Lay’s Potato Chips in

Hungary:

The Second ‘Money in the Bag’

Promotion
The PepsiCo team had been evaluating what to do next after the success of the ‘Money in the-
Bag’ (MIB) promotion for Lay’s potato chips in Hungary. Their review of the results of the
promotion campaign suggested the following long-term objectives: build aided awareness of
Lay’s brand to 55%, further build brand equity, promote trial and reach an adoption rate of
15%, achieve 30% growth in sales volume, and a 50% market share. In order to achieve these
objectives, it was felt that for the duration of the promotion a 300% sales uplift was required.
With these objectives in mind and given the success of the MIB promotion, the team decided
to launch a second ‘Money in the Bag’ promotion (MIB2).

The Money-in-the-Bag 2 Promotion

The MIB2 promotion ran from 3 April 1997 to 6 June 1997. It was based on the same concept
as the previous MIB promotion providing consumers with a high probability of an instant win
when purchasing Lay’s potato chips. The delivery mechanics were changed to project an
image of an innovation (see Exhibit 1).

Prizes

The prize insertion rate in 90g Lay’s bags (Salt, Paprika, Cheese & Onion) averaged 1-in-2
packets at the start of the promotion. This was later changed to 1-in-4 (giving an average
insertion rate over the course of the promotion of 1-in-3). A blue sachet indicated if the
consumer had won the grand prize, a cash prize, or a coupon for a free product (any other
PepsiCo snack product in 22g or 30g bags). Four grand prizes were awarded. The grand prize
winners would be invited to the national Mint and given two minutes each to scoop as many
coins as they could from an enormous container filled with new 100 HUF coins (US$0.57 at
the time). Reminiscent of fairy tales, adventure movies and the Gold Rush, the winners were
allowed to keep all the coins they could scoop up in the time available. (See Exhibit 2 for an
overview of the prize pool.)

Media and Promotion

The media support included TV, radio, movie and print advertising along with POS material
and displays. The grand prize was heavily advertised with famous personalities endorsing the
promotion. For instance, the highlight of the press event at the launch of the promotion was
the presence of Olympic gold medallists Istvan Kovacs (boxer) and Attila Czene (swimmer)
competing to win the ‘trial scoop’ in the Mint. (See Picture 1)

Pricing

The relative prices of the main competitors are depicted in Exhibit 3. Over time, Lay’s prices
increased relative to its main competitors.

Other Promotions

The year 1997 was characterized by fierce competition among sales promotions. During the
MIB2 promotion in April and May, Chio ran its ‘Sour Cream and Onion’ promotion, which
was a standard cents-off coupon promotion introducing a new flavour to the market. From
August through November 1997 Chio followed up with a ‘Home Movie Party’ promotion
whereby consumers who sent in three empty bags of Chio products had a chance to win a
home movie system and a party for their friends hosted by Chio. During the same time, Lay’s
countered with its ‘Car Mania’ promotion. Consumers had to mail in three Lay’s bags to enter
in a lottery where they could win a new car. A car could be won each week.

Results after the MIB2 Promotion

Sales volume of the potato chip market in 1997 was very similar to that of the previous year,
suggesting that the various promotions did not grow the market (Exhibit 4). Even seasonal
patterns of consumption were practically identical – the bi-monthly sales volumes for 1996
and 1997 correlating almost perfectly (annual sales volume correlation, r = .94). Hence, any
gain in market share was achieved at the expense of a competitor’s sales volume. Competition
was fierce.

Lay’s market share increased to 48% during the MIB2 promotion and rose above 50% in the
two months following the promotion, outperforming Chio. In the two months preceding the
promotion (February-March), Lay’s share had been 32%. However, four months after the
MIB2 promotion ended its market share slipped to pre-promotion levels (see Exhibit 4). Chio,
in comparison, continuously grew its market share.

During and after the MIB2 promotion, aided brand strength of Lay’s improved considerably
but not quite to the degree of Chio (see Exhibit 5). Aided brand awareness of Lay’s was 80-
90%, Chio’s close to 100%. On unaided brand awareness Lay’s had improved a little, but not
as much as Chio. Advertising awareness of Lay’s had not increased, but it had for Chio,
which was ahead of Lay’s on that measure, too.

Consumption intention (also an aided measure) had been high for Lay’s and remained so after
the MIB2 promotion. Chio had caught up and both brands were in the 90-100% range.
Whereas few respondents had had a favourite potato chip brand before the MIB2 promotion,
now 50% indicated Chio and 30% indicated Lay’s as their favourite brand, suggesting that
stable brand preferences had started to develop.

