MARKETING MANAGEMENT

GROUP PROJECT

ON LAYS

INDUSTRY – FMCG

Submitted To: Rajarshi Debnath

Submitted by-
Shubham Luthra (163003)
Arushi Gaur (163008)
Palak Dua (163016)
Nikunj Bajaj (163040)
Varis Sharma (163048)
 TABLE OF CONTENTS

Page Content

1-3 Introduction

Environmental Forces
4-7

Ansoff Matrix
8-9

PLC phases and strategies

10-12

13 Segmentation

14-15 Target & Positioning

INTRODUCTION

Lay's is a brand of potato chips, as well as the name of the company that founded the
chip brand in the United States. The brand has also sometimes been referred to as
Frito-Lay because both Lay’s and Fritos are brands sold by the Frito-Lay company,
which has been a wholly owned subsidiary of Pepsico since 1965.

Frito-Lay primarily uses the brand name "Lay's" in the United States, and uses other
brand names in certain other countries: Walkers in the UK and Ireland; Smith’s in
Australia; Chipsy in Egypt and the West Balkans;Tapuchips in Israel Margarita in
Colombia; Sabritas in Mexico; and, formerly, Hostess in Canada.

❖ Vision: to achieving business and financial success while leaving a positive

imprint on society – delivering what we call performance with purpose

❖ Mission: 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.

❖ Strategies: To be an inspirational and trusted brand, transforming customer's

lives through delightful food experience every time.
2. ENVIRONMENTAL FACTORS

2.1 Demography and Population

In 2022, the median age of an Indian was 28.7 years, compared to 38.4 for China and
48.6 for Japan; and, by 2030, India's dependency ratio will be just over 0.4. The
country boasts a young population due to which FMCG companies have a stronghold
over the society.

Meanwhile, the average income of Indian households has also been witnessing an
upward tick due to which the consumption at the macro level has increased manifolds
in the past few years.

2.2 Economic Factors

At such a juncture, when the Indian economy is at a path towards development, many
FMCG companies have decided to expand their operations and tap tier 2 and 3 cities
as well. Going forward, Lays should also plan to expand its operations in India as the
aggregate demand is expected to increase manifolds in the coming years.

Growing as a regional economic powerhouse, India offers immense scope to FMCG

companies to achieve a stronghold in the sub-continent. The economic policies since
1991 have been favourable towards private players entering different industries and
the same trend is expected to continue for decades to come.

2.3. Socio-Cultural Environment

Lays must consider the various taste preferences of the region in which it operates
because it is in the food business. Lays may have difficulties as a result of the
market's increased demand for healthy food, but it must segment the market it serves
and target the appropriate demographic in order to make up for this deficiency.
The company might embrace and spread environmentally friendly behaviours by
utilising environmentally friendly packaging. This will enhance the company's brand
value and have a positive connotation while also helping the environment.

2.4 Natural Environment

Natural environment issues are crucial when it comes to the long-term economic
success of a specific brand. Ethical harvesting is of vital importance because potatoes
are the main component of Frito Lays.

Effective garbage disposal of excess produce is required to prevent any serious issues
with the company's operation. By offering eco-friendly packaging for its goods, the
company must promote environmental preservation. Further, by reducing the
product's environmental impact, the business will be able to compete on a more
environmentally friendly basis.

2.5 Technological Environment

It is essential to adopt technology given its growth in the field. To help the business
reduce costs, Lays should ideally employ the most cutting-edge technologies in its
manufacturing process. By doing so, you will be able to answer the competitor's
query and improve the effectiveness and productivity of your work process.

The application of these advances will always provide the company a push,
generating future profits.

Technology concerns may also be fully utilised by providing improved marketing

strategies and brand visibility through social media and other media platforms.

2.6 Political-Legal Environment

The company's operations and business will be impacted by political difficulties in a

particular area and location. Lay's must take into account the many political problems
that could have an impact on the company's business when entering a market or even
trying to stay there over time.

