Company - Product: Solid Company, Sold Philosophy Creating A Better Tomorrow For Future Generations
Company - Product: Solid Company, Sold Philosophy Creating A Better Tomorrow For Future Generations
Company - Product: Solid Company, Sold Philosophy Creating A Better Tomorrow For Future Generations
COMPANY - PRODUCT
The company that we have chosen is Pepsi Co India Holdings Pvt. Ltd. PepsiCo is a
world leader in convenient snacks, foods and beverages.
Solid Company, Sold Philosophy
Creating a Better Tomorrow for Future Generations
PepsiCo
Mission and At PepsiCo, we believe being a responsible corporate citizen is
not only the right thing to do, but the right thing to do for our
Vision
business.
PepsiCo
Values
& Our Values & Philosophy are a reflection of the socially and
environmentally responsible company we aspire to be. They
Philosophy
are the foundation for every business decision we make.
Corporate
Governance
Source: http://www.pepsico.com/Company.html
PepsiCo has invested more than USD 1 billion in India since its establishment
PepsiCo has a diverse range of products from Tasty Treats to Healthy Eats
It has more than 36 bottling plants including 13 Company & 23 Franchise owned
ones
Uncle Chips
Aliva
Kurkure
Cheetos
Lehar Namkeen
There are many flavors that are available in India. The following are the flavors:
Classic Salted
American Style Cream and Onion
Lime n Masala Masti
Magic Masala
Tomato Tango
Lays is launched in India in 1995. It has become an indispensable part of the snacking
culture and became the worlds largest and favorite snack food brand.
Lays has established itself as a youth brand with its irresistible tastes, international and
Indian flavors. It continues to grow in the hearts and minds of its customer.
TOPIC
The topic that we have chosen is Branding
Branding Definition American Marketing Association:
A name, term, design, symbol, or any other feature that identifies one seller's good or
service as distinct from those of other sellers. The legal term for brand is trademark. A
brand may identify one item, a family of items, or all items of that seller. If used for the
firm as a whole, the preferred term is trade name.
Philip Kotler says, a sellers promise to deliver a specific set of features, benefits and
services consistent to the buyerssuch a strong force today that hardly anything goes
unbranded.
Branding Strategies
Individual names, e.g. Bisquick, Gold Metal and Betty Crocker offered by General
Mills. The failure of one product does not harm the companys reputation;
Blanket family names, e.g. Campbells, Heinz and General Electric. This limits the
spending on advertising and name research and makes it possible to benefit from
different products;
Company trade name with individual product names, e.g. Kellogs Rice Krispies,
Kellogs Raisin Bran. This makes it possible to use the company name is used to
legitimize the names of products. Simultaneously products are individualized by their
individual names (Kotler 2001:192).
Suggest the products benefits and qualities, e.g. DieHard, Sunkis and Craftsman;
Be easy to pronounce, recognize and remember, e.g. short names like Tide, Aim or
Puffs;
Be distinctive, e.g. Kodak, Exxon and Oracle;
Be extendable, e.g. Amazon.com expanded from a bookseller into other categories;
Not carry poor meanings in other countries and languages, e.g. Nova means
doesnt go in Spanish (based on Armstrong and Kotler 2003:290-291, Kotler
2001:192).
To study
o Brand History
o Brand awareness
o Brand associations
o Brand attitude
o Brand attachment
o Brand investment
o Brand performance
o Brand success
o Competitive reactions to the brand
To suggest ways to improve brand equity
In India, chips are a major part of evening siesta. Under such conditions, it is better to
have a health conscious brand. PepsiCo Indias responsibility is to continually improve
all aspects of the world in which they operate Environment, Social, Economic, Health
creating a better tomorrow than today. Lays has also included health perspective in its
recent packaging with the launch of Smart Snack idea.
Effective brand management requires a long term view of marketing actions. Because
consumer responses to marketing activity depend on what they know and remember
about a brand, short term marketing actions, by changing brand knowledge, necessarily
increase or decrease the long term success of future marketing actions.
