Marketing Assignment on Lay’s

Wajahat Ahmad Khan

PRINCIPLES OF MARKETING
ASSIGNMENT

SUBMITTED TO:
MISS MAIMOONA RIAZ

SUBMITTED BY:
WAJAHAT AHMAD KHAN

BAHRIA UNIVERSITY

DEPARTMENT OF MANAGEMENT SCIENES

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Marketing Assignment on Lay’s
Wajahat Ahmad Khan

Table of Contents
Page
1. Introduction to
Marketing…………………………………………………. 3

2. History of
Lay’s………………………………………………………….
……….. 4

3. Names and Biography

……………………………………………………….. 6

4. Marketing Department Details

………………………………………….. 7

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Marketing Assignment on Lay’s
Wajahat Ahmad Khan

Introduction to Marketing
Marketing is a social process which satisfies consumers' wants. The
term includes advertising, distribution and selling of a product or
service. It is also concerned with anticipating the customers' future
needs and wants, often through market research. A market-focused, or
customer-focused, organization first determines what its potential
customer’s desire, and then builds the product or service. Marketing
theory and practice is justified in the belief that customers use a
product or service because they have a need, or because it provides a
perceived benefit.

Two major factors of marketing are the recruitment of new customers

(acquisition) and the retention and expansion of relationships with
existing customers (base management). Once a marketer has
converted the prospective buyer, base management marketing takes
over. The process for base management shifts the marketer to building
a relationship, nurturing the links, enhancing the benefits that sold the
buyer in the first place, and improving the product/service continuously
to protect the business from competitive encroachments.

For a marketing plan to be successful, the mix of the four "Ps" must
reflect the wants and desires of the consumers in the target market.
Trying to convince a market segment to buy something they don't
want is extremely expensive and seldom successful. Marketers depend
on marketing research, both formal and informal, to determine what
consumers want and what they are willing to pay for it. Marketers hope
that this process will give them a sustainable competitive advantage.
Marketing management is the practical application of this process. The
offer is also an important addition to the 4P's theory.

The four Ps are:

• Product: The product aspects of marketing deal with the

specifications of the actual goods or services, and how it relates
to the end-user's needs and wants. The scope of a product
generally includes supporting elements such as warranties,
guarantees, and support.
• Pricing: This refers to the process of setting a price for a
product, including discounts. The price need not be monetary - it

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Marketing Assignment on Lay’s
Wajahat Ahmad Khan
can simply be what is exchanged for the product or services, e.g.
time, energy, psychology or attention.
• Promotion: This includes advertising, sales promotion, publicity,
and personal selling, and refers to the various methods of
promoting the product, brand, or company.
• Placement: or distribution refers to how the product gets to the
customer; for example, point of sale placement or retailing. This
fourth P has also sometimes been called Place, referring to the
channel by which a product or services is sold (e.g. online vs.
retail), which geographic region or industry, to which segment
(young adults, families, business people), etc.

These four elements are often referred to as the marketing mix, which
a marketer can use to craft a marketing plan. The four Ps model is
most useful when marketing low value consumer products. Industrial
products, services, high value consumer products require adjustments
to this model. Services marketing must account for the unique nature
of services. Industrial or B2B marketing must account for the long term
contractual agreements that are typical in supply chain transactions.
Relationship marketing attempts to do this by looking at marketing
from a long term relationship perspective rather than individual
transactions.

History of Lay’s
In 1932, Herman W. Lay began his potato chip business in Nashville by
delivering snack foods from his Model A Ford touring car. Like Mr.
Doolin, he also had tried his luck in the ice cream business. Mr. Lay and
a friend had planned to sell ice cream along the parade route at the
1928 Democratic National Convention in Houston, Texas. Their
business venture failed when the parade was rerouted and their ice
cream stand was left on a deserted street.

After a variety of jobs, the then 24-year-old Mr. Lay was hired as an
extra route salesman to sell and make deliveries for the Barrett Food
Products Company, an Atlanta, Georgia manufacturer of Gardner's
Potato Chips. Later that year, he took over Barrett's small Nashville
warehouse as a distributor, using his Model A car as a delivery truck
and $100 in capital. Mr. Lay received a weekly allotment of potato
chips and a cash allowance; the job paid no salary, just an advance
against his commission on sales. He now had a job, his own territory,
and a business to independently run.