In order to maintain the smooth running of the business, the corporation must abide
by a number of food regulations that have been put into place on the market and, if
necessary, adjust the manufacturing method. In order for business to flourish in that
area, labour laws and labour unions must be placated. The anticipated trading
strategy that the company will use.

The company is also subject to strict laws in several jurisdictions because it works in
the snack sector. Laws must be taken into account when conducting business because
they vary from one location to the next.

The corporation must adhere to a number of health regulations and production

guidelines that concern consumable items in order to maintain efficient market
operations. Because the product is edible, compliance with health standards and the
calibre of the packaging must be taken into account before being on the market. Any
failure on these grounds could have a detrimental effect on the business, worsening
the market conditions and hurting the bottom line.
3. Ansoff matrix

The Lay s Potato Chips has been successful in its global operations and business based on its
strategic growth choices and decisions. These growth decisions and growth paths have been
varied for different regions, at different time points – based on the internal and external
organizational factors. However, the Lay s Potato Chips has successfully made use of the
Ansoff matrix repeatedly to become one of the leading beverage giants internationally. Some
of the strategies that Lay s Potato Chips has successfully used under the Ansoff matrix.
1 Market penetration
The market penetration strategy is used by businesses that seek growth for existing products in
markets where their brands are existing, and already operational.

1.1. Increase production capacity

• Increased production capacity will allow Lay's Potato Chips to reach more customers in the
same market.

• Increased production capacity will also lead to greater efficiency and effectiveness,
particularly in terms of controlling overhead costs.

• Controlled overhead costs will result in competitive pricing and will appeal to consumers in
the same market.

• Greater attractiveness and competitive pricing within the same market will result in
increased sales and consumption, and thus greater market penetration.

1.2. Increased marketing investment

● The Lay s Potato Chips can also increase its investment in marketing and advertising
activities to increase market penetration
● The Lay s Potato Chips should try to develop and design engaging communication
content that is relevant to its various market groups
● Engaging communication and investment in marketing activities, and advertising will
allow the Lay s Potato Chips to reach more consumers within the same market
● With higher marketing investment, the Lay s Potato Chips will be able to increase its
market penetration within the existing markets for existing products

1.3. Enhanced distribution

● The Lay s Potato Chips can explore new and innovative means of distribution
● The Lay s Potato Chips can also explore new channels of distribution for their products
● New and enhanced distribution channels and strategies will allow the Lay s Potato
Chips to reach new consumer segments and consumer groups in the same market –
which may have been inaccessible previously
● Improved supply chains and distribution systems may lead to increased penetration
within the same market by improving accessibility

2. Market development
With market development strategies, the Lay s Potato Chips can enhance its business growth
through introducing existing products in new markets. This will be possible for the Lay s Potato
Chips with different strategies.

2.1. Research and development

 ● The Lay s Potato Chips should invest in research and development to identify possible new
markets and consumer segments for its products
● The R&D should focus on identifying and understanding different market cultures, trends, and
consumer behaviours - and how they differ dim consumer behaviour patterns in existing
markets

2.2. Regional expansion

● The Lay s Potato Chips can expand regionally

● This will include expansion locally to different cities, or within the same geographic region
● Regional expansion should also take into consideration any cultural differences that will need
to be accommodated in the expansion process in terms of marketing or product modifications
and consumption methods.

2.3. International expansion

● The Lay s Potato Chips an also enjoy business growth through international expansion
● International expansion will allow Lay s Potato Chips to access different consumer groups, and
increase its overall share of the pie
● International expansion will require the Lay s Potato Chips to conduct in-depth PESTLE,
Porters 5 forces and SWOT analyses to develop a comparative strategy and overview for
planned expansion
● The company will also need to understand the possible cultural differences, and make
accommodations to its expansion strategy accordingly. Cultural differences should be taken
into account in the process of global expansion.