Pepsi Cos major enduring brand Lays, needs to be carefully managed so that its value
does not depreciate. By analyzing the brand and its value chain in terms of what the
brand represents, what value it provides to the customer, what makes brand superior,
what strong or unique association exists in the minds of consumers; we can study and
identify issues if any and suggest new ways of branding it.
SWOT ANALYSIS
We adopt the procedure of SWOT analysis to critically evaluate the standing of Pepsi
Cos brand Lays. We have constructed a matrix of strengths and weaknesses,
opportunities and finally threats that corroborate our stance on the successful banding
strategy employed at PepsiCo. These matrices help us complete the SWOT matrix
based on derived ranks that we can associate with each of the dimensions.
In our endeavor to find the right selection of dimensions we brainstormed and searched
over the most versatile source of information Internet and devised a long but not
exhaustive list of parameters that affect the business of an FMCG (fast moving
consumer goods) company like PepsiCo (Frito Lay division). In order to make the list
more comprehensive we also interviewed company employees (Human Resources,
Frito Lay) to provide us with vital insights of the strengths, weaknesses, opportunities
and strengths as identified by them.
The following classifications were done based on importance or value for product and
user:
Cost advantage: Medium importance. In food and beverages industry there are many
similar products offering variety and minor price differentiation is not of much
significance
Effective communication: High importance. Proper promotion campaigns and consumer
awareness are of utmost importance
R&D: Medium. More R&D leads to more differentiation and product diversification and
provides strategic advantage. However, for chips category there are limitations to this
Innovation: High. Innovation in promotions, production and products are of utmost
importance for consumables
Consumption Growth: High Importance. Consumption growth means increasing
demand and the product is in Growth stage.
Loyal customers: High Importance. Loyal customers for foods and beverages is a great
advantage
Market share leadership: High Importance. Every company/product wishes to be market
leader.
Management team: Medium importance. Marketing management and product
management need to be good but ultimately the product is what matters for
consumables
Secrecy: Medium. Much secrecy cannot be maintained but certain recipe may be
important for the success of the product.
Brand equity: High. Though the brand offering or value may not be good but the brand
name and its association in the minds of customer matter the most
Financial position: High. A company with a good financial position can invest more in
R&D, advertising and take more risks.
Supply chain: High. A product may be good but it is of no use if it doesnt reach the right
customers.
Shelf Space: High. A product that has more shelf space has a advantage over the
competitors
Reputation management: High. A product that is reputed and trustworthy is preferred
over the one that not reputed especially in food and beverages consumption.
Unique products: Medium. Though differentiation matters, in food and beverages
differentiation is more difficult.
Health: High. Consumers are getting more and more health conscious.
Online Presence: Low. Online advertising may increase sales to some extent for food
items but TV, Radio and Printed commercials are more effective
Inventory/Stocking: Low. For food and beverages, inventories are maintained by
retailers depending on demand.
Performance Ranking:
5: Major Strength, 4: Minor Strength, 3: Neutral, 2: Minor Weakness, 1:Major Weakness
Based on the current market scenario and survey, the performance card for Lays is as
follows:
E.g. Cost Advantage is Ranked 3 Neutral as competitors have same priced products so
it is neither a weakness nor strength
Effective Communication is Ranked 5 Major Strength as Lays has created demand and
Brand Equity with effective promotion and communication strategies.
Health is Ranked 2 Minor Weakness as people are getting more and more health
conscious but part of the younger generation still prefers to have chips.
