New Project of Lays

7/29/2019 New Project of Lays

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ACKNOWLEDGEMENT

Thanks to Al-mighty Allah who bestowed us the capability and

opportunities to complete this Project, and thanks to our

marketing teacher Prof. Shehzad Alam who teaches us so well

that we are able to make this plan.


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Executive Summary

This report is about the significance and objectives of LAYS CHIPS inrespect of marketing.

In this report we have discussed the brief history and portfolio of the

company, the marketing environments that affect the workings of the

company.

Moreover, this report also deals with the marketing objectives, marketing

strategies such as target market, pricing and product, place and promotionstrategies.

At the end of the report we also make a detailed SWOT (Strengths,

Weaknesses, Opportunities and Threats) analysis of LAYS CHIPS andgave some recommendations which may opens the new horizons of the

growth and progress of the company.


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Pepsi in World:

Pepsi has one of the most interesting histories of any product in the market. From its

humble beginnings the people of Pepsi make the story what it is - including its inventor,

customers, competition, corporate managers, salesmen, distributors, cartoon spokes-persons and including some of the biggest names in entertainment history. There have

been good times and bad times - plus lots and lots of changes over the years.

Pepsis beginning:

The summer of 1898, as usual, was hot and humid in New Bern, North Carolina. So a

young pharmacist named Caleb Bradham began experimenting with combinations of

spices, juices, and syrups trying to create a refreshing new drink to serve his customers.

He succeeded beyond all expectations because he invented the beverage known around

the world as Pepsi-Cola.

His creation, a unique mixture of kola nut extract, vanilla and rare oils, became so

popular his customers named it "Brad's Drink." Caleb decided to rename it "Pepsi-Cola,"

and advertised his new soft drink. People responded, and sales of Pepsi-Cola started to

grow, convincing him that he should form a company to market the new beverage.

Pepsi in Pakistan:

The market in Pakistan is surely dominated by Pepsi. It has proved itself to be the

No.1 soft drink in Pakistan. Now a days Pepsi is recognized as Pakistanis National drink.


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In 1971, first plant of Pepsi was constructed in Multan, and from their after Pepsi is going

higher and higher.

Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognizedbrand. Cokes basic strength is its brand name. But Pepsi with its aggressive marketing

planning and quick diversification in creating and promoting new ideas and product

packaging, is successfully maintaining is No.1 position in Pakistan. In coming future

Pepsi is also planning to enter into the field of fruit drinks. For this it has test marketed its

mango juice in Karachi for the first time.

When Pepsi was introduced in Pakistan, it faced fearce competition with 7up,

lemon and lime drinks, which was established during 1968, in Multan. Pepsi introduced

its lemon and lime, "Teem" to compete with 7up.After some years, Pepsi took over 7up,

and this enhanced Pepsi's profits and market share. In Pakistan, Pepsi with 7up enjoys

68% of the market share where as the coke just has 20% market shares.

Lays

Before 1944 Herman W. Lay begins a small business in Nashville, TN, distributing

potato chips made by a company in Atlanta, GA, In 1944, The H.W.Lay Company

changes its product name to LAYS Potato Chips. In 1961, The Frito Company and

H.W.Lay & Company merge to form Frito-Lay, Inc, with headquarters in Texas and sales

over $127 million. In 1963, LAYS Potato Chips coins new slogan: Betcha cant eat just

one. In 1965, Frito-Lay, Inc. and the Pepsi-Cola Company merge to form PepsiCo, Inc.

LAYS.

The Smith's Snack food Company is acompanybest known for producing and selling a

range of snack food such as chips. It is now owned by New Yorkbased company
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PepsiCo. In Pakistan Lays is introduced April 2007, its plant is made by Pepsi

International, Plot No.413, Raiwind Road, Lahore.

Slogan:

o That's another reason to smile! Lay's Potato Chips (2007)

o Lays ka mazaa lo (Lay's Pakistan)meaning-Have fun with Lay's.

MISSION STATEMENT

Business mission of Lays, in Pakistan, is to be the best and biggest brandof Pepsi

co to provide customers with Quality, Affordable, and Convenient Fun Foods

within Arm's Reach.

