Research Methodology

History: How it all began?
In 1932, C.E. Doolin entered a small San Antonio cafe and purchased a
bag of corn chips. Little did he dream this savory chip would become
one of the nation's most popular snacks.
Mr. Doolin learned that the manufacturer of the chips was eager to sell
his small business, so he purchased the recipe, and began to sell
FRITOS
®

Corn Chips from his Model T Ford.
Meanwhile, that same year, Herman W. Lay began his potato chip
business in Nashville by delivering snack foods. Not long after, Mr. Lay
purchased the manufacturer, and the H.W. Lay & Company was
formed.



The success of Frito-Lay is a tribute to two
entrepreneurs' dreams.





H.W. Lay & Company became one of the largest snack food companies
in the Southeast, and LAY'S® brand Potato Chips is still America's
favorite potato chip.
Years later, in 1961, the Frito Company and the H.W. Lay company
merged to become Frito-Lay, Inc. Today, Frito-Lay brands account for
59% of the U.S. snack chip industry.
These days, our founders' dream to be America's favorite snack food
company continues to be fulfilled by more than 45,000 Frito-Lay
employees in the United States and Canada who make, sell, and deliver
a wide variety of fun and environmentally friendly foods for you to
enjoy.



In the early 1980s, PepsiCo continued to grow its Frito-Lay brands in
two ways—through international expansion and acquisition. Through a
joint-venture with Walkers, a UK chip and snack manufacturing
company, Frito-Lay increased its distribution presence in Europe.
Similar joint-ventures were arranged in other regions of the world in the
2000s, including Smith's in Australia, and Sabritas and Gamesa in
Mexico. As a result of these international arrangements, some global
Frito-Lay products (such as Doritos) are branded under the same name
worldwide. Others maintain their original regional names. For
example, Lay's chips are a similar product to Walkers Crisps in the
UK and both share similar logo designs.




The Quaker Oats Company merged with PepsiCo in 2001, resulting in
Quaker snacks products, including Chewy granola bars and Quaker rice
cakes, becoming organized under the Frito-Lay North America
operating division. This operating structure was short-lived, and in
2003, as part of a restructuring, the international operations of Frito-Lay
(formerly Frito-Lay International) were brought within the PepsiCo
International division, while Frito-Lay North America was maintained
as its own division, comprising Frito-Lay business within the United
States and Canada.

Frito-Lay continued to experiment with changes to the composition of
its products, introducing Reduced Fat Lay's and Cheetos in 2002. The
"Baked" product line also expanded in 2002 to include Baked
Doritos. In 2003, Frito-Lay introduced the first products in its "Natural"
line, which were made with ingredients that had been organically
produced. The first of these included Organic Blue Corn Tostitos,
Natural Lay's Potato Chips (seasoned with sea salt), and Natural
Cheetos White Cheddar Puffs.

A new CEO, Irene Rosenfeld, was appointed in 2005. Under her
management, Frito-Lay North America continued to expand its product
lines with acquisitions such as Stacy's Pita Chip Company, which
represented "Frito-Lay's desire to participate more broadly in the $90
billion macrosnack category", particularly involving snack foods made
with more natural ingredients, according to reports from within its

industry at that time. In 2010, Frito-Lay reformulated Lay's Kettle and
Lay's flavored chips into a new variant labeled as being made with all-
natural ingredients. Sales of Lay's potato chips grew by 8% following
the change to all-natural ingredients. As a result, Frito-Lay announced
in 2010 its plans to convert approximately half of all Frito-Lay products,
including Sun Chips, Tostitos, Fritos and Rold Gold pretzels, to all-
natural ingredients in 2011.



Lay’s, the world’s largest and favourite snack food brand, has steadily
established itself as an indispensable part of India’s snacking culture
since its launch in 1995.
With its irresistible taste, international and Indian flavours and youth-
centric imagery, Lay’s has established itself as a youth brand and
continues to grow in the hearts and mind of its consumers.
Over the years, Lay’s has become known for its engaging and innovative
promotions and campaigns. The brand known for its ‘No one can eat
just one’ campaign has moved its positioning to ‘What’s the
programme?’ making Lay’s ‘the main food of every programme‘! Saif

Ali Khan has been the face of the brand for over five years, and has
recently been joined by the captain of the Indian cricket team M.S.
Dhoni. Both embody the youthful energy and appeal of the brand.



