Lay’s Potato Chips in

Hungary (B1):

Promotion Activity and Results

In 1996 PepsiCo Snacks launched a novel consumer promotion, ‘Money in the Bag’ (MIB), in
the Hungarian market. By the end of the promotion Lay’s market share had almost tripled.
Compared to its earlier billboard campaign, this outcome represented a remarkable success.
Additionally, consumers and media were extremely positive about the MIB promotion.

‘Money in the Bag’ Promotion

PepsiCo Snacks launched the MIB promotion in April 1996. Having been initially planned for
a duration of two months, its success prompted an extension until September 1996. It was the
first instant-win promotion of its kind, not only in the salty snack category but also for any
product in Hungary. It gave consumers a high probability of an instant cash prize (22%
chance of success) or an instantly redeemable coupon for a free PepsiCo Snack product when
they purchased Lay’s potato chips. The expectation was that the promotion would create a
buzz, build brand awareness, and promote trial of Lay’s chips. The team was confident that
once consumers tried Lay’s chips, they would realise that their quality was superior to that of
its main competitor, Chio. This would lead to repeat purchase, increased sales volume, and
increased brand image. PepsiCo Snacks was thus hoping to capture market share in a
relatively short period of time.

Prizes to be Won
A small blue sachet was inserted in numerous Lay’s potato chips packs. The sachets contained
either currency bills (some of considerable value), or immediately redeemable coupons for a
free product (any other Lay’s product in a 28g packet) (see Exhibit 1 for a description of the
promotion and Exhibit 2/Picture 1 for a description of the prize pool). Due to a high number
of inserted sachets, consumers had a good chance of finding one in the chips purchased. The
retailers instantly redeemed the coupons for a Lay’s product of the consumer’s choice.
 Picture 1

Distribution
To support MIB at the point of sale, retailers were given incentives in the form of trade
promotions to provide additional shelf space for Lay’s. These incentives included branded
giveaways for incremental product purchase. For example, retailers would receive a Lay’s
branded sweatshirt if their sales reached a certain level. The sales force was motivated with
the help of commissions based on incremental volume.
A customer service hotline was implemented to take retailer and distributor calls, capture re-
order opportunities and feedback from the trade. Finally, an intensive sampling and tasting
campaign was also launched.

Media
The media objective was to create a buzz about the fun and excitement of the MIB promotion.
The communication message was “Lay’s Money Fever Has Broken Out,” drawing attention to
the high-value prizes of the promotion and the high probability of winning. Both media
advertising and public relations activities were used. Media advertising comprised TV
coverage for 42 days, radio for 28 days, and movies for 56 days. Public relations activities
included a press event at the launch and continuous press releases.
The promotion was further supported with strong point of sale material. By showing cash
bursting out of packets of Lay’s (see Picture 2), POS materials visually captured the fun and
excitement consumers would experience from participating in the “betting” involved in
buying Lay’s chips – it was as exciting as going to a casino. The POS materials included
headboards, stop signs, door stickers and posters. In-store presence was further highlighted
with the help of attractive pre-bundled carton displays that retailers could place on the
shelves.

Picture 2

Pricing

Throughout the duration of the promotion Lay’s was priced competitively with Chio, but
below Bahlsen and UB, the two premium brands, and above Zweifel, the discount brand (see
Exhibit 3).

Results after the ‘Money in the Bag’ Promotion

Sales volume and market share (Exhibit 4). Lay’s tripled its market share in the potato chips
market from 12% at the beginning of February 1996 to 34% by the end of September 1996,
while Chio and United Biscuits lost substantial market share, although Chio was still the
market leader (albeit by a small margin). In terms of volume of potato chips sold, the category
grew by more than 30% during the promotion and stabilised at almost 20% higher by the end
of the promotion in September 1996.

Brand awareness (Exhibit 5). During the period of the promotion, aided brand awareness of
Lay’s doubled from 20% to 40%. Aided awareness was measured by asking respondents to
check which snack brand names they knew on a list of names: 40% of the respondents
recognized Lay’s as a snack brand. Although this was a significant improvement, aided brand
awareness for Chio increased from 60% to 70%. Unaided awareness – the percentage of
respondents mentioning the specific brand when asked to list snack brands they knew – did
not change during the course of the MIB promotion and remained weaker for Lay’s (11%)
than for Chio (40%). At the end of the promotion, advertising awareness – the percentage of
consumers who listed a given brand when asked what kind of snack advertisement they knew
– was higher for Lay’s (52%; up from a previous 7%) than for Chio (34%). This was taken as
an indication that the promotion successfully generated buzz.1

Consumption intention (Exhibit 5). When asked to indicate on a list of brands which ones they
intended to consume the following week, 95% of respondents listed Lay’s and 73% listed
Chio. Before the MIB promotion, Lay’s intention was 18% and Chio’s was 59%. In contrast,
when asked to list names of snack brands consumed the previous week (without the aid of a
list of brands), at the end of the promotion 50% of the respondents listed Chio, but only 17%
listed Lay’s. As with awareness, with subjective consumption measures Lay’s was doing
somewhat better than Chio when respondents where reminded of the existing brands (i.e.,
aided indices), but Chio’s was still doing considerably better when they were asked to
generate brands spontaneously (unaided indices).