Continuous blind taste tests showed that during and after the MIB2 promotion Lay’s had a
better taste than Chio potato chips (Exhibit 6). Most of the time, the regular Lay’s chip was
indistinguishable in taste from the Gold Standard, the best potato chip Lay’s could produce
without compromising costs. What looked like a decrease in Lay’s perceived taste during the
first promotion did not re-appear in these data.

Despite Lay’s taste advantage, Chio steadfastly maintained its lead in quality image (Exhibit
7a) and in value-for-money image (Exhibit 7b). Lay’s quality image reached its lowest point
during the MIB2 promotion. In fact, it was lower at that time than after the first MIB
promotion although it subsequently recovered to its previous level. Its value-for-money image
started a small but steady decline at that time.

Discussion Question:

Was MIB2 a success keeping in mind the strategic objectives of brand awareness, brand
image and purchase intent?
 Exhibit 1
PepsiCo Memo Describing the Plan for ‘Money in the Bag 2’

OBJECTIVE: - Build further awareness and distribution, promote trial of Frito Lay products,
broaden current consumer base, build brand equity.
- Achieve 30% sustainable volume growth and 300% promotional uplift.
- Increase total aided brand awareness to 55%
- Adoption1: 15%
- Market Share: 50%

TIMING: - 3 April – 6 June 1997

CONCEPT: - Same as previous promotion. Provide consumers with a high

probability of an instant win when purchasing Lay’s potato chips.
Improve mechanics to promote innovation image.

MECHANICS: - Prize insertion* in 90g Lay’s (Salt, Paprika, Cheese & Onion)
* Insertion rate average at 1/3 (1/2 to start, later 1/4.)
- Blue sachet contains main prize**, cash prize, or coupon for free product
(any other Frito Lay product in small –30g or 22g bags),
** Main Prize: 4 x 2 mins scooping in the Mint (new 100 HUF coins)
- Retailers redeem consumer coupons and exchange for Frito Lay product.

SUPPORT: MEDIA - TV, Radio, Movies, Print

PR - Press event at launch***

*** Olympic gold medallists (Istvan Kovacs/boxer,
Attila Czene/swimmer to contest in trial
scooping)
- On-going press releases

POS - Headboards, stop signs, door stickers, posters

DISPLAYS: - Pre-packaged mixed product bundles,

pre-packaged Lay’s displays (racks),
carton box displays

SAMPLING: - Intensive sampling and tasting campaign

1 Percentage of respondents who mention Lay’s when asked which snack products they
consumed last week. (See Case B1 – Exhibit 6 – Last Eaten Chips Brand). In July through
September 1996 that figure was 17%.
 Exhibit 2
PepsiCo Memo Entitled ‘Prize Pool for Money in the Bag 2’

TOTAL VALUE OF PROMOTIONAL CASH PRIZE: HUF 33 900 000.

USD 193 715 @ 1 $ = 175 HUF

1000 x 5000 HUF notes

1000 x 1000 HUF notes
2000 x 500 HUF notes
269000 x 100 HUF notes

TOTAL: 273 000 pieces - value 33 900 000

HUF

FOUR MAIN PRIZES (MONEY SCOOPING): HUF 4 759 100

USD 27 195 @ 1 $ = 175 HUF

1 225 200 HUF

1 183 800 HUF
1 272 000 HUF
1 078 100 HUF

TOTAL VALUE OF FREE PRODUCTS PRIZE: HUF 51 371 000.

USD 293 549 @ 1 $ = 175 HUF

ADDITIONAL PRIZES MIX (FREE 30G PRODUCTS)

(Cheetos, Ruffles, Lay’s)
30% Ruffles: 327 900 x 47 HUF = 15 411 300 HUF
30% Cheetos: 327 900 x 47 HUF = 15 411 300 HUF
20% Lay’s paprika: 218 600 x 47 HUF = 10 274 200 HUF
20% Lay’s salt 218 600 x 47 HUF = 10 274 200 HUF

TOTAL: 1 093 000 bags – value 51 371 000 HUF

TOTAL PRIZE VALUE: HUF 90 030 100.

USD 514 458 @ 1$ = 175 HUF
 Exhibit 3

Competitors’ prices relative to Lay’s prices (in %). Prices are estimated by dividing sales volume by
monetary value of sales.

