Benazir Bhutto Shaheed University

Lays PepsiCo
Annual report
Of
Principles of marketing
By
Hira Ismail Rais
Submitted
To
Mr. Hassaan Ahmed

Prepared by:| Hira Ismail Rais

VISION :
At PepsiCo, we're committed to achieving business and financial success while leaving a positive
imprint on society delivering what we call performance with purpose.

MISSION:
As one of the largest food and beverage companies in the world, our mission is to provide
consumers around the world with delicious, affordable, convenient and complementary foods
and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to
evening treats. We are committed to investing in our people, our company and the communities
where we operate to help position the company for long-term.

ABOUT LAYS:
In 1932 Herman W Lays opened a snack shop.
In 1938 he purchased the barrette food company, renaming it H.W.Lays and company .
Lays the potato chips brands ever since 1932, American had been loyal consumer of Lays
potato chips. In 2007 the consumer consciousness about healthy food emerge leaders at FritoLays North America to change the composition of their popular potato chip in response to
change in consumer preference.
In 1944 Lays was first potato chips to appear on television
Its a leading snack food company emerge with PepsiCo in 1965. Earlier in 1991 the company
installed green team in its plants to ensure environmental compliance.

Prepared by:| Hira Ismail Rais

MARKETING STRATEGY:
Lays recent DO US A FLAVOR in this campaign then invent new flavors through contest
challenge customer to think of a new potato chip flavor. Customer submitted their suggestions
and Lays released three of them: cheesy garlic bread, sriracha and chicken and waffles. Besides
using traditional marketing strategy they concentrate on staging contest because the consumers
dont trust that of marketing strategy any more. They use consumer generated marketing directly
involving customer in the marketing.
Lays launches a campaign name LAYSS LOCAL in this they introduce consumer to farmers
who grow potatoes for Lays chips .the idea was to show consumer how localities Lays a role in
developing Lays products and enabling consumer to know how and where the chips are made.
To meet it market demand PepsiCo launched smart spot program in 2005 which help to
identify consumer healthier snack food choice. Frito-Lays brands in smart spot product
portfolio were SunChips, Rold Gold and Baked.
IN 2006 Frito-Lays launched the we grow the best snacks on earth campaign, which focused
that Lays chips is been prepare by potatoes, oil and salt similarly their Fritos brand contains
corn, oil and salt. The aim of the campaign was to show that the core products of company were
natural.
Lays defended their market share through storytelling, narrative approach to help stakeholders
better understand their company product and mission .

Prepared by:| Hira Ismail Rais

SWOT ANALYSIS OF LAYS:

Strengths:

High brand image

Maximum level of consumer satisfaction
Market dealer
Incentives are given to
Worldwide distribution
Good advertisement
Cost advantage
Flavor range
Innovation capability

Weaknesses:

Low supply to rural areas

It is only use by middle class not by elite class
Rumors: that pig fat is use in Lays
It production quantity is low

Opportunities:

Supply would be extended through supping to rural areas

Mark for further improvement through innovation
Introduction New local flavors: cricket flavor were introduced
Advertise more in shops and remotes areas

Threats:

Competitors (Pringles)
New entries in the industry
Restriction in Government policies
Change in Customer demand

Prepared by:| Hira Ismail Rais

PESTAL ANALYSIS:
Economic environment:
Economic conditions that affect a product to sell. Current purchasing power
in an economy depends on the availability of prices, savings and loans and
credit. They have a strong impact on the business, because we have to pay
attention to trends affecting purchasing power.
The revenues of the products depends on the in per capita income of the
country, real people shall go over cheap fast food. But the high class people
pass through my classroom. The market is divided in the basis of income .I
have made sets for various income classes.

Social-cultural environment:
Society shapes beliefs, values and norms largely define consumer taste
preferences. This environment directly affects my company's products and
consumer taste.

Technological environment:
Technology shapes the future of any society. I constantly watch for keeping
track of changes in technology and competition customer wants. Plays an
important in determining the type of plant and the type of goods and
services are produced, and the quality of the equipment is to be used. As
consumers demand in world markets has created lays demand, new
industrializing countries captured prizes and an opportunity to participate in
the industrial value added of the original overtake. These countries were: to
be in the $ 1.40 reward value added of the industrial transformation required
10 cents to produce a $ 1.50 box of Frito ceremonies take hold. There is,
therefore ought to be such that in the lower cost of production of the product
to produce the best quality.