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As his territory expanded, his profits rose. He hired his first salesman in
1934, the same year that his H.W. Lay Distributing Company became a
major distributor for the Barrett Food Products Company. Three years
later, Mr. Lay had 25 employees and had moved into a larger
manufacturing facility where he produced popcorn and peanut butter
sandwich crackers.

A representative of the Barrett Food Company contacted him in 1938

with an offer to sell Mr. Lay the company's plants in Atlanta and
Memphis for $60,000. Unable to raise but $5,000 from investors and
associates, he borrowed $30,000 from a bank and persuaded the
Barrett Company to take the difference in preferred stock. Mr. Lay
moved his headquarters to Atlanta, replaced the Barrett signs with
"H.W. Lay Co., Inc." signs on October 2, 1939, and remained as
president and chairman of the board until 1961.

When he formed the H.W. Lay Corporation in 1939, Mr. Lay had
fourteen trucks covering the Nashville - Chattanooga area. Expansion
was also a vision for Mr. Lay, who, over the next few years, purchased
the Barrett manufacturing plant in Jacksonville, Florida, and additional
plants in Jackson, Mississippi, Louisville, Kentucky, and Greensboro,
North Carolina. He retained the Gardner trademark of Barrett Food
Products until 1944, when he changed the product name to Lay's
Potato Chips and introduced "Oscar — the Happy Potato" as its
advertising symbol. In 1945, Mr. Lay signed an exclusive franchise
agreement with The Frito Company to manufacture and distribute
FRITOS in most of the sales territory covered by The H.W. Lay
Company.

In 1949, the company established a research lab to develop new

products. The purchase of two other snack food companies, the
Richmond (Virginia) Potato Chip Company and the Capitol Frito Corp.,
increased his product line and distribution area in the 1950's. By 1956,
H.W. Lay & Company, now publicly-owned, was the largest
manufacturer of potato chips and snack foods in the United States; it
had more than 1,000 employees, plants in eight cities, and branches or
warehouses in thirteen others. Its primary product, LAY'S® Potato
Chips, is America's favorite potato chip.

Frito-Lay, Inc. Is Formed

In 1945, the Frito Company granted H.W. Lay & Company an

exclusive franchise to manufacture and distribute FRITOS ® Corn
Chips in the Southeast. As the two companies worked toward national
distribution, a close business affiliation developed which eventually
resulted in a merger. In September 1961, just 29 years after the

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founding of both companies, The Frito Company and H.W. Lay &
Company merged to become Frito-Lay, Inc., the largest snack selling
company in the United States.

Frito-Lay and Pepsi Join

In February 1965, the Board of Directors for Frito-lay, Inc. and Pepsi-
Cola announced a plan for the merger of the two companies. On June
8, 1965, the merger of Frito-Lay and Pepsi-Cola Company was
approved by shareholders of both companies, and a new company
called PepsiCo, Inc. was formed. At the time of the merger, Frito-Lay
owned 46 manufacturing plants nationwide, had more than 150
distribution centers across the United States, and was listed on the
New York Stock Exchange. In 1998, PepsiCo acquired Tropicana; and in
2001 acquired The Quaker Oats Company.

Frito-Lay Today

Today, Frito-Lay has more than fifteen $100 million brands: LAY'S®,
FRITOS®, CHEE.TOS®, BAKEN-ETS®, RUFFLES® DORITOS®, FUNYUNS®,
TOSTITOS®, BAKED LAY'S®, WOW!®, SUNCHIPS®, MUNCHIES®,
OBERTO®, ROLD GOLD®, GRANDMA'S® Cookies and Quaker Chewy
Bars®, Quakes® and Fruit & Oatmeal Bars®.

