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Target Market Pricing Analysis

Product Competition and LAYS Weight Price (Cost) flavour Sweet Chili Heat Mixed Regular ------------cheddar Jalepeno Original +/'$differenc e +/'$Differenc e

Shoppers Drug Mart

Tostitos pretzels Humpty Dumpty Snack foods Rold Gold NO-Name Brand SunChips MS.Vickies 220g 300g 400g ---------------' 220g 220g $3.79 $3.99 $4.20 ---------------' $2.49 $3.99 $3.49 ($0.30) ($0.50) ($0.71)

$1.00 ($0.50)

LAYS
Product Competition and LAYS

220g
Weight

Plrice (Cost)

flavour Sweet Chili Heat Mixed -------------------------------------------Jalepeno Original

Convenience Store
Tostitos Humpty Dumpty Snack foods Rold Gold NO-Name Brand SunChips MS.Vickies 45g 85g ----------------------------------------------40g 60g $0.99 $1.29 -----------------------------------------$0.99 $0.99 Plrice (Cost) $$(0.30) ------------------------------------------$+/'$differenc e

LAYS
Product Competition and LAYS

Weight

flavour

Wal-Mart
Tostitos Humpty Dumpty Snack foods Rold Gold NO-Name Brand 280g 300g 400g 150 $2.47 $3.67 $3.67 $1.37 Sweet Chili Heat Mixed Regular BBQ $1.02 ($0.18) ($0.18) $2.12

SunChips MS.Vickies

225 220

LAYS

220g

$3.47 $3.45 $3.49

cheddar Jalepeno Original

$0.02 $0.04

Product Competition Aand Lays Product

Weight

Plrice (Cost)

Flavour Sweet Chili Heat Mixed ------------cheddar Salt 'n' Vinegar Original

+/'$differenc e

Gas Station
Tostitos Humpty Dumpty Snack foods Rold Gold NO-Name Brand SunChips MS.Vickies 90g 90g $1.49 $1.49 $0.00 $0.00

70g 75g 75g

$1.49 $1.49 $1.49 Plrice (Cost)

LAYS
Product Competition Aand Lays Product

Weight

flavour Sweet Chili Heat Mixed Regular BBQ cheddar Jalepeno Original

$0.00 $0.00 --------------+/'$differenc e

No-Frills
Tostitos Humpty Dumpty Snack foods Rold Gold NO-Name Brand SunChips MS.Vickies 280 300 400 200 225 220 $3.27 $2.69 $2.99 $1.09 $3.49 $3.77 $3.49 $0.22 $0.80 $0.50 $2.40 $0.00 ($0.28)

LAYS

220g

SWOT ANALYSIS
Strengths Excellent branding and advertising Excellent distribution and availability Loyal Customers Baked from real potatoes Good Advertising Sold @ many retailers Cost advantage Effective communication Loyal customers Weaknesses Assumed High fat and cholesterol in potato wafers even after zero trans fat is marketed on the packs

Low supply in remote areas A health risk

Opportunities

Product and services expansion has room for improvement can supply to remote areas
Leverage successful brand Pepsi Advertise more Buy out competition More Brand recognition More Flavors as compared to Bingo

Threats

Availability of healthier products Tostitos Humpty Dumpty Rolling Gold No-Name Sunchips Ms.Vickies
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Target Market Analysis Demographic Age: Gender: Family size: Stage of family life cycle: Income: Occupation: Education: Ethnic background Home ownership: Personality: Lifestyle: Benefits sought Usage Rate User Status Loyalty Status Geographic Region City or census in Metropolitan Climate 2+ Universal Any size Young single, young married, older single, older married. Corporate, students, athletes, professional High school, college/university, elementary Multi-cultural Own home; rent Procrastinators, hard workers, competitive Energy, quick appetite fix. Medium User Regular user bet yah cant eat just one 1. P.E.I, 2. Ontario, 3. Quebec, 4. Alberta 1. 145,000. Rural 2. 13,000,000 suburban 3. 7,000,000 Urban. 4. 3,000,000 Rural Northern Cool wind

Psychographic Behavioristic

Positioning Statement
The lays product has been through many trials and tribulations, but is now a strong influence in the snack food category. Not much could be said about the weak points of the product but much could be said about why target consumers choose to continue to be life long customers. A few of the reasons why the target market continues to use the product is that, its affordable and traditional. Although it surpasses the expectations and goals of the competition, one of the advantages it has over its competitors is that its a staple in the snack food industry giving it a comfortable familiarity that consumers can always rely on..

