LAY'S

Group 4
Aashima Garg (19P001)
Ayushi Garg (19P013)
Ishita Jain (19P021)
Shreyansh Agrawal (19P052)
Tarun Lahoti (19P058)
Siddharth Maroo (20EDHEC01)
LAY'S POTATO CHIPS:
BRAND IMAGE IN
HUNGARY 

Key Dilemma
How to improve Brand
Awareness, Brand Image &
Purchase Intent among
Hungarian Consumers
KEY POINTS
OF
DISCUSSION
• The Marketing Budget Split
– Media Advertising &
Consumer Promotion
• Advertising Channel
Strategy – Outdoor vs Mass
Media
• Communication Strategy –
What to convey to the
consumer?
• Promotion Strategy 
 PEPSICO INC. HISTORY
1965 1978 1990s
Pepsi-Cola and Frito Lay were Acquired Taco Bell Products in over 160 countries;
merged to form PepsiCo Inc. Revenues exceeding $30 billion

1977 1986 1995

Acquired Pizza Hut Acquired KFC. Entered Hungary with an initial
green field investment of $10
million.
PEPSICO IN HUNGARY
– AN OVERVIEW
• PepsiCo Snacks entered Hungary in 1995
• Major Product: Lay’s Potato Chips
• Competitors had first mover advantage of at least 2 years
• Marketing Strategy: Outdoor billboard campaign (costing over
US$130,000) – proved ineffective in building the brand
• By Dec 1995, 10% market share – promotion along with the
soft drinks
• Lay’s suffered from weak Brand Awareness, Brand Image
and Purchase Intent
HUNGARIAN POTATO CHIPS MARKET

MARKET OVERVIEW – SALTY SNACK

5 major categories:
MARKET
• Traditional Snacks (49%)
• Potato Chips (17%)
• Extruded Corn Products (17%)
• Nuts (14%)
• Other salty snacks (2%)
HUNGARIAN POTATO CHIPS MARKET

 CONSUMER BEHAVIOUR
• Target Segment for Lay's: 8 to 54-year olds
• Snacking habits differed significantly from Western European markets
• High inflation (over 28%) + rising unemployment (about 12%) -
rapid decline in consumer buying power
• Price conscious consumers
• Bought traditional snacks and homemade cookies and biscuits
• Taste most important consideration for 68% consumers
• Snack purchase driven by impulse buying
• Consumer and trade promotions were important
HUNGARIAN POTATO CHIPS MARKET – COMPETITOR ANALYSIS

Chio United Biscuits, Bahlsen  Zweifel 

 Market leader - 46% volume share  Market share – 28%, 8%  Market share – 10%

 High brand awareness through   Competed on quality  Competed on price

 Heavy marketing (USD 1m) -
Mass media (44%), Consumer
promotions
 Catchy jingle - "Chio, Chio,
Chio Chips"
 Mid-price segment product- 2%
costlier than Lay's
 Premium products - 12% and 10%  5-7% cheaper than Lay's
costlier than Lay's
 Small marketing budget on
 Metalized color foil packaging- high promotions
quality
 Limited distribution
 Marketing spend on TV and radio 

 Transparent packaging- medium

quality

 Strong distribution network

CONSUMER PERCEPTION
• Intention to consume: Lay’s 18% vs Chio 59% – weak
intent
• Blind Taste Test: 69% consumers preferred Lay’s taste
over Chio
• Lay’s was of higher quality, but the consumers didn’t
know that
• Contrasting consumer perception: 81% said Chio was
of good quality compared with only 47% for Lay’s 
• So, just having higher quality wasn’t enough – need for
stronger marketing 
 MARKETING PROBLEMS
• Lay's mostly spent on Outdoor advertising (Billboards) -
94% of marketing budget in 1995
• Only 7% of consumers were aware of Lay’s initial
billboard campaign – Ineffective strategy
• 42% of consumers who had unaided awareness of Chio
advertising – captured mind share using jingle
• Total Share in advertising for potato chips by Lay's
was low (9%)
• Chio was heavily spending on Mass media like TV &
Radio
 SWOT

Helpful Harmful

Strength Weakness
c
• Strong International Parentage of PepsiCo • Low unaided Awareness
• •
Internal

Better performance with respect to Taste in Blind Test Weak Brand Image & low purchase intent
• Competitive Pricing  • Low Market Share
• High Quality Packaging • Late Market Entry

Opportunities
SWOT Threat
• Aggressive Tactics by competitors
• Better performance with respect to Taste in Blind Test
• First mover advantage to the competitors
External

• Targeting quality customers 

• Switching to more favored channels of promotion
 ALTERNATIVES
AVAILABLE
Split between Consumer Consumer offers Advertising strategy
Promotion and
advertising? 

Choice between- Choice between- Choice between-

1. 60-40 with more on 1. BOGO 1. Generate impulse buy
consumer offers? (Maaza, Thumps-up)
2. Sample trials at
2. Budget for Radio supermarkets 2. Communicate superior
& outdoor? quality
3. Coupons (Dove, Harpic)
 RECOMMENDATIONS
Enhanced Brand Awareness + Stronger Brand Identity =
Enhanced Purchase Intent

Core Value Proposition to be communicated:

High Quality at affordable prices!

Advertising Strategy – 
Aggressively focus on mass media channels like
TV & Radio to create awareness capture & mind
share – Spend about 45% of the marketing
budget on mass media; reduce outdoor spending
 RECOMMENDATIONS

Communication Strategy –
Unique potato production process
must be communicated through
advertising – buidling brand
association with quality

Blind Tests & Trials - 

Increase frequency of trials to reinforce taste
& quality – increased awareness
 RECOMMENDATIONS

Consumer Promotions –
The Consumer must be offered
discounts & coupon promotions to
leverage the impulsive buying behavior
– create purchase intent

Cross Marketing –
BOGO schemes should be offered to
promote Lay's Potato Chips with
PepsiCo's existing beverage portfolio
– create purchase intent
THANK YOU