A PROJECT REPORT

ON

“MARKETING POLICIES OF LAYS”

SUBMITTED FOR THE PARTIAL FULLFILLMENT OF THE DEGREE

OF BACHELOR OF BUSINESS ADMINISTRATION

BY

Alisha Haseeb
Roll No:(1810101098)

Under the guidance of-

Dr. Angrish Agarwal

(ASSOCIATE PROFESSOR)
DEPARTMENT OF MANAGEMENT
Invertis University, Bareilly,

INVERTIS UNIVERSITY, BAREILLY (U.P.)

SESSION 2020-21

1
 CERTIFICATE

TO WHOM IT MAY CONCERN

This is to certify that ALISHA HASEEB student of BBA -5th

Semester in our institute has Successfully completed his project work
entitled to “MARKETING POLICIES OF LAYS” for the partial
fulfilment of degree of Bachelor of Business Administration for the
session 2020-2021.

Dr. Manish Gupta Ms Shilpi Dixit Dr. Angrish Agarwal

(Dean Management) (HOD, B.BA) (Associate Professor)

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 STUDENT DECLARATION

I Alisha haseeb a Bonafide student of BBA in Invertis university,

Bareilly would like to declare that the project “REPORT ON
MARKETING POLICIES OF LAYS” submitted by me in partial
fulfilment for the requirement in degree of bachelor of business
administration, is my original work.

Place: BAREILLY

Date: 8-06-2021

Signature of the candidate:

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 ACKNOWLEDGEMENT

It is really a matter of pleasure for me to get an opportunity to thank all the

persons who contributed directly or indirectly for the successful completion of
the project report, “REPORT ON MARKETING POLICIES OF LAY’S”.
First of all, I am extremely thankful to my college INVERTIS UNIVERSITY
for providing me with this opportunity and for all its cooperation and
contribution.
I also express my gratitude and thanks to my Project mentor and guide Dr.
Angrish Agarwal for giving me the encouragement and freedom to conduct my

project.

I am also grateful to all my faculty members for their valuable guidance and
suggestions for my entire study.

THANK YOU

ALISHA HASEEB

ROLLNO: (1810101098)

TABLE OF CONTENT

4
S.no PARTICULAR PAGE
. NO.
1 Title Page i
2 Certificate ii
3 Student Declaration iii
3 Acknowledgement iv
4 Table of Content v-vi
5 List of Table vii-viii
6 Chapter-I Introduction 1-3
7 Chapter-II Literature Review 4-5
8 Chapter-III Research Objective, Design and 6-7
Methodology
9 Chapter-IV Data Reporting and Interpretation 8-24
10 Chapter-V Research Findings 25-26
11 Limitations/Conclusion/Research Scope 27
12 Bibliography 28-30
13 Appendix 31-33
14 Project Guide Comment 34

INTRODUCTION

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 Lay's is a brand of potato chip varieties, as well as the name of the company that founded
the chip brand in the United States. It has also been called Frito-Lay with Fritos. Lay's has
been owned by PepsiCo through Frito-Lay since 1965.
"Lay's" is the company's primary brand, with the exception of limited markets where other
brand names are used: Walkers in the UK and Ireland; Smith's in
Australia; Chipsy in Egypt[1] and the West Balkans;[2] Tapuchips in Israel;[3] Margarita
in Colombia; Sabritas in Mexico; and, formerly, Hostess in Canada

Product type Potato chips

Owner PepsiCo (via Frito-Lay)

Country United States

Introduced 1940; 81 years ago

Related brands Frito-Lay

Walkers
Hostess
Smith's

Markets Worldwide

Previous owners 1940–1961 Lay's

1961–1965 Frito-Lay Inc.

Type Subsidiary

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Industry Food processing

Predecessors The Frito Company

H.W. Lay & Company

Headquarters Plano, Texas
, 
U.S.

Area served Worldwide

Key people Steven Williams (CEO)

Products Snack foods

Brands Lay's, Fritos, Doritos, Ruffles, Cheetos, Sun Chips, Tostitos, Rold

Gold, Funyuns, Walkers, Kurkure

Revenue US$15.798 billion (2017)[1]

Parent PepsiCo

Website fritolay.com

RESEARCH OBJECTIVES

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1. To know the SWOT Analysis of lays.
2. To know the STP analysis of lays.

RESEARCH METHODOLOGY

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Research can be defined as an investigation or enquiry to search for new facts in

any branch of knowledge. It is a systematic and scientific enquiry or

investigation into a subject in order to discover or revise facts

The basic type of research used to prepare this report is Descriptive. The study
is mainly based on the secondary data which refers to that form of information
that has already been collected and is available. These include some internal
sources within the company and externally these sources include books and
periodicals, published reports, internet and data of LAYS.

COMPANY PROFILE

Frito-Lay Company is the world leader in the salty snack category, controlling more than 35
percent of the world market in snack chips and 60 percent in the United States. Among the
company's well-known brands are five that generate annual sales of $1 billion each: Lay's,

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Ruffles, Doritos, Tostitos, and Cheetos. In addition to its dominance of the potato chip,
tortilla chip, and corn chip sectors (the last of these led by the Fritos brand), Frito-Lay has
major brands in other categories, such as Rold Gold pretzels, Cracker Jack candy-coated
popcorn, and Grandma's cookies. About $4 billion of the company's overall net sales are
generated outside the United States, with sales in 42 countries. Lay's, Ruffles, and Chee-tos
are among Frito-Lay's major international brands, along with such local favorites as Walker's
in the United Kingdom and Sabritas in Mexico. Frito-Lay Company is the snack food
division of PepsiCo, Inc., generating about half of the parent company's revenues and two-
thirds of its profits.

Early Years of the Frito Company

Frito-Lay traces its origins to the early 1930s. In the midst of the Great Depression, the lack
of job prospects spurred a number of young people to turn to entrepreneurship in order to get
ahead. Among these were the founders of the two companies that would merge in 1961 to
form Frito-Lay. Elmer Doolin's entrance into the snack food industry was one of
happenstance. In 1932 the Texas native was running an ice cream business which was
struggling because of a price war. Doolin began seeking a new venture and happened to buy a
five-cent, plain package of corn chips while eating at a San Antonio café. At the time, corn
chips or "fritos" (the word frito means fried in Spanish) were a common fried corn meal
snack in the Southwest. Typically, cooks would cut flattened corn dough into ribbons, then
season and fry them.
Impressed with his five-cent snack, Doolin discovered that the manufacturer wished to return
to Mexico and would sell his business for $100. Doolin borrowed the money from his
mother, purchasing the recipe, 19 retail accounts, and production equipment consisting of an
old, handheld potato ricer. Initially setting up production in his mother's kitchen, Doolin
spent his nights cooking Frito brand corn chips and sold them during the day from his Model
T Ford. Early production capacity was ten pounds per day, with profits of about $2 per day
on sales ranging from $8 to $10 per day.
Doolin soon expanded to the family garage, and increased production by developing a press
that operated more efficiently than the potato ricer. Within a year of his purchase of the
business, Doolin moved the headquarters for the Frito Company from San Antonio to Dallas,
the latter having distribution advantages. Sales began expanding geographically after Doolin
hired a sales force to make regular deliveries to stores. The Frito Company also began selling

the products of potato chip manufacturers through license agreements. The company soon
had plants operating in Houston, Tulsa, and Dallas.
In early 1941 Doolin expanded to the West Coast by opening a small manufacturing facility
in Los Angeles. Only the onset of World War II and rationing slowed Frito's growth. But
sales quickly picked up again following the war's end, and by 1947 revenues exceeded $27
million. Doolin moved his company toward national status through licensing agreements. The
first came in 1945, when Frito granted H.W. Lay & Company an exclusive franchise to
manufacture and distribute Fritos in the Southeast. This marked the beginning of a close
relationship between the two companies, and would eventually lead to their 1961 merger. In

10
1946 another franchise was launched in Bethesda, Maryland, followed by a Hawaii-based
franchise in 1947. The following year, Frito introduced Chee-tos brand Cheese Flavored
Snacks, which gained immediate popularity. Meantime, the Fritos brand went national in
1949 when Doolin purchased color advertisements in several magazines, including Ladies'
Home Journal, Better Homes and Gardens, and  Life.
By 1954 the Frito Company business included 11 plants and 12 franchise operations. In 1953
the Frito Kid made his debut as a company spokesman; the character continued to be used in
Fritos advertising until 1967. In 1956 the Frito Kid made an appearance on the "Today" show
with host Dave Garroway, marking the Frito Company's first use of television advertising.
Fritos gained a new advertising theme in 1958 with the debut of "Munch a Bunch of Fritos."
That year, the Frito Company acquired the rights to Ruffles brand potato chips. The following
year, Doolin died, having led his company to its status as a major snack food maker, with
revenues exceeding $51 million. The Frito Company continued to operate 11 plants, but its
franchise operations had been reduced to six after the company bought out several
franchisees. John D. Williamson took over as president of the company. Within two years of
Doolin's death, the Frito Company would merge with H.W. Lay.

Early Years of H.W. Lay & Company

H.W. Lay & Company, Inc. was founded by another entrepreneur, Herman W. Lay. Born in
humble circumstances in 1909 in Charlotte, North Carolina, Lay had worked a variety of jobs
and run a few small businesses from the age of ten, including an ice cream stand, before
taking a position as a route salesman at the Barrett Food Products Company, an Atlanta-based
potato chip manufacturer, in 1932. Later that year, lay borrowed $100 to take over Barrett's
small warehouse in Nashville on a distributorship basis. This was coincidentally the same
year that Doolin had established the Frito Company.
Lay started out selling Barrett's Gardner brand products from his 1928 Model A Ford,
initially pocketing about $23 a month. Growth came rapidly, however. In 1933 Lay hired his
first salesman, and by the following year his company had six sales routes. By 1936 Lay
employed a workforce of 25 and had moved his company from its original warehouse to
another Nashville building. From this location, lay began manufacturing products himself,
including peanut butter cracker sandwiches and french fried popcorn. In 1938 the latter
became the first item marketed under the Lay's name, specifically Lay's Tennessee Valley

Popcorn. By that year Lay was distributing snack foods throughout central Tennessee and
southern Kentucky, and had opened a new warehouse in Chattanooga. The most significant
development of 1938, however, came as a result of financial difficulties encountered by
Barrett Food Products. After securing $60,000 in financing through business associates and
friends, Lay bought Barrett, its plants in Memphis and Atlanta, and the Gardner's brand
name. He changed the name of the company to H.W. Lay & Company, Inc., with
headquarters in Atlanta.

11
During the early 1940s H.W. Lay added manufacturing plants in Jacksonville, Florida;
Jackson, Mississippi; Louisville, Kentucky; and Greensboro, North Carolina. Lay also built a
new plant in Atlanta featuring a continuous potato chip production line, one of the first in the
world. In 1944 the company began marketing potato chips under the Lay's name, with the
Gardner's brand becoming a historical footnote. That same year, H.W. Lay became one of the
first snack food concerns to advertise on television, with a campaign featuring the debut of
Oscar, the Happy Potato, the company's first spokesperson. The following year, H.W. Lay
gained from the Frito Company an exclusive franchise to manufacture and distribute Fritos
corn chips in the Southeast.
After establishing a research laboratory to develop new products in 1949, H.W. Lay
expanded its product line during the 1950s to include barbecued potato chips, corn cheese
snacks, fried pork skins, and a variety of nuts. The company also expanded outside the
Southeast and acquired a number of weaker competitors. In 1956 H.W. Lay went public as a
company with a workforce exceeding 1,000, manufacturing facilities in eight cities, and
branches or warehouses in 13 cities. Revenues in 1957 stood at $16 million, making Herman
Lay's company the largest maker of potato chips and snack foods in the United States. H.W.
Lay had also gained fame for carefully developing and utilizing its sales routes. Company
salespeople were among the first to go beyond simply delivering their merchandise to store
owners, as they also stocked the merchandise for the owners, set up point-of-purchase
displays, and helped to assure product quality by pulling stale bags off the shelves and
displays before they could be sold. This "store-door" delivery system helped to increase
revenues as the salespeople were able to "work" a particular sales territory more intensely. By
the spring of 1961, H.W. Lay had operations in 30 states, following the purchase of Rold
Gold Foods, makers of Rold Gold Pretzels, from American Cone and Pretzel.

