per cent of sales in the United States snack-food industry recorded retail sales of $37 billion in 1990 which includes candy, cookies, crackers, nuts, snack chips, and assorted other items. The company is the leading manufacturer of snack chips in the US, capturing nearly one half of the retail sales in this category and has 39 manufacturing plants, more than 1,600 distribution facilities and a 100,000 person route sales team that calls on more than 400,000 retail store customers each week in United...
Words: 261 - Pages: 2
...FOUR P’S OF MARKETING FRITO-LAY VARIETY PACK Ebony Flowers AMERICAN INTERCONTINENTAL UNIVERSITY ABSTRACT Frito-Lay is the emerging market leader in the snack food business. The leading innovation that represents this continued commitment is the Frito-Lay Variety pack. The marketing strategy utilizes four key aspects to meet the needs of this particular market - product, pricing, place and promotion. Every business must offer a product or service that people place in high demand for the venture to be profitable and sustainable. Frito-Lay’s Variety pack combines twenty lunch able size bags of five different well known Frito-Lay chip brands that come in twenty different combinations. Upon examining the individual lunch sizes in the current market, the suggested retail price is a better cost savings and worth the value. For the 2014 school year, Frito-Lay, America’s favorite salty snacks, has teamed up with the number one video game in the world, SkyLanders, to attract its target market which brings the most fun to the family. From home to the school lunch box or anywhere in between, all the consumers have to do is grab a bag on the go! Frito-Lay's Variety packs are easy to carry, easy to store and easy to pack it's the perfect staple for every home. FOUR P’S OF MARKETING AND FRITO-LAY VARIETY PACK Merriam-Webster’s Online Dictionary defines marketing as “the activities that are involved in making people aware of a company's products, making sure that the products...
Words: 1174 - Pages: 5
...SUCCESSFUL MARKETING AND PRODUCTION STRATEGIES OF FRITO-LAY PURPOSE Frito-Lay Inc. has remained the dominant leader in its industry through the success of consumer-focused business strategies: Effective marketing strategies to promote products during times of economic downfall. Product innovations, and adjustments to accommodate consumer preferences resulting from dietary trends. Creative, and inventive promotional techniques used to remain superior to competitors. This report discusses these strategies as a model for other businesses within the snack-food industry. Data for this report was gathered through current books, articles, journals, reports, and business research databases, including: Datamonitor, Factiva, Business & Company Resource Center, Business Source Complete, and IBISWorld located through Newton- Gresham Library, on Sam Houston State University’s campus, in Huntsville, Texas. BACKGROUND Frito-Lay is currently one of the leading and most recognizable company names in the snack-food industry. The company’s 17 leading brand names generate billions of dollars in annual sales. As one of the four company divisions of PepsiCo, Frito-Lay North America is the most profitable, contributing 39% of the company’s operating profit, and one-third of PepsiCo’s entire revenue. (Entire paragraph paraphrased (Frito-Lay North America, 2006). Frito-Lay was originally formed in the 1930’s during the Great Depression as an entrepreneurial venture...
Words: 1486 - Pages: 6
