frito lay dips marketing case
Frito-Lay’s Dips 1. SWOT Analysis Strengths: § Frito-Lays were a highly profitable product line and had show phenomenal sales growth in the past five years. § ‘Shelf-stable’ dips can be displayed virtually anywhere in a supermarket. § Frito-Lay is a nationally recognized leader in the manufacture and marketing of salty snack foods. ... § In 1985, Frito-lay captured about 33 percent of the salty snack food tonnage sold in the United States. § For Frito-Lay’s cheese dips, Frito-Lay chose to stay with the Frito-Lays name to trade off the company’s equity in salty snacks and capitalize on the company’s strengths in marketing and distribution. § The phenomenal success of Frito-Lays Dips was due to two factors: cheese dips were novel and Frito-Lays flavors were innovative, and they had the right merchandising location next to salty snacks. § Consumer household penetration increased from 12 percent in 1983 to 20 percent in 1984, driven largely by placing cheese dips near salty snacks. The association between chips and dips was conveyed in promotions and in shelf placement. Weaknesses: § Frito-Lay’s enchilada bean dip was dropped from the Mexican dip line in mid-1985 as a result of falling sales. ... It had been expected that consumers would switch to Frito-Lay’s other Mexican dips; but they didn’t and went to competitors. § Total dollar sales of dips for Frito-Lays declined in 1985 and the forecasted sales of cheese dips would be unchanged from the previous year. § In 1985, consumer household penetration flattened, indicating a need for consumer-pull marketing. ... § Sour cream-based dips are the most popular in flavor and account for 50 percent of total dip sales so Frito-Lay has an opportunity to gain market share with sour cream-based dips. § Sales trends indicate that Mexican dips would show a 4 percent increase in sales in 1986. So Frito-lay may want to get into this market again since they discontinued the enchilada bean dip. ... Threats: § The market for dips is highly fragmented and difficult to measure.