Frito-Lay, Inc.: 1961-65

In September 1961 H.W. Lay and the Frito Company merged to form Frito-Lay, Inc., a snack
food giant headquartered in Dallas with revenues exceeding $127 million. The new company
began with four main brands--Fritos, Lay's, Ruffles, and Cheetos--and a national distribution
system. Williamson served as the first chairman and CEO of Frito-Lay, with Lay taking the
position of president. In 1962 Lay took over as CEO, with Fladger F. Tannery becoming
president; two years later, lay added the chairmanship to his duties.

In 1963 Frito-Lay began using the slogan "Batcha Can't Eat Just One" in its advertising for
Lay's potato chips. Two years later comedian Bert Lahr began appearing in ads in which he
attempted--always unsuccessfully--to eat just one Lay's chip. Annual revenues for Frito-Lay
exceeded $180 million by 1965, when the company had more than 8,000 employees and 46
manufacturing plants.

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June 1965: Frito-Lay + Pepsi-Cola = PepsiCo
In June 1965 Frito-Lay merged with Pepsi-Cola Company to form PepsiCo, Inc., with Frito-
Lay becoming an independently operated division of the new company. Pepsi's CEO and
president became CEO and president of PepsiCo, while Herman Lay was named chairman, a
position he held until 1971. Lay then served as chairman of the executive committee until
1980, when he retired. He died in December 1982.
There were a number of forces that drove the two companies together. The 1960s was an era
of consolidation, with a number of food and beverage firms being gobbled up by larger
entities. Pepsi-Cola was considered a takeover target not only because it ran a distant second
in the soft drink sector to industry giant Coca-Cola Company, but also because little of the
company's stock was in the hands of management. Following the creation of PepsiCo,
however, the new company's directors held a much larger proportion of shares, with Lay
holding a 2.5 percent stake himself. A second force behind the merger was Frito-Lay's desire
to more aggressively pursue overseas markets. The company's sales had largely been
restricted to the United States and Canada, but it could now take advantage of Pepsi's strong
international operations, through which Pepsi products were sold in 108 countries.
A third force was the perceived synergy between salty snacks and soft drinks. As Kendall
succinctly related to  Forbes in 1968, "Potato chips make you thirsty; Pepsi satisfies thirst."
The plan was to jointly market PepsiCo's snacks and soft drinks, thereby giving Pepsi a
potential advantage in its ongoing battle with Coke. Unfortunately, these plans were
eventually scuttled by the resolution of a Federal Trade Commission antitrust suit brought
against Frito-Lay in 1963. The FTC ruled in late 1968 that PepsiCo could not create tie-ins
between Frito-Lay and Pepsi-Cola products in most of its advertising. PepsiCo was also
barred from acquiring any snack or soft drink maker for a period of ten years.

New Products, the Frito Bandito, and Increased Competition: 1965-79

Frito-Lay began its PepsiCo era with the same lineup of brands it had when Frito-Lay was
created in 1961: Fritos, Lay's, Ruffles, Cheetos, and Rold Gold. Shortly after the creation of
PepsiCo, Lay's became the first potato chip brand to be sold nationally. Of even greater
importance was increased new product development activity. In 1966 Frito-Lay began test-
marketing a new triangular tortilla chip under the brand name Doritos. Compared to regular

tortilla chips, Doritos were more flavorful and crunchier. Launched nationally in 1967,
Doritos proved successful, but additional market research revealed that many consumers
outside the Southwest and West considered the chip to be too bland--not spicy enough for
what was perceived as a Mexican snack. Frito-Lay therefore developed taco-flavored Doritos,
which were introduced nationally in 1968 and were a tremendous success. Four years later,
national distribution began of nacho cheese-flavored Doritos, which were also a hit.

13
Ironically, with increasing popularity, Doritos became less and less identified as a "Mexican
snack," a development that echoed the earlier brand history of Fritos. During the 1970s
Doritos became Frito-Lay's number two brand in terms of sales, trailing only Lay's. This
spectacular growth was fueled by heavy advertising expenditures--as much as half of the
company's overall $23 million ad budget in the mid-1970s. The "Crunch" campaign began in
the early 1970s, and gained added impetus in 1976 when Avery Schrieber began crunching
Doritos on national television. Frito-Lay also found lesser success in this period with other
new products, including Funyuns onion-flavored rings, which debuted in 1969, and the
Munchos potato crisps that were launched in 1971.
In 1968 Frito-Lay began a new Fritos advertising campaign featuring the Frito Bandito, a
Mexican bandit complete with a long mustache, sombrero, and six-gun who spoke in a heavy
accent. Ads showed the cartoon character robbing and scheming to get his beloved Fritos
corn chips. The campaign quickly drew heavy criticism from Mexican American groups who
alleged that it showed a prejudice against Mexican Americans and perpetuated a stereotype.
Responding to the protests, radio and television stations in California began pulling Frito
Bandito spots off the air. Frito-Lay finally ended the campaign in 1970.
During the 1970s Frito-Lay began feeling the effects of increased competition. The Lay's
brand was challenged not only by more aggressive regional brands but also by such
newfangled chips as Pringles and Chipos. These chips were made from mashed or dehydrated
potatoes molded into a uniform shape, which enabled them to be stacked into a can or
packaged in a box. In either case, they had several advantages over regular potato chips: they
were less fragile, their packaging was less bulky, and they had a longer shelf life. Most
importantly, they could be made in one location and shipped nationally, rather than having to
be made in a nationwide system of regional plants. Pringles and Chipos were also backed by
the national advertising prowess of two consumer product giants--Procter & Gamble
Company and General Mills, Inc., respectively. Additional competition in the 1970s came
from Nabisco Inc., maker of Mister Salty pretzels and such extruded snacks as Flings and
Corkers, and Standard Brands Inc., which was expanding its Planters brand beyond nuts into
corn and potato chips, cheese curls, and pretzels. Despite its formidable foes, Frito-Lay
remained the clear leader in the U.S. snack industry, with sales by the late 1970s exceeding
the $1 billion mark, more than double that of the nearest competitor, Standard Brands.
Moreover, Frito-Lay was far from resting on its laurels. It increased its overall production
capacity by one-third by 1979 through the opening of a new plant in Charlotte, North
Carolina, and the culmination of expansion programs at ten existing plants. Keeping Frito-
Lay ahead of the competition during this period was D. Wayne Calloway, who became
president and chief operating officer in early 1976.

New Product Ups and Downs in the 1980s

The 1980s started out promisingly, with Frito-Lay acquiring the Grandma's regional brand of
cookies in 1980 for $25 million, in a venture outside of its salty snack stronghold. In 1983 the
company made a national launch of the Grandma's brand, and soon was selling five varieties.
Among these was a homemade-style cookie that was soft on the inside but crispy on the

14
outside. In 1984 Procter & Gamble sued Frito-Lay and two other cookie makers for
infringing on its patent for Duncan Hines crispy-chewy cookies. The parties reached a
settlement in 1989, whereby Frito-Lay agreed to pay about $19 million to Procter & Gamble,
while the bulk of the $125 million settlement was shared equally by the two other defendants,
Nabisco and Keebler Co.
In addition to the acquisition of Grandma's, the early 1980s also saw Frito-Lay introduce
Tostitos tortilla chips. Debuting in 1981, Tostitos was the most successful new product
introduction yet in Frito-Lay history, garnering sales of $140 million in the first year of
national distribution. The development of Tostitos came out of market research on Doritos
indicating that some consumers felt the latter chips were too heavy, too thick, and too
crunchy; at this time, there was a general trend toward consumer preference for 'lighter-
tasting' foods, as well as an increased interest in Mexican food. Frito-Lay thus created the
thinner, crispier Tostitos, which could be eaten alone, made into nachos, or dipped into
increasingly popular salsas. By 1985 Tostitos was Frito-Lay's number five brand, with sales
of about $200 million, trailing only Doritos ($500 million), Lay's ($400 million), Fritos ($325
million), and Ruffles ($250 million). Also in 1985 Frito-Lay expanded its tortilla chip line
with the introduction of Santitas white and yellow corn round chips.
In 1983 Calloway shifted to the PepsiCo headquarters in Purchase, New York, to become the
parent company's CFO (and eventually its chairman and CEO). Taking over as president of
Frito-Lay was Michael Jordan, who held the position for two years before also heading to
Purchase and eventually becoming PepsiCo president. Willard Korn served as president of
Frito-Lay during the mid-1980s, a period coinciding with the company's relocation of its
headquarters from Dallas to Plano, Texas, but more importantly with a spate of failed product
introductions. In 1986 Frito-Lay rolled out a slew of new products, several in the nonsalty
snack sector, including Toppels cheese-topped crackers, Rumbles crispy nuggets, and
Stuffers dip-filled shells. The company also attempted to penetrate the growing market for
kettle-cooked chips, a variety harder and crunchier than regular potato chips, with a brand
called Kincaid. The barrage of new products was too much for Frito-Lay's 10,000-strong
sales force to handle; products were lost on store shelves and all of the new brands were
quickly killed. Korn resigned from his post in November 1986, with Jordan returning to
Texas to head Frito-Lay once again.
Under Jordan's leadership in the late 1980s, Frito-Lay focused on revitalizing its existing
brands rather than developing new brands. Among the successful line extensions introduced
in this period were Cool Ranch flavor Doritos and a low-fat version of Ruffles. In 1989 Frito-
Lay acquired the Smartfood brand of cheddar-cheese popcorn, a regional brand it hoped to
roll out nationwide. The company was also finding success in the international market, where
profits were increasing 20 percent per year, revenues exceeded $500 million by the end of the

decade, and Frito-Lay products were being sold in 20 countries. Overall sales stood at about
$3.5 billion.

Rising Fortunes in the 1990s

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Entering the 1990s, Frito-Lay faced continuing challenges from both regional and national
players, including the upstart Eagle Snacks brand, owned by beer powerhouse Anheuser-
Busch Cos. Eagle Snacks gained market share in the 1980s with premium products that sold
for low prices, some of which were 20 percent lower than those of Frito-Lay. In addition to
the increased competition, Frito-Lay also suffered in the late 1980s through 1990 from self-
inflicted wounds, such as increasing prices faster than inflation, letting the corporate payroll
become bloated, and allowing product quality to decline. As a result, profits were on the
decline in the early 1990s.
In early 1991, Roger A. Enrico was named to the top spot at Frito-Lay, after most recently
serving as president of PepsiCo Worldwide Beverages. Enrico, a former Frito-Lay marketing
vice-president, immediately set out to turn around the stumbling but still formidable snack
giant. During 1991 the company eliminated 1,800--or about 60 percent--of its administrative
and managerial jobs, creating a much more streamlined structure. Four of the company's 40
plants were closed or sold off, and more than 100 package sizes and brand varieties were
dropped from what had become an unwieldy product portfolio. These moves resulted in
annual savings of approximately $100 million. On the selling side, Frito-Lay created 22
sales/marketing offices to bring decision-making closer to retailers and consumers. The
company also slashed its prices. In its first big new product success since Tostitos, Frito-Lay
launched SunChips in 1991, garnering $115 million in sales during the first year; the
multigrain, low-sodium, no-cholesterol chip/cracker found a ready market among adults
seeking a more healthful snack. In moves designed to revitalize its longstanding brands,
Frito-Lay redesigned the packaging for several products, including Fritos and Rold Gold
pretzels, and reformulated both Lay's and Ruffles potato chips--the first time the Lay's
formula had ever been changed. To enhance the flavor of both chips, the company developed
a new frying process and switched from soybean oil to cottonseed oil. With consumers
preferring less salty snacks, the sodium content of the chips was also reduced. The new Lay's
chips were introduced in 1992 through an ad campaign featuring the tag line, 'Too Good to
Eat Just One!' a variation on the old 'Batcha Can't Eat Just One' slogan. In 1993 Rold Gold
pretzels were the subject of the product's first network television campaign, with ads
featuring 'Seinfeld' star Jason Alexander as 'Pretzel Boy.' The following year the formula for
Doritos was reformulated to make the chips 20 percent larger, 15 percent thinner, and
stronger tasting--changes that were based on careful market research. Frito-Lay also
continued to roll out new products, including Wavy Lay's potato chips and Baked Tostitos
(1993), Cooler Ranch flavor Doritos (1994), and Baked Lay's (1996).
By the mid-1990s, as the snack food sector entered a slower growth period marked by heavy
price competition, it became increasingly clear that Frito-Lay would remain the industry
front-runner by a wide margin. The company increased its share of the salty snack market in
the United States from 38 percent in the late 1980s to 55 percent by 1996. Competitive

pressure from Frito-Lay led two of its fiercest rivals to wave the white flag. Borden sold most
of its snack businesses in the mid-1990s as part of a massive restructuring. In early 1996
Anheuser-Busch shut down its Eagle Snack unit after failing to find a buyer for the unit; it
sold four of Eagle's plants to Frito-Lay, which converted them to production of its main
brands.

