SCMS NOIDA

Marketing project
FRITO-LAYS

Submitted to- Submitted by-

Dr. Harshit Maurya Leepakshi
Diksha
Preetpal Singh
BBA 1st Year Ritu mita
Section-B Rounak Bhalla
 INDEX

Serial no Topic
1. Purpose
2. Introduction
3. Indian snack industry
4. Competitors
5. History
6. Frito-Lay Globally
7. Frito-Lay India
8. Lays marketing Profile
9. Data analysis
10. Demand
 ACKNOWLEDGEMENT

We hereby take this opportunity to thank all

those people including our friends and
colleagues who have helped us for the
successful completion of this project.
We would also like to thanks Dr.Harshit
Maurya for his continuous support and
guidance he have rendered for the successful
completion of this project. We express our
gratitude’s towards our parents for their
encouraging support, incandescent sprit and
endurance towards the making of
this project. In the ends a special thanks to
all members who are directly or indirectly
associated with the project.
1.Purpose of the project
The project purports to decipher the satisfaction level as well as the preference of consumers
pertaining to the various flavours of Lay’s a new range of savoury snacks. We aim to analyse
the success, marketability and future growth prospects of Lay’s. Basically we intend to find out the
most popular flavour of Lay’s in the market from our sample. Snacks as such are sector is largely
unorganized. Here we will also look into the market for this a survey was conducted in
Noida, where respondents were asked to fill a questionnaire. The data was collected and
analyzed to obtain conclusions. This report carries an introduction of the company profile,
detail of the methodology followed, detailed data analysis and the results so obtained.

2. Introduction

2.1 PepsiCo
PepsiCo Inc. is an American multinational food, snack and beverage corporation
headquartered in Purchase, New York, United States, with interests in the manufacturing,
marketing, and distribution of grain-based snack foods, beverages, and other products.
PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay.

PepsiCo's product mix as of 2012 (based on worldwide net revenue) consists of 63 percent
foods, and 37 percent beverages On a worldwide basis, the company's current products lines
include several hundred brands that in 2009 were estimated to have generated approximately
$108 billion in cumulative annual retail sales.
The primary identifier of a food and beverage industry main brand is annual sales over $1
billion. As of 2009, 21 PepsiCo brands met that mark: Pepsi, Mountain Dew, Lay’s,
Gatorade, Tropicana, 7Up, Doritos, LiptonTeas, QuakerFoods, Cheetos, Mirinda,Ruffles, Aq
uafina, Pepsi Max, Tostitos, Sierra Mist, Fritos, and Walkers.

2.2 Frito-Lay

Frito-Lay, Inc. is the division of PepsiCo that manufacturers, markets and sells corn

chips, potato chips and other snack foods. Frito-Lay began in the early 1930s as two separate
companies, The Frito Company and H.W. Lay & Company. The two merged in 1961 to
form Frito-Lay, Inc. Four years later, in 1965, Frito-Lay, Inc. merged with the Pepsi-Cola
Company, resulting in the formation of PepsiCo, Inc. Since that time, Frito-Lay has operated
as a wholly owned subsidiary of PepsiCo.

They make best snacks on earth and have good fun while they are at it. Whether you are
looking for a savoury treat to enjoy while kicking back and relaxing at home or picking up
snacks for a weekend get-together, we have something tasty for occasion.

In India, Frito-Lay uses its international brands as well as Uncle Chips, a home-grown brand
that it bought out in 2000.

Vision of Frito-Lay
“At Frito-Lay, our success lies in our commitment to provide quality products under some of
the world’s most beloved brand names. As a part of PepsiCo, we are also committed to
performance with purpose-working with world class talent to make sure what is good for our
business is what is good for everyone.”

