Frito Lays Chip Dip Verse Vegetable Dip
FRITO LAYS CHIPS
**All information provided by professor from Case Study.
BACKGROUND AND ENVIRONMENT
Frito Lay is a division of PepsiCo, Inc. They are a nationally recognized leader in the manufacture and marketing of salty snack foods. Brands include Lay’s, Ruffles, Frito’s, Doritos, Tostitos, Cheetos, pretzels and Funyuns. They produce nuts, peanut butter crackers, beef sticks, cookies, snack bars and more. In 1985, sales approached $3 Billion. The majority of dips are sold through supermarkets. They sell and deliver through a “front-door store delivery system” in which one person performs the sales and delivery functions. This system allows the products to be closely monitored and restocked, as well as creates a relationship between the sales/delivery person and the supermarket staff.
Frito-Lay's net sales for dips of over $87 million in 1985 amounted to a 290% increase in sales growth from 1981. This success leads the company to a major issue of how the company can be further developed. Officers within the company had two different viewpoints when planning for the future. They must chose whether they should continue marketing and expanding their chip dips, or grow the new vegetable dip category.
Frito Lay has a strong brand name in the chip and dip industry. Due to fierce competition, sales have remained constant while profits have declined. The market for dips is highly fragmented, however approximately 80% of dip sales are by supermarkets. Chip dips are either refrigerated (55%) or shelf-stable (45%). Frito-Lay was the major competitor in shelf-stable dips, followed by regional chip manufactures however Kraft had begun to enter the cheese-based dip market. These dips were mostly located near snack foods including chips.
Among chip dips, sour cream based dips are the most popular and account for 50% of total dip sales. Cheese based dips account for 25% of dip sales, bean and picante dips (10%) and cream cheese based dips
**All information provided by professor from Case Study.
BACKGROUND AND ENVIRONMENT
Frito Lay is a division of PepsiCo, Inc. They are a nationally recognized leader in the manufacture and marketing of salty snack foods. Brands include Lay’s, Ruffles, Frito’s, Doritos, Tostitos, Cheetos, pretzels and Funyuns. They produce nuts, peanut butter crackers, beef sticks, cookies, snack bars and more. In 1985, sales approached $3 Billion. The majority of dips are sold through supermarkets. They sell and deliver through a “front-door store delivery system” in which one person performs the sales and delivery functions. This system allows the products to be closely monitored and restocked, as well as creates a relationship between the sales/delivery person and the supermarket staff.
Frito-Lay's net sales for dips of over $87 million in 1985 amounted to a 290% increase in sales growth from 1981. This success leads the company to a major issue of how the company can be further developed. Officers within the company had two different viewpoints when planning for the future. They must chose whether they should continue marketing and expanding their chip dips, or grow the new vegetable dip category.
Frito Lay has a strong brand name in the chip and dip industry. Due to fierce competition, sales have remained constant while profits have declined. The market for dips is highly fragmented, however approximately 80% of dip sales are by supermarkets. Chip dips are either refrigerated (55%) or shelf-stable (45%). Frito-Lay was the major competitor in shelf-stable dips, followed by regional chip manufactures however Kraft had begun to enter the cheese-based dip market. These dips were mostly located near snack foods including chips.
Among chip dips, sour cream based dips are the most popular and account for 50% of total dip sales. Cheese based dips account for 25% of dip sales, bean and picante dips (10%) and cream cheese based dips