COMPANY PRODUCTS

PEPSI COLA BRANDSPepsi The Joy of Pepsi.

Pepsi Lime Have the Lime of Your Life.

Diet Pepsi Lime Have the Lime of Your Life.

Diet Pepsi 0 crabs. 0 calories. It's the diet cola.

Pepsi Twist A Twist on a Great Thing.

Diet Pepsi Twist A Twist on a Great Thing.

Pepsi Vanilla The Not-So-Vanilla Vanilla.

Diet Pepsi Vanilla The Not-So-Vanilla Vanilla

Wild Cherry Pepsi Check Out The Cherry.
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Aquafina FlavorSplash Purity Guaranteed.

All Pepsi Cola Brands

Aquafina Sparkling Purity Guaranteed.

Lipton Iced Tea

Lipton Brisk

Main and big competitors:

Competitors:

One cant imagine about a business without competition. Lays has also some competitors. Major

threats to Lays are Triple Em, Kolson and smith , which has almost 68% of the market share.

But as quality of the product play an important role that is not up to the standard by the

competitors. So, Lays is outstanding in all ways to the competitors like quality, quantity, price

and variety of the products etc.

GRAPH

Lays = 68%

Kolson = 10%

Triple Em = 10%Smith = 5%

Others = 7%


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MARKETING STRATEGIES

Core marketing strategy is to achieve the objectives, to provide consumer the product he

wants. To provide Lays at an "arms length", to the consumers. For this company has allocated

sufficient resources.

TARGET MARKET:

Many snacks are heavy oncalories, fat, and salt. The term "junk food" was popularized in 1972

by Michael Jacobson of the Center for Science in the Public Interest.

The concern with empty calories has continued, and of particular concern has been the targeting

of youth by Lays potato chips (Pepsi).

MARKETING MIX OF LAYS POTATO CHIPS

PRODUCT

Pepsi is producing potato chips in different flavours which are consumer product in the

brand name of Lays. Therefore, the major emphasis is on quality of all the potato chips

products. For this, they have quality control circle at unit level and also quality control

laboratory.

Quality:

At Pepsi product (lays) quality & honesty is the guiding principle in defining its quality

management system. The company has an independent QMS control and assurance team. With

untiring & dedicated efforts the company has attained the HACCP certification during the year

2007. Pepsi has also upgraded its ISO9000 certificate during 2006.

Lays ensures its highest commitment to quality by:

* Compliance to the applicable regulatory requirements.

* Meeting customers requirements and expectations.
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* Promoting good manufacturing practices in Lays potato chips.

* Progressive reduction in all types of wastes.

* Promoting continuous quality improvement initiatives.

The production policy of Pepsi for Lays provides the guidelines for production and related

aspects.

The director of production is the person who heads the production department. All the

decision relating to production is made in consultation with the related sections and the other

related department.

The company has a policy to become independent in all kinds of its production. Company

has made a vertical integration in this respect.

The recent step which company has made towards this goal is installation of the Lays

plant. The production department tries to meet the all of its production on time. For this purpose

full time production is run.

Production department employees are both permanent and temporary labor.

Temporary labor is hired, when it is required. Mostly the temporary labor is hired in the

peak season.

Production department works with the co-ordination of Procurement and Marketing

department.

The planning of production is based on the annual sales target. On the basis of production

is planned on monthly basis. Salary of the permanent workers are paid on the monthly basis and

paid in cash to the labor.

As a snack food, the Lay's brands contain very few vitamins and minerals in any variety. At ten

percent of the daily requirement per serving,vitamin Cis the highest. Salt content is particularly

high, with a serving containing as much as 380 mg of salt.

A oneounce(28gram) serving of Lay's regular potato chips has 130caloriesand contains ten

gramsoffat, with three grams ofsaturated fat. Kettle cooked brands have seven to eight grams

of fat and one gram of saturated fat but are 140 calories. Lays Natural has nine grams of fat, two
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grams of saturated fat and 150 calories. Stax typically contain ten grams of fat, 2.5 grams

saturated fat and are 160 calories per serving. Wavy Lays are identical to the regular brand

except for a half-gram less of saturated fat in some combinations. The various brands do not

contain anytrans fats.