Names and Biography

Al Carey
President & Chief Executive Officer of Lay’s International

Born: 1962
Gender: Male
Race or Ethnicity: White
Occupation: Business
Nationality: American

Past posts
CEO of Enron

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Marketing Assignment on Lay’s
Wajahat Ahmad Khan

Alan Henderson
General Manager Snacks (Lay’s and
Kurkure) Pakistan.
Born: 1959
Gender: Male
Occupation: Business
Nationality: American

Education
MBA from university of London
BBA from University of London

Saqib Haroon
Marketing Head of Lay’s Chips
Pakistan
Born: 1975
Gender: Male
Occupation: Business
Nationality: Pakistani

Education
MBA from University of Toronto
B.com from University of Punjab

Marketing Department
The marketing department's activities range from developing
marketing profile for an advertising campaign to creating the posters
and holding press conferences. It is important for the marketing
department set objectives which fit the overall aims of the business.
The marketing objectives should reflect the aims of the whole
organization and they should attempt to aid the achievements.

Lay’s is the largest North American brand owned by PepsiCo,

generates 38 percent of its parent company’s profits. Sixty percent of
the company’s marketing efforts go to developing new products and
40 percent go toward existing brands. The marketing department at
Lay’s works at it’s very best to achieve as many highest sales as
possible. The first part of this process is by creating a good marketing
mix

Marketing Mix of Lay’s

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Marketing Assignment on Lay’s
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Marketing Mix consists of four factors

 Product: It concerns with the actual product itself and in this case
lay’s chips. People at lay’s chips try their best to be as innovative
and creative as possible by introducing new products and flavors.
At the moment lay’s chips offers four flavors which are Salted,
barbeque, masala and French Cheese and they are planning to
launch new and exciting flavors in the future. The packing of the
product also maters, that’s why Lay’s has designed a bright colored
packing which is sure to attract customers

 Price: It plays a major factor in the success of a product. When a

product has a low price, people from more and more living
standards can buy that product, Lay’s is doing the exact same
thing. Currently Lay’s has four different size packs of chips. The
lowest one at 5rs and the biggest one of 20rs. Buy this strategy
people with low income can afford to buy lay’s chips as well as the
people with high incomes.

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Marketing Assignment on Lay’s
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 Promotion: Lay’s does extensive advertising and utilizes all the

media resources available which include TV, radio, posters and
billboards. Advertising on TV is the best way to attract customers
especially when you have a famous celebrity in your ad. Just
Recently Lay’s Chips launched an advertising campaign in which
they had the famous Ali Zafar on board. This advertising campaign
worked out good for Lay’s and it paid off with a large increase in
sales.

 Placement: This refers to how the product is distributed to the

consumer. If the product is not available at the right time in the
right place then even the best product in the world will not be

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Wajahat Ahmad Khan
bought in quantities expected. Lay’s uses a versatile value chain to
get the product from the factory to the consumer. The factory of
Lay’s chips is in Lahore and Karachi. The chips are packed and
distributed to the rest of the cities from here in trucks. The quantity
of the chips distributed is so large that since now there has never
been a shortage in any of the cities.

Product prepared at Factory then Transported in Trucks to Shops where customer

buys the product

Change in Trends

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Today, with health concerns becoming a growing priority for many
consumers, evolving demographics and a changing retail environment,
Lay’s realizes the time has come to address its reputation as a junk
food leader and challenge the conventional wisdom.
We’ve got a perception problem that we’ve got to change. We want
our customers to know that they can feel good about eating Lay’s
snacks.

In the near future

Chips containing sunflower oil have seen great success in Canada and
other regions in the United States and lay’s is planning to bring these
chips containing sunflower oil to Pakistan. And educate consumers
about the new and improved product.

To achieve this goal, the new Lay’s packaging will show sunflowers
bursting off the bag to convey the healthier image. The company will
also launch a strong advertising and public relations campaign to
educate consumers about the chips, and bring science-based health
information to the consumers about the differences between good fats
and bad fats.

In the future Lay’s would like all of its products to contain five or fewer
ingredients. Lay’s also is planning to establish Sun Chips as its number
one healthy product brand with a new marketing campaign educating
consumers about the chip’s whole grain and wheat ingredients. The
company is working on unveiling fruit and vegetable chips in the late
future. While new product development and recreations aren’t cheap
or easy—for instance, it cost the company in millions to take trans fats
out of its chips but taking risks is essential.

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References

PepsiCo Islamabad: 0514490491

Pepsi Lahore: 111724725

www.pepsico.com

www.fritolay.com

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