Lays
Lay's is the brand name for a number of potato chip varieties as well as the name of the company
that founded the chip brand in 1932. Lay's has been owned by PepsiCo since 1965. As with most
snack foods, the Lay's brands contain very few vitamins and minerals in any variety. At ten percent
of the daily requirement per serving, vitamin C is the highest. Salt content is particularly high, with
a serving containing as much as 380 mg of sodium.
3. Indian Snack Industry

Snacks are a part of Consumer Convenience/ Packaged Foods segment. Snack is described as
a Small quantity of food eaten between meals or in place of a meal. Snack food generally
comprises bakery products, ready-to-eat mixes, chips, namkeen and other light processed
foods. According to the ministry of food processing, the snack food industry is worth Rs100
billion in value and over 4, 00,000 tonnes in terms of volume. Though very large and diverse,
the snacks industry is dominated by the unorganized sector According to an Apeda survey
almost 1,000 snack items and 300 types of savouries are sold across India. The branded
snacks are sold at least 25% higher than the unbranded products Savoury snacks have been a
part of Indian food habit, since almost ages. Though there is no particular time for snacks,
normally they are consumed at teatime. The variety is almost mind-boggling with specialties
from all regions, which have gained national acceptance industry. he been growing around
10% for the last three years, while the branded segment is growing around 25% per annum to
stand at Rs 5,000-Rs 5,500 crore, due to various reasons like Multiplex culture, snacking at
home while watching TV, pubs and bars.

4. Competitors

Of course the branded segment is much smaller at Rs 2,200 crore, which is what makes it so
attractive to food Companies that are looking at bigger shares and in the branded snacks
market, to get down to basics, Frito Lay commands a share of 45%, followed by Haldiram’s
at 27% and ITC at 16%. Rest is divided between a handful of new entrants, wannabes
and many regional players of the wide range of snacks available, potato chips constitute a
sizeable segment of the Indian snack food industry, according to India Info line. The potato chip market
is generally an unorganized industry. Nearly all potato chip snack products are manufactured
and sold locally. There is also no uniform standard for packaging, as there is in Europe, the
United States and other more developed regions.

5. HISTORY

Lay’s, the world’s largest and favourite snack food brand , has steadily established itself as an
indispensable part of India’s snacking culture since its launch in 1995.

With its irresistible taste, international and Indian flavours and youth-centric imagery, Lay’s has
established itself as a youth brand and continues to grow in the hearts and mind of its consumers.

Over the years, Lay’s has become known for its engaging and innovative promotions and campaigns.
The brand known for its ‘No one can eat just one’ campaign has moved its positioning to ‘What’s
the programme?’ making Lay’s ‘the main food of every programme‘! Saif Ali Khan has been the
face of the brand for over five years, and has recently been joined by the captain of the Indian
cricket team M.S. Dhoni.

In 2008, Lay’s launched the never-before ‘ Fight for Your Flavour’ allowing consumers to vote for
the flavour of their choice. The flavour with the maximum votes would continue in the market. The
flavours have been selected by the Lay’s brand ambassadors Saif Ali Khan and M.S. Dhoni with each
celebrity rooting for the flavour of their choice.

In November 2008, Lay’s made yet another innovative breakthrough –  the Chip-n-Sauce pack. This
first-to-market pack has been launched for cricket lovers as they settle in their seats to savour the
best sporting action of the season.

In June 2009, Lay’s launched its new positioning platform: ‘ Lay’s – Be a Little Dillogical’.

6.Frito-lay globally

Through Frito-Lay, PepsiCo is the largest globally distributed snack food company in the
world, with sales of its products in 2009 comprising 40 percent of all "savoury snacks" sold
in the United States and 30 percent of the non-U.S. market. While the product catalogue
varies significantly by country, PepsiCo divides its snack products into two primary brand
categories: those produced within North America, and those produced outside of North
America. In certain regions of the world, the company's snack food products are produced
under regionally specific names such as Sabritas and Walkers. The primary snack food
brands and products produced under the Frito-Lay name include Fritos corn
chips, Cheetos cheese-flavoured snacks, Doritos and Tostitos tortilla chips, Lay's potato
chips, Ruffles chips and Walker's potato crisps—each of which generated annual worldwide
sales over $1 billion in 2009. 
7.Frito-lay India