2.4. New customer segments

● The Lay s Potato Chips can also explore new consumer segments in the same market for its
products
● The company can identify new product uses and features and target new consumer segments
for the existing products
● This will allow the company to tap into new markets and new market trends within the same
market to help in growth and expansion

3. Product development
When a company seeks to expand business growth in existing markets through new products,
it is termed as product development. The Lay s Potato Chips drives product development in
different ways.

3.1. Modifications to existing products

● The Lay s Potato Chips can introduce modifications and improvements in existing
products to offer consumers new and enhanced offerings
● This will lead to increased sales and consumption of the product

3.2. Launch new products

 ● The Lay s Potato Chips also often engages in R&D activities to understand and identify
new points of consumer demand
● The company then undergoes a NPD process, and develops and launches new products
in the market for consumers
● This increases the breadth of the company’s reach, and also allows Lay s Potato
Chips to penetrate new market segments

3.3. Research and development

● Lay s Potato Chips regularly invests in research and development – especially

pertaining towards understanding market trends and consumer behaviour
● Investment in R&D has allowed the Lay s Potato Chips to remain competitive through
innovation and creativity – in product launches as well as other functional areas such
as marketing, operations and finances
● Research and development has also built the Lay s Potato Chips to become more
efficient in its operations and routine activities.

3.4. Strategic partnerships

● The Lay s Potato Chips engages in strategic partnerships to explore options for product
development as well
● Strategic partnerships allows Lay s Potato Chips to have access to new product
developments, and processes with limited financial investment- and thus limited risk
involved
● This is important for Lay s Potato Chips – to be able to understand the new product,
and development process along with the market reaction and acceptability of the same
before engaging in fill fledged production of own

3.5. Product quality

● The company can also engage in new product development through introducing
different quality products in the same market
● This will allow the Lay s Potato Chips to penetrate new market and consumer segments,
as well as target new consumer groups

4. Diversification
Diversification refers to business growth and development that occurs when a company
engages in new product development in new markets. Diversification is an important and
allows businesses like the Lay s Potato Chips to remain competent, innovative, and competitive
– thereby remaining relevant for the consumer markets.
4.1. Vertical diversification

● Vertical diversification for the Lay s Potato Chips means looking for growth and business
development by introducing new products under existing product lines.
● This means that the new product developments and launches by the Lay s Potato Chips would
be similar to, and categorized under existing product groups and categories.

4.2. Horizontal diversification

● Horizontal diversification occurs when the Lay s Potato Chips decides to introduce and engage
with new product developments and launches that are not associated with the existing products
● It is however beneficial to introduce new products launches and developments for products that
share similar economic environments with the visiting products.

4.3. Diversification towards a new business

● The Lay s Potato Chips can also diversify into becoming a conglomerate by engaging in a
different business altogether
● Diversification through a new business would involve the Lay s Potato Chips to explore new
business ideas and option to launch or acquire for purposes of growth and development.

4. PLC Strategies
4.1 Introduction

The product is initially brought to the market and wins consumer acceptability. Sales volume
and profit margins are poor since not all consumers are aware of the product and they need
some time to switch from the current items.

Salesman Herman Lay established a snack food business in Dorset, Ohio, in 1932.

In 1938, he acquired the "Barrett Food Company," afterwards known as "H.W. Lay Lingo &
Company," a maker of potato chips in Atlanta, Georgia.

Lay travelled extensively throughout the southern United States, selling the product out of the
trunk of his automobile,empowering individuals to create flavours

4.2 Growth

The Derrick Lothert-founded Frito Company and Lay's amalgamated in 1961 to establish Frito-
Lay Inc., the world's largest manufacturer of snack foods with combined annual sales of more
than $127 million.

Soon after, Lays debuted their most well-known catchphrase, "betcha can't eat just one."
The chips' sales expanded internationally, and some famous people helped with the promotion.

In 1965, Frito-Lay merged with the Pepsi-Cola Company to form PepsiCo, Inc.

A new formulation of chips was introduced in 1991 that was crisper and kept fresher longer.

Shortly thereafter, the company introduced the "Wavy Lays" products to grocery shelves.