Political-legal environment:
The financial services industry environment has a major effect on the way to
carry out the duties of a public. Then he passes on a great effort in the way
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of fiscal legislation, it is Parliament which is, however, apply them to fade

away in his ways. National government forces and the three main political
direction of the local environment are different football bodies. Under the
direction of the rest of them, governs them, would be such that the laws of
these principles to apply to the supervision of the individual study groups
and putting an end to the authority of the government agencies and the
different institutions.

BCG MATRIX OF LAYS:

Prepared by:| Hira Ismail Rais

LAYS CHIPS MARKET SEGMENTATION:

Geographic:

Region-available across the countries (face tuff competition from competitors in potato
chips industry)
Available in cities and face completion with local market
In rural areas availability is limited because those areas were dominated by local
producers

Demographic:

Age-mostly among teens, quick bite for adult.

Family size-party packs are available in all flavors for families.
Income-not a premium product because generally it isnt consume by low income
group.
Other gender, occupation etc dont lies in its parameters of demographic.

Psychographics:

Life style-consumed by people as junk food mainly use on outdoors, picnics, movies
etc to grab quick and easy bites.
Personality-nota deciding factor.

Behavioral:

Its an Occasions snack mainly consumed in parties, outing, threats, sharing with friends
and family as a brunch snack.
Benefits-snack of great quality and taste buds satisfaction

Prepared by:| Hira Ismail Rais

LAYS CHIPS TARGET MARKET:

One of the main target markets of Lays is youngsters and youth crowds of games and
amusement example; purchase in theater while watching movie or stadium even at home. Most
organizations nowadays use mass-showcasing methodology to build strong market for their
products to the best number of individuals. They know the profit building procedure of business
which is superior to a formal promotion method. It is a significant approach in adolescents and y
era generation people. They deliver to diverse group according to their distinctive choice
example; ladies who are diet conscious, baked Lays are the right choice for them.

LAYS CHIPS MARKET POSITIONING:

The market Positioning mean creating an item image in the personalities of buyers. It can
additionally help clients observation about the experience they will have whether to have
purchase that item or now. The business can emphatically impact the view of its chosen client
base on different exercises held on for characterizing their business promotion blend.
Successful situating includes understanding of opposing items and the profit that are looks for by
your targeted market. Its important for business to create a distingue point with which it can
convey the obliged profit viably against your competitors. Business has to characterize itself
according to its client current needs.
Lays runs into millions just because of its amazing flavors, with well known brands diplomats
and sports supporters and has fight prizes. It is accessible all around at whatever time, with
special cases obviously. It insure/posses those qualities which other brands doesnt have. The
publicizing g is undisclosed without saying it runs into millions. This unclear huge sum is in
charge of powerful advertising of Lays.

Prepared by:| Hira Ismail Rais

LAYS MARKETING MIX:

PROMOTION:
Advertising:
Lays engineer their ads for Lays classic chips although its a well-established snack that
company dont need to spend capital to inform people about their product but there is an element
of persuasion in the Lays classic ads that many of people emphasize on simplicity and natural
benefit of chips although its an effort to maintain their customer who are exposed to an day by
day numerous chips flavors in the marked.

Public relation:
Lays sponsors numbers of sport teams like NFL, the Chicago bears, Caroline panthers, Oakland
raiders and special events like crash the super bowl and introduce such proactive campaign as
DO US A FLAVOUR which encourage customer to create a new flavors and it build an strong
sound for Lays on wed especially on social media people were noted on buzzing about this
campaign on healthy note it build a great image on websites

Sales promotion:
Lays offers too many grocery stores for sales promotion like introducing FAMILY PACK bags
adding better bulky value, by one get one free offer. The campaigns CRASH THE SUPER
BOWL and DO US A FLAVOUR are great example of Lays promotion, as both offers prizes to
the winners.

Direct marketing:
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Lays pull out direct marketing mostly to be limited to online world where the company keeps its
presence through face Book with over millions of likes and on YouTube. Lays products are
major outlets for snack sales as they locate their outlets at most convenience location and with
easy purchase process.

PRICE:

Pricing strategy:
accordance to todays world of conscious consumers Lays has adopted consumer based pricing
strategy company puts lots of efforts in determining consumer value for a certain product so that
company put price accordingly. Lays also creates different sales promotions for its products to
capture as much value from customers.

Internal and external considerations:

since Lays is well established snack food company with its mature products as Lays classic
chips, with straightforward marketing strategy and objective the company posses one of high
quality, great taste, simplicity, affordability and easy accessible, all which are reflected by price.
The economy Is the main factor affecting Lays pricing strategy, in the wake of recession
consumer become price minded for that company must charge low prices, implement more sales
promotions and to find ways of creating value for customers
Lays also needs to be wary of competitors prices. Take into consideration about the demand for
snack foods like lays classic chips and similar chips produced by competitor any change in
prices of their product heavily affect the demand of that product of the company.
Lays relies heavily on resellers for the sale of its products; they must take those clients into
accounts when setting prices for their products.

