Lay´s Potato Chips in Hungary

Group D

Creating Awareness and Building Brand Image at Product Launch

Agenda

1. Marketing Objectives2. Problem Statement3. Situation Analysis4. Alternative Courses of Action5. Evaluation of Alternatives6. Decision7. Implementation plan8. Risk Analysis9. Program Monitoring

How John F Stevenson, General

Manager of PepsiCo Snacks in

Hungary will make a successful

launch of Lays chips.

Objective

Marketing Objectives

What will the future environment be like?• Consumer spending will decrease• Chio will protect its Brand :

packaging, increase spending, lower price

Successful Launch of Lays in Hungary

Objective Current 1 year plan

Market Share 12% 32%

Brand Awareness 7% 40%

Purchase Intention 18% 60%

Media Spending 9% 34%

1. How to split budget between advertising media and consumer promotions?– Match Chio´s (44% to 56%)?

2. Which specific advertising media should be used?

3. What message should advertising convey?

4. Which promotion activities should be included?

Problem Statement

• Context• Competition• Consumer• Company

Situation Analysis

Hungary• Inflation 28%• Unemployment 12%• Decreasing consumer buying habits• Population: 10,064,000 Hungry people

Context

Chio ; 46%

Lays; 12%United Buscuits;

25%

Bahlsen, 8%

Zweifel; 8% Others; 1%

Competition

• Mkt budget: U$ 1 Mill• 44% mass media• 56% promos• Price discounts• $102% Lays• “Chio equals Chips”

• Mkt budget: U$ 500,000• TV media & radio• $112% Lays

Mkt budget: U$ 500,000TV media & radio$ 110% Lays

Price positionPrice promotions$ 95% Lays

• Price conscious

• 68% are taste sensitive

• Target segment: 8 – 54 years old

• Snack purchase driven by impulse buying and promos

• Purchase of Potato Chips is based on impulsive behaviors, the emotions linked with the brand play an important role in impacting the buying behavior, leading to an increase in sales and brand awareness.

Consumer

• Blind tests– 69% preferred Lays over Chio

• Brand perception– Good quality evaluation:

• Chio 81%

• Lays 47%

– Good value• Chio 55%

• Lays 17%

Consumer Research

Company SWOT

Internal External

Expertise provided by PepsiCo Inc.Superior taste reflected in blind test Visual perception of excellence High-quality package Price competitive

Hungarian consumers tend to be price-conscious 68% of customers state that taste is the most important attribute Possibility of using more relevant media channels for advertising Localization of taste

Weak brand awarenessBrand image Purchase intent Late market entry Lack of knowledge of Hungarians' consumer behavior and purchase drivers Low market share.

Chio´s competitive response Decline in consumer buying power (inflation & unemployment).

Strengths

Weaknesse

sOpportu

nitie

sThreats

• Advertising 60% - Promotion 40%• Advertising 40% - Promotion 60%• Advertising 50%- Promotion 50%

Chio: Advertising 44% - Promotion 56%

Alternative Courses of Action

• Marketing Plan– Cross Promotion with Pepsi brands • 2 Lays packages Get 1 Pepsi• 2 Pepsi Get 1 Lays package

Alternative Courses of Action

• Objective of Campaign– Increase market share (12% - 32%)• Take SOM from Chio• Pepsi and brand consumers

– Increase brand awareness– Increase trial to reinforce taste and

quality– Link brand equity to young

generation and fun

Alternative Courses of Action

• National campaign in alliance with Pepsi brands– Advantages• Double the resources (Pepsi brands

pays)• Increase awareness and leverage on

established brand equity (Pepsi 30% SOM)• Leverage on distribution• Cross exhibitions

– Disadvantages• Not targeting Coca Cola consumers

Alternative Courses of Action

Evaluation of Alternatives

• Need to increase market share to 32%• Need to concentrate more resources on

promotion than on advertising

in US $ Chips Sales Value 5,101,304.34 Each SOM point 51,013.04 Lays Current Sales 612,156.52 12%Sales Increase 1,020,260.87 20% 1,632,417.39 32% Investment 1,000,000.00 Increase Sales 1,020,261.00 ROI 1,020.00

• Based on ROI and qualitative analysis, we should allocate resources:• 60% for promotion• 40% for advertising

Decision

Implementation Plan

• Product:- Original Lays Chips- Bigger sizes- Local taste• Paprika flavor• Goulash flavor

Implementation Plan

• Price- Keep price 98% Chio- Price discounts in

supermarkets and retails

• Place: leverage distribution on SD- Supermarkets- Retail Outlets- Grocery/Convenience- Small shop- Vending Machines- Cinemas- Bars

14%

19%

32%

21%

9%6%

Supermarket C+C Shop ABC Shop Small ShopVending Others

Implementation Plan

Implementation Plan

• Advertising

Pepsi Lays

Implementation Plan

• Promotion

If brand awareness is not increasing, but sales are

Place more $ in advertising and move to 50%-50% alternative

Risk Analysis

• Evaluate activity with market research to understand if it is increasing brand awareness

• Evaluate sales increase

Program Monitoring• Through Market Research

- Brand Awareness- Market Share- Consumer perception in quality

image and value

• ROI- Initial investment done by Lays and

Peps, evaluate vs. increase in sales during the activity period, to see who did it work better for

Conclusions1. How to split budget:

60% P – 40% Ad

2. Which specific advertising: TV, Radio, Sports, Cinema, Outdoor

3. What message should advertising convey?Focus on taste

4. Which promotion activities should be included?Sampling, price discounts, subsidize activity

Thanks!