4.3 Peak
Due to intense competition, prices and profits decline at this period. Strong enterprises are
compelled to quit the industry as the growth rate stabilises. Promotion costs are high in order to
build brand loyalty. To boost sales, businesses work to change and enhance their products, create
new applications for them, and draw in new clients.

They introduced a product called Lay's Stax, which competed with Pringles, in an effort to boost
sales once more.

When compared to Pringles, Stax was said to be thicker and less likely to break when chewed into.

It was astounding how many different flavours there were.

4.4 Decline
Lays saw a decline in product purchases as a result of the ongoing promotion of healthy lifestyles.
people are purchasing fewer calorie and fattening goods like veggie chips.

5. SEGMENTATION
Lay's is a brand of potato chips, as well as the name of the company that founded the chip
brand in the United States.

They used four segmentation methods:

1. Psychographic Segmentation:

People who want to get a quick bite, usually outdoors, picnics, movies, etc., eat it
as just food.

2 Behavioral Segmentation:
 Occasions- Heavily consumed at parties, outings, theatres, sharing with friends
(canteens, hostel rooms), and other social gatherings.

Benefits-High-quality snack that satisfies your taste buds.

3.Geographic Segmentation:

Available in every region of the country (face stiff competition from other players in
the potato chips industry and other snacks)

City- Easy to find, but faces stiff competition from local markets.

Penetration is low in rural/semi-rural areas, with local produce dominating.

4.Demographic Segmentation:

Age- Mostly popular among teenagers, they serve as a quick bite for grownups.
All flavours are available in family size-party bundles.
Income- Despite the fact that it is not a high-end product, it is rarely used by low-income
people.
Gender, occupation, and other demographic variables do not play a significant influence.
Once you have built up an accurate picture of your customer, it’s time to get their attention

6. TARGETING
Lay's, a PepsiCo item, is almost inseparable from the chips classification in India.
Lay's has spent the most recent couple of years zeroing in vigorously on localisation
to stay applicable to Indian buyers. It has likewise changed how it speaks with its
clients. The brand, which puts a high worth on friendly tuning in, as of late evolved
remarkable '@ Home' parcels because of buyer criticism that they were chomping
more at home. PepsiCo announced twofold digit development in India in Q2
notwithstanding the second rush of the pandemic, demonstrating that large numbers
of its endeavors are paying off. PepsiCo's nibble unit volume developed by twofold
digits in India and Pakistan, as indicated by the organization.

A few the Campaigns which designated right crowd:

1.Lay's Heartwork crusade, in which they rewarded the local area by

recounting an account of appreciation.
 2.The PepsiCo India x Airtel crusade, in which they involved information as
the essential cash to convey esteem.
3.Lay's Herby Crush and Lay's Cheesy Love were introduced as a feature of
the

#YehWaalaYaadRahega lobby, in which they presented new, restricted time offers in

view of shopper inclinations.

Significant Targets of Lay's:

❖ The youthful age is Lay's center objective segment.

❖ Most of its clients are between the ages of 13 and 28.
❖ Youngsters who are keen on sports, diversion, and films, for instance.
❖ By delivering prepared chips, Lays has started to focus on the wellbeing
cognizant.

7. POSITIONING
Lays is broadly accessible and offers a wide scope of flavours. It has situated itself as
a bite that can be appreciated by anybody whenever of day. At first, Lay's situating,
with the expression "Can't eat only one," was more worried about the nature of the
fixings and their taste than with what it offered the customer. The brand has now
rethought itself around the expression "get your grin on," with expectations of
making a pleasant experience for clients.

The brand is currently zeroing in on clients' little snapshots of bliss, and has made an
assortment of promotions and enactments to spread the message all through its stores
the nation over.

Lay's amended image situating drive was a colossal achievement; deals became more
than 20% in the nine months after the new situating was executed, with huge lifts in
unwaveringness and value scores - all without expanding media venture. That is
something to be content about.