Dimension
Performance
5
Cost advantage
Effective communication
High
X
X
R&D
Innovation
Importance
X
X
Consumption Growth
Loyal customers
Med
Management team
Secrecy
Brand equity
Financial position
Supply chain
Low
Shelf Space
Reputation management
Unique products
Health
X
X
X
X
Online Presence
Inventory/Stocking
X
X
X
X
ATTRACTIVENESS
OPPORTUNITY MATRIX
SUCCESS PROBABILITY
HIGH
Emerging markets and expansion
HIGH
LOW
Innovation
abroad
LOW
Online promotion
Takeover
SERIOUSNESS
THREAT MATRIX
PROBABILITY OF OCCURENCE
HIGH
HIGH
External changes
LOW
Maturity products
or imports
Price Wars
LOW
Product substitution
Economic Slowdown
SWOT MATRIX
Strength
Weakness
Effective communication
Health
Innovation
Online Presence
Financial position
Inventory/Stocking
Supply chain
Brand equity
Consumption Growth
Shelf Space
Loyal customers
Opportunities
Threats
External changes
Maturity products
Product substitution
Economic Slowdown
Price Wars
abroad
Today the chips industry in India is at a mature stage and the competition in this product
category is increasing. The low entry barriers, less bargaining power of buyers and
suppliers have all contributed to the increase in competition in for chips in India. The
modern Indian also prefers to have chips as an impulse snack so there is demand for
the different chips products. Lays is a major player in this category and if the status
needs to be maintained then an edge is needed over the competitors. The Lays brand
needs to be carefully studied and enhanced with the changing customer preferences
and inclinations. We are studying Lays brand, its current status and how it can be
improved through a qualitative study based on primary data collected from chip
consumers.
Literature Review
Brand interest and perceived Brand quality can be enhanced through Advertising
creativity. The effects are mediated by consumer-perceived creativity, suggesting that
consumers are important judges of creativity. An extra degree of creativity may send
signals about the advertiser that rub off on consumer perceptions of the brand (Dahlen,
Rosengren, Torn, 2008).
Consumer perceptions of the creativity in an advertisement mediate the advertisement's
effects on the brand and make the impact of the manipulated ("hidden") creativity much
greater. (Dahlen, Rosengren, Torn, 2008). Another research has found that, when
bypassing functional aspects of high spending, for example, that bigger advertisements
increase attention or that repeated exposures facilitate comprehension and breed liking,
wasteful expenses have positive effects on brand perceptions (Ambler and Houier,
2004; Kirmani and Rao, 2000).
Another study says that there is no guarantee that creativity in an advertisement makes
it more memorable or appealing to consumers (Kover, Goldberg, and James, 1995).
Many creative advertising efforts may be wasted, in the sense that they do not add to
the functionality of the advertisement (i.e., they neither enhance consumer recall and
liking of the advertising, nor increase comprehension and persuasiveness of the
communicated message). In tests of advertising expense, Kirmani (1990, 1997)
manipulates advertising sizes, colors, endorsers, and repetition and finds that they may
all increase perceived marketing effort.
Interestingly, Kirmani (1990) notes that it is possible that perceived advertising quality
("includes the care and creativity used to design the ad") could also have an effect on
perceptions of marketing effort. A survey among top-level agency creatives ranked the
sameness among brands as the number one reason for improved creativity; rather than
communicating a specific message (which is likely to resemble competitors'),
advertising creativity must make the brand interesting and exciting (Reid, Whitehill King,
and DeLorme, 1998). The impact of agency creativity on campaign outcomes is positive
but the impact of excessive creativity is negative, and agency creativity is more powerful
in high rather than low competitive intensity and in low rather than high market
dynamism (Li, Wenyu, Guanping, Nan, 2008). Creative advertising can provide a
competitive edge for a brand, add to its value, and give it an advantage over its rivals in
terms of more positive market response (Frazer 1983; Newman 1993).
Divergence and originality alone are not sufficient for advertising creativity, which also
must be relevant (Smith and Yang 2004) or appropriate (Koslow, Sasser, and
Riordan 2003) for the task at hand. Creative advertising must be able to communicate
effectively and achieve the advertisers goals efficiently. We seek to determine if the
current creative ads of Lays are relevant, convey the right message and thereby have a
positive impact on the Lays Brand.
Consumers who have bought and/or used a brand have established memory structures
about the brand through these interactions, which makes processing and retrieval of
brand information easier (Romaniuk and Samuel Wight, 2008). Brand users, by virtue of
their past usage experience, or repeated exposure to brand promotions have the brand
name stronger in memory, and therefore are more easily able to encode any encounters
with the brand which in turn influences sales. Further, the more stimuli that are provided,
the easier it is to retrieve items from memory (Crowder 1976; Zinkhan et al. 1986; Craik
& Tulving 2000).