Competitor's Prices Relative to Lay's (%)

Per Cent

10-11/96

10-11/97
2-3/96

4-5/96

6-7/96

8-9/96

12/96-

2-3/97

4-5/97

6-7/97

8-9/97
1/97

Note. Each data point represents the average of a two-month time interval. The Money in the Bag 1 promotion
ran April to September 1996; the Money in the Bag 2 promotion ran 3 April to 6 June 1997.
 Exhibit 4
Market Shares and Sales Volumes of Potato Chips

Time Period 1996

months 2-3 4-5 6-7 8-9 10-11 12-1
Sales Volume (tonnes) 206 279 277 245 226 228
Sales Value 2,397 3,287 3,324 3,001 2,767 2,796
(100,000Huf)

Time Period 1997

months 2-3 4-5 6-7 8-9 10-11 12-1
Sales Volume (tonnes) 206 270 258 230 237 221
Sales Value 2,560 3,483 3,429 2,938 3,098 2,924
(100,000Huf)

Market Shares of the Sales Value of the PC Market (%)

Perc Cent

Hungária
 Exhibit 5
Brand and AdVertising Awareness, Attitudes,
and Consumption Intentions for Lay's and Chio
Per Cent Respondents

100%

Per Cent Respondents

100%
80%
60%

40%
20%
0%
12/96
2-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97

12/96
2-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97
10-

10-
Per Cent Respondents

Per Cent Respondents

100% 100%
80%

60%
40%

20%
0%
12/96
2-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97

12/96
2-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97
10-

10-
Per Cent Respondents

Per Cent Respondents

100% 100%
80% 80%
60% 60%

40% 40%
20% 20%
0% 0%
12/96

12/96
2-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97

2-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97
10-

10-

Note. The Money in the Bag 1 promotion ran April to September 1996; the Money in the Bag 2 promotion ran 3
April to 6 June 1997.
Unaided brand awareness: Percentage of respondents who listed the brand in response to the question which
snack brands they knew.
Aided brand awareness: Percentage of respondents who check marked which snack brand names they knew on a
list of names.
Favourite snacks brand: Percentage of respondents who listed a given brand in response to the open-ended
question "What is your favourite chips brand?"
Last eaten snacks brand: Percentage of respondents who listed the brand in response to the open-ended question
"What kind of snacks did you consume last week?"
Consumption intention: Percentage of respondents who checked marked on a list of brands the given brand in
response to the question "What kind of snacks are you going to consume next week?"
Advertising awareness: Percentage of respondents who listed the given brand in response to the question "What
kind of snack advertisement to you know?" While the question was open-ended, previous questions had
provided lists of brands making this question somewhat closed-ended.
 Exhibit 6
Blind Taste Tests

Lay's Versus Chio Blind Taste Test

MIB 1 MIB 2
80

70
Per Cent Respondents Choosing

ng
i
s
o 60
o
h
C
50
nts
Lay's
40
onde Chio
p
s
R 30
e
nt
e
C 20
r
e
P 10

0
10-12/96

10-12/97
1-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97
3/96 6/96 9/96 3/97 6/97 9/97
1- 4- 7- 1- 4- 7-
10-12/96 10-12/97
Three Month Time Periods

Lay'sLay's
Versus
Versus
GoldChio
Standard
BlindBlind
TasteTaste
Test Test

MIB 1 MIB 2
70

g 60
Per Cent Respondents Choosing

n
i
s
hoo 50
C
nts 40
Lay's
nde
o
s 30 Gold Standard
p
e
R
nt 20
e
C
r
Pe 10

Money in the Bag promotion

0
10-12/96

10-12/97
1-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97

1-3/96
1-3/964-6/96
4-6/967-9/96
7-9/96-12/96
-12/961-3/97
1-3/974-6/97
4-6/977-9/97
7-9/97-12/97
-12/97
0 0
1 1
Three Month Time Periods

Note. Respondents blind to which of two potato chips they tasted chose the one they preferred. Each data point
represents the average of a three-month time interval. The Money in the Bag 1 promotion ran April to
September 1996; the Money in the Bag 2 promotion ran 3 April to 6 June 1997.
 Exhibit 7a
DeVELOPment of Quality Image for Lay's and Chio

MIB 1 MIB 2
100

90

80

70

60
Per Cent

Lay's
50

40

30

20

10
10-12/96

10-12/97
2-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97

Note. Each data point represents the average of a three-month time interval. The Money in the Bag 1 promotion
ran April to September 1996; the Money in the Bag 2 promotion ran 3 April to 6 June 1997.

Exhibit 7b
DEVELOPment of Value-for-Money Image for Lay's and Chio
Respondents (%) Agreeing with Value-for-Money Claims

70

60

50
Per Cent

40

Chio
30

20

10
10-12/96

10-12/97
2-3/96

4-6/96

7-9/96

1-3/97

4-6/97

7-9/97

Three Month Time Periods

Note. Each data point represents the average of a three-month time interval. The Money in the Bag 1 promotion
ran April to September 1996; the Money in the Bag 2 promotion ran 3 April to 6 June 1997.