Lays Classic Potato chips are cooked in 100% pure sunflower oil (originally hydrogenated oil

until January 1st, 2007). A one ounce serving has 150 calories, 90 of which are from fat, 10

grams of fat, and 1 gram of saturated fat.

They have many flavors in the baked lays as well. Baked lays are produced in cheddar, barbecue,

and original.

INDIVIDUAL PRODUCT DECISIONS

We now look at decisions relating to the development and marketing of Pepsi's product.

We will focus on decisions about product attributes, branding packaging, labelling, and product-

support services.

PRODUCT ATTRIBUTES

Developing a product involves defining the benefits that the product will offer. Thesebenefits are communicated and delivered by product attributes such as:

1. Product quality

2. Product features

3. Product design

Decisions about these product attributes greatly affect consumer reaction to Pepsi's

product.

PRODUCT QUALITY

Quality is one of the marketer's major positioning tools. Quality has two dimensions -

level and consistency.
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Product quality means the ability of a product to perform its functions. It includes the

product's overall durability, reliability, precision and other valued attributes. Lays has chosen the

quality level that matches target market needs and wants.

Lays continuously improves its product by total company dedication. Recently Lays has

improved its product quality means using better quality control to reduce defects that annoy

consumers.

PRODUCT FEATURES

A product can be offered with varying features. A company can create higher-level

models by adding more features.

Following are the features on which Pepsi has competitive advantage.

1. Quality

2. Availability

3. Convenient price

PRODUCT DESIGN

Another way to add consumer value is through distinctive product design. As style of

Pepsi's recent Lays Potato Chips Masala flavour) is eye catching, garb attention.

It also creates product that is easy, safe, inexpensive to use, simple and economical to produce

and distribute.

Now new Lays French Cheese of Pepsi can attract attention, improve product

performance, cut product costs and give the product a strong competitive advantage in the target

market.

BRANDING

Consumer view a brand name as an important part of the product and branding can add

value to the product. A name, term, sign, symbol or design or a combination of these intended to


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identify the goods and services of one seller or group of seller and to differentiate them from

their competitors.

PACKAGING

Packaging includes the activities of designing and providing the container or wrapper for

a product. Lays Salted potato chips 27gm and 85 gm has secondary package, because its pack is

thrown away immediately after the consumption. The carton in which potato chips are available

is environment friendly and is disposable.

LABELLING

Labelling is also part of packaging and consists of printed information appearing on or

with the package.

COMPETITIVE ADVANTAGE:

This informative label provides Pepsi a strong competitive advantage in the competitors

market as its labelling is very attractive, its graphics and combination of colours is such that it

catch the customer attention at once.

RECENT CHANGES

As Pepsi is a well known brand. It has not changed its label and packaging of Lays

potato chips (85 gm). Since it has launched the Lays potato chips.

Recently Pepsi has changed and refresh its old fashioned Lays potato chips and label. Pepsi has

developed its existing potato chips with new packaging, symbols and much stronger, deepercolours to suggest freshers and more flavour.

Modifying the product

Pepsi has changed the characteristics of its potato chips. Characteristics such as quality,

feature, and style to attract new users and to inspire more usage which has improved the productquality performance and taste.

Ingredients of Pepsis Lays Salt Potato chips

Potatoes

Edible oil

Natural and natural identical masala flavor

Salt


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PRICE

The Pepsi is a profit-oriented organization. The price polices are well structured andprovide guidelines to set the prices. The prices of the product are set to remain competitive in the

target market and achieve the target sale and growth.

FACTORS TO CONSIDER WHEN SETTING PRICES

A company's pricing decisions are affected both by internal company factors and external

environmental factors.

INTERNAL FACTORS AFFECTING PRICING DECISION

Internal factors affecting pricing include Pepsi's marketing objectives, marketing-mix

strategy, costs and organizational.Marketing Objectives of Lays

Lays has very clear marketing objectives which has made it easier to set the price.