16
In 1996 PepsiCo merged its domestic and international snack food operations into a single
entity called Frito-Lay Company, consisting of two main operating units, Frito-Lay North
America and Frito-Lay International. The following year Frito-Lay bought the Cracker Jack
brand from Borden, marking the company's reentrance into the nonsalty snack food sector.
Also in 1997 Frito-Lay reentered the sandwich cracker market with the national introduction
of seven varieties. Frito-Lay expanded internationally in 1998 through the acquisition of
several salty snack assets in Europe and Smith's Snackfood Company in Australia from
United Biscuit Holdings plc for US$440 million. In late 1998 Frito-Lay announced that it had
formed a broad Latin American joint venture with Savoy Brands International, part of a
Venezuelan conglomerate, Empresas Polar SA. Covering Venezuela, Chile, Colombia,
Ecuador, Guatemala, Honduras, Panama, Peru, and El Salvador, the joint venture was
designed to enable Frito-Lay to better penetrate the $3 billion salty snack sector in Latin
America. Also in 1998 Frito-Lay began selling its Wow! line of low-fat and no-fat versions
of Doritos, Ruffles, Lay's, and Tostitos. Made with a fake fat called olestra developed by
Procter & Gamble (ironically the maker of rival chip Pringles), the Wow! products were
controversial because of reports and studies that indicated that the chips could cause gastric
distress. All olestra products carried warning labels stating that they 'may cause abdominal
cramping and loose stools.' Despite waves of negative publicity, the Wow! line was the best-
selling new consumer product of 1998, garnering a whopping $350 million in sales.
By the end of the 1990s, Frito-Lay's aggressive new product development, advertising, and
marketing efforts had further increased the company's share of the U.S. salty snack market to
60 percent. With the domestic market so firmly in its control, Frito-Lay was sure to look
increasingly overseas for growth opportunities, particularly because there was no other global
competitor in the industry. In the early 21st century, the company was likely to continue its
expansion of its main brands--especially Lay's, Ruffles, Chee-tos, and Doritos--into new
markets and to seek additional acquisitions and joint ventures in order to add more brands to
its non-U.S. portfolio, which featured Walker's in the United Kingdom and Sabritas in
Mexico.

Principal Divisions: Frito-Lay North America; Frito-Lay International.

Principal Competitors: Borden, Inc.; Campbell Soup Company; ConAgra, Inc.; General
Mills, Inc.; Golden Enterprises, Inc.; International Home Foods, Inc.; Keebler Foods
Company; Lance, Inc.; Nabisco Holdings Corp.; Poore Brothers, Inc.; The Procter & Gamble
Company.

Key Dates:
 1932: Elmer Doolin founds the Frito Company in San Antonio, Texas, and begins
making Fritos corn chips.

17
  1938: Herman W. Lay buys Atlanta potato chip maker, changes name to H.W. Lay &
Company, Inc., the following year.
 1944: H.W. Lay begins marketing potato chips under the Lay's name.
 1948: Frito Company introduces Cheetos snacks.
 1958: Frito Company acquires the rights to Ruffles brand potato chips.
 1961: The Frito Company and H.W. Lay & Company are merged to form Frito-Lay,
Inc.
 1965: Frito-Lay, Inc. and the Pepsi-Cola Company merge to form PepsiCo, Inc., with
Frito-Lay becoming a division of the new company.
 1967: Doritos tortilla chips make their national debut.
 1970: Frito Bandito advertising campaign is abandoned following complaints from
Mexican American organizations.
 1981: Company introduces Tostitos tortilla chips.
 1991: Sunchips multigrain snacks are introduced.
 1997: Company acquires the Cracker Jack brand.
 1998: Wow! line of low-fat/no-fat chips debuts.

HISTORY
In 1932, salesman Herman Lay opened a snack food operation in Nashville, Tennessee.[4] In
1938, he purchased the Atlanta, Georgia -based potato chip manufacturer "Barrett Food

18
Company", renaming it "H.W. Lay Lingo & Company". Lay crisscrossed the southern United
States, selling the product from the trunk of his car.
The business shortened its name to "the Lay's Lay Lingo Company" in 1944 and became the
first snack food manufacturer to purchase television commercials, with Bert Lahr as a
celebrity spokesman.[5]
In 1961, the Frito Company, founded by Charles E. Doolin, and Lay's merged to form Frito-
Lay Inc., a snack food giant with combined sales of over $127 million annually, the largest of
any manufacturer. Shortly thereafter, Lay's introduced its best-known slogan "batcha can't eat
just one". Sales of the chips became international, with marketing assisted by a number of
celebrity endorsers.[citation needed]
In 1965, Frito-Lay merged with the Pepsi-Cola Company to form PepsiCo, Inc. A new
formulation of chip was introduced in 1991 that was crisper and kept fresher longer. Shortly
thereafter, the company introduced the "Wavy Lay's" products to grocery shelves, with a
national rollout in 1994.[6] In the mid to late 1990s, Lay's introduced a
lower calorie baked version and a variety that was completely fat-free (Lay's WOW
chips containing the fat substitute olestra).
In the 2000s, kettle-cooked brands appeared as did a processed version called Lay's Stax that
was intended to compete with Pringles,[7] and the company began introducing a variety of
additional flavour variations.
In 2012, Frito-Lay products controlled 59% of the United States savory snack-food market.[8]

International

Country Description Image

PepsiCo commercialized potato chips

under the name Frenchitas until 2001.
Argentina
They are now marketed under
the Lay's label.[citation needed]

Australia PepsiCo acquired The Smith's

Snackfood Company in 1998 and
marketed Frito-Lay products under that
label, using the name Thins. After
Thin's was sold to Snack Brands
Australia (Owned by Arnotts), Smith's
produced a line of potato chips under
the Lay's brand for a brief period of
time. The Lay's line was eventually
rebranded in 2004 as Smith's Crisps,

19
 while the traditional Smith's line was
renamed Smith's Crinkles. This is still
sold in Australia as a direct competitor
to Smith's Crisps. Since 2009, Lay's
have been available in Australia
exclusively at Costco, where they are
available in a single flavour and size
(500g plain). They continue to be
manufactured in Australia by Smith's.
[citation needed]

Lay's are sold in three varieties: Lay's,

Lay's Light and Lay's Sensations (Thai
Sweet Chili/Red Paprika/Oven Roasted
Chicken and Thyme). Lay's Super Chips
(Heinz Ketchup/Mexican
Pepper/Perfect Pickles/Salt 'n' Pepper
(all through Ahold Delhaize) and Lay's
Baked Chips (Mediterranean
Benelux
Herbs/through Ahold Delhaize). As
with Doritos, Lay's are manufactured,
distributed and imported in The
Netherlands by Frito Lay's Benelux
division, Smith's Food Group. Lay's
used to be called Smiths in the Belgium
and the Netherlands until the name was
changed in 2001.[citation needed]

The first attempt to sell the brand in the

country was in 1999, but it was
Brazil discontinued after a short time. It
returned in 2013 and has remained on
sale since then.[9][10]

Canada As Lay's were produced by another

company at that time, the chips were
known as Hostess. In 1996, Hostess was
rebranded to Lay's with a television
commercial featuring Mark
Messier and Eric Lindros aired in 1997
that relaunched the brand.[citation needed]

20
 The Hostess Potato Chips
product lineup in Canada
containing Lay's Flavored chips
inside a Hostess bag

The chips are sold under the

name Margarita. They are still
Colombia
commercialized under the label Lay's,
however.[citation needed]

Lay's was once sold under its own label

until it was merged with the local
Egypt label Chipsy, which has since become
the local unit of Lay's under much the
same arrangement as Walkers.[citation needed]

Cricketers Mahendra Singh
Dhoni, Gautam
India Gambhir[11] and Bollywood actors Saif
Ali Khan[12] and Ranbir Kapoor[13] have
endorsed Lay's.

Lay's products are distributed

by Indofood.[14] Starting August 18,
2021, the company will no longer
Indonesia
manufacture Lay's products due to
Indofood's ending of its licensing
agreement with PepsiCo.[15]

Lay's products are distributed as

Iran
Sensation by MazMaz.[citation needed]

Ireland, Unite Lay's acquired Walkers in 1989.

d Kingdom Walkers produce and distribute a wide
range of snacks, and crisp flavours
include Cheese & Onion, Ready Salted,
Salt & Vinegar. Walkers also makes
Sensations-branded crisps in the UK.
The logo used by Walkers is noticeably
similar to the Lay's logo, featuring a red Logo of Walkers, the
ribbon around a yellow sun, and derives international brand of Lay's in

21
 from the Walkers logo introduced in
1990. The other Frito-Lay brands are
also distributed through the Walkers Ireland and the UK
label. [16]

Lay's label is distributed with the name

Israel
Tapuchips (‫ )תפוצ'יפס‬by Strauss-Elite.[17]

Lays are distributed in by Ferrero

Italy
SpA since 2014.[citation needed]

PepsiCo acquired Sabritas S. de R.L. in

1966. Lay's along with other products
such
as Cheetos, Fritos, Doritos and Ruffles a
re marketed under the Sabritas brand.
Mexico
The logo for the Mexican company
sports the red ribbon, but it has a
stylized smiling face instead of the sun.
It controls around 80% of the market.
[citation needed]

Lay's brand has been endorsed by

renowned stars of the country Junaid
Pakistan
Jamshed, Ali Zafar and also
actor Fawad Khan.[citation needed]

Lay's is the best sold and the most

bought chips brand in the country, being
followed by Chio Chips. Lay's bought
Romania
its own terrain to grow potatoes for
chips on in early 2008, making chips
out of their own potatoes.[citation needed]

Lay's are distributed as Chipsy,

Serbia domestic company acquired by PepsiCo
in 2008.[citation needed]

Lays are distributed by the Simba

South Africa
Chip company since 1998.[18]

22
United Arab Lay's and Walkers are sold as different
Emirates labels.[citation needed]

Flavours:

Country Description

Lay's Barbecue-flavoured potato chips, which appeared in 1958,

was the only flavour available in the United States other than the
conventional salted chip until the introduction of Sour Cream &
Onion in the late 1970s.[citation needed]

In the United States, Lay's offers a number of flavour

combinations, in addition to the classic chips. Flavored products
in the traditional fried varieties include Classic, Sour Cream &
Onion, Barbecue, Salt & Vinegar, Chipotle Ranch, Cheddar &
Sour Cream, Hidden Valley Ranch, Salt & Pepper, Flamin' Hot,
Limón, and a thicker "Deli style" chip. The WOW! brand was
rebranded in 2004 as Lay's Light after the olestra formula was
altered and the U.S. Food and Drug Administration allowed
removal of warnings about various health consequences of the fat
substitute. Other potato chip flavors offered by Lay's are Garden
United States Tomato and Basil, Honey Barbecue, Sweet Southern Heat
Barbecue, Tapatio Limon, Simply Sea Salt Thick Cut, Fiery
Habanero, and Dill Pickle Brand.[citation needed]
Lay's has occasionally solicited new flavor ideas through its "Do
Us a Flavor" promotions. The 2013 contest produced three new
flavors: sriracha, chicken and waffles, and cheesy garlic bread.
Cheesy garlic bread was chosen as the winner and was added to
the lineup, however the other flavors remain on sale in some
regions. The 2016 "Do Us a Flavor" was rebranded "Passport to
Flavor" for the 2016 Summer Olympics. The four finalists were
Chinese Szechuan Chicken, Greek Tzatziki, Brazilian Picanha,
and Indian Tikka Masala.[19]
The 2017 contest produced four flavors: Crispy Taco, Bacon
Wrapped Jalapeño Popper, Everything Bagel with Cream Cheese,
and Fried Green Tomato.[citation needed]