Brand image (Exhibits 5 and 6). Qualitative research suggested that Lay’s had created an
image in the minds of the consumers of an innovative and fun product. It had become ‘cool’
to eat Lay’s chips. On the other hand, there was no brand that a majority of respondents
called their favourite (6% and 8% of respondents for Lay’s and Chio, respectively. See
Exhibit 5). This was encouraging for the newcomer Lay’s, as it suggested that consumer
attitudes had not yet consolidated. Lay’s overall quality image had improved somewhat over
the course of the promotion (Exhibit 6b)2 but a major cause for concern was that its image
was consistently below that of Chio’s. The value-for-money image demonstrated a similar
trend (Exhibit 6b).3

Blind taste tests were conducted continuously during the promotion to ensure that Lay’s
outperformed Chio in taste. In all blind taste tests, the majority of consumers preferred Lay’s
to Chio potato chips, although their preference was lower during the MIB promotion
compared to the period before the promotion started. Further, whereas before the promotion
respondents had shown no preference between the Gold Standard (PepsiCo’s ultimate potato
chip) and Lay’s, during the promotion a majority of consumers preferred the Gold Standard to
Lay’s (Exhibit 7).

Discussion Questions
1. In what respect was the promotion a success, and in what respect did it not succeed?

2. In hindsight, which marketing decisions would you have definitely supported and which
ones would you have definitely changed? How would you have changed these?

1 The fact that advertising awareness – being assessed at the end of the interview – was higher
than aided brand awareness suggests that advertising awareness is more appropriately
interpreted as aided advertising awareness.
2 Quality image reflected the percentage of respondents agreeing that a brand had the
following attributes: “high quality”, “always fresh”, “great tasting” or “having a taste which is
hard to resist”.
3 This measure reflected agreement with the attributes “good value for money”, “worth paying
more for”, and “really different from other snacks”.
 Exhibit 1
Original Pepsi-Co Memo Describing the ‘Money in the Bag’ Promotion

OBJECTIVE: - Build awareness, distribution and promote trial of Lay’s products.

- Launch Lay’s potato chips.
- Build volume.

TIMING: - April 1996 – September 19964

CONCEPT: - Provide consumers with a high probability of an instant win

when purchasing Lay’s potato chips (1-in-6 insertion rate at
start of promotion; later increased to 1-in-3 insertion rate;
chance of winning cash prize during the two phases
was maintained at 22%).

MECHANCS: - Prize insertion in 100g Lay’s (Salt, Paprika),

- Blue sachet contains cash prize or coupon for free product
(any other Lay product in small 30g bag),
- Retailers redeem consumer coupons and exchange them
for Lay product.

SUPPORT: MEDIA - TV (42 days), Radio (28 days), Movies (56

days), Print
PR - Press event at launch
On-going press releases
POS - Headboards, stop signs, door stickers, posters
DISPLAYS: - Pre-packaged mixed product bundles,
pre-packaged Lay’s displays (racks),
carton box displays
SAMPLING: - Intensive sampling and tasting campaign

4 Note: The original dates planned for the MIB promotion were 18 March – 29 April 1996, but
were extended due to the success of the promotion.
 Exhibit 2
Original Pepsi-Co Memo Describing the Prize Pool for ‘Money in the Bag’ 5

TOTAL VALUE OF PROMOTIONAL CASH PRIZE:

HUF 19 600 000.

USD 138 028 @ 1 $ = 142.8 HUF

1000 x 5000 HUF notes

2000 x 1000 HUF notes

6000 x 500 HUF notes

96000 x 100 HUF notes

TOTAL: 105 000 pieces – value 19 600 000 HUF

TOTAL VALUE OF FREE PRODUCTS PRIZE:

HUF 19 304 000.

USD 135 182 @ 1 $ = 142.8 HUF

ADDITIONAL PRIZES MIX (FREE 30g PRODUCTS)

(Cheetos, Hamka’s, Ruffles, Boca-bits)

30% Ruffles: 148 500 x 39 HUF = 5 791 500 HUF

30% Cheetos: 148 500 x 39 HUF = 5 791 500 HUF

20% Hamkas: 99 000 x 39 HUF = 3 861 000 HUF

20% Boca-bits: 99 000 x 39 HUF = 3 861 000 HUF

TOTAL: 495 000 bags – value 19 304 000 HUF

TOTAL PRIZE VALUE: HUF 38 904 000.

USD 272 210 (@ 1 $ = 142.8 HUF)

5 This memo refers to the initially planned time period (see footnote to Exhibit 1).
 Exhibit 3
Pricing from February to September 1996

Competitors’ prices relative to Lay’s prices (in %). Prices are estimated by dividing sales volume by
monetary value of sales.

