EXTERNAL ENVIRONMENT ANALYSIS:
ECONOMY:
The
economy of the United States,
or whatever country Stax are being sold in, does not contribute greatly to the
sales of the product. If the economy is
good and people have more spending money, they most likely will not go out and
buy more Stax. However, they may buy two
cans of different flavors instead of just one since they have a few extra
dollars in their pockets. If the economy
is on a downward trend people may slowly start to purchase other, cheaper
brands of potato chips instead of Stax, but this would only be in extremely
downward trends. Therefore, the economy
does not greatly affect the chip industry since most American’s enjoy eating
potato chips.
COMPETITION:
The
competition in the chip industry is very fierce. Food company’s often are coming out with new
flavors and styles of chips every year.
Frito-Lay is an example of this, as they saw Proctor & Gamble had
virtually no competition, so they developed Stax. The market of stackable chips is relatively
new to Frito-Lay, as they debuted Stax several years ago into a new
market. Pringles are the only major
competitor with Stax, as there are no other stackable chips on the market. Torengos are also in competition with Stax
and Pringles, as they are stacked chips but are not potato chips. Torengos are tortilla chips, which are
usually dipped, unlike the potato chips of Pringles and Stax. Go Snacks are also a less popular canned
chip. Go Snacks consist of bite sized
popular chips, such as Doritos.
MARKETING GOALS/EXPECTED OUTCOMES
The
marketing goal or expected outcome for the Frito-Lay, Lays Stax, product would
be for their customers to chose their chips over anything else in that isle.
Everyone knows how many choices of chips and junk food there are down that one
isle, and Frito-Lay wants to be the choice you make. Lays Stax will offer its
customers with a high quality distinct taste that everyone will enjoy. The main
goal for the company is just to get people to buy their new product.
TARGET MARKET DESCRIPTION
The
target market for the Frito-Lay company who sells Lays Stax would be a younger,
on-the-go person. Possibly a college student who has the unique need of staying
up late to study or do homework and chips are all he can afford. The company is
not marketing to older people because not many older people even eat chips,
hence the “young, on-the-go” Also the
company markets to adults who cook, especially on their website, where the
Frito-Lay company gives recipes and other ideas to use the chips. Because the
Stax container is said to be crush resistant, portable, and re sealable it
markets to the on-the-go person who is always late or just carry’s food with
them, possible in the car. These people need something that will not fly open
or roll away when they drive, and the Stax container does it. The main target
market for the Lays Stax department is the young, on-the-go person who loves
chips.
MARKETING MIX DESCRIPTION
Product:
Lay’s
Stax offers a new dimension to Frito-Lay’s already comprehensive product
line. Stax are available in six
different flavors; BBQ, Cheddar, Monterey Pepper Jack, Original, Salt and
Vinegar, and Sour Cream & Onion.
Each potato crisp is the same shape, which are curved downward on the
ends. This shape is also similar to
Pringle’s chips, which is a main competitor.
Flavor on the chips is on the bottom of every chip which ensures each
person who eats it tastes more flavor as it goes directly on the tongue. Flashy portable containers which are
re-sealable and crush-resistant contain the new salty treat. The blue container with a yellow cap attracts
consumers in the aisle ways of many stores, which influences impulse buying for
the product.
DISTRIBUTION:
Unlike
other chip brands, Stax can be found all over the United States. All Frito-Lay products are distributed
through PepsiCo, which puts its products all over the place. Many organizations and businesses purchase
products from either the Coca-Cola Company or PepsiCo which provide much of the
snack food products for their clients; such as schools, amusement parks, sports
venues, and restaurants. All of
PepsiCo’s products, including Frito-Lay, can be found in monopolized markets
where there is no competition. This
monopoly makes their products stand out and gives Stax a unique opportunity to
overcome competitors. Stax are also
distributed throughout many stores in which monopolies are impossible. However, Frito-Lay is allowing the consumer
to find the closest store by providing a search on their website, www.fritolay.com. This feature on the website lets a user enter
their zip code, which then results the nearest stores that sell Lay’s
Stax. Included with each store are an
address, telephone number, and the other products that store sells. Frito-Lay knows that Stax can be found
throughout the country; therefore they provide this search on their website in
order to focus consumers on their products.
PRICING:
Making potato
chips does not an expensive venture.
Lays Stax can be considered a more expensive potato chip because of its
unique design and container. The plastic
container costs more to produce than a standard bag most chips are found in,
plus the containers hold fewer chips it is cause for a higher price. For one can of Stax of any flavor, it usually
is around $1.50, while the main competitors, Pringles, are usually around or
below $1.00.