Canada The following Lay's flavors are available nationally in Canada:

Classic, Lightly Salted, Wavy Original, Dill Pickle, BBQ, Old
fashion BBQ, Ketchup, Salt & Vinegar, Smoky Bacon, Sea Salt

23
 & Pepper, and Cheddar & Sour Cream. There are also a number
of regional flavors, including Fries & Gravy and Roast Chicken
(available in Atlantic Canada), Sour Cream & Onion (available in
Ontario, Atlantic Canada, and Western Canada) and Wavy
Smoky BBQ and Wavy Old Fashioned Ketchup (available in
Western Canada).[citation needed]
Lay's made Canadian flavor "All Dressed" available in the United
States that was launched in 2015.[20] The flavor combines the
potato chip flavors of barbecue, sour cream and onion, ketchup,
and salt and vinegar.[21]
In 2013, Lay's ran a "Do Us a Flavour" contest in Canada, with
four flavors chosen as finalists: Creamy Garlic Caesar, Perogy
Platter, Grilled Cheese & Ketchup, and Maple Moose. Maple
Moose was chosen as the winner, but discontinued in February
2014 due to low sales.[22]
In 2014, Lay's ran a second "Do Us a Flavour" contest in Canada,
with a new batch of finalists: Bacon Poutine, Cinnamon Bun,
Jalapeño Mac n' Cheese, and Tzatziki.[23] Jalapeño Mac n' Cheese
was chosen as the winner.[24]

The following Lay's (called Sabritas) are available nationally in

Mexico: Original, Ruffles, Tostitos, Doritos, Cheetos, Pake-Taxo,
Mexico Japoneses (peanuts), Cheetos Poffets, Rancheritos, Adobados,
Fritos, Churrumais, Caseras, Sabritones, Crujitos and Chicharrón
Clásico.[citation needed]
Ruffles are a variant of the Lay's called "Lay's Ondas" (Lay's
Peru
Waves).
The flavors are: Ready Salted, Salt & Vinegar, Prawn
Cocktail, Cheese & Onion, Pickled Onion, and Marmite. Walkers
also ran a 'Do Us a Flavour' promotion wherein the public vote
for the flavor they like the best. Flavors included in the 2010
promotion were: Spanish Chicken Paella, Japanese Teriyaki
Chicken, German Bratwurst Sausage, Italian Spaghetti
Bolognese, French Garlic Baguette, American Cheeseburger,
Brazilian Salsa, Scottish Haggis, Irish Stew, English Roast Beef
United and Yorkshire Pudding, Dutch Edam Cheese, Australian BBQ
Kingdom, Ireland Kangaroo, South African Sweet Chutney, Argentinian Flame
Grilled Steak and Welsh Rarebit.[citation needed]
The previous winner of this promotion was Builders Breakfast.
2014 competition flavor choices included Chip Shop Chicken
Curry, Pulled Pork in sticky BBQ sauce, Sizzling Steak Fajita,
Cheesy Beans on Toast, Hotdog with Tomato Ketchup and Ranch
Raccoon. Pulled Pork in sticky BBQ sauce won, with the winning
suggestion receiving a £1,000,000 prize.[citation needed]

France About eight varieties of potato chips are marketed in a number of

flavors for a total of approximately thirty products. Lay's flavors

24
 available in France include Barbecue, Cheeseburger, Bolognaise,
Roasted Chicken, Cheese, Salt & Vinegar, Spicy, and Nature.
[citation needed]

Lay's are made and packed by Tasty Foods and Corina Snacks
LTD, with Mediterranean flavors which include Feta cheese
Greece, Cyprus flavor, Tzatziki, Olive and Tomato, Oregano, Sea Salt & Black
Pepper and various more. There are hundreds of sub-variations in
the Mediterranean line adjusted to each country's liking.[citation needed]
Lays are sold in several varieties:
Lay's Classic (Herbal Butter, Paprika, Salted, Salt & Vinegar,
Smoked Bacon, Sour Cream & Black Pepper, Sour Cream &
Onion, Sweet Paprika) Lay's Light (Paprika, Salted) Lay's Super
Germany Chips (Paprika, Salted) Bugles (Nacho Cheese, Original, Nach
Cheese, Sweet Chili)
As with Doritos, Lays are manufactured, distributed and imported
in Germany by Frito Lay's Benelux division, Smith's Food Group.
[citation needed]

Netherlands, Belgium The following flavors are marketed: Lay's (Naturel (Natural),

Paprika (Bell Pepper), Cheese Onion, Bolognese Original,
Barbecue Ham (Barbecue Bacon), Stokbroodje Kruidenboter
Smaak (Baguette with garlic butter flavour), and Pickles) Lay's
Super Chips (Naturel (Natural), Paprika (Bell Pepper), Patatje
Joppie (French Fries with Joppiesaus), Heinz tomato ketchup,
Salt'n Pepper, and Just Paprika (Bell Pepper), Lay's Sensations
(Red Sweet Paprika, Thai Sweet Chili, Mexican Peppers &
Cream, Sweet & Spicy Tomato Chutney, and Japanese Teriyaki),
Lay's Light (Natural, Paprika (Bell Pepper), and Balsamico),
Lay's Oven (Naturel (Natural), Paprika (Bell Pepper), Crispy
thins Emmental Cheese, Mediterranean Herbs, Barbecue, Crispy
Thins Olive Oil & Herbs, Crunchy Biscuits Tomato & Spring
Onion, Crunchy Biscuits Paprika & Mediterranean Herbs
(Crunchy Biscuits Bell Pepper & Mediterranean Herbs), and
Olive Oil & Herbs), Lay's Deep Ridged (Naturel (Natural), Sweet
Chili, American BBQ, and Xtreme Cheese).[citation needed]
Lay's Pops (Naturel (Natural), and Paprika (Bell Pepper)), Lay's
Sticks (Naturel (Natural), and Paprika (Bell Pepper)), and Lay's
Finest (Mixed Pepper & Sea Salt, and Finest Sea Salt). In
addition, Lay's started a new campaign in 2010 in the
Netherlands, in which people can enter a competition to suggest
new flavors, resulting in three new flavors being produced, and,
after voting, with one of them becoming the winner (the three
new flavors being 'Mango Red Chilli', 'Patatje Joppie' and 'Nr. 66
Babi Pangang'). 'Patatje Joppie' became the winner of the
competition and is now being sold as limited edition. Patatje
Joppie means French Fries with Joppiesaus. A new campaign
added three flavours to the list, called Lay's raad de smaak A, B,
and C (Guess the flavour). In Belgium, the same contest was held

25
 and their choices were 'Bicky Crisp' and 'Indian Curry Style'.
Bicky is a sort of hamburger sauce with mayonnaise, onions and
pickles. Bicky Crisp won. There is also a Cucumber and Goats
flavour.[25] In the Netherlands, Lay's announced another contest to
find a new flavor and replace 'Patatje Joppie'.[citation needed]

Both international and local flavors are available, including

Bacon, Cheese, Onion, Paprika, as well as Crab, Mushroom &
Russia
Sour Cream, and Salted Cucumber. In addition to regular potato
chips, Lay’s MAX and Lay’s Strong series are offered.[citation needed]
Lay's flavors are Salt, Paprika, Cheese, Barbecue, Sour Cream &
Dill; the Lay's Sensations flavors are: Thai Chili, Baked chicken
Romania
with lemon and thyme; Lay's Max and Lay's Sticks flavors are:
Paprika and Salt.
Chips flavors are: Cheese, Green Onion, Chicken with Spices,
Salted, Paprika, Hot Green Peppers, Fromage, Cucumber and
Guacamole. There are also the Lay's appetite flavors of Cheese
and Onion, Classic Salted, Ham and Cheese, Ketchup and
Cheese. Lay's Strong: Chilli and Knuckle of Pork and
Horseradish.[citation needed]
'Lay's Prosto z pieca' ('Lay's Straight from the Oven') flavors are:
Natural Salted, Mediterranean Herbs, Tomato with Basil and
Poland
Grilled Paprika and lastly the '4 Pory Roku' ('4 Season of the
Year') which change flavor every Season. Lay's Appetite Stix:
Ketchup, Garlic and Sour Cream Dip. Lay's with flavors: Winter
Onion, Piquant Paprika, Creamy Forest Mushroom, Cheese,
Salted, Grilled Bacon, Tomato, Onion, Fromage. Lay's Strong:
Chilli & Lime, Wasabi, Piri Piri. Lay's Max: Paprika, Salted,
Grilled Meat, Cheese & Onion. Oven Baked: Cheese & Onion,
Natural.[citation needed]

Lay's was launched in India 1995.[26] In 2010 there was a

India competition in making new flavors and the flavor 'Mastana
Mango' was selected.[27]
Lay's been launched in 2007.[28] In the country Lays are available
in ‘Masala’, ‘Salted’, 'French cheese', 'Paprika' and ‘Yoghurt &
Herb’ flavours. Another form of Lay's quite popular in Pakistan is
Pakistan their Wavy line, which is basically the wrinkle version of the
chips.[29][30] Like India, Pakistan also had counterparts of Lay's
Chaat Street flavors (Dahi Baray and Mint Chutney flavors) in
2013-'14.[31][32]
Thailand, Philippines Flavors featured are Classic, Sour Cream & Onion, Cheese &
Onion, Mexican Bar-B-Q, Japanese Nori Seaweed, Basil, Squid,
Spicy Chili Squid, Seafood and Mayonnaise, and Spicy Seafood.
Temporary international flavors have also been introduced, such
as French Mayonnaise, Balsamic Vinegar and Salt (England),
Garlic Soft Shelled Crab (Hong Kong), Soy Sauce, Salmon

26
 Teriyaki (Japan), Lobster, Bacon & Cheese (America). Other
traditional "Thai" flavors include Tom Yum, Thai Chili Paste,
Thai Seafood Dip, Chili and Lime.[citation needed]
Cool & Refreshing (Cucumber, Kiwi, Blueberry, Cherry Tomato,
and Lime), Classic Flavors (American Classic, Italian Red Meat,
Mexican Tomato Chicken, Texas Grilled BBQ, and French
Chicken), Intense & Stimulating (Numb & Spicy Hot Pot, and
China
Hot & Sour Fish Soup), and Stax (Authentic Original, Green
Cucumber, Tomato, Sizzled Barbecue, Finger Licking Braised
Pork, Black Pepper Rib Eye Steak, Sea Salt And Cheese, Sea Salt
And Chocolate, Garden Tomato, Green Tea, and Lime).[33]
Lay's: Natural Classic, Brazil BBQ Pork Rib, Cheddar Cheese,
Manhattan Rib Eye Steak, Nori Seaweed, Texas Tenderloin
Steak, Sour Cream & Onion, Thai Spicy Squid[34]
Vietnam
Lay's Stax (Imported from Thailand[34]): Original, Extra Cheese,
Hot Chili Squid, Sour Cream & Onion, Spicy Lobster

The flavors are Salmon Teriyaki, Classic Salty, Nori Seaweed,

Pizza, Grilled Chicken Paprika, and Fiesta BBQ. It is produced
Indonesia, Malaysia, B
by Indonesian-based PT Indofood Frito lay Makmur, a joint
runei Darussalam
venture between PT Indofood CBP Sukses Makmur with Seven-
Up Nederland B.V.[35]
It is available in several flavors, including Salt, Salt & Vinegar,
Chilli, Chilli-Lemon, Ketchup, French cheese, Pizza, and Flaming
Saudi Arabia and Hot. Lay's Max is available in flavors: Chili, Cheese and Italian
the Gulf Cooperation Blend. Lay's Forno, which has less fat by 60%, is available in six
Council countries flavors: Authentic Cheese, Black Pepper, Lemon & Black Pepper,
Labneh & Mint, Italian Mix (A spicy tomato flavor) and Za’atar.
[citation needed]