In India, Lay's is available in several flavours: "India's Magic Masala", "American Style
Cream & Onion", "Spanish Tomato Tango", "Classic Salted", "West Indies' Hot 'n' Sweet
Chilli", "Swiss Grilled Cheese" and "Thai Sweet Chilli". In 2013, Lay's released two new
flavours, "French Salt & Cracked Pepper" and "Lays Chile Limon". A baked variant of Lay's
called "Lay's Baked" is available in the following flavours: "Original Salted", "Cream, Herb
& Onion" and "Sunkissed Tomato". Lay's Maxx is available in two flavours: Sizzling
Barbecue and Macho Chilli. In 2014, Lays was ranked 49th among India's most trusted
brands according to the Brand Trust Report 2014, a study conducted by Trust Research
Advisory, a brand analytics company.
8. Lays marketing strategies
8.1Product

Lay's target young generation and the brand have positioned itself as a youth brand. The
major chunks of its consumer are of age between 13-18 and 18-26. The youth brand
ambassador endorsing the brand carries the young imagery forward. Lays target the health
conscious too. By its 'snack smart' program they are targeting the health and wellness area.

8.2Price Strategy

Lays come in many price variants. It has packets of Rs 5, Rs 10, Rs 20, Rs 30 and Rs 65. This
shows that lays offer different packet sizes. Lays also started giving 30% extra on few of its
packets.

8.3Promotional Strategy

Lay's focus is on consumer engagement modules and crowd sourcing strategy to promote our
brands. Its various promotional strategy like " Chala Change Ka Chakkar", "Fight For Your
Flavor" and " Campaign Dillogical" are all consumer interaction driven. All its campaigns are
supported by mega 360-degree communication medium on TV, Radio, Print, Viral, Outdoor
and Cinema.

8.4Distributional channels

The company functions over 40 distribution centres, serving more than 2,500 stockiest,
reaching approximately 1 million retail stores that makes the product available on a mass
scale and is easily available. And now they have plans to extend more the existing
distribution network to reach out to 3 tier towns and villages in India.
 Questionnaire

Marketing survey on consumer preference

Frito-Lay

Part-1
Q1. Gender
Male Female
Q2. Age
10-20 20-30 30-40 40-50 above
Q3. Occupation
Student private public corporate others
Q4. Income per month (per annum)
5lakhs and below 5lakh-10lakh
10lakh-15lakh 15lakh and above none
Q5.Do you consume Frito-lay?
Yes No
Q6.How often do you think of buying Frito-Lay?
Everyday 3-5 times a week
1-2 times a week never

Q7.Which product of Frito-lay do you consume?

Lays Cheetos both

Q8. What size of Frito-Lay you usually purchase?

Small Medium Large

Q9. Would you buy more potato chips if it’s on sales?
Yes No
Q10. Where do you usually purchase potato chips from?
Vending machine grocery store convenient stores
Others
Q11. How do you determine what to pick and purchase?
Price flavour size of bag packaging design
Brand quality expiry date nutritious value
Others
Q12. When do you purchase potato chips, do you worry any of the following?
Food preservatives artificial colouring fat facts
Health Other
Q13. Why do you prefer Frito-lay over other companies?
Easily available Quality Price Range
Variety of flavours Others_______________________
 Part II
Rate Frito lay on the following criteria, with 1 being ‘strongly disagree’ and 5
being ‘strongly agree’

1 2 3 4 5
1. Frito lay has attractive pack design
2. Frito lay has favourable taste
3. Frito lay is reasonably priced
4. Frito lay has attractive advertisements
5. Frito lay has positive brand reputation
6. Frito Lay has a wide variety of flavours
7. Frito lay has a wide variety of pack sizes
8. Frito Lay is easily available
9. Frito Lay satisfies you on a personal level
10. How would you rate Frito lay
9.Data Analysis

9.1

From the above pie chart it can be seen that the age group 20-30 and 30-40 are the major
customers of the Frito-Lay. As in 20-30 people are of younger age group and they are mainly
consumers but in 30-40 they are mainly customers as they purchase it for their family.

9.2
From the above data it is observed that people consume the product at frequent intervals. lays
have captured the market in such a way that out of 100 people 96 people consume the product
and that too 3 to 5 times a week.

