Frito Lays Dip Case Analysis

Frito Lays Dip Case Analysis

Frito Lays Dip Case Analysis

Introduction/Background

Promotion and marketing by an organization is crucial in its operation. It is through marketing that business operations are spread to the potential customers. Marketing is a situation where services and products of a given organization reach the market. However, strategies adopted can make a business either achieve more or less. It is these actions that the business that makes marketing a success or failure. Frito-Lays Dips Company is no exception to use marketing strategies that would promote its sales.

The Lays Company specializes in the production of dips, a flavor typically used as an appetizer or accompaniment to a meal. Its major competitor’s remained Kraft and Borden. In addition, it began experiencing competition from other substitute products to dips, such as salad dressings and dry soup mixes. It is estimated that about 20 percent of the market is dominated by these various substitutes produced by Marie’s, Bob’s Big Boy, Marzetti’s and Walden Farms.

To reach the market, the company uses various avenues, for example, supermarkets and retail outlets. However, a considerable share of 80 percent is sold through the supermarkets. Despite the competition that the company experienced, the market situation is in its favor.

Case problem

Frito Company aims to expand its market share and therefore increase sales. From the sales it experienced during the years of 1981 through 1985, there is evident of sales growth. The company dips were highly profitable for the five years and the management wished to devise ways so that dips could develop further. Since they had dominated the snack food market, they sought to expand to the new growing health conscience consumer. A major issue of contemplation is how this could be done. Two different standpoints were reached. One of the views aimed to develop the market segment in its present condition, by promoting...