Since its acquisition of Chipsy (‫شيبسى‬ [ˈʃibsi, ˈʃibsi, ˈʃibsi],

shortened to [ʃibsi]), Lay's chips (marketed as Chipsy) in Egypt
inherited the Chipsy range of flavors as well as the pre-merger
Lay's flavors. These flavors include salt
Egypt and vinegar, cheese (most likely based on rumi cheese and the
most popular flavor), seasoned cheese, tomato (a ketchup-based
flavor), kebab on charcoal, and chili & lime, and peri flavor. In
2010, a shrimp flavor was added after a national contest.[citation
needed]

Lay's flavours consist

Mauritius of barbeque, salt and vinegar, roasted chicken, paprika, onion and 
cheese.[citation needed]

27
Nutritional information

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.
A one-ounce (28 gram) serving of Lay's regular potato chips has 160 Calories, and contains
ten grams of fat, with one gram of saturated fat. Kettle-cooked brands have seven to eight
grams of fat and one gram of saturated fat, and are 140 Calories. Lay's Natural has nine
grams of fat, two grams of saturated fat and 150 Calories. Stax chips typically contain ten
grams of fat, 2.5 grams saturated fat and are 160 calories per serving. Wavy Lays are
identical to the regular brand, except for a half-gram less of saturated fat in some
combinations. Now the various brands do not contain any trans fats.
A 50 gram serving of Lay's BarBQ chips contains 270 calories, and 17 grams of fat. It also
contains 270 mg of sodium, and 15% Vitamin C.
The baked variety, introduced in the mid-1990s, feature 1.5 grams of fat per one ounce
serving, and have no saturated fat. Each serving has 110 to 120 Calories. Lay's Light servings
are 75 Calories per ounce and have no fat.
Lay's Classic Potato chips were cooked in hydrogenated oil until 2003.[36] Currently, the chips
are made with sunflower, corn and/or canola oil.
Baked Lays are produced in cheddar, barbecue, sour cream and onion, and original flavors.

28
29
KEY EMPLOYEES

PepsiCo is as a place that seeks out different perspectives and celebrates diversity at every
level of the organization.
From leadership to frontline associates, our people reflect our diverse consumers and the
communities in which we operate.
That’s why we’re so proud of the more than 55,000 employees who make your favourite
snacks happen.

Meet the people who guide our vision.

Steven Williams
CEO
PepsiCo Foods North America

Jamie Caulfield
Senior Vice President & Chief Financial Officer PepsiCo Foods North America

30
Joan Cetera
Vice President of Communications
PepsiCo Foods North America

Rachel Ferdinando
Senior Vice President and Chief Marketing Officer Frito-Lay North
America

31
Cara Keating
President of PepsiCo Foods Canada
Canadian businesses of Frito-Lay North America and Quaker Foods
North America

Denise Lefebvre
SVP, Foods R&D Global R&D

32
Michael Lindsey
Chief Growth Officer
PepsiCo Foods North America

Steve Llewellyn
Senior Vice President and General Manager of Field Sales
Frito-Lay North America

33
Laura Maxwell Senior Vice President of Supply Chain
for PepsiCo Foods North America

Patrick McLaughlin
Senior Vice President of Human Resources, Chief Human Resources
Officer
PepsiCo Foods North America

34
35
 MAJOR PRODUCTS AND SERVICES

Frito-Lay is engaged in the manufacturing and distribution of corn chips, potato chips, tortilla
chips and other snack foods. The company's key products include the following:
Products:
Potato chips, Tortilla chips, Corn chips, Cheese Flavored snacks, Pretzels, Dips, Potato
crisps, Multigrain snacks, Wheat snacks, Popcorn, Cookies, Plantain chips, Salsas, Potato
sticks, Pork skins
Brands:
Lay’s, Doritos, Tostitos, Cheetos, Fritos, SunChips, Oven Baked, Frito-Lay Dips, Baken-ets,
Cracker Jack, Cracker Jack’D, Chester’s, Isleno, Grandma’s, Funyuns, Maui Style, Matador,
Miss Vickie’s, Munchies, Munchos, Nut Harvest, Rold Gold, Ruffles, Sabra, Santitas,
Sabritones, Simply, Stacy’s, SmartFood, Spitz.

16

36
37
38
 

39
 

TOP COMPETITORS

The following companies are the major competitors of Frito-Lay North

America, Inc.
1. Campbell Soup Company
2. ConAgra Foods, Inc.
3. General Mills, Inc.
4. Kellogg Company
5. Mondale International, Inc.
6. Old Dutch Foods, Inc.
7. The Procter & Gamble Company
8. Snyder's-Lance, Inc.
9. Hostess Brands, LLC

OUR VISION

40
At Frito-Lay, we’re all about good fun — from making tasty snacks to get your party started
to taking care of our 50,000 employees who know how to find the fun in everyday
challenges. As a proud member of the PepsiCo family, Performance with Purpose is what we
work to achieve every day. And to us, that means creating the high-quality snacks our fans
deserve, while caring for our people, communities and the environment we share.

That is, winning in the marketplace, accelerating growth and keeping our commitment to the
planet and our communities. A clear set of strategies that will make us Faster, Stronger, and
Better, define this vision.

OUR BRANDS
we make the best snacks on earth and have good fun while we’re at it! Whether you’re
looking for a savory treat to enjoy while kicking back and relaxing at home or picking up
snacks for a weekend get-together, we have something tasty for every occasion. Explore all
our brands below, to find your perfect snack.

OUR COMMITMENT

For many years, we have been taking steps to reduce our impact on the environment while
making, moving and selling America’s favourite snacks. Key to our success in this space is
our employees. Working at our manufacturing and sales sites across the U.S., our people help
us take steps to reduce our environmental impact each and every day.

SLOGANS

 Simply made. Simply Good. (2009)

41
  That's another reason to smile! Lay's Potato Chips (2007)
 Food for the fun of it! (2007)
 Lay's, get your smile on! (2006-)
 Lay's. Want some?
 Batcha can't eat just one (1960s-present)
 You can't eat just one.... Lago bet! (Lay's India)
 Her programme kea main food (Lay's India) meaning- The main food for every
programme
 No one can eat just one (Lay's India)
 The more you eat the more you want, — Doritos Tortilla Chip
 For the bold. Hostess potato chips.
 Bole mere lips, I love Uncle Chips
 Ruffles have Bridges. Uncle Chipps.

LITERATURE REVIEW
Frito-Lay, Inc. is a division of PepsiCo, Inc. a New York-based diversified consumer goods
and services firm. Other PepsiCo, Inc. divisions include Pizza Hut. Inc., Taco Bell

42
Corporation, Pepsi Cola Company, Kentucky Fried Chicken, and PepsiCo Foods
International. PepsiCo, Inc. recorded net income of $1.077 billion on net sales of $17.8
billion in 1990. Frito-Lay, Inc. is known as a worldwide leader in the manufacturing and
marketing of snack chips capturing nearly 50% of all retail sales in this area. It houses well--
known brands such as Lay's brand and Ruffles brand potato chips. Fritos brand corn chips,
Doritos brand, Tostitos brand and Sanitas brand tortilla chips, Cheetos brand Cheese-
Flavored snacks, and Rold Gold brand pretzels. The snack chips industry accounts for
approximately 26% of the snack-food industry Doritos brand tortilla chips and Ruffles brand
potato chips have the distinction of being the only snack chips worth $1 billion in retail sales
in the world. Frito-Lay, Inc. accounts for 13% (half of total sales) of sales in the United States
snack-food industry which is approximately worth 3.5 billion per annum. Frito-Lay is a
major power-house in the snack chips industry. It accounted for 50% of all snack chips retail
sales in 1990. Of the top ten best-selling snack chips in the United States, 8 of them are Frito-
Lay brands and the top 5 selling chips are all Frito-Lay brands. We can consider Frito-Lay to
be major player it not the monopolistic leader in this category. Categories in the snack food
industry include candy, cookies, crackers, nuts, snack chips, and assorted other items. This
classification consists of establishments primarily engaged in manufacturing potato chips,
corn chips, and similar snacks. Establishments primarily engaged in manufacturing pretzels
and crackers are classified in SIC 2052: Cookies and Crackers; those manufacturing candy
covered popcorn are classified in SIC 2064: Candy and Other Confectionery Products; those
manufacturing salted, roasted, cooked, or canned nuts and seeds are classified in SIC 2068:
Salted and Roasted Nuts and Seeds; and those manufacturing packaged unpopped popcorn
are classified in SIC 2099: Food Preparations, Not Elsewhere Classified.

The "salty snack" industry includes potato chips, corn chips, tortilla chips, ready-to-eat
popcorn (except candy-coated), pork rinds, potato sticks, and extruded snacks such as cheese
puffs. According to the Snack Food Association, Frito-Lay was the undisputed champion of
this industry category, with Tostitos, Ruffles, Rold Gold, Fritos, Lay's, Cheetos, Sun Chips,
and many more top sellers under its umbrella. Potato chips and tortilla chips controlled the

43
snack foods market. Some 84 percent of American households eat potato chips, which had
one-third of the salty snacks market. The snack chip industry contains mainly three types of
competitors namely, the national brands, regional brands, and private brands. National brands
are those that distribute products nationwide include Frito-Lay, Borden, Procter and Gamble,
RJR Nabisco and Eagle snacks. Regional competitors consist of regional brand firms which
distribute products in certain parties of the United States. Private brands are produced by
regional or local manufacturers on a contractual basis for major supermarkets chains.
The competition in the snack food industry is very intense. As many as 650 different types of
snack chip products are introduced into the market each year by both national and regional
brand companies. Most of the products are new flavors for existing snack chips. It is reported
that the new-product failure for snack chips is very high. Pricing is often very competitive
and snack chip manufacturers often resort to price deals to attract customers.

STRATEGY CONSIDERATIONS

Riskey presented a few strategy options tor Sun Chips Multigrain Snacks to the management
of Frito-Lay. An increase in advertising and merchandising expenditure was advocated if the
brand was test further or launched nationally. They believed that brand awareness would
increase with additional spending and felt that spending the national introduction equivalent
of $30 million could stimulate brand trial as well.
A large package size was also recommended. This would result in additional volume as a
larger package size is being purchased. They believed that a forth, larger package could add
about one-half ounce to the average annual purchase per repeat purchase occasion. Some felt
that another package size would only be more applicable after the brand is established in the
market.

The option of building household repeal and depth of repeat business was also recommended.
Using a flavor extension, it could increase the repeats per repeater to an average of 3 ½ times
per year given greater variety for consumers.

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The test market for Minnesota-St. Paul was an immense success. There was no need to
extend the test market exercise as with such results, it was only a matter of time before
competitors would get wind of these test results and proceed to launch a similar product. Any
delay in launching the product proper would result in a likely loss of the first mover
advantage.
There are 2 possibilities that Frito-Lay has in order to capitalize on the strong test market
results
(a) Move with a nationwide launch using the tactics and strategies of the Minnesota-St. Paul
test market as a template
(b) Move with a partial launch in selected states, hence minimizing all possible risks of
failure
In the light of these results, the team recommends that Frito-Lay adopt the second option and
begin a partial launch of Sun Chips. We recommend the launch to be held at another 5 states,
whose demography is most similar to that of Minnesota-St. Paul. This will give a higher rate
of success as well as minimize the costs of failure.

AWARDS AND RECOGNITION

45
PepsiCo in its Frito-Lay division, has earned a variety of awards and recognition across
several categories, including environmental sustainability, diversity and inclusion, safety and
innovation. We are proud to share some of our latest honours with you.

AWARD

Bronze Stevie for “Most Valuable Corporate Response”

Corporate Citizenship Award

Community Impact Award

Sustainability

AWARD

The ACT Expo Fleet Awards are the ultimate recognition of fleet operators who show true
leadership in sustainable transportation. The awards recognize fleets that have gone above and
beyond what has been required to achieve sustainability in their transportation operations.

Received the “2017 Excellence in Energy Efficiency” award for projects done in 2016 to reduce
electrical consumption. The award was given to us by Rocky Mountain Power (our electricity
provider), the Utah governor’s board and Utah Clean Energy

The winners, chosen by the Fleet Owner Magazine’s staff showcase the impact that key words and
images can have in effectively promoting a brand.