PROMOTION:
The
Frito lay company has a vast number of promotion methods for their Lays Stax
chips. The Stax from lays have been available for some time now and have produced
many television commercials. Some of them feature celebrity appearances to help
them attract attention. Other products of the company had their commercials
aired during the widely viewed super bowl helped to promote the Frito lay name
in the end it got their name out. This may have got people into the brand name
and tried Stax due to brand loyalty. Lays also has a promotional game for the
Stax that offers discounts to customers. The game requires you to go to their
website and spin a roulette wheel with various prices on it. Whatever the ball
lands on that is the discount you get then you can print out a receipt for the
discount. There are a series of regulations that comply with the game. For
example you need to be at least thirteen and a legal United States citizen. The website
is a good promotional source for Stax as well. They offer information about the
chip and the various flavors. It also talks about how the container is
advertised to help the chips to stay whole and not break into a bunch of crumbs.
The container is also advertised as a way to keep the chips fresh.
Positioning Statement:
Lays
Stax provide a unique kind of chip and container to appeal to the “on-the-go”
consumer. Unlike chips in a regular bag,
Stax are stacked in a tall container, which keep the chips from taking up a lot
of space. Stax also are portable to be
ensure that family’s and friends will be able to enjoy good, quality chips
wherever they may be, whether traveling, on a picnic, or sports games, Stax can
be taken virtually anywhere without a bulky bag.
Action Plans:
I. Activity: Although the
Frito-Lay website is very user-friendly, it does not provide much actually
information about the company. It does give a long, in depth history of the
company, but no information on how it is doing now. We would change the
website, so it would include more detailed company information instead of news
and articles.
Responsibility:
The marketing and advertising directors/department would be in charge of
rearranging the website to make it more informational. They would have to
contact other informational departments to gather the information, such as the
financial or accounting departments.
Schedule:
The directors of the marketing, accounting, and financial departments would have
to meet to come up with some sort of schedule to work on the information for
the new section of the website. Then they would have to work around a designers
schedule to actually make the website outline.
Budget:
In order to have a useful and enjoyable website without spending too much money
the company should spend no more than $9,000. This way they could update the
information, add new information, a new section for the company information,
and new graphics. This money should be spent for the production of the website
only.
Evaluation
Procedures: We believe this new and updated website would help the company a
significant amount. With more information, their customers will be able to
understand and get to know the company better. There can be surveys or tests
run to see how many people like this website better or how many more people
check it out.
II. Activity: The
Frito-Lay company has come up with an excellent container for the chips by its
use of plastic instead of cardboard, but it is not big enough. Some people can
barely get their hand in the container because is not wide enough. If the
Frito-Lay company would widen the packaging of the Stax they would make their
customers happier.
Responsibility:
The employees that work at the factory where the container production takes
place would be responsibly for making the width on the containers bigger. The
designers of the container would first give the factory workers new
measurements, but then the responsibility would be with the employees who actually
work in the factory.
Schedule: After
the designers of the container produce the new measurements for the packaging,
they would be sent to the factory to be put into action. Although this would
have to follow the hours in which the factory employees were working. The
schedule of this action plan would have to work around when the employees were
there.
Evaluation
Procedures: I believe if the containers of the Stax were made wider, the sales
would go up and the Frito-Lay company would overall make more money. Especially
if the company were to advertise the “wider container” on the label customers
would more likely buy it to see how different it was. The company could also
put out a survey on their newly remade website to see if customers felt the
difference and how they liked it. This way the company can know if it needs to
be bigger still or if they made it right.
III. Activity: As
of right now the price to purchase one package of Lays Stax at a local grocery
store is $1.59. A package of their competitors, Pringles, is about $1.00. The
Frito-Lay company should lower the price of their product a bit to appeal to
more customers.
Responsibility:
The accounting and finance department would be charge of gathering the
information to see how much the company can actually lower their price. These
departments would then be responsible for making the price and contacting
everyone who is a part of changing the prices at the stores.
Schedule: The
departments of finance and accounting would have to gather the information
necessary before they can make a new price, so they would have to work around
when the information can be taken. After the price change is set they need to
contact the stores and other so the departments would have to work around the
schedules of anyone store or gas station etc. that they needed to in order to
get their price change known.
Budget:
Evaluation
Procedures: The company may lose money at first and then they lower their
prices, but in the end we believe this would be better for the Frito-Lay
company because right now customers are looking at the price of Pringles and
the price of Stax and realizing how much cheaper it is for the Pringles. Before
the company actually changes the price, they can take a survey of customers who
purchase Pringles or Stax to see what they think it should cost. After the
price change occurs, another survey can be taken to see how much more Stax are
selling because of the price change.
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