Market share leadership

In the beginning of its establishment and for several years lays was consistence with

market share leadership. It wanted to enjoy largest market share with the lowest costs and highest

long-run profit. lays had reached for the price and marketing program that has achieved this goal.

Product-quality leadership

After getting the market share leadership especially in the potato chips market, lays has

adopted. Product-quality leadership as lays wants to provide better quality product as compare to

its competitors at convenient prices.

COST

Costs as a function of production experience

lays has gained experience in manufacturing and sales of potato chips and flavorings

based upon or derived from fresh potatoes, it has learned how to do it better with higher volume,

lays has become more efficient and has gained economics of scale. As a result average cost tends

to fall with accumulated production experience.


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EXTERNAL FACTORS AFFECTING PRICING DECISIONS

External factors that affect lays pricing decisions include the nature of market and

demand, competition and other environmental elements.

Monopolistic competition:

A market in which many buyer and sellers trade over a range of price rather than a single

market prices.

Lays also has monopolistic competition as a range of prices occurs because sellers can

differentiate their offers to buyers. As lays in market varied in quality, features or style or the

occupying services can be varied. Buyers see differences in seller product and will pay different

prices for them. Sellers try to develop differentiated offers for different customer segment and in

addition to price freely use branding, advertising and personal selling. For example, Tripple Em,

Super Crisp, Smith, Bunnys Crisp and several other rational brand of potato chips compete with

dozens of regional and local brands

PRODUCT MIX PRICING STRATEGY

lays looks for a set of prices that maximizes profit on the total product mix which are

often based on demand and cost and faced different degree of competition.

Retail price of Lays potato chips

Lays Masala Potato Chips (small size) Rs.6

Lays Masala Potato Chips (27 gm) Rs.10

Lays Masala Potato Chips (85 gm) Rs.20

Lays Masala Potato Chips (Jumbo size) Rs.30

PRICE ADJUSTMENT STRATEGIES:

When the marketing situation changes lays adjust its prices and adopt price adjustment

strategies, to account for various customer differences and changing situation.

Discount and allowances pricing:

Discount is a straight reduction in prices on purchases during a stated period of time.

. Seasonal discount:

A seasonal discount is price reduction to the reseller to purchase merchandise out of

season by lays e.g., in winter season when the demand reduced and retailers are reluctant to buy

merchandise.


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PROMOTION:

It advertises using print media like newspapers, magazines etc. For their promotional

purposes, they use various kinds of media such as print, broad cast, specialty, out of home and

interactive.

Promotional Strategy:

Pull Strategy

Pull strategyIt is a strategy which uses actual customer demand to determine production and distributionschedules. In marketing, it is using intensive advertising to create customer demand for a

product. In either case, the product is pulled through the system by the consumer.

Lays chips provide wall clocks, menu paperpads calendars to its dealers. Recently consumer Promotion has been introduced for students in schools where Layschips co branded with Jang group for conducting a series of Super Fun

Day. The only trade promotion havebeen in lays is for new range products where trader

gets one pack free against every twelve packs, he buys.

Lays chips also provide key chains and calendars to its customers.

Promotional Activities

1) Advertising:

Lays chips arranges advertisement on different media. Advertising accounts for about

3million dollars of the total promotional budget. In-fact, advertising is most popular and

effective media to persuade the customers. We advertise and promote our product through

o BILL BOARDS

o WALLS PAINTING

o RADIO


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o TV

o NEWSPAPER

o MAGZINES

Share of Different Media for Advertising

Electronic 15%

Print Media 12.5%

Out Door 17.5%

2)Sales Promotion:

Its share in promotional budget is about 28.5%. It includes Sampling Trade Offer

Trade Offer in sale promotion is designed to gain resellers support and to improve selling

efforts, including discount, allowances and trade shows.

Sales force promotion in sales promotion is designed to motivate the sales force and make sales

force selling efforts more effective, including bonuses, contests, gifts and sales rallies.

DISTRIBUTION / PLACEMENT:

The company is having its own vehicles to distribute the products to the distributors.

Distributors and agents are used to reach the target market. Agents also sell the products to the

retailers in the specified area.

Selling Policy:

Almost all the selling is done by the cash payment. Company gives credit to CSD and

Utility Stores for a short period.