46
 AWARD

AOE for 2014 RC performance which received in the spring of 2015

The annual SmartWay Excellence Award honors top shipping (retailers and manufacturers) and
logistics company partners for superior environmental performance and additional actions to reduce
freight emissions through effective collaboration, operational practices, a robust system for
validating and reporting their SmartWay data, and communications and public outreach.

Private Fleet of the Year

The annual SmartWay Excellence Award honors top shipping (retailers and manufacturers) and
logistics company partners for superior environmental performance and additional actions to reduce
freight emissions through effective collaboration, operational practices, a robust system for
validating and reporting their SmartWay data, and communications and public outreach.

Marketing

AWARD

Winner // Lay’s // Smile with Lay’s // Achievement in Branding Reputation and Engagement

Bronze // Stacy’s Pita Chips // Stacy’s Stands With You // Design Packaging Design: Special Editions
& Promotional Packaging

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AWARD

Silver // Adobe // Make a Masterpiece // Cyber: Microsites

Silver // Cheetos // Cheetos Museum // Cyber: Food & Drinks

Gold // Cheetos // Cheetos Museum // Cyber: Co-Creation & User Generated Content

Gold // Cheetos // Cheetos Museum // Promo & Activation: Co-Creation & User Generated Content

Gold // Cheetos // Cheetos Museum // PR: Food & Drinks

Gold // Cheetos // Cheetos Museum // PR: Co-Creation & User Generated Content

Finalist // Doritos // Doritos Rainbows // Positive Change: Social – Brands

Silver // Doritos // Doritos Rainbows // LGBT Community

Silver // Cheetos // Cheetos Museum // Snacks & Desserts

Merit // Tostitos // The Breathalyzer Bag // PR: Events & Experiential

Merit // Tostitos // The Breathalyzer Bag // Intellectual Property: Integrated Digital and Physical Product

Merit // Tostitos // The Breathalyzer Bag // Direct Marketing // Craft – Use of Digital Technology

48
AWARD

Merit // Tostitos // The Breathalyzer Bag // Direct Marketing // Craft – Art Direction

Merit // Tostitos // The Breathalyzer Bag // Branded Entertainment – Innovation in Branded

Entertainment

Merit // GRANDMA’S Cookies // Are You My Grandma? // Film: Online Films & Video – short form –
campaign

Bronze // Tostitos // The Breathalyzer Bag // Public Relations – Integrated Campaign

Bronze // Doritos // Doritos No Choice // Social Media: Social Engagement – Community Building

Bronze // Cheetos // Cheetos Museum // Social Media: Branded Social Campaign

Silver // Tostitos // The Breathalyzer Bag // UX/UI

Gold // Cheetos // Cheetos Museum // Social Media: Social Engagement – User Generated Content

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Pepsi to launch Lay's campaign ahead of Cricket World Cup 2015

NEW DELHI: Beverage and snacks major PepsiCo India will launch Lay's campaign
featuring Bollywood actor Ranbir Kapoor ahead of the ICC Cricket World Cup 2015. 

The campaign called 'Yeh Game Hi Hai... Taste Ka' captures the frenzy which grips India
when the ICC Cricket World Cup is on and how mismatched timings of the matches this year

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will create a dilemma for viewers, PepsiCo said. This year, the tournament is taking place in
Australia and New Zealand with matches being broadcast anywhere between 3:30 am and 12
noon, India time. "We are very excited about this campaign. This powerful campaign brings
together love for Lay's and cricket. This campaign will run on multiple touch points,
including television, radio and digital medium," Rajiv Mathrani, Director & Category
Marketing Head-Snacks PepsiCo India told PTI. PepsiCo is also one of the sponsors of the
tournament. The campaign will go on air in few days, Mathrani said. Elaborating on the
campaign," PepsiCo said: 'Yeh Game Hi Hai... Taste Ka' campaign will unfold with 360-
degree outreach and engagement plan... the campaign will cut across multiple media vehicles.
There is a robust plan to popularise the campaign and bring people closer to
matches." "Taking the insight of mismatched timings we will have significant presence across
Digital retail, radio, print and TV," the company added. 
The company will also run a contest wherein winners can win tickets to matches in Australia
and LED TVs. 

DATA ANALYSIS
SWOT ANALYSIS:

Lays is a popular brand of potato chips which is owned by Frito Lays which is a

fully owned subsidiary of PepsiCo. The potato chips are available in a number of
variants some of which are global like American Cheese and some others which
are local like India’s magic masala.  The chips which have got many popular
variants like Classic salted, Spanish Tomato Tango, Lays Cheddar & Sour Cream,
and LaysFlamin Hot etc.

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 A market leader in most markets it is a part of Frito Lays control 56 % of
the market share in the American market which is one of its biggest. Lays is one of
the flagship brands of potato chips and not generates sales revenue close to 1.2
billion USD. Lays was introduced for the first time in the year 1932 and since then
it has been able to consistently beat the competition and sustain its leadership in
the market.

Table of Contents
 Strengths in the SWOT analysis of Lays
 Weaknesses in the SWOT analysis of Lays
 Opportunities in the SWOT analysis of Lays
 Threats  in the SWOT analysis of Lays

Strengths in the SWOT analysis of Lays

The following are the strengths of Lays:

 Global yet local: Lays has been a popular flavor of potato chips across the world because
while they have flavors which are accepted internationally like Classic Salted or American
Cheese, they also have local flavors like Spanish Tomato Tango or India’s magic masala. These
flavors give a local tinge to the brand.
 Frito Lays: Frito Lays is a veteran in snacking business and has been a consistent leader here.
The company has a market share of more than 35 percent of the world market in snack chips
and 60 percent in the United States. Frito Lays also has five of the world’s top chips brands -
Lay’s, Ruffles, Doritos, Tostitos, and Cheetos each of which gives the company an annuals
sales of 1 billion USD each. The company has the presence in all popular chips categories such
as


 potato chip, tortilla chip, and corn chip sectors. This experience gives Lays the
much-needed backing in the chips category.
 Wide distribution channel: PepsiCo which is currently the owner company of
Lays has a widespread distribution channel. This ensures that Lays is made
available in even remote locations which in turn has increased its popularity
manifold.
 Target segment: Lays has the right segment as its primary target which is the
young adult. Through interesting advertisements and right brand

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 ambassadors who represent youth, vibrancy, and energy the brand has won the
hearts of millions of youngsters across the world.
 Local Sourcing: One of the key strategies of Frito-Lay’s to win the hearts of
customers was to introduce local sourcing and connect them to the supplier
through one of their programs called “ Lays Local Campaign” which was
introduced in the year 2009. Through this program, a customer could get
introduced to five farmers who were growing potatoes for the company. This
was done in order to ensure that the customer had no qualms about the source.

Weaknesses in the SWOT analysis of Lays

Weaknesses are used to refer to areas where the business or the
brand needs improvement. Some of the key weaknesses of Lays are:

 Reduction in snacks consumption: There has been a reduction in snacks consumption

globally due to growing health concerns. This reduction has impacted the sales of Lays
negatively.
 Poor margins: There is very high competition in the snacks market and not much
scope for differentiation except in flavouring. The scope of price differentiation is less
since the customer is highly priced sensitive. Thus these brands need to keep prices as
low as possible with the result that the margins are very low.
 The low propensity for innovation: In a snack like Frito Lays there is very low scope
for innovation. The result is that the brand Lays which has been in the business for a
long time is losing market share to smaller rivals and the low brand loyalty from
customers is making them switch brands aggressively.

Opportunities in the SWOT analysis of Lays

Some of the opportunities include :

 Healthy snacks: There has been a shift of customer preference of customers from

snacks to healthy snacks. This has resulted in a creation of a new market for baked
snacks as well as organic snacks. These areas that Lays can look into for new business
 Exposure: In comparison to earlier years people are more aware of global brands as
well as global flavors with the result that there is increased scope for globalizing the
offerings from Frito Lays.

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Threats in the SWOT analysis of Lays
Some of the threats include:

 Competition: Some of the major competitors of Lays Are Ruffles, Doritos, Tostitos,

and Cheetos. There is also growing competition from a lot of local brands.

MARKETING PLAN FOR FRITO LAY

SEGMENTATION
Segmentation is the division of the market into various homogenous groups.
Basically, Frito Lay products are generally marketed to the Hispanics prior to targeting the
general market. Frito Lay has Mexican roots which explain why the Hispanic market was the
initial market segment. The attractiveness of the market is evident on the strong needs for
snacks among all segments. Nevertheless, the focus of segmentation is on penetrating the
teen segment. As such, while the Hispanic population likes bold and spicy Flavored snack,
there is high influence on kids in making snack purchase decisions, emerging Y generation
has purchase power and busy lifestyles demand food on the go.
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 Further, Frito Lay is a leader in the dip market but since there are many competitors in
the market the company decided to penetrate the vegetable dip segment. This is in addition to
chip dips segment particularly the shelf-stable sour cream based dip and other chip dips
which are already in the mature stage of its lifecycle.

TARGETING
            Targeting is the identification of audience to which a product will be marketed. As
already noted the Hispanic population is the initial target market but now also includes the
generations X and Y. Teenagers make up a considerable percentage in the marketing
activities of Frito Lay especially since they are very particular with value of money. 

POSITIONING
            Positioning refers to the creation of image in the minds of the target market.
Frito Lay indulgence that offers extreme taste, crunch and flavour is the value proposition.
With this, it is critical that a well-developed product mix should be use wherein the loud
image and the bold flavour of Frito Lay products could be highlighted.  

MARKETING MIX – 4P’s

Leanne Oliver
Product in the Marketing Mix of Lays:
Lays is a popular brand that offers several variants of potato chips in the
consumer market. It believes in introducing variants at regular intervals to
attract its customers at the habitual basis. In the 1990s it offered its
consumers a fat-free variety with low-calorie version.

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Additional flavors were also added to its products to increase its customer
share. Some of the variants in Lays product portfolio are as follows-

 Lays Barbecue Flavored Potato Chips

 Lays Chile Limon Flavored Potato Chips
 Lays Deli style original Potato Chips
 Lays Classic Potato chips
 Lays Cheddar & Sour Cream Flavored Potato Chips
 Lays Wavy Milk Chocolate Covered Potato Chips
 Lays Wavy Ranch Flavored Potato Chips

 Lays Wavy Cheddar Flavored Potato Chips

 Lays STAX Extra Flamin ’Hot Flavored Potato Chips
 Lays STAX Sour Cream & Onion Flavored Potato Chips
 Lays STAX Salt & Vinegar Flavored Potato Chips
 Lays Dill Pickle Flavored Potato Chips
 Lays Flamin ‘Hot Flavored Potato Chips
 Lays Honey Barbecue Flavoured Potato Chips
 Lays Lightly Salted Potato Chips
 Lays Limon Flavored Potato Chips
 Lays Pico de Gallo Flavoured Potato Chips
 Lays Salt and Vinegar Flavored Potato Chips
 Lays Southern Biscuits and Gravy Flavored Potato Chips
 Lays Kettle Cooked Jalapeno Flavored Potato Chips

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Place in the Marketing Mix of Lays:
Lays have gained international recognition and its products are easily
available in most countries of the world. Its founder started snack-
food operations from Dorset in the United States and with time expanded to
include most global countries like Australia, Argentina, Brazil, Colombia,
Egypt, India, Indonesia, Italy, Mexico, Pakistan, UAE, Canada, United
Kingdom and South Africa. Lays have a strong distribution network that
includes services of manufacturers, distributors, retailers to reach
consumers via corner shops, discount stores, convenience stores,
hypermarket and supermarket.

Price in the Marketing Mix of Lays:

Lays have adopted several pricing strategies to satisfy its price-conscious
customers. Company’s value-based prices are the reflection of its position
as a brand with distinctive features like effortless accessibility, easy
affordability, great taste and high quality.

57
Lays remain wary of its competitors and have reserved competitive
pricing plan to keep its product prices at par with rival companies to
maintain customer loyalty. It also uses a promotional pricing plan at regular
periods to increase its short-term sales volume. The company offers
several incentives like bulk deals, discounts and price packs. This helps in
maximum sales in minimum time and garners extra profits.