Therefore retrieval of all brands for advertising awareness measures will depend on the
nature of the cue and the difficulty of the measure. Top-of-mind brand awareness can
reflect the increased propensity for the consumer to remember the brand at the point of
purchase, over other brands (Miller & Berry 1998). The level of promotional activity for
the top five firms generates a relatively high level of top-of-mind awareness regardless
of transaction intention ( Gulas, Larsen, Coleman 2009). We intend to determine if Lays
is a Top-of-mind brand and if it influences the buying decision over its competitors.
According to a survey done on Frito Lays, good health is a concern for every customer,
and so they continue to provide them with the products which they require. They focus
on the areas of weight management and positive nutrition, with along heart health. Frito
Lays had come up with an idea of Baked Lays and Tostitos which are low in calories as
compared to others. Frito Lays products contain 3 basic ingredients: corn or potato,
healthier oils, and salt/seasonings. In 2003, Frito Lays has eliminated trans-fat in all
their products and shifted to corn oil which is a healthier one. In 2006, they removed
saturated fat from the potato chips by using sun flower oil.
According to another survey on global food industry growth, it is found out that the long
term growth is because of the increasing needs and demands of the customers which
are met by the brilliant innovations by the players in the industry. Lays had adopted the
strategy of providing them with 100-calorie packaging. They have also repositioned
them as snack foods rather than something to eat when youre hungry. They also
came up with fruit and vegetable based chips.
Attractive images on packaging post a great advantage to a brand as compared to
others of the same category. Explicit graphical images have always been a way to
Data Analysis
Hypothesis
H1 : Creative Advertising has a positive effect on Brand Image
Related Graphs
Which of the following ads do you appreciate?
Lays Be a little Dillogical Ad
20 37%
feat. Dhoni
Bingos
Mad
Angle-Glad
12 22%
Bangle Ad
Kurkures
Maaro
Tedho
21 39%
Family Ad feat. Juhi Chawla
Alivas Ad feat. Chitrangada
14 26%
Singh
Smart Chips Ad feat. Aamir
13 24%
Khan with huge sized T-shirts
People may select more than one
checkbox, so percentages may add up to
more than 100%.
Description
37% of the respondents like the Lays Ad and 39% like Kurkures Ad showing that
people have a liking for creative ads. Hence, the hypothesis is proved right.
Creative Advertising has a positive effect on Brand Image.
Hypothesis
H2 : Complementary Co-brands have a positive effect on Brand Preference
Related Graphs
You have chips with:
Soft
drinks
38
69%
4 7%
1 2%
Sandwiches
5 9%
Tea/Coffee
6 11%
If you get a discounted combo pack (like chips and a drink), would you prefer it over chips
alone?
Yes
39
71%
No
15
27%
Description: As seen in the graphs above, the percentage of respondents who would
like to have soft drinks with chips is the largest at 69%. Also 71% of the respondents
preferred a discounted combo rather than individual item of chips. These confirm that
our hypothesis is right.
Complementary Co-brands have a positive effect on Brand Preference.
Hypothesis
H3 : Health Products have a positive effect on Brand Preference
Related Graphs
Which of these products to you regularly buy?
Aliva
10
19%
Smart
2
4%
Chips
Bingo
10
19%
Lays Chips
42 78%
Kurkure
17 31%
Description: Though people are becoming more health conscious these days, they still
prefer taste when it comes to snacks. This fact is shown by just 19% and 4% of people
choosing to eat Aliva and Smart Chip Products respectively. Hence, the hypothesis is
proved wrong.
Promoting Health Products does not have a positive effect on Brand Preference
for chips.
(Note that this study doesnt consider the effect of health initiatives like reducing calorie
content or trans-fats in chips on the Brand Preference. It only considers that promoting
health products does not have any positive influence on the preference for that Brand)
Hypothesis
H4 : Top-of-Mind status has a positive effect on Brand Preference
Related Graphs
Whenever hungry, which of the following comes to your mind first?
