Creator Influencer Strategy Master Class - Corinne Rose Guirgis
Lays case study_Marketing
1. +
Case study: Lay´s Potato
Chips in Hungary
A presentation by the Purple Cow Riders: Rahul Singla,
Tshering Dolma Gurung, Clemens Doerr, Mehak Gupta
& Kennedy Kimutai
27/04/2015, MDM-Consumer Behaviour
2. +
History of PepsiCo
n Established in 1965.
n A merger of Pepsi-Cola & Frito-Lay.
n Acquired:
n Pizza Hut in 1977
n Taco Bell in 1978
n KFC in 1986
n Presence in more than 160 countries Major businesses – Beverages , Restaurants and
Salty snacks.
n Integral part of growth strategy: Expansion into new markets.
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3. +
PepsiCo in Hungary
n PepsiCo salty snack division set up in April 1995.
n Major Product: Lay’s Potato Chips.
n Marketing strategy : Outdoor Billboard Campaign à proved ineffective in brand
building…
n By Dec. 1995, 10% market share à promotion together with Pepsi drink.
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4. +
Failed Advertising Campaign
n Results of the billboard advertising campaign was a disappointment.
n Lays suffered a weakness in:
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Brand
Awareness
Purchase
Intent
Brand
Image
5. +
Hungarian Potato Chips Market
n In 1996, Market in terms of volume ~ 11,000 tons
n Consisted of 5 major categories:
ü Traditional snacks (49%)
ü Nuts (14%)
ü Potato chips (18%)
ü Extruded product made of corn (17%)
ü Other salty snack (2%)
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6. +
The competitors of Lay´s
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Strong
distribution
network
46% market
share
Transparent
plastic
packaging
(medium
quality)
Priced 2%
higher than
Lay´s
Products -
potato
chips to
corn
product
Heavy
marketing
Catchy
Jingle
7. +
Zweifel, 10%
United
Biscuits, 27%
Chio, 46%
PepsiCo
Snacks, 10%
Bahlsen, 7%
Zweifel
² Austrian brand.
² Low Price segment.
² Price positioning 5%/
7% less than Lay’s and
Chio.
² Mostly price
promotions.
United Biscuits
² U.K. Brand.
² Premium Price Segment.
² Price positioning 12%
higher than Lay´s.
² Metalised coloured foil
packaging (high quality).
² TV and radio advertising.
Bahlsen
² German Brand.
² Premium Price Segment.
² Price Positioning 10% higher
than Lay´s.
² Metalised coloured foil
packaging (high quality).
² TV and radio advertising.
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10. +
Hungarian Consumer Behavior
n Snack habits differed significantly with Western European markets.
n In 1995, high inflation and rising unemployment.
n Rapid decline in consumer buying power.
n Price sensitive à preferred:
n Traditional snacks
n Homemade cookies & biscuits
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11. +
Hungarian Consumer Behavior
n Consumers were asked why a particular brand was their favourite: 68% responded that
taste is very important.
n Sales of snacks were much less concentrated in large supermarkets.
n Hungarinas have Impulse buying habits à competitors concentrated in promotions
(price reduction, coupons, pay-back etc.).
n Lays target consumers were: 8-54 years of age.
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12. +
Survey/Marketing Problems
n In 1995 only 7% of consumers were aware of Lay’s
billboard campaign - advertising awareness was
very low.
n Because 29% of all media advertising was done
by Chio (memorable jingle etc. ). – mostly on TV
and Radio
n Only 9% of all media advertising was for Lay’s,
mostly spent on the billboard campaign.
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14. +
Blind taste test
n Lay´s was made of high-quality chips. But
do consumers think that too?
n Blind taste test: 69% preferred Lay´s
taste instead of Chio.
n 50% preferred Lay´s to the “Gold
Standard”.
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15. +
High quality not enough L
n Lay´s focused on high quality chips (no brown spots) and packaging (metalised foil).
n Not sufficient to establish a high-quality image in consumer minds:
n 81% of consumers surveyed said that Chio was of good quality compared with only
47% for Lay’s.
n Further, 55% of consumers agreed that Chio offered good value compared with only
17% for Lay’s.
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16. +
Setting a powerful strategy in 1996
Market research proved
Lay´s quality was superior
to Chio.What should be
next years strategy?
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Increase
Lay’s
brand
aware-
ness
Com-
municate
a brand
image of
superior
quality
Promote
trial of
the
product
Strategic
Objectives
17. +
Key decisions to be made
US$1 million marketing budget for 1996
How to split the budget spending between media advertising and consumer
promotions?
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18. +
Key decisions to be made
US$1 million marketing budget for 1996
How to split the budget spending between media advertising and consumer
promotions?
n Chio´s budget splitting – 44% media advertising and 56% consumer promotions
n Lay´s could focus on a 60% consumer promotions and 40% media advertising
(impulse buying by consumers, capitalize using promotions)
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19. +
Key decisions to be made
Which specific advertising media should be
used and what message should the
advertising convey?
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20. +
Key decisions to be made
Which specific advertising media should be
used and what message should the
advertising convey?
Mainly a strong message of taste! (68%
consumer response) & also slightly quality
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TV 50%
Radio
30%
Cinema
10%
Outdoor
10%
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Key decisions to be made
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Which promotional activities should be included?
22. +
Key decisions to be made
Which promotional activities should be included?
n Focus on taste as proven by the blind taste test.
n A “taste challenge”: winner takes home coupons or free Lays delivery for a whole
year…
n Host “challenge” events (for families or young people) , winner takes home coupons.
n Buy 1 get 1 free (BOGO)
OR Cross-selling with Pepsi:
Buy 2 Lay´s & get a free Pepsi
Buy 2 Pepsi & get one Lay´s chips free
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23. +
Best Lay´s commercial ever:
https://www.youtube.com/watch?v=NsdU602juNM&feature=youtu.be
One of Lay´s Hungarian commercials:
https://www.youtube.com/watch?v=fXrTs4A1De8
What is your opinion? Stimulus?
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tasty
Lay´s
a taste
of
heaven