Promotions in the Marketing Mix of Lays:

Lays are one on of the companies who realized the importance of

advertising at its onset. In the year 1944, it bought television commercials
and appointed Bert Lahr as its celebrity spokesman and became the first
manufacturer of snack-food items to do so. Currently, it has utilized every
possible advertising tool to create brand visibility. Its ads are funny and
attractive with catchy taglines. Ads are shown in popular
television channels, radio, magazines, newspapers, hoardings at popular
places and on sides of several vehicles like bus, tram and auto-rickshaws.

In order to move with changing times, it has started campaigning in social

media portals via Twitter, Facebook, Blogs and YouTube. Lays have
realized the importance of celebrity endorsement and have roped in several
famous personalities to act in its ad campaigns. In India actors Ranbir
Kapoor and Saif Ali Khan along with cricketer Mahendra Singh Dhoni
endorse Lays. In Pakistan, the product is endorsed by Ali Zafar, pop star.
Several popular taglines are associated with lays like batcha can’t eat just
one and be a little dialogical.

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CO-ORDINATED MARKETING ACTIVITIES:

(a) TQM Approach: Frito Lay is working on continuous improvement of quality&

conducts customer surveys to evaluate customer satisfaction.

(b)Improved designs: (both product & process) are implemented to reduce cost & fault
rate.

DEMOGRAPHICS
With the increase in population, the number of computer users are also increasing
substantially. This factor is taken into account during demand forecasting.

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STRATEGIES

New packs of Rest 3 and Rest 5 of Kurkure and Cheetos are introduced to compete
with companies like Bingo, Parley etc.…

MARKETING SHARE

13% 5%

14% 58%

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COMPETITION

Multinational snack maker Frito-Lay has indianite its potato chips brand Lay’s in the
wake of competition by new entrants like ITC’s Bingo.

 ITC – Bingo
 Parley Snacks – Musset Bites& Stix, Smart Chips, Chee sling.
 Other Players – Balaji Wafers, Haldiram, Yellow Diamond.

Although, Frito-Lay India leads the market with a share of 45 per cent, it has lost over 10 per
cent share in the Rs 2,000 crore branded snacks market this year. Haldiram’s and ITC have a
market share of 27 and 16 per cent, respectively.

COMMUNICATION

           

Frito Lay communicates its loud image and bold flavor through endorsements, psychographic
usage and popularity usage. Advertisements are existent on TVs, radios, magazines,
newspapers and other printed materials, billboards and the Internet.

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BRAND BREADTH

What Are the Marketing Goals for Frito-Lay?

Frito-Lay uses a variety of marketing techniques to achieve its business goals. The Frito-Lay
company is a $13 billion subsidiary of PepsiCo that employs 48,000 people. This brand,
filled with well-recognized products including Cheetos, Doritos, Rold Gold Pretzels and Sun
Chips, is found on the store shelves of most major chains and convenience stores. The 75-
year-old business owes much of its success to the achievements of its marketing division.

CONSUMER TARGETING

A prime marketing goal of Frito-Lay is attracting consumers through extensive targeting. The
company gains this recognition through advertising its snack foods to parents with kids,
offering products in vending machines and using brand mascots such as Chester Cheeto to

62
appeal to its youthful demographic. Charles Larson, author of the book, "Persuasion:
Reception and Responsibility," states Frito-Lay taps into the child and teen market by
allocating 9 percent of its advertising resources on website advertisements. The company also
engages in partnerships with other businesses known to attract kids and teens.

PRODUCT ADAPTATION

Companies must be willing to alter their products to suit the changing tastes of their
consumers. Frito-Lay introduced its "Baked" line of potato chips to accommodate consumers
desiring healthier snack options. The focus on the environment in the late 2000s compelled
the company to introduce the biodegradable snack bag for its line of Sun Chips. Elizabeth
Royte cites another instance in her book, "Garbage Land: Secrets of the Trash Trail," how
Frito-Lay was one of several companies to offer an organic line of products in hopes of
tapping into the $226 billion spent by consumers in 2000 on eco-conscious products.

MARKET PENETRATION

Another marketing goal is gaining market share from different ethnic groups or by going
overseas. The company meets this goal by introducing products with flavors and a packaging
design that appeals to a specific region. Ken Black, in "Business Statistics," says Frito-Lay
offered the Hispanic community Chile and tomato chips, fried corn strips and lime-seasoned
chips. The company also included a smiley-face on the packaging to remind these consumers
of a Mexican sister brand that used a similar image. Frito Lay engages in similar marketing
efforts with the Chinese and Indian markets.

OVERCOMING OBSTACLES
Frito-Lay uses marketing efforts to overcome stigmas related to its products. The health
movement and the Atkins diet posed significant threats to a company that purveys high-carb,

63
high-calorie snack foods. In some cases, Frito-Lay piggybacks on health trends such as
locally grown food by offering chips from potatoes grown in the U.S. The company also uses
advertising techniques to make women feel less guilty about their eating habits by touting
healthier ingredients.
SEGMENTING AND TARGETING MARKETS
LAY’S is such kind of product which is designed for the region of south Asia specially the
sub-continent (Pakistan and India) where the people like spicy kinds of food and Snacks
including urban and suburban areas. LAY’S is not concerned with any religion, race,
occupation, family life cycle or gender and has a target market in every social class. Main
concerned segment is youth who have experienced high product consumption level. But they
are also targeting families, as they understand this influence factor in this region. Except
lower classes of our society, every social class and income level is favourable for the
company. LAY’S is usually consumed on occasionally basis, providing the better quality at
economical price along with the convenience to consume. We deeply focus on non-users,
potential users and first time users in readiness stage they are unaware, desirous, interested
and intending to buy. LAY’S is expecting the positive response from the customers. Lay's
Chip targeted high schools, knowing that children were driving Frito-Lay's growth in US.

One of the major target market of Lays is children and young audiences of sports and
entertainments such as consumers in theatres or stadiums even at home. "Most businesses
today use a mass-marketing approach designed to increase market share by selling their
products to the greatest number of people". They know the benefit of market segmentation
strategy which is much better than a formal marketing strategy. Its major distribution is
within teens and generation Y. They produce different style for different group. For
example, women who don’t want the fat…they make Baked ones.

As we all know Lay’s Potato Chip is known for one of the best snack in the world. The
Company has 33 different snacks already and 4 new products have introduced in 2012.The
products have an amazing taste. The most important factor in successful new product

64
introduction is a good match between the product and market needs- as the marketing concept
would predict.

DEVELOPING NEW PRODUCTS GOES THROUGH MANY STAGES

BEFORE GOING TO THE MARKET.

The first stage is new product strategy that is the roadmap of future product.
The second stage is generation of ideas coming from customers, distributors, competitors,
research and development. then product goes to another stage Business analysis. Lays does
research of competition and market to determine future profitability. The next stage is
development when Lays tested of the product performance and safety. Then its products
are introduced in test market to evaluate consumer’s response. Finally Lays brings the
product to commercialization. Lays has experienced sales force that presents new product to
the market.

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INTEGRATED MARKETING COMMUNICATION
One of the major target markets of Lays is children and young audiences of sports and
entertainments such as consumers in theatres or stadiums even at home. Lay's uses product
advertising to stimulate primary demand for primary product such as Lay's classics.
The promotion plan then becomes an integral part of the marketing strategy for reaching the
target market.
Lays has many ways of communicating with their consumers. This is very important for sales
and product popularity. Lays makes sure their communication starts in retail stores. A major
way of Lays communicating with their consumers is through internet sites such as blogs.
These blogs are used for finding out information about Lays products and finding out
consumers’ needs through letting them post what products they would like to taste. Also if
any customers have any question a Lays’ consumer care team can help answer it. This form
of communication is an advantage for Lays for the fact that everyone uses the internet and
email so their consumers have easy access to communicate with the company.

FRITO-LAY’S NEW MARKETING PLAN TARGETS BOTH HAVES

AND HAVE-NOTS

Healthy food advocates have been pushing hard to get consumers out of the supermarket
snack aisles and into the produce section as a way to address our nation’s serious obesity
epidemic. Not surprisingly, snack-food companies have launched a counter-offensive,
reshaping their marketing plans to lure eaters back.

In fact, Frito-Lay might have been taking notes at the occupy movements around the country.
According to a recent story in The New York Times, the company is readying plans to entice
the palate of the country’s elite one percent by introducing new products and renewing
existing brands .

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But they’re not leaving lower-income consumers alone. Company execs hope to lure the
remaining 99 percent with dollar-store checkout displays packed with products like crispy,
but not exactly nutritionally dense, Taqueros. But most companies follow the money.

“While the overall $22 billion salty snacks market is losing sales, its $2 billion premium end
has grown on average about 7 percent over the last two years, according to Goldman Sachs,”
writes Strom. The low-end market expects 4 percent growth.

Over at the Public Library of Science (PLoS), a series on “Big Food” shows the growing
influence and agenda of multinational food companies.

“Food, unlike tobacco and drugs, is necessary to live and is central to health and disease. And
yet the big multinational food companies control what people everywhere eat, resulting in a
stark and sick irony: one billion people on the planet are hungry while two billion are obese
or overweight,” write the editors.

SEE PRODUCT CONCEPTS

As a convenience product, Lay’s potato chip is available everywhere, including, gas station,
grocery chains, newsstands and vending machines. Convenience products are usually
inexpensive and require little shopping effort and planning.  Lay’s has a product line
extension, trying to make their company larger and provide more than just potato chip to the
world although it remains on top. It produces other products to keep the company successful,
with achievements of manufacturing FRITO-LAY® Almonds Roasted Salted, Cashews
Salted, Peanuts Salted, Sunflower Seeds, Trail Mix Nut and Chocolate, etc. This is what you
would also call a product mix because the company does not just only sell one product.

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 Lay’s tries to provide the best for its consumer so today they are working on packaging chips
with attractive colour, healthy, safety and informational labelling.

Lay’s Chips – Product Analysis

Before Lay’s chips were introduced the

Core Product company took surveys to find out what people wanted from potato chips
and found.

The Core Benefits from lay’s chips are:

 E l i m i n a t e s hunger.

 P r o v i d e s energy.

 People save time waiting at eateries because chips are quick and easy.

Physical Characteristics:
Actual Product

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  V e r y thinly sliced potatoes, which are fried, baked, processed or

kettle cooked. Depending on the

format, which they are being sold.

 F l a v o u r e d with any of the 20+

flavours’.

 S o l d in five different formats first being the regular fried chips, then

came the Lay’s WAVEY then the

fat-free WOW brand, then came the processed STAX, and lately the

new KETTLE COOKED.

 T h e y come in three different sizes the smallest, which is intended for

personal consumption. Then there is the regular size bag that could be
shared with one or two people, and then there’s the family

size, which is intended to be shared with others.

 C o m e s in a shiny foil bag that has a different design for each of the

different flavours

 L a y ’ s regular and lay’s STAX have

16 different flavours, and the Lay’s

Kettle Cooked have 4 different flavours.

 T h e Branding of Lay’s Chips is a

sunburst with a red ribbon going around it saying “Lay’s”

 The design of the bag is 2 pieces of foil heat-crimped at the top and bottom
with an easy open flap in the middle of the back piece of foil.

Addition features and benefits of Lay’s

Augmented Product
Chips:

 L a y ’ s has a website where

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 someone can go look up nutritional information

 I n f o r m a t i o n on the company

 T h e company’s history

 H o w to contact Lay’s Chips?

 They also have a “chip-tracker” if you go online to www.lays.ca and

put 3 digits that are on your bag of chips, you can find out where your
bag of chips was made!

 L a y ’ s has an 1888 number a person can call with comments or questions.

THE MARKETING MIX

PRICING ANALYSIS

The lays brand uses a number of different ways of selecting an approximate price level.
There are many ways to select a price which may include: demand orientated approach,
cost orientated approach, profit orientated approach and competition Orientated approach.

DEMAND ORIENTATED APPROACH

In the demand orientated approach, the lays brand, based on what I have seen uses the
penetration pricing approach which means that the Frito lay company initially started off
selling their product at a low price and then gradually increased the price based on the

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response given by consumers. As you can see tin the competitive analysis chart the lays
brand uses odd even pricing so as to appear cheaper than the other competitors.