9.3

Frito_lays in india is mostly known for its lays product over the Cheetos. Lays has effectively
targeted the audience in terms of their taste and preferences although Cheetos are consumed
but less than the consumption of lays. The market only for the Cheetos consumers is very less
in India.
9.4

The value people drive from the lays product is basically through its price, different flavours,
packaging size, brand name. Other factors like nutrition value and others hardly effect
consumers purchasing behaviour. Lays has till now effectively design its product and time to
time introduced new flavour to ensure continuous involvement of consumer.

9.5

Worries related to purchase

food preservatives
artificial colouring
fat fact
health
other
From the above it can be shown that people are mostly worried for purchase because they
have issues related to artificial colouring, fat, health, food preservatives etc.

9.6

From the above it can be shown that Frito-Lay is preferred over other products because it is
easily available in the market indicating that the company has implemented its distribution
strategy effectively. Others factors for its preference are Quality, price range, flavours etc.

9.7

120

100
80
yes
60
no
40
20

0
Do you consume frito lays?
As of now Frito-lays holds the highest market share In India. People prefer lays over other snack
products.

Will Frito-Lay’s hold Over Snacks Market Continue?

After spending a decade on Indian soil and creating a market for branded snacks in India, PepsiCo’s
food division, Frito-Lay, is now attempting to hold on to its market share of over 50% in the
particular segment. And it’s all because of a flurry of both past and new entrants like Haldiram’s,
Balaji, Parle, Perfetti, and of course, ITC’s aggressive posturing with Bingo, a brand which is growing
almost on a daily basis. At the same time, competition from the local players too has intensified
manifold raising the big question: Can Frito Lay sustain its supremacy?

Experts value the Indian snacks market at around $3 billion. And branded segment makes up for
roughly 50% (Rs.6,000 crore approximately) of this pie. But what makes the segment most attractive
for both local and branded players is its double digit growth rate that is well supported by rising
income and changing consumption patterns in the country. Thus, while the competition is on rise,
this space, with approximately 1,000 snack varieties vying for consumers’ palette, is gradually getting
cluttered, increasing the worries for branded players, especially for the market leader Frito-Lay.

But once the local players sensed the growth potential of the market and started organising
themselves, Frito-Lay found itself in the middle of an issue with its market share falling from 66% in
2008 to 58% at present in the Rs.2,500 crore potato chips segment. Moreover, Frito-Lay is also
planning to enter the lucrative Rs.11,000 crore biscuits market in the country, a category growing at
roughly 20% annually.

9.8
The branded snacks market has seen increased activity with the entry of FMCG heavyweight
ITC. Frito-Lay, the market leader in this segment, is now faced with the task of guarding its
position, even as competitors set targets to garner more than half the market share.

How do you perceive competition which reportedly has taken away a share from Frito-
Lay?

In the past one year, they have also grown and it has been a good year for us. More
competition has helped in building the category further. They try to grow with our consumer
and have hence brought about several innovations in our portfolio both in terms of food
ingredients and consumer trends.

What is the growth opportunity in the snacking segment?

Modern retail has opened up new avenues for us. They ensure visibility in this space through
our marketing and reach. They are constantly trying to find out what are the different needs
of a Frito-Lay consumer.

What is Frito-Lay's strength in the branded snacks category?

Actually there is not just one but four strengths - their core trademarks, the ability to
innovate, smart marketing and retail visibility. One can walk on any street in India and very
likely find a stand selling Frito-Lay snacks.

What are the challenges you face while tapping growth in this category?

The challenge we face is from within. They have to constantly raise the bar for innovation
and then achieve that target. Even as the category grows, they have to make sure we are
growing too.

What percentage of sales of Frito-Lay is used in advertising?

