Cracker Jack – Frito Lay Case

Problem statement:

Frito Lay must decide how to proceed with the acquisition and integration of the Cracker Jack product into the existing Frito Lay product lines.

Subproblems:

1. Although Cracker Jack’s name registers virtually universal awareness, it has not been making promotion for its products and it has led to a decrease in consumer’s consumption.

2. Cracker Jack’s financial resources have been declining from 1994 to 1996.

3. Cracker Jacks suffers from under-consumption due to several marketing problems.

4. Cracker Jacks must be integrated in to the existing Frito Lay distribution chains and marketing plans.

Situational Analysis – External Environment (Uncontrollable)

Legal / Political

1. Potential liability due to Cracker Jack prizes.

2. Safety concerns from Cracker Jack prizes.

3. Licensing royalties from professional sports teams and high-profile children’s properties such as Scooby Doo, Looney Tunes, Wishbone, and Animaniacs.

Social/Cultural (Institutional / Buyer Behavior)

Product concept: Caramel covered popcorn. Good as a snack.

1. Crack Jacks as a brand is world-famous brand.

2. Consumers view these kinds of snacks as impulse buys.

3. Recent consumer choices indicates changing consumer tastes towards healthier offerings.

4. Consumer sales have been declining for many years. May be indicative of changing tastes.

5. Consumers associate Crack Jack brand with pleasant memories and a “simpler” time. However they favor more contemporary brands in the marketplace.

6. Consumers awareness may be lacking due to a lack of marketing.

7. Consumers seem unwilling to pay a premium for the product.

8. Consumption generally is limited to the afternoon and early evening hours. Consumers do not view the product as an “all day” snack.

Market Demand (Industry / Company Sales, Market Shares)

The target market of this RTE (Ready-to-eat) caramel popcorn consists of U.S households with a female...