COST ORIENTATED APPROACH

The Frito lay brand and other snack brands usually use the standard price mark-up pricing
approach which means that it s ells the product a t a higher price to compensate for
the cost it takes to make the product to gain a profit. In the recent years there has been an
increase in the price of the bag of chips because it was spent on advertising.

PROFIT ORIENTATED APPROACH

Because the lays brand and generally all snacks are sold in supermarkets the profit orientated
approach that is being used is the Target Return on sales Pricing. The supermarkets
generally set prices that will give them a percentage of the profit garnered from the
selling of lays chips.

PRICING STRATEGIES:

The pricing strategy which is LAY’S is following, cannot be easily evaluate because from
company has not mentioned clearly about any system. However most of the companies
including this are following the Cost-Based Pricing. But a company cannot follow a single
strategy straight because in the FMCG’s product market their will be affluence of competitors
based pricing along with a bit effect of customer value.
Their cost includes:

 Man Power
 Machinery
 Electricity
 Raw material

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  Employees

Setting the right price is the most important thing, and Lays is doing well. Price is set by
keeping in view the quality of the product and the prices which are being offered by the
competitors.

Profit Maximization:

Pepsi has priced its products to achieve a certain percentage return on its sales. It has settled
the price of its products so that it can earns a net profit on its net sales.

Consumer Satisfaction:

There is a balance in consumer’s mind between the price they pay and the quality of the
product they purchase.

Affordable Price:

The price of Lays is affordable for middle level income groups. The price is adjusted
according to the demand of the product.

ADVERTISEMENT

The Lays chips started advertising through commercials in 1950. Since then they have
succeeded and now have a unique way of promoting their product by having an outdoor
advertisement and by using a hand carved billboard. They also have a website which helps
them handle the customer service and they even appeared on harper’s magazine. This
allowed them to become more aware of customer complaints, which in result would make
their product better.

Lays: No One Can Eat Just One

Company: Frito Lay ( PepsiCo Group )

Agency: JWT

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If you believe that it is not possible to brand a commodity that too a food product and sell it at
a premium, think again. You are mistaken. Ask any youngster what would he like as a snack
food. Chances are that he will say Lays..

Lays from Frito lay : a group company of PepsiCo India is the only money making machine
for this global giant in India. Indian snack food business is a huge market to the tune of
17000tonnes out of which the branded foods contribute around 6500 tonne. In revenue terms,
Indian snack food business is worth around Rs 2500 crore and growing. Lays commands a
monopoly sort of position in the Potato chips category which is around 85% of the snack food
market.

Lays is competing head on with the unbranded players in the market and if you look at the
broader levels of competition , this brand is competing even with the snacks from our own
kitchen. It is interesting to see how this brand has succeeded in the commodity business. It
followed all the rules to perfection.

1. Quality: the brand offered superior quality compared to the other unbranded snacks there
by reducing the risk to the customer. The crisp and beautifully packed chips were a new
experience for the Indian consumer.

2. Value addition: the brand offers unimaginable range of potato chips with many flavours
made especially for India. Together with many new international flavours, it easily caught the
imagination of Indian consumer

3. Aggressive brand building: No one needs to teach PepsiCo How to build a brand! Lays
spent lot of money on brands building and once established were able to charge a premium
for the brand. Although initially Indian consumer were pissed off by the high price, slowly
the brand established its credentials. The so called "Liberation child' and the software yuppies
caught hold of this brand. These trend setters made this brand a must for looking cool in
campuses. " Lays with Cola" began to take its toll on "Samosa and Tea".

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Lays lavishly spent money on brand building. The ads were catchy and was positioning the
product on the platform of "Taste”. The baseline ' No one can eat just one " is one of the most
successful baseline in Indian advertising. The baseline is true also since the taste is
compelling that no one can eat just one. The brand ambassadors Saif and Priety gave a cool
attitude to this brand making it more interesting for the new generation. Lays have always
tried to excite its fans by launching new flavors frequently. This ensured that the brand is
never boring. The latest flavor is the Latino style. The company is going to focus on Music as
a base for building this brand.
With ITC foraying into this business will see the market expanding. But Lays have put itself
in a formidable position that is difficult to match. For now, no one can eat just one.

Sales promotion
When the customer buys the product they are eligible to enter in a code that is included
with the product. Than you can save points to use later on a vacation.

Create a Potato Chip Flavor, Win $1 Million

  Think you have taste buds worth $1 million?  Lays announced a new flavor contest that
offers the winner $1 million or 1 percent of the chip’s net sales for 2013.

Facebook votes will determine the ultimate potato chip champion.  The company will select
three finalists.  Instead of hitting a “Like” button, users will hit a “I’d Eat That” button to cast
their vote.

Ram Krishnan, vice president of marketing at Frito-Lay told India today “I fully expect this
to get us into a different flavor category.”

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The company ran a similar contest in Spain that a 21-year-old student won with his Spanish-
tapas inspired chip.  The chip, Flavored to taste like prawns, garlic and peppers, won the
student 20,000 euros ($25,000) and 1 percent of the chip’s sales for 2012.  Lays also held
similar contests around the world in Australia, Poland and Egypt. Companies including Ben
& Jerry’s and Baskin-Robbins have done flavor contests in the past.

STRENGTHS AND WEAKNESSES:

Advertisement:

PROS: - used to sell the product/service

-Allows the customer to know about the product
-Gets the companies name and product in the market
-Allows customer to see the product in a positive light.

CONS:
-Expensive

Public Relations:

PROS:

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 -Allows customers to know that the producers care about them
-Creates relationship between the company and the buyers
-Possibly attract new customers
-Allows customers to be more involved in the product

CONS:

-Time consuming
-Pricey
-Dealing with more complaints/people

Sale Promotion:

PROS:
-Returning customers
-Customer purchasing more
-Possibly attracting customers

CONS:

- Dealing with more complaints

- Stressful

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Direct response:

PROS:

-Interact directly
-Quick access information
-Customer appreciation

CONS:

- Requires a response

- Pricey because there has to be employees that are ready with a response.

DISTRIBUTION ANALYSIS

There are many distribution channels to Lay’s chips. A few of those

distribution channels a r e w i t h v e n d i n g ma ch in es , Lay’s fa ct or y , and
L ay ’s c hi ps website itself. A direct channel to the consumer would be with a
vending machine because the consumer is able to receive the item within one’s
hands. The rest of the three channels are considered indirect channelling
because there are other intermediaries involved between the producer and
consumer. With Seven Eleven the consumer comes only in contact with the
retailer that works there . The consumer is able to purchase as much of the
product as he/she really wanted to. With Lay’s factory, they are able to sell low
cost and unit values that are frequently purchased in case quantities to the
wholesaler. The whole seller then can sort the products in smaller quantities for
consumers to purchase. Lastly, on the internet with Lays.ca, an agent is appointed
to handle the many different manufacturers and wholesalers that may want to

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purchase from the company. After the product going through the wholesaler, it
then follows by the retailer that tries to sell it to the consumer.

Distribution Channel

A. Producer Producer Coproduce Producer

Vending Machines Seven El even Lay's Factory Lays .ca

Agent

Wholesaler Wholesaler

Retailer Retailer Retailer

Consumer Consumer Consumer Consumer

STRENGTH AND WEAKENESS OF DISTRIBUTION

ANALYSIS

STRENGTHS

Lay’s distribution is pretty widely spread. It covers the internet which majority consumers are
using, appears in gas stations which many people go in and out of multiple times, seen in well-
known grocery stores when people need to purchase necessities, and also convenient stores
when people go to purchase minor needs/wants. Having Lay’s chips seen in such a variety of
places allow the product to have a higher chance of being purchased. The more the consumer
sees the product compared to another brand, the more the product will be known. Lay’s

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numerous wholesalers, agents, and also retailers allow it to be a successful company known
worldwide.

WEAKNESS
There aren’t many weaknesses that Lay’s chips distribution has. Adding a couple more
producers would greatly increase the profit within the company because it’s another way
for the product to be purchased by the consumer. It is also another way for more consumers
to know about the product.

FACTORS THAT DETERMINE LAY’S DEMAND

 Brand name: lays is a very popular brand name and trusted among most of the
people. This influences its demand on a huge scale.

 Quality product: Lays is a product of standard quality having registered itself with
the Indian health standards and thus is trusted by all.

 Taste and preferences: the taste and preferences of a consumer affects the demand of
a product hugely. Since the lays potato chips come in a huge variety of flavors it
covers the demand of a huge percentage of the population

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  Price: lays has a nominal price (Rs. 10), and thus is affordable by a huge range of
people. It also follows the law of demand because of which it’s demand is more since
it’s price is less.

 Population: lays is a form of potato chips which is consumed by the people of all
ages, be it senior citizens or students.

 Government policy: there are no government restrictions imposed on lays as such

because of which it can produce in order to meet the demands.

 Advertisements: of all the factors mentioned advertisements are the most important
determinant. Since potato chips are a homogenous product by increasing the ads, it’s
popularity can be increased.

POSITIONING STATEMENT

The lays product has been through many trials and tribulations, but is now a strong influence
in the snack food category. Not much could be said about the weak points of the product but
much could be said about why target consumers choose to continue to be lifelong customers.
A few of the reasons why the target market continues to use the product is that, its affordable
and traditional. Although it surpasses the expectations and goals of the competition, one of
the advantages it has over its competitors is that it’s a staple in the snack food industry giving
it a comfortable familiarity that consumers can always rely on.

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 FINDINGS

The study helped us understand the patterns behind purchase of chips and what psychosocial
benefits one derives from them. Also, it helped track where Lay’s stood in the eyes of
consumers

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 CONCLUSION

            In sum, Frito Lay products are made available to the general public through various,
integrated marketing initiatives. Its value proposition of bold flavour and loud image, coupled
with competitive prices, is the marketing drivers behind Frito Lay. From the Hispanic
population to the mass, Frito Lay boasts for its wide array of snack foods and dips that
complement the needs and lifestyle of the target segments that demand for convenience and
foods on the go. Conclusion

Lay’s is not only competing head on with the branded-unbranded players in the market, it is
competing even with the snacks from our own kitchen. It is interesting to see how this brand
has succeeded in the commodity business. It followed all the rules to perfection. Based on the
survey results we conclude that Lay’s is the leading Snack Product with Kurkure fast
catching up. Lay’s still enjoys the Youthful image due to the Brand ambassadors and various
promotional campaigns. By involving customer in co-creating the products Lay’s has
achieved the goal of Consumer engagement. With a good brand awareness & recall, high

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customer & brand equity, it’s only poised to grow further in an ever-expanding and highly
competitive market

FUTURE RECOMMENDATIONS

Lay’s chips are running a very successful business as seen in the many advertisements
they have already. Lay’s should keep everything they have now but just add on a few more
things to have a better outcome with the product. One way to increase sales and profit
to the company could be having an electronic marketing channel which allows
intermediaries to make a time , place , flavour , and possession utility for
consumers. Having more web sales allows Lays to double their sales opportunities and
also allows the consumer to have an easier access to the product. Lays should keep t h e
website they have that allows agents t o o r g a n i z e t h e p r o d u c t s t o
wholesalers but also have a part where it allows consumer to purchase the product
themselves. With this done, it allows the consumer to have more of an interaction with
the producer. This should only happen if the consumer is purchasing a large amount to
reduce any minor conflicts that may occur with small purchases.

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 BIBLIOGRAPHY

 www.fritolay.com

 www.googleimage.com

 www.scribd.com

 www.slideshare.com

 http://www.pepsicoindia.co.in/

 http://economictimes.indiatimes.com/

 http://www.usatoday.com/

 www.studymode.com

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SOME BOOKS:

 Research methodology, Kothari, cr,2ND Edition, New Age International

Publishers
 Kotler Philip, marketing management, (Pearson education,12th edition)

Project guide comment

1. Number of visits by student

2. Sincerity of student
a) Very good
b) Average
c) Poor

3.Quality of work done

a) Very good
b) Average
c) Poor

4.Ability to learn

a) Very good
b) Average
c) Poor

5.Any other-

6.Project guide name &signature-

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