Lays Chips Product Analysis

Before Lays chips were introduced the company took surveys to find out what people wanted from potato chips and found. Core Product The Core Benefits from lays chips are: Eliminates hunger. Provides energy. People save time waiting at eateries because chips are quick and easy. Physical Characteristics: Very thinly sliced potatoes, which are fried, baked, processed or kettle cooked. Depending on the format, which they are being sold. Flavored with any of the 20+ flavors. Sold in five different formats first being the regular fried chips, then came the Lays WAVEY then the fat-free WOW brand, then came the processed STAX, and lately the new KETTLE COOKED. They come in three different sizes the smallest, which is intended for personal consumption. Then there is the regular size bag that could be shared with one or two people, and then theres the family size, which is intended to be shared with others. Comes in a shiny foil bag that has a different design for each of the different flavours. Lays regular and lays STAX have 16 different flavours, and the Lays Kettle Cooked have 4 different flavours. The Branding of Lays Chips is a sunburst with a red ribbon going

Actual Product

Augmented Product

around it saying Lays The design of the bag is 2 pieces of foil heat-crimped at the top and bottom with an easy open flap in the middle of the back piece of foil. Addition features and benefits of Lays Chips: Lays has a website where someone can go look up nutritional information Information on the company The companys history How to contact Lays Chips. They also have a chip-tracker if you go online to www.lays.ca and put 3 digits that are on your bag of chips, you can find out where your bag of chips was made! Lays has a 1888 number a person can call with comments or questions.

Strengths and Weaknesses

Strengths that Lays chips have over the competitors are: Lays uses 100% Canadian potatoes. These potatoes come from over 16000 acres of farmland over 7 provinces. They cook their potatoes in 100% sunflower oil therefore there is no trans-fat. Lays has been working with the same farmers on average 25 years, now thats commitment. Weaknesses that Lays chips have: Their bag is non-recyclable and non-biodegradable. They need to fill the bag all the way; not half chips and half air. It is also one of the more expensive brands of snack foods.

Future Recommendations
My future recommendations to Lays chips would be keep using 100% Canadian potatoes because that shows loyalty, and customers love seeing their countrys name on something they are buying it gives them a sense of pride knowing that they are eating home grown Canadian potatoes. I would also keep cooking them in 100% sunflower oil because people today are more and more health conscious. If they are cooked in sunflower oil there is no trans-fat. The fact that when the bag is thrown out it is basically helping fill up another landfill that thought doesnt please people, so like the brand Sun-Chips who has made a compostable biodegradable bag, Lays should do the same so people can be happy when they discard the bag.

The Marketing mix Pricing Analysis

Pricing analysis
The lays brand uses a number of different ways of selecting an approximate price level. There are many ways to select a price which may include: demand orientated approach, cost orientated approach, profit orientated approach and competition orientated approach.

Demand orientated approach

In the demand orientated approach, the lays brand, based on what I have seen uses the penetration pricing approach which means that the Frito lay company initially started off selling their product at a low price and then gradually increased the price based on the response given by consumers. As you can see tin the competitive analysis chart the lays brand uses odd even pricing so as to appear cheaper than the other competitors

Cost orientated approach

The Frito lay brand and other snack brands usually use the standard price markup pricing approach which means that it sells the product at a higher price to compensate for the cost it takes to make the product to gain a profit. In the recent years there has been an increase in the price of the bag of chips because it was spent on advertising.

Profit Orientated approach

Because the lays brand and generally all snacks a re soled in supermarkets the profit orientated approach that is being used is the Target Return on sales Pricing. The supermarkets generally set prices that will give them a percentage of the profit garnered from the selling of lays chips Competition Oriented Approach

B. Strengths and Weaknesses

The strengths of the lays brand is numerous. The lays brand has grown into a powerhouse of a brand hat infiltrated nearly every store and home in the world and has now become a part of the North-American tradition. It continually raises the ceiling of its brand by bringing the consumer closer to its product. It does this by introducing the consumer to the people that actually make the poduct, the farmers. On its web page is variety of videos of the farmer form different regions of Canada and the world detailing how the process works and the care that goes into it.

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The lays brand weaknesses are few but they might include lowering the markup percentage of the chips thereby competing with the other brands and gaining more profit for the company. Because it is already such a huge brand and is a staple in the snack and food market less could be used to promote the product and more money
could put to making a product that health conscious and environmentally conscious. By doing this I think it will gain the attention of more people which result in higher sales.