Competitors Feb-Mar Apr-May Jun-Jul Aug-Sep

Chio 2 -1 -3 -3
Bahlsen 10 17 35 43
UB 12 10 9 16
Zweifel -5 -8 -4 -3

Competitor's Prices Relative to Lay's (%)

50
Money in the Bag promotion
40

30
Chio
Per Cent

Bahlsen
20
UB

10 Zweifel

0
Feb-Mar Apr-May Jun-Jul Aug-Sep
-10
Time Period During 1996

Note. Each data point represents the average of a two-month time interval. The promotion ran April to
September.
 Exhibit 4
Market Shares and Sales Volumes of Potato Chips in 1996

Time Period Feb-Mar Apr-May Jun-Jul Aug-Sep

Sales Volume (tonnes) 206 279 277 245
Sales Value (in 100,000Huf) 2,397 3,287 3,324 3,001

Market Shares of the Sales Value of the PC Market (%)

60%
Money
Money in the in the Bag (April
Bag promotion promotion
- September)
50%
Lay's
Chio
40%
Perc Cent

Hungária
30% Bahlsen
20% UB
Zweifel
10%
Other
0%
2-3/96

4-5/96

6-7/96

8-9/96

Two Month Time Periods

Note. Each data point represents the average market share of a two-month time interval.
 Exhibit 5
Brand and ADVERTISING Awareness,
Attitudes, and Consumption Intentions for Lay's and Chio

Unaided Brand Awareness

Jan-Mar 96 Apr-Jun 96 Jul-Sep 96
Lay's not available 11% 13%
Chio not available 39% 40%
Note. Percentage of respondents listing the brand in response to the question, which
snack brands they knew.

Aided Brand Awareness

Jan-Mar 96 Apr-Jun 96 Jul-Sep 96
Lay's not available 20% 40%
Chio not available 60% 70%
Note. Percentage of respondents who check marked which snack brand names in a list of
names they knew.

Favourite Chips Brand

Jan-Mar 96 Apr-Jun 96 Jul-Sep 96
Lay's not available 2% 6%
Chio not available 14% 8%
Note. Percentage of respondents who listed a given brand in response to the open-ended
question "What is your favourite chips brand?"

Last Eaten Snacks Brand

Jan-Mar 96 Apr-Jun 96 Jul-Sep 96
Lay's not available 11% 17%
Chio not available 60% 50%
Note. Percentage of respondents who listed the brand in response to the open-ended
question "What kind of snacks did you consume last week?"

Consumption Intention
Jan-Mar 96 Apr-Jun 96 Jul-Sep 96
Lay's 18% 41% 95%
Chio 59% 67% 73%
Note. Percentage of respondents who check marked on a list of brands the given brand in
response to the question "What kind of snacks are you going to consume next week?"

Advertisement Awareness
Jan-Mar 96 Apr-Jun 96 Jul-Sep 96
Lay's 7% 34% 52%
Chio 42% 51% 34%
Note. Percentage of respondents who listed the given brand in response to the question
"What kind of snack advertisement do you know?" While the question was open-ended,
previous questions provided lists of brands making this question somewhat closed-ended.

Note. The promotion ran from April to September 1996.

 Exhibit 6a
DeVELOPment of Quality Image for Lay's and Chio

Respondents (%) Agreeing with High Quality Claims

100
Money in the Bag promotion
90

80

70

60
Per Cent

Lay's
50
Chio
40

30

20

10

0
2-3/96

4-6/96

7-9/96
Three Month Time Periods

Exhibit 6b
DEVELOPment of Value-for-Money Image for Lay's and Chio

Respondents (%) Agreeing with Value-for-Money Claims

70
Money in the Bag promotion

60

50
Per Cent

40
Lay's
Chio
30

20

10

0
2-3/96

4-6/96

7-9/96

Three Month Time Periods

Note. Each data point represents the average of a three-month time interval. The promotion ran April to
September.
 Exhibit 7

Lay's Versus Chio Blind Taste Test

80

70
Per Cent Respondents Choosing

60

50

Lay's
40
Chio

30

20

10

Money in the Bag promotion

0
1-3/96

4-6/96

7-9/96
Three Month Time Periods

Lay's
Lay's Versus
Versus Gold
Gold Standard
Standard Blind
Blind Taste
Taste Test
Test

70

g 6060
Per Cent Respondents Choosing

n
i
oos50
50
Ch
nts 40
40
Lay's
Lay's
de
Gold
Gold Standard
Standard
Standard
pon
s 3030
Re
t
n
20
20
Ce
r
Pe 10
10
Money
Money in
in the
the Bag
Bag promotion
promotion
0
0
1-3/96

4-6/96

7-9/96

3/96 6/96 9/96

1- 4- 7-
Three Month
Three Month Time
Time Periods
Periods

Note. Each data point represents the average of a three-month time

interval. The promotion ran April to September.