lay's npp corrected final print

Lay’sSofia Shoffner,

Wei Dai,Mariana Aristizabal,

Chandler Shipley

New Product Proposal

Lay’s Brand Audit Info

Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation

Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation

Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation

5P’s for Collisions Positioning Product Price Placement Promotion

2

Nature of CompetitionClass: Food

Category: SnackType: Chips

Target MarketAge group: 18-25

Main CompetitