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Thanks to Al-mighty Allah who bestowed us the capability and opportunities to complete this Project, and thanks to our marketing teacher Prof. Shehzad Alam who teaches us so well that we are able to make this plan.

Executive Summary
This report is about the significance and objectives of LAYS CHIPS in respect of marketing. In this report we have discussed the brief history and portfolio of the company, the marketing environments that affect the workings of the company. Moreover, this report also deals with the marketing objectives, marketing strategies such as target market, pricing and product, place and promotion strategies. At the end of the report we also make a detailed SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of LAYS CHIPS and gave some recommendations which may opens the new horizons of the growth and progress of the company.

Pepsi in World:
Pepsi has one of the most interesting histories of any product in the market. From its humble beginnings the people of Pepsi make the story what it is - including its inventor, customers, competition, corporate managers, salesmen, distributors, cartoon spokespersons and including some of the biggest names in entertainment history. There have been good times and bad times - plus lots and lots of changes over the years.

Pepsis beginning:
The summer of 1898, as usual, was hot and humid in New Bern, North Carolina. So a young pharmacist named Caleb Bradham began experimenting with combinations of spices, juices, and syrups trying to create a refreshing new drink to serve his customers. He succeeded beyond all expectations because he invented the beverage known around the world as Pepsi-Cola. His creation, a unique mixture of kola nut extract, vanilla and rare oils, became so popular his customers named it "Brad's Drink." Caleb decided to rename it "Pepsi-Cola," and advertised his new soft drink. People responded, and sales of Pepsi-Cola started to grow, convincing him that he should form a company to market the new beverage.

Pepsi in Pakistan:
The market in Pakistan is surely dominated by Pepsi. It has proved itself to be the No.1 soft drink in Pakistan. Now a days Pepsi is recognized as Pakistanis National drink.

In 1971, first plant of Pepsi was constructed in Multan, and from their after Pepsi is going higher and higher. Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized brand. Cokes basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick diversification in creating and promoting new ideas and product packaging, is successfully maintaining is No.1 position in Pakistan. In coming future Pepsi is also planning to enter into the field of fruit drinks. For this it has test marketed its mango juice in Karachi for the first time. When Pepsi was introduced in Pakistan, it faced fearce competition with 7up, lemon and lime drinks, which was established during 1968, in Multan. Pepsi introduced its lemon and lime, "Teem" to compete with 7up.After some years, Pepsi took over 7up, and this enhanced Pepsi's profits and market share. In Pakistan, Pepsi with 7up enjoys 68% of the market share where as the coke just has 20% market shares.

Before 1944 Herman W. Lay begins a small business in Nashville, TN, distributing potato chips made by a company in Atlanta, GA, In 1944, The H.W.Lay Company changes its product name to LAYS Potato Chips. In 1961, The Frito Company and H.W.Lay & Company merge to form Frito-Lay, Inc, with headquarters in Texas and sales over $127 million. In 1963, LAYS Potato Chips coins new slogan: Betcha cant eat just one. In 1965, Frito-Lay, Inc. and the Pepsi-Cola Company merge to form PepsiCo, Inc. LAYS.

The Smith's Snack food Company is a company best known for producing and selling a range of snack food such as chips. It is now owned by New York based company

PepsiCo. In Pakistan Lays is introduced April 2007, its plant is made by Pepsi International, Plot No.413, Raiwind Road, Lahore.
Slogan: o That's another reason to smile! Lay's Potato Chips (2007) o Lays ka mazaa lo (Lay's Pakistan)meaning-Have fun with Lay's.

Business mission of Lays, in Pakistan, is to be the best and biggest brandof Pepsi co to provide customers with Quality, Affordable, and Convenient Fun Foods within Arm's Reach.

COMPANY PRODUCTS PEPSI COLA BRANDS Pepsi The Joy of Pepsi. Pepsi Lime Have the Lime of Your Life. Diet Pepsi Lime Have the Lime of Your Life. Diet Pepsi 0 crabs. 0 calories. It's the diet cola. Pepsi Twist A Twist on a Great Thing. Diet Pepsi Twist A Twist on a Great Thing. Pepsi Vanilla The Not-So-Vanilla Vanilla. Diet Pepsi Vanilla The Not-So-Vanilla Vanilla Wild Cherry Pepsi Check Out The Cherry.

Aquafina FlavorSplash Purity Guaranteed. All Pepsi Cola Brands Aquafina Sparkling Purity Guaranteed. Lipton Iced Tea

Lipton Brisk

Main and big competitors:

One cant imagine about a business without competition. Lays has also some competitors. Major threats to Lays are Triple Em, Kolson and smith , which has almost 68% of the market share. But as quality of the product play an important role that is not up to the standard by the competitors. So, Lays is outstanding in all ways to the competitors like quality, quantity, price and variety of the products etc.


Lays Kolson Triple Em Smith Others

= 68% = 10% = 10% = 5% = 7%

MARKETING STRATEGIES Core marketing strategy is to achieve the objectives, to provide consumer the product he wants. To provide Lays at an "arms length", to the consumers. For this company has allocated sufficient resources.

TARGET MARKET: Many snacks are heavy on calories, fat, and salt. The term "junk food" was popularized in 1972 by Michael Jacobson of the Center for Science in the Public Interest. The concern with empty calories has continued, and of particular concern has been the targeting of youth by Lays potato chips (Pepsi).


Pepsi is producing potato chips in different flavours which are consumer product in the brand name of Lays. Therefore, the major emphasis is on quality of all the potato chips products. For this, they have quality control circle at unit level and also quality control laboratory.

At Pepsi product (lays) quality & honesty is the guiding principle in defining its quality management system. The company has an independent QMS control and assurance team. With untiring & dedicated efforts the company has attained the HACCP certification during the year 2007. Pepsi has also upgraded its ISO9000 certificate during 2006.

Lays ensures its highest commitment to quality by: * * Compliance to the applicable regulatory requirements. Meeting customers requirements and expectations.

* * *

Promoting good manufacturing practices in Lays potato chips. Progressive reduction in all types of wastes. Promoting continuous quality improvement initiatives.

The production policy of Pepsi for Lays provides the guidelines for production and related aspects. The director of production is the person who heads the production department. All the decision relating to production is made in consultation with the related sections and the other related department. The company has a policy to become independent in all kinds of its production. Company has made a vertical integration in this respect. The recent step which company has made towards this goal is installation of the Lays plant. The production department tries to meet the all of its production on time. For this purpose full time production is run. Production department employees are both permanent and temporary labor. Temporary labor is hired, when it is required. Mostly the temporary labor is hired in the peak season. Production department works with the co-ordination of Procurement and Marketing department. The planning of production is based on the annual sales target. On the basis of production is planned on monthly basis. Salary of the permanent workers are paid on the monthly basis and paid in cash to the labor. 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 content is 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 and contains ten grams of fat, with three grams of saturated fat. Kettle cooked brands have seven to eight grams of fat and one gram of saturated fat but are 140 calories. Lays Natural has nine grams of fat, two

grams of saturated fat and 150 calories. Stax typically contain ten grams of fat, 2.5 grams saturated fat and are 160 calories per serving. Wavy Lays are identical to the regular brand except for a half-gram less of saturated fat in some combinations. The various brands do not contain any trans fats.

Lays Classic Potato chips are cooked in 100% pure sunflower oil (originally hydrogenated oil until January 1st, 2007). A one ounce serving has 150 calories, 90 of which 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. INDIVIDUAL PRODUCT DECISIONS We now look at decisions relating to the development and marketing of Pepsi's product. We will focus on decisions about product attributes, branding packaging, labelling, and productsupport services. PRODUCT ATTRIBUTES Developing a product involves defining the benefits that the product will offer. These benefits are communicated and delivered by product attributes such as: 1. 2. 3. Product quality Product features Product design Decisions about these product attributes greatly affect consumer reaction to Pepsi's product.

PRODUCT QUALITY Quality is one of the marketer's major positioning tools. Quality has two dimensions level and consistency.

Product quality means the ability of a product to perform its functions. It includes the product's overall durability, reliability, precision and other valued attributes. Lays has chosen the quality level that matches target market needs and wants.

Lays continuously improves its product by total company dedication. Recently Lays has improved its product quality means using better quality control to reduce defects that annoy consumers. PRODUCT FEATURES A product can be offered with varying features. A company can create higher-level models by adding more features. Following are the features on which Pepsi has competitive advantage. 1. 2. 3. Quality Availability Convenient price

PRODUCT DESIGN Another way to add consumer value is through distinctive product design. As style of Pepsi's recent Lays Potato Chips Masala flavour) is eye catching, garb attention. It also creates product that is easy, safe, inexpensive to use, simple and economical to produce and distribute. Now new Lays French Cheese of Pepsi can attract attention, improve product performance, cut product costs and give the product a strong competitive advantage in the target market.

BRANDING Consumer view a brand name as an important part of the product and branding can add value to the product. A name, term, sign, symbol or design or a combination of these intended to

identify the goods and services of one seller or group of seller and to differentiate them from their competitors. PACKAGING Packaging includes the activities of designing and providing the container or wrapper for a product. Lays Salted potato chips 27gm and 85 gm has secondary package, because its pack is thrown away immediately after the consumption. The carton in which potato chips are available is environment friendly and is disposable. LABELLING Labelling is also part of packaging and consists of printed information appearing on or with the package. COMPETITIVE ADVANTAGE: This informative label provides Pepsi a strong competitive advantage in the competitors market as its labelling is very attractive, its graphics and combination of colours is such that it catch the customer attention at once. RECENT CHANGES As Pepsi is a well known brand. It has not changed its label and packaging of Lays potato chips (85 gm). Since it has launched the Lays potato chips. Recently Pepsi has changed and refresh its old fashioned Lays potato chips and label. Pepsi has developed its existing potato chips with new packaging, symbols and much stronger, deeper colours to suggest freshers and more flavour. Modifying the product Pepsi has changed the characteristics of its potato chips. Characteristics such as quality, feature, and style to attract new users and to inspire more usage which has improved the product quality performance and taste. Ingredients of Pepsis Lays Salt Potato chips

Potatoes Edible oil Natural and natural identical masala flavor Salt

The Pepsi is a profit-oriented organization. The price polices are well structured and provide guidelines to set the prices. The prices of the product are set to remain competitive in the target market and achieve the target sale and growth.

FACTORS TO CONSIDER WHEN SETTING PRICES A company's pricing decisions are affected both by internal company factors and external environmental factors. INTERNAL FACTORS AFFECTING PRICING DECISION Internal factors affecting pricing include Pepsi's marketing objectives, marketing-mix strategy, costs and organizational. Marketing Objectives of Lays Lays has very clear marketing objectives which has made it easier to set the price. Market share leadership In the beginning of its establishment and for several years lays was consistence with market share leadership. It wanted to enjoy largest market share with the lowest costs and highest long-run profit. lays had reached for the price and marketing program that has achieved this goal. Product-quality leadership After getting the market share leadership especially in the potato chips market, lays has adopted. Product-quality leadership as lays wants to provide better quality product as compare to its competitors at convenient prices. COST Costs as a function of production experience lays has gained experience in manufacturing and sales of potato chips and flavorings based upon or derived from fresh potatoes, it has learned how to do it better with higher volume, lays has become more efficient and has gained economics of scale. As a result average cost tends to fall with accumulated production experience.

EXTERNAL FACTORS AFFECTING PRICING DECISIONS External factors that affect lays pricing decisions include the nature of market and demand, competition and other environmental elements. Monopolistic competition: A market in which many buyer and sellers trade over a range of price rather than a single market prices. Lays also has monopolistic competition as a range of prices occurs because sellers can differentiate their offers to buyers. As lays in market varied in quality, features or style or the occupying services can be varied. Buyers see differences in seller product and will pay different prices for them. Sellers try to develop differentiated offers for different customer segment and in addition to price freely use branding, advertising and personal selling. For example, Tripple Em, Super Crisp, Smith, Bunnys Crisp and several other rational brand of potato chips compete with dozens of regional and local brands PRODUCT MIX PRICING STRATEGY lays looks for a set of prices that maximizes profit on the total product mix which are often based on demand and cost and faced different degree of competition. Retail price of Lays potato chips Lays Masala Potato Chips (small size) Lays Masala Potato Chips (27 gm) Lays Masala Potato Chips (85 gm) Lays Masala Potato Chips (Jumbo size) PRICE ADJUSTMENT STRATEGIES: When the marketing situation changes lays adjust its prices and adopt price adjustment strategies, to account for various customer differences and changing situation. Discount and allowances pricing: Discount is a straight reduction in prices on purchases during a stated period of time. . Seasonal discount: A seasonal discount is price reduction to the reseller to purchase merchandise out of season by lays e.g., in winter season when the demand reduced and retailers are reluctant to buy merchandise. Rs.6 Rs.10 Rs.20 Rs.30

It advertises using print media like newspapers, magazines etc. For their promotional purposes, they use various kinds of media such as print, broad cast, specialty, out of home and interactive.

Promotional Strategy: Pull Strategy Pull strategy

It is a strategy which uses actual customer demand to determine production and distribution schedules. In marketing, it is using intensive advertising to create customer demand for a product. In either case, the product is pulled through the system by the consumer. Lays chips provide wall clocks, menu paper pads calendars to its dealers. Recently consumer Promotion has been introduced for students in schools where Lays chips co branded with Jang group for conducting a series of Super Fun Day. The only trade promotion have been in lays is for new range products where trader gets one pack free against every twelve packs, he buys. Lays chips also provide key chains and calendars to its customers.

Promotional Activities
1) Advertising:
Lays chips arranges advertisement on different media. Advertising accounts for about 3million dollars of the total promotional budget. In-fact, advertising is most popular and effective media to persuade the customers. We advertise and promote our product through o BILL BOARDS o WALLS PAINTING o RADIO

o o o


Share of Different Media for Advertising Electronic Print Media Out Door

15% 12.5% 17.5%

2) Sales Promotion:
Its share in promotional budget is about 28.5%. It includes Sampling Trade Offer Trade Offer in sale promotion is designed to gain resellers support and to improve selling efforts, including discount, allowances and trade shows. Sales force promotion in sales promotion is designed to motivate the sales force and make sales force selling efforts more effective, including bonuses, contests, gifts and sales rallies.

The company is having its own vehicles to distribute the products to the distributors. Distributors and agents are used to reach the target market. Agents also sell the products to the retailers in the specified area. Selling Policy: Almost all the selling is done by the cash payment. Company gives credit to CSD and Utility Stores for a short period. Lays has indirect channels of distribution.

There are 6 distributors in Lahore .

Shahbaz Brothers Snacks Traders CGI Fazal Industry Asif Brother Shah G

Order Taking Process:

Lays has specific distribution department which takes care of the order taken from the retailers. The order process is completed only in one day when the order is placed.

Area Coverage:
LAYS is distributed in 12 majors cities of the country. The distribution of the Lay's is done only on the company vehicles driven by company trained drivers with sales man. They supply stock minimum 70 shops and at maximum 130 shops in a day.

They are offering discounts to the bulk and regular buyers. They are giving 30% discount and also giving complementary gifts.

Commission to Lays Sales Man:

Company offers 8% commission on achieving the given target of supplying stock to the Sales man.

ACCOUNT AND FINANCE DEPARTMENT: Finance is the most basic activity a company does when it is in the process of production and sales. If this sector is not handled properly, then the whole company becomes insolvent and bankrupt. The personnel of the finance department are supposed to keep an eye on the business activity of the company and provide funds for its development.


Almost all income level especially below 5000 and even above 10000 can buy and consume LAYS. Brand conscious people like it most. LAYS being the multi national company having the huge investment spending massive amount on advertising campaigns to aware the customer towards LAYS People are comfortable with the Price of LAYS. Placement is becoming a plus point it means company is emphasizing on its distribution and placement strategies. LAYS chips have a strong brand image at their back like Lays and also PEPSI International. LAYS 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).

Human Capital is the main strength of LAYS.


Competitors like Kolson and Triple M are investing heavily in branding. Facing the enormous competitors prevailing in the market. Declining Sales Total Some areas like Highways (especially on Motorway) and many others exist in Pakistan where still LAYS cannot manage to fulfill their requirements and where the products of competitors are available. They lack behind in catering the rural areas and just concentrating in the urban area. During the last year, it was published in Financial Post that there has been big

complaints from the customers with regard to the bad taste that they experienced during the span of six months.

Changing Social Trend As in all over the world people are rushing towards fast food and beverage because of life which has become much faster, it provide the company a favor to capture this fast moving market with its take away product.

Supply of this product in the remaining areas of Pakistan. Design such strategies and advance planning to become the market leader in the smallest span of time. Addition of new local flavors helps a lot to sustain in the market.


Competitors like Kolson and Triple M are the biggest threats to our product. New entrants can also the threat for the LAYS 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 LAYS chips.



In Star market share and industry growth are high. Lays lies in Star because its demand is very high nowadays and we can make further investment for this product. Lays is very leading product in market now a days.


In Cash Cow market share is high and industry growth is low. In this case demands are equal to supply. Thats why Lays lies in Cash Cow because they have equal supply and demands. Lays is very popular snacks right from the start so there is no further investment for this product


A question mark is a situation where market share is low and industrial growth is high. Kurkure and Pepsi twist lies in this area because they are newly launch products in Pakistan. It can be and star in future if they get more progress.


There is no product of Pepsi which lies in Dog because all Pepsi Products making development in the market.

From the above data we can conclude that Lay's is in star because of having 68% shares. From the above saying we have made or sum up the result that it has differential advantage over other products (competitors). o Packaging o Taste o Flavors

These are all specialties falls Lay's in Star category.

The Main References Are


Muhammad Saqib Haroon Marketing Manager Snacks 37-C-1, Gulburg III, Lahore


Khushnood Ahmed Regional Sales Manager Snacks 37-C-1, Gulburg III, Lahore


Kashif Javaed Customer Services Executive 37-C-1, Gulburg III, Lahore