Lays has indirect channelsof distribution.


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There are 6 distributors in Lahore .

Shahbaz BrothersSnacks Traders

CGI

Fazal IndustryAsif BrotherShah G

Order Taking Process:

Lays has specific distribution department which takes care of the ordertaken from the retailers. The order process is completed only in one day when the order is

placed.

Area Coverage:

LAYS is distributed in 12 majors cities of the country. The distribution of the

Lay's is done only on the company vehicles driven by company trained drivers with sales man.

They supply stock minimum 70 shops and at maximum 130 shops in a day.

Discount:They are offering discounts to the bulk and regular buyers. They are giving

30% discount and also giving complementary gifts.

Commission to Lays Sales Man:

Company offers 8% commission on achieving the given target of supplying stock

to the Sales man.


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ACCOUNT AND FINANCE DEPARTMENT:

Finance is the most basic activity a company does when it is in the process of production

and sales. If this sector is not handled properly, then the whole company becomes insolvent and

bankrupt. The personnel of the finance department are supposed to keep an eye on the business

activity of the company and provide funds for its development.

SWOT ANALYSIS

Strengths

Almost all income level especially below 5000 and even above 10000 can buy and

consume LAYS.

Brand conscious people like it most.

LAYS being the multi national company having the huge investment spending massiveamount on advertising campaigns to aware the customer towards LAYS

People are comfortable with the Price of LAYS.

Placement is becoming a plus point it means company is emphasizing on its distribution

and placement strategies.

LAYS chips have a strong brand image at their back like Lays and also PEPSIInternational.

LAYS being a new product in snacks which is also useful for health consciouspeople because it is made of grains (wheat, rice and many others).

Human Capital is the main strength of LAYS.


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Weaknesses

Competitors like Kolson and Triple M are investing heavily in branding.

Facing the enormous competitors prevailing in the market.

Declining Sales Total

Some areas like Highways (especially on Motorway) and many others exist in Pakistanwhere still LAYS cannot manage to fulfill their requirements and where the products of

competitors are available. They lack behind in catering the rural areas and just concentrating in the urban area.

During the last year, it was published in Financial Post that there has been big

complaints from the customers with regard to the bad taste that they experienced during

the span of six months.

OPPORTUNITIES

Changing Social Trend

As in all over the world people are rushing towards fast food and beverage because of life

which has become much faster, it provide the company a favor to capture this fast moving

market with its take away product.

Supply of this product in the remaining areas of Pakistan.

Design such strategies and advance planning to become the market leader in the smallest

span of time.

Addition of new local flavors helps a lot to sustain in the market.


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Threats

Competitors like Kolson and Triple M are the biggest threats to our product.

New entrants can also the threat for the LAYS chips and may create hurdles in thegrowth.

Small companies that are not a problem at that time may become the main competitors or

threats to LAYS chips.

BOSTON CONSULTANT MATRIX (BCG)


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STAR

In Star market share and industry growth are high. Lays lies in Star because its demand is very

high nowadays and we can make further investment for this product. Lays is very leading

product in market now a days.

CASH COW:

In Cash Cow market share is high and industry growth is low. In this case demands are equal to

supply. Thats why Lays lies in Cash Cow because they have equal supply and demands. Lays is

very popular snacks right from the start so there is no further investment for this product

QUESTION MARK:


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A question mark is a situation where market share is low and industrial growth is high. Kurkure

and Pepsi twist lies in this area because they are newly launch products in Pakistan. It can be

and star in future if they get more progress.

DOG:

There is no product of Pepsi which lies in Dog because all Pepsi Products making

development in the market.

CONCLUSION:

From the above data we can conclude that Lay's is in star because of

having 68% shares. From the above saying we have made or sum up the result that it has

differential advantage over other products (competitors).

o Packaging

o Taste

o Flavors

These are all specialties falls Lay's in Star category.

The Main References Are

1. Muhammad Saqib Haroon

Marketing Manager

Snacks

37-C-1, Gulburg III, Lahore


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2. Khushnood Ahmed

Regional Sales Manager

Snacks


3. Kashif Javaed

Customer Services Executive


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