Kurkure
Lays Chips
34
62%
Bingo
5%
Kurkure
12
22%
Aliva
0%
Monaco
4%
Digestive
Biscuits
5%
12 22%
Lays
34 62%
Cheese Balls
4 7%
Piknik
3 5%
Peppy
1 2%
Description: When asked what comes to the mind first when they are hungry, 62% of
the respondents answered Lays. Exactly the same percentage of people again came up
with the answer of Lays when questioned what they eat most. These two responses in
conjunction prove the hypothesis correct.
Top-of-Mind status has a positive effect on Brand Preference.
Your
favourite
celebrity
7%
Tetra
Pack
20 36%
Hypothesis
Plastic
container
1 33%
8 Zip pouch
Cartoon characters
7 13%
Images
itself
of the content
Related Graphs
Which of the following package do you think keeps your snack the way you wish to find it?
Description:
In the above graph, 45% of the responses favoured Images of inner content and 33%
preferred vibrant colors while just13% preferred Cartoon characters and 7% preferred
celebrity images. This indicates that people prefer relevant images on the packages as
compared to attractive images. The same applied to Cartoon characters however our
sample is not truly representative to confirm this as it doesnt have many responses
from age group under 14. Also the second figure shows that people look for appropriate
packaging like Zip pouch and Tetra Pack. Hence the hypothesis is confirmed.
Implications
1. Continuing the creative advertising will ensure that there is brand awareness and
recall for Lays.
2. Having a complementary co-brand in Pepsi has provides an additional benefit
and having a promotional offer on combo offer will ensure that both will together
will be preferred over a competitors product
3. Relevant images of the content of the package can influence the purchase
decision to some extent and does not have any negative implications
4. Zip-pouches can improve sales as consumers donot have to eat all the chips in
one go and can reseal the pack to consume it later, the contents still remaining
fresh.
Limitations
We studied how brand preference is affected by positioning as a health brand but did
not consider the affect on sales of an existing product by upgrading its health value. The
study considered affect of packaging cartoon characters, celebrity images, etc on
purchase decision on population as a whole but did not consider affect of this on
different age demography as preferences might vary according to age. In this case the
packaging would then depend on the age range of customer group that contributes to
the maximum sales.
Future research
First, further study may consider how the sales are affected by further improving the
health value of a popular product. Second, the impact of packaging on purchase
decision for different age demography can be studied. Third, the study could be carried
out from insights/data obtained from stores, malls, etc. that might provide more
insights.References
(http://www.marketingpower.com/mg-dictionary-view329.php - 2007-05-07)
http://www.pepsico.com
Advertising Creativity Matters; Dahlen, Rosengren, Torn; Journal Of Advt.
The Effect of Agency Creativity on Campaign Outcomes; Li, Dou, Wang, Zhou;
Journal of Advertising, vol. 37, no. 4
Brand and Message Recall: The Effects of Situational Involvement and Brand
Symbols in the Marketing of Real Estate Services; Gulas, Larsen, Coleman;
Department of Marketing, Raj Soin College of Business, Wright State University
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1446491/pdf/11189801.pdf
http://www.enotalone.com/article/8355.html
http://business.highbeam.com/industry-reports/food/potato-chips-corn-chipssimilar-snacks
http://www.brandchannel.com/features_profile.asp?pr_id=378
Getting the last laugh: Dairy products woo kids with colorful fun images; By Judy
Sutton
The Psychology of Attitudes, Fort Worth: Harcourt Brace Jovanovich, Eagly, Alice
H. and Shelly Chaiken 1993.
Appendices
Questionnaire. Everyone can answer this one :) Foodie or no foodie, you can't say no to them!
Which of the following ads do you appreciate? *
Soft drinks
Sandwiches
Tea/Coffee
Which of the following do you eat most: *
Lays Chips
Bingo
Kurkure
Aliva
Monaco
Digestive Biscuits
If you get a discounted combo pack with chips and a drink, would you prefer it over chips alone?
Yes
No
Which of the following illustration do you like to see on your snacks package? *
Cartoon characters
Aliva
Smart Chips
Bingo
Lays Chips
Kurkure
Whenever hungry, which of the following comes to your mind first? *
Kurkure
Lays
Cheese Balls
Piknik
Peppy
Which of the following package do you think keeps your snack the way you wish to find it? *
Tetra Pack
Plastic container