They are not just spending on advertising, but also on research and development. They have
to do both.
9.9 Correlation

Income Do you Often do Name of

Occupatio
  Gender Age per consume you buy the
n
month Fritolay fritolay fritolay

Gender 1
Age 0.084564 1
Occupation -0.03234 0.450726 1
Income per month -0.14579 -0.54431 -0.51072 1
Do you consume Fritolay 0.102062 -0.0794 0.003301 -0.01674 1
Often do you buy fritolay -0.05201 -0.06729 -0.06896 0.172015 0.406043 1
Name of the fritolay -0.42917 -0.29324 -0.05592 0.104803 0.142668 0.136145 1
Size -0.16214 -0.03345 0.01678 0.033093 -0.04633 0.019393 0.039364
Preference for sales 4.85E-18 0.206677 -0.04235 -0.04374 -0.13363 0.068091 -0.18463
place for purchasing 0.145521 0.19074 0.03726 -0.19448 0.086638 0.113518 0.041635
Factors for determining 0.024934 0.061907 0.346121 -0.19894 0.033592 0.124873 0.16932
Worries related to purchase -0.05487 0.026914 -0.00562 -0.10067 -0.11574 -0.12651 -0.0074
Preference over other
-0.0928 0.055074 0.118415 0.102853 -0.1171 -0.05989 0.124236
companies
attractive design 0.181237 0.027587 0.057965 -0.07376 0.193195 -0.00419 -0.03803
Favourable taste -0.06135 -0.07125 0.048615 0.121499 0.116886 0.110609 0.107578
reasonably priced -2.5E-17 0.133678 0.023822 -0.15953 0.205288 -0.07145 -0.04724
advertisements 0.113398 -0.08481 -0.15771 0.04202 -0.06687 -0.08551 0.008806
brand reputation 0.10393 -0.31288 -0.07021 0.129846 0.120216 0.153439 0.034408
variety of flavours 0.100125 0.00889 0.070028 -0.10994 -0.18139 0.063135 -0.12707
variety of sizes 0.109888 -0.01859 0.057753 0.082608 -0.02804 0.032146 -0.10611
easily available -0.07173 -0.04658 -0.01067 0.054118 0.061495 0.160775 0.238002
personal level -0.00944 -0.0345 -0.15395 0.156798 -0.03277 0.089146 0.083265
rate fritolay 0.088757 0.047286 0.112313 -0.10959 -0.05888 0.076161 -0.07047
10 .Demand Of Frito-Lay

PepsiCo Inc reported better-than-expected first-quarter profit, helped by stronger demand for its
Frito-Lay snacks in North America and price increases in its beverage business.

Revenue in the Frito-Lay business rose 3.1 percent to $3.32 billion partly on new product launches
like Cheetos Sweetos, a sweet version of the salty snack, and Rold Gold Pretzel Dippers.

"The Americas did terrifically well," Chief Financial Officer Hugh Johnston said in an interview. "Frito-
Lay picked up from a volume perspective."

Demand was weak in Europe, where the company raised prices as a result of currency impacts, he
added.

PepsiCo's net revenue fell 3.2 percent to $12.22 billion in the quarter, for the first time in four
quarters. The cited a stronger dollar, adding that revenue rose 4.4 percent, excluding results from
mergers, acquisitions or takeovers.

At least 30 percent of revenue comes from outside North America.

Rival Coca-Cola Co reported a rise in revenue for the first time in nine quarters on Wednesday,
helped by a 6 percent increase in North America, its biggest market.

The dollar, which has surged about 8.5 percent against a basket of major currencies this year, will
hurt 2015 revenue by about 10 percentage points and earnings by about 11 points, PepsiCo said.

The company had said a strong dollar was expected to cut full-year revenue and earnings by about 7
percentage points. On a conference call with analysts, Johnston said the company was more
aggressively sourcing materials locally to limit the impact from currency.

PepsiCo stock fell 1.6 percent to $95.72.

Net income attributable to PepsiCo was little changed at $1.22 billion, but earnings rose to 81 cents
per share from 79 cents.
CONCLUSION
Therefore we can conclude that Frito-Lay is the biggest snack industry of India. There are
many people who consume it and they like its various flavours also and it is also widely
available in all parts of our country. The reason for Frito-Lay being largest supplier of snacks
in India is its effective promotion techniques like endorsing their products by well known
celebrities and continuously introducing new products with catchy taglines.

But now it is in hard competition with other brands like Haldirams , parle and many more not
only the well known brands but local suppliers are also giving tough fight for the share in
markets of india.