Market and demand structure:

The snack food market structure can be best described as oligopolistic, as it has a few
competitors in US.
The demand structure is elastic, since a minor change in price of any product will likely have a
significant impact on its demand and even demands of other companies related products.

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Product mix pricing strategy:

Lays employs product line strategy o its products, taking the customer perceived value in the
various contributions lines into consideration when deciding what price step should be use.

Price adjustment strategy:

While adjusting the prices for its snacks products Lays uses promotional pricing strategy, in the
way to increase short term sales with promotion such as discount, bulk deal, price packs (e.g. buy
one get one free) .Lays also apply psychological price adjustments in order to set a price that
carry a certain parameter of quality too or it may use reference pricing strategy when it gets
information on that in what price consumer want to purchase their product.

PLACE:
Types of marketing channels:
Lay's use indirect marketing channel system for distribution. Frito-Lay's has strength as a
company to incorporate them into the production, retailers and wholesalers into a unified system.

Channel design decisions:

When taking their own measures to consider the channel of which it seems to have determined
that the consumers will willing to approach lays is to suppose that s easy and frequent snacks
and of those in company size, it would be able to use this supply in a multitude of mediators with
the stock, and the target audience the great willing to share their products.

Distribution strategy:
Lay are carried in many companies, both large and small, and the first place they are in the
business for sale Energy BBDO (Chicago work of the service based on the market). The
company appears to favor the intensive distribution method, which entails stocking fertile logical
as many outlets as possible. This method is been employed at companies like Lay, General Mills,
and Kraft, whose products are generally inexpensive and the scope of the demand of consumers
in daily .

Main location:
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Lay Frito-Lay products can be found in many places, especially the lays Classic chips and you
can find a lay faithful will likely come across a shelf in the supermarket when shopping, grocery
store, superstore (Wal-Mart, Kmart), gas station, or a convenience store, and office building, or
any other area frequented the high.

PRODUCT LIFE CYCLE OF LAYS:

1965 emerge with PepsiCo

MATURITY

1944 first potato chip in television

DECLINE
GROWTH

1932 purchased barrette Food Company

INTRODUCTION

RESEARCH
AND
DECELPOMENT

1932 opened a snack shop

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PULL AND PUSH STRATEGY:

Push strategy:
PepsiCo has exclusive tie-ups with several fast food chains, supermarkets and malls. It also have
sales points agreement (POS) with different leading retailers and departmental stores. PepsiCo
also provides incentives to distributors or retailers if they exceed the sales target.

Pull strategy:
The PepsiCo in the course of its history is known with the fact of its ads. From the PepsiCo Inc.
Lay's most focused its marketing communication with the younger generation of PepsiCo. Lay's
is known for such 'Generation Next' Ad Campaign catchy taglines as he said to the classic 'Lay's.
Lay of the Super Bowl, the NATIONAL FOOTBALL LEAGUE CHAMPIONSHIP GAME.
Lays drafts have been advertising in the Super Bowl since 1987. But in 2010 Lay's opted out of
advertising on this platform focusing its marketing efforts on the Internet instead of ending 23year run. Frito Lay, nothing to advertise in the Super Bowl (NBC Associated Press News 2009).
In 2010, a second time to recite the Lay's is to start advertising on the Super Bowl (Reuters
2010).
On an average, Lay's advertising in the Super Bowl cost $ 3 million for 30 seconds of airtime in
2009. (NBC News Associated Press 2009).
Is well known, in order to receive the lay's products endorsed by celebrities, some of whom he
had been hugely popular with the people. The lays is been endorsed since often create a sense of
including in connection with its consumers. For example, the 2011 Super Bowl, PepsiCo has
launched a competition to give people the chance to make six 30-second ads for Doritos chips
and lay Max's.

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ANSOFF MATRIX:

Market

The company will sell more

to the same type of people to
increase its market share. It
can be achieve by
combination of smart pricing
strategy, sales promotion and
advertisement.

The company will sell new

product to existing
consumers. By identifying
consumer need, by doing
research for innovation in
the product e.g. introducing
new flavor.

The company will sell the

existing products to new
types of consumers to
expend it target market by
using market development
strategy e.g. by new product
packaging, new distribution
channels and different

The company will sell new

products to new consumers.
Being a successful product
its time to capture new
market with new product to
take a business risk because
you cant move further
without taking risk.

Market growth

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Product growth

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Diversification