**All information provided by professor from Case Study.


Frito Lay is a division of PepsiCo, Inc. They are a country wide recognized head in the manufacture and marketing of saline snack foods. Brands include Lay's, Ruffles, Frito's, Doritos, Tostitos, Cheetos, pretzels and Funyuns. They produce nuts, peanut butter crackers, beef twigs, cookies, munch bars and even more. In 1985, sales got into contact with $3 Billion. The majority of scoops are sold through supermarkets. That they sell and deliver through a " front-door shop delivery system” in which a single person performs the sales and delivery capabilities. This system permits the products to be closely monitored and restocked, as well as makes a relationship between sales/delivery person and the supermarket staff.

Frito-Lay's net sales for dips of over $87 million in 1985 amounted to a 290% increase in product sales growth via 1981. This success leads the company into a major issue of how the company can be further created. Officers in the company acquired two diverse viewpoints preparing for the future. They need to chose whether or not they should continue marketing and expanding their chip dips, or perhaps grow the new vegetable dip category.

Angustiado Lay includes a strong name brand in the processor chip and dip industry. Because of fierce competition, sales have remained constant while profits have rejected. The market pertaining to dips is extremely fragmented, nevertheless approximately 80% of dip sales will be by supermarkets. Chip dips are possibly refrigerated (55%) or shelf-stable (45%). Frito-Lay was the major competitor in shelf-stable dips, followed by regional chip makes however Kraft had started to enter the cheese-based dip market. These types of dips had been mostly located near snacks including poker chips.

Among chip dips, sour cream based dips are the the majority of popular and account for 50 percent of total dip sales. Cheese structured dips are the cause of 25% of dip product sales, bean and picante dips (10%) and cream parmesan cheese based dips account for 15% of drop sales. These types of dips are generally used with saline snacks including potato chips and corn chips.

About 1/3 of dips are used with fruit and vegetables. Vegetable scoops are located in produce portions, next to soup blends, with dressings for salad and in treat sections. The majority of vegetable dips are sold on the regional basis and are local brands. It is estimated that 35% of refrigerated salad dressing can be used for plant dips (assume Ranch! ). No significant competitors been with us in the vegetable dip marketplace, other than dressings for salad which accounted for 25% of vegetable scoops. Trends indicated that consumers were progressively more concerned with nourishment, and this may help shift consumers to fruit and vegetables and veg dips. Likewise, no main competitor experienced introduced a " Rack Stable Vegetable Dip”. If perhaps Frito Put chose to industry vegetable dips, they may lose some economies of size by certainly not marketing with chips, and avoiding the " luminosidad effect” that they currently enjoyed.

Competition coming from Kraft and Campbell Soups has begun making the marketplace even more competitive. Till 1983, Frito Lay hadn't had to carry out in marketing and promotions for their products. Retail outlet placement got sufficed. Generally, dips were promoted with Frito-Lay saline snacks. This method allowed for free of charge products to share a marketing finances and plan.


•Grow computer chip dip collection OR vegetable dip series

•Chip Dip benefits the sales of chips (Frito Lay provides chips), although vegetable dip benefits the sales of vegetables (Frito Lay does not sell vegetables) •Dip competition and marketing efforts had been increasing •Sales stagnant, profits declining

•Attracting new customers

•Types of dip to increase (shelf secure vegetable dip? )

•Allocation of resources (production, circulation and marketing)


1985 Frito Dip Sales: $87, 000, 000

1985 Promoting Expense (VC): $25, 481, 000

85 G& A Overhead: $6, 572, 000

1986 Forecasted Sales: $87, 000, 000*1. 1=...


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