Cheetos

By:
Group 13
Amrit Saikia
Akshay Mehta
Himani Parikh

Sales Promotion Project

 About the product:
Cheetos is a brand of cheese-flavored puffed cornmeal snacks made by Frito-Lay, a subsidiary ofIn 2010,
Cheetos was ranked as the top selling brand of cheese puffs in its primary market of the United States;
worldwide the annual retail sales totaled approximately $4 billion. The original Crunchy Cheetos are still in
production but the product line has since expanded to include 21 different types of Cheetos in North
America alone. As Cheetos are sold in more than 36 countries, the flavor and composition is often varied to
match regional taste and cultural preferences—such as Savory American Cream in China, and Strawberry
Cheetos in Japan PepsiCo.
In India, we have 5 varieties of Cheetos Available:
1. Cheese Balls 4. Cheese Puffs
2.Masala Balls 5. Tangy Loops
3. Cheesy Crunchy
Promotions Studied:
Frito-Lay offers a number of common grocery store sales promotions (consumer promotions) such as :

1. “Family Size” bags for better bulk value

2. Buy-one-get-one-free initiatives
3. The “Crash the Super Bowl” Campaign
4. “Do Us A Flavor” Campaign
5. Online Presence
6. Attractive Layouts.
Objective of the Sales Promotion:

1. To introduce new flavors into the Market.

2. To attract new customers.
3. To induce existing customers into buying more.
4. Helps the company to remain competitive against Uncle Chips, Doritos, e.tc.
5. To add to the stock of the dealers.
6. Increase U.S. market share by 5%.
Design of Promotion:

Location: Perimeter Holding Power 160 SVLR SDV Holding

Key Benefits: Power: $56.00
1. Provide a smaller footprint Retail Sales / Turn: $94.40
2. impactful merchandising solution Annual Turns: 26
with a great variety of savory snacks Annual Sales: $2454.04
3. Contemporary design in a highly Annual Profit: $998.40
visible location elevates the look and
feel of your total store .
4. Delivers on consumers’ need for
snacks that offer an “on-the-go”
solution focusing on portability
Tray Dump Bin
Demand Moments: Work/School Break
Time - SS
Design of Promotion:

Location: Urban Key

Benefits: Provides a destination for the best selling most profitable snack
brands within arms reach of the register
When located 6 feet from the register, a 30% increase in sales is realized .

Holding Power: 210 XXVL SDV Holding Power: $218.40 Retail Sales / Turn:
$312.90 Annual Turns: 26 Annual Sales: $8135.40 Annual Profit: $2457.00
Impact of Promotion:
Productivity gains and lower commodity costs helped PepsiCo achieve fourth-quarter income of $1,718
million, or $1.17 per share, up 31% from income of $1,311 million, or 87c per share, for the comparable
period. Net revenue declined 7% to $18,585 million from $19,948 million.
PepsiCo posted organic revenue growth of 4% for the quarter and 5% for the full year.
Operating profit for the Frito-Lay North America segment advanced 6% to $4,304 million for the full year,
driven by productivity gains and lower commodity costs that were partially offset by operating cost
inflation and higher marketing expense. Net revenue for the segment was $14,782 million for the year, up
2% from the prior year.
Impact of Promotion:
Competitors Reaction:
Distributers Reaction:
Distributers Reaction:
The Distributers want the most popular flavors to be supplied, but because of govt. norms, Frito Lay is not
able to cater to their requests.
Mounting commodity pressure, increased marketing expenditure, higher transportation costs, and foreign
currency headwinds resulted in a decline in core gross and operating margins.
Due to the effect on the company the overall margins of the distributers have been reduced. Thus they are
switching to other competitors in the market.
Analysis of Design:

1. “Crash the Super Bowl”, worked for about 10 years thus increasing the word of mouth along with sales.

2. Online presence of the product, lead to the formation of community fan clubs, sharing their experiences.

3. Attractive layouts & easily movable trays helped in easy movement and attracting customers.

4.”Do us a flavor” campaign helped increase brand awareness, get people talking & boost sales. It was a
great success. It encouraged people to send their own recipe to the company.
 Learning
1. Effective sales promotion simulates demand.
2. It is of utmost Importance to Dealers and Middlemen
a. Facilitates larger sales :-
The dealers get advantages of sales promotional techniques for increasing their sales. Sales promotion is a
coordinating activity between sales, advertising, research & public relations efforts & they reduce the
resistance at the point of sales.
b. More facilities & assistance :-
The producer, under the sales promotional programme, provides various facilities & assistance to the
middlemen, such as assistance to marketing research, providing with display materials and managerial
assistance, etc. for maintaining regular stock for sales.
Thank-you