In 2008, Lay’s launched the never-before ‘Fight for Your Flavour’
allowing consumers to vote for the flavour of their choice. The flavour
with the maximum votes would continue in the market. The flavours
have been selected by the Lay’s brand ambassadors Saif Ali Khan and
M.S. Dhoni with each celebrity rooting for the flavour of their choice.



In November 2008, Lay’s made yet another innovative breakthrough –
the Chip-n-Sauce pack. This first-to-market pack has been launched for
cricket lovers as they settle in their seats to savour the best sporting
action of the season. The Lay’s Chip-n-Sauce large pack comes in two
unique flavours – Chilli Chinese with a Schezwan Sauce sachet and
Chatpata Indian with a Tamarind Sauce sachet inside the pack.

In June 2009, Lay’s launched its new positioning platform: ‘Lay’s – Be a
Little Dillogical’. The new Dillogical concept makes an instant connect
with youth caught between the desire to succeed and the desire to
remain engaged with certain moments that offer a deep emotional
fulfilment. This friction is like a game between the heart and the head, a
struggle between what you want to do and what you have to do. It’s all
about making things that matter to the heart, happen.


The new platform has been launched with a series of ads built around
the universal consumer struggle between what the mind asks one to do
and what the heart desires. A powerful 360 degree approach supports
the new TVC, and has indeed prompted consumers to be a little
Dillogical.




Lays International: World Wide Recognition!

 The UK Lays is known as Walkers. Walkers products are distributed
in the United States of America under the indigenous Lays label.
Walkers flavors include Cheese & Onion, Ready Salted, Salt &
Vinegar. Walkers also make Sensations-branded crisps in the UK.
The logo for the British version is noticeably similar to the American
brand, featuring a red ribbon around a yellow sun. The other Frito-
Lay brands are also distributed through the Walkers label.


 In the Benelux Lay's are sold in three varieties: Lay's, Lay's Light and
Lay's Sensations (Thai Sweet Chilli/Red Paprika/Oven Roasted
Chicken and Thyme). Lay's Super Chips (Heinz Ketchup/Mexican
Pepper/Perfect Pickles/Salt 'n' Pepper (all through Delhaize) and
Lay's Baked Chips (Mediterranean Herbs/through Delhaize). As with
Doritos, Lay's are manufactured, distributed and imported in The
Netherlands by Frito Lay's Benelux division, Smith's Food Group.

 In Iran, Lay's products are distributed as Sensation by MAZ MAZ
Company which is the Largest and fully armed by latest technology
in the field of production of potato chips in the Middle East.


 In India, Bollywood superstar Saif Ali Khan and Indian
cricketer Mahendra Singh Dhoni endorse Lays.
 In Argentina, Lays was commercialized before 2001 with the
name Frenchitas and Chizitos for the Cheetos.


 In Australia, PepsiCo acquired The Smith's Snack food Company in
1998 and marketed Frito-Lay products under that label, using the
name Thins.


After Thins was sold to Snack Brands Australia (Owned by Arnotts),
Smith's produced a line of potato chips under the Lay's brand for a
brief period of time. The Lay's line was eventually rebranded in 2004
as Smith's Crisps, while the traditional Smith's line was renamed
Smith's Crinkles. This is still sold in Australia as a direct competitor
to Smith's Crisps.
 In Colombia, the chips are sold under the name Margarita. They are
still commercialized under the label Lay's, however.


 In Mexico, PepsiCo acquired Sabritas S. de R.L. in 1966. Lays along
with other products such as Cheetos, Fritos, Doritos and Ruffles are
marketed under the Sabritas brand. The logo for the Mexican
company sports the red ribbon, but it has a stylized smiling face
instead of the sun. It controls around 80% of the market there.
 In Egypt, Lay's was once sold under its own label until it was merged
with the local label Chipsy (شيبسى), which has since become the
local unit of Lay's under much the same arrangement as Walkers.

 In United Arab Emirates, Lay's and Walkers are sold as different
labels.
 In Pakistan, the Lays brand is endorsed by renowned pop star Ali
Zafar. Lays has also introduced two new flavors 'Dahi Baray' and
'Mint Chutney' in Pakistan with a campaign of 'Chaat Street'


 In Israel, the Lay's label is distributed with the name Tapuchips
(צופת'ספי) by Strauss-Elite.
 In Brazil, products are distributed under the Elma Chips label.
 In Vietnam, Lay's products are distributed as Poca.
 From 2014, Lay's are distributed in Italy by Ferrero SpA



Nutritional Information

 As with most snack foods, 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 sodium.
 A one-ounce (28 gram) serving of Lay's regular potato chips has
160 Calories, and contains ten grams of fat, with one gram
of saturated fat. Kettle-cooked brands have seven to eight grams of
fat and one gram of saturated fat, and are 140 Calories. Lays Natural
has nine grams of fat, two grams of saturated fat and 150 Calories.
Stax chips 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.
 A 50 gram serving of Lay's BarBQ chips contains 270 calories, and 17
grams of fat. It also contains 270 mg of sodium, and 15% Vitamin C.
 The baked variety, introduced in the mid 90s, feature 1.5 grams of fat
per one ounce serving, and have no saturated fat. Each serving has
110 to 120 Calories. Lay's Light servings are 75 Calories per ounce
and have no fat.
 Lay's Classic Potato chips were cooked in hydrogenated oil until
2003.
[6]
Currently, the chips are made with sunflower, corn and/or
canola oil.

 Baked Lays are produced in cheddar, barbecue, sour cream and
onion, and original flavors.


Quality Standards

1. HACCP (Hazard Analysis and Critical Control Point).
2. Certification by TQCSI (Australia), which confirms that products are
manufactured in a food safety environment and the manufacturing
process has adequate controls to track products.
3. American Institute of Baking (USA), one of the best auditing bodies for
confirming process and product safety.
4. Our Plants are ISO 14000 certified, which confirms that the
manufacturing process ensures environmental safety.
5. Our plants are also certified to ensure that the safety of products,
processes, environment and people is maintained at a very high level.
This certification is issued by OHSAS 18001 (Occupational Health and
Safety Assessment Series), USA.








The Production Process:

The production process begins on farms in select regions across India
where the best potatoes are grown specifically for Frito-Lay. Upon the
potatoes’ arrival at plants, it can take as little as 24 hours for the chips
to be made. Lay’s chips are made using the following simple process:


 Wash – the potatoes are thoroughly bathed in water.
 Peel – next, we gently peel the skin off the potatoes, even as the flavour
remains intact.
 Slice – The potatoes are thinly sliced and rinsed again to remove any
remaining starch.
 Cook - The slices are cooked to a crispy crunch in edible vegetable oils.
 Season – Finally, the chips are topped off with a mouth watering
sprinkle of salt or seasoning




The potatoes have now become delicious chips and are packed and
delivered to a store near you.













MARKET Analysis (1) : PLACE AND PRICE


The marketing mix is a business tool used in marketing and by
marketers. The marketing mix is often crucial when determining a
product or brand's offer, and is often associated with the four
P's: price, product, promotion, and place. In service marketing,
however, the four Ps are expanded to the seven P's or eight P's to
address the different nature of services.
The concept is simple. Think about another common mix – a cake mix.
All cakes contain eggs, milk, flour, and sugar. However, you can alter
the final cake by altering the amounts of mix elements contained in it.
So for a sweet cake add more sugar!
It is the same with the marketing mix. The offer you make to your
customer can be altered by varying the mix elements. So for a high
profile brand, increase the focus on promotion and desensitize the
weight given to price.
Another way to think about the marketing mix is to use the image of an
artist’s palette. The marketer mixes the prime colours (mix elements) in
different quantities to deliver a particular final colour. Every hand
painted picture is original in some way, as is every marketing mix. Let’s
look at the elements of the marketing mix in more detail.






Price
Price is the amount the consumer must exchange to receive the offering .
Solomon et al (2009).
The amount a customer pays for the product. The price is very
important as it determines the company's profit and hence, survival.
Adjusting the price has a profound impact on the marketing strategy,
and depending on the price elasticity of the product, often it will affect
the demand and sales as well. The marketer should set a price that
complements the other elements of the marketing mix.

The company’s goal in terms of price is really to reduce costs through
improving manufacturing and efficiency, and most importantly the
marketer needs to increase the perceived value of the benefits of its
products and services to the buyer or consumer.
Lays come in many price variants. It has packets of Rs 5, Rs 10, Rs 20
and Rs 25. This shows that lays offer different packet sizes. Lays also
started giving 20% extra on few of its packet.



Place
Refers to providing the product at a place which is convenient for
consumers to access. Various strategies such as intensive distribution,
selective distribution, exclusive distribution and franchising can be used
by the marketer to complement the other aspects of the marketing mix
Place includes company activities that make the product available to target
consumers.
Kotler and Armstrong (2010).
Place is also known as channel, distribution, or intermediary. It is the
mechanism through which goods and/or services are moved from the
manufacturer/ service provider to the user or consumer.


The company functions over 40 distribution centers, serving more than
2,500 stockiest, reaching approximately 1 million retail stores that

makes the product available on a mass scale and is easily available. And
now they have plans to extend more the existing distribution network to
reach out to 3 tier towns and villages in India.




Although figures vary widely from product to product, roughly a fifth of
the cost of a product goes on getting it to the customer. 'Place' is
concerned with various methods of transporting and storing goods, and
then making them available for the customer. Getting the right product
to the right place at the right time involves the distribution system. The
choice of distribution method will depend on a variety of circumstances.
It will be more convenient for some manufacturers to sell to wholesalers
who then sell to retailers, while others will prefer to sell directly to
retailers or customers.








Product

Product means the goods-and-services combination the company offers to the
target market.
Kotler and Armstrong (2010).
For many a product is simply the tangible, physical item that we buy or
sell. You can also think of the product as intangible i.e. a service.
In order to actively explore the nature of a product further, let’s
consider it as three different products – the CORE product, the
ACTUAL product, and finally the AUGMENTED product.



Lay’s target young generation and the brand have positioned itself as a
youth brand. The major chunks of its consumer are of age between 13-
18 and 18-26. The youth brand ambassador endorsing the brand carries

the young imagery forward. Lays target the health conscious too. By its
‘snack smart’ program they are targeting the health and wellness area.






The product range and how it is used is a function of the marketing
mix. The range may be broadened or a brand may be extended for
tactical reasons, such as matching competition or catering for seasonal
fluctuations. Alternatively, a product may be repositioned to make it
more acceptable for a new group of consumers as part of a long-term
plan
Promotion

Promotion includes all of the activities marketers undertake to inform
consumers about their products and to encourage potential customers to buy
these products.
Solomon et al (2009).
Promotion includes all of the tools available to the marketer for
marketing communication. As with Neil H. Borden’s marketing mix,
marketing communications has its own promotions mix. Whilst there is
no absolute agreement on the specific content of a marketing
communications mix, there are many promotions elements that are
often included such as sales, advertising, sales promotion, public
relations, direct marketing, online communications and personal selling.


Promotion is the business of communicating with customers. It will
provide information that will assist them in making a decision to

purchase a product or service. The razzmatazz, pace and creativity of
some promotional activities are almost alien to normal business
activities.
The cost associated with promotion or advertising goods and services
often represents a sizeable proportion of the overall cost of producing an
item. However, successful promotion increases sales so that advertising
and other costs are spread over a larger output. Though increased
promotional activity is often a sign of a response to a problem such as
competitive activity, it enables an organisation to develop and build up a
succession of messages and can be extremely cost-effective.

Lay’s focus is on consumer engagement modules and crowd sourcing
strategy to promote our brands. Its various promotional strategy like ‚
Chala Change Ka Chakkar‛, ‛Fight For Your Flavor‛ and ‚ Campaign
Dillogical‛ are all consumer interaction driven. All its campaigns are
supported by mega 360-degree communication medium on TV, Radio,
Print, Viral, Outdoor and Cinema.








Recommendations
















Conclusion
Lay’s is not only competing head on with the branded-unbranded
players in the market, it 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. Based on the
survey results we conclude that Lay’s is the leading Snack Product with
Kurkure fast catching up. Lay’s still enjoys the Youthful image due to
the Brand ambassadors and various promotional campaigns. By
involving customer in co-creating the products Lay’s has achieved the
goal of Consumer engagement. With a good brand awareness & recall,
high customer & brand equity, it’s only poised to grow further in an
ever-expanding and highly competitive market.









summary
The s t udy he l pe d us unde r s t a nd t he pa t t e r ns be hi nd
pur c ha s e o f c hi ps a nd wha t psychosocial benefits one derives
from them. Also, it helped track where Lay’s stood in the eyes of
consumers.