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Marketing Communication Analysis

Public relations:

October 5, 2011

Frito-Lay Unveils Near Net Zero Manufacturing Facility

September 27, 2011

Doritos Challenges Fans to Crash The Super Bowl and Vie For a Once-In-A-Lifetime Opportunity to Work With The Lonely Island

September 22, 2011

Frito-Lay Has a Million Reasons to Celebrate Its Safe Drivers

December 31, 2008

Die-Hard Buckeye And Longhorn Fans Score School-Spirit Opportunity Of A Lifetime With Tostitos "Race To The Bowl"

November 17, 2008

Frito-Lay's TrueNorth Nut Brand Joins Oscar - Winner Helen Hunt to Put the Spotlight on People Pursuing Their Life's Passions

-They also have forums and news that allow you to keep up to date with the product. -They have a specific site for questions and they provide the answers. - Chances to win a trip to CMA music festival in Nashville, May 17th, 2011

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Advertisement:

http://harpers.org/archive/2009/04/hbc-90004702 The Lays chips started advertising through commercials in 1950. Since than they have succeeded and now have a unique way of promoting their product by having an outdoor advertisement located in San Francisco and by using a hand carved billboard. They also have a website which helps them handle the customer service and they even appeared on harpers magazine. This allowed them to become more aware of customer complaints, which in result would make their product better. Sales promotion:

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When the customer buys the product they are eligible to enter in a code that is included with the product. Than you can save points to use later on a vacation. Strengths and weaknesses: Advertisement: PROS: - used to sell the product/service -Allows the customer to know about the product -Gets the companies name and product in the market -Allows customer to see the product in a positive light. CONS: Expensive

Public Relations: PROS: Allows customers to know that the producers care about them Creates relationship between the company and the buyers Possibly attract new customers Allows customers to be more involved in the product

CONS: Time consuming Pricey Dealing with more complaints/people

Sale Promotion: PROS: Returning customers Customer purchasing more Possibly attracting customers

CONS: Dealing with more complaints Stressful

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Direct response: PROS: Interact directly Quick access information Customer appreciation

CONS: - Requires a response - Pricey because there has to be employees that are ready with a response.

Part C: Our product to differentiate from the rest of the competition will put toys and rewards with our chips. b) The strengths are that they control 59% of the United States snack market. This shows that they are able to compete and distribute amongst there competitors. The distribution of the product is like any other distribution of foods.

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Distribution Analysis
There are many distribution channels to Lays chips. A few of those distribution channels are with vending machines, Wal-mart, Lays factory, and Lays chips website itself. A direct channel to the consumer would be with a vending machine because the consumer is able to receive the item within ones hands. The rest of the three channels are considered indirect channeling because there are other intermediaries involved between the producer and consumer. With Seven Eleven the consumer comes only in contact with the retailer that works there. The consumer is able to purchase as much of the product as he/she really wanted to. With Lays factory, they are able to sell low cost and unit values that are frequently purchased in case quantities to the wholesaler. The whole seller then can sort the products in smaller quantities for consumers to purchase. Lastly, on the internet with Lays.ca, an agent is appointed to handle the many different manufacturers and wholesalers that may want to purchase from the company. Some of the many locations that are to purchase are Wal-mart, Costco, Fortinos, and etc. After the product going through the wholesaler, it then follows by the retailer that tries to sell it to the consumer.

Distribution Channel
A.Producer
Vending Machines

B.Producer
Seven Eleven

C.Producer
Lay's Factory

D.Producer
Lays.ca Agent

Wholesaler Retailer Consumer Consumer Retailer Consumer

Wholesaler Retailer Consumer

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Strength
Lays distribution is pretty widely spread. It covers the internet which majority consumers are using, appears in gas stations which many people go in and out of multiple times, seen in well-known grocery stores when people need to purchase necessities, and also convenient stores when people go to purchase minor needs/wants. Having Lays chips seen in such a variety of places allow the product to have a higher chance of being purchased. The more the consumer sees the product compared to another brand, the more the product will be known. Lays numerous wholesalers, agents, and also retailers allow it to be a successful company known worldwide.

Weaknesses
There arent many weaknesses that Lays chips distribution has. Adding a couple more producers would greatly increase the profit within the company because its another way for the product to be purchased by the consumer. It is also another way for more consumers to know about the product.

Future Recommendations
Lays chips is running a very successful business as seen in the many advertisement they have already. Lays should keep everything they have now but just add on a few more things to have a better outcome with the product. One way to increase sales and profit to the company could be having an electronic marketing channel which allows intermediaries to make a time, place, flavor, and possession utility for consumers. Having more web sales allows Lays to double their sales opportunities and also allows the consumer to have an easier access to the product. Lays should keep the website they have that allows agents to organize the products to wholesalers but also have a part where it allows consumer to purchase the product themselves. With this done, it allows the consumer to have more of an interaction with the producer. This should only happen if the consumer is purchasing a large amount to reduce any minor conflicts that may occur with small purchases.

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Table of Contents
Recommendations ........................................................................................................... Pg.1 Business Report ................................................................................................................ Pg.3 Competitive Analysis ...................................................................................................... Pg.4 S.W.O.T ................................................................................................................................. Pg.6 Target Market Analysis .................................................................................................. Pg.7 Positioning Statement and Positioning Map ......................................................... Pg.8 Product Analysis............................................................................................................... Pg.9 Pricing Analysis ................................................................................................................ Pg.12 Marketing Communication Analysis ........................................................................ Pg.14 Distribution Analysis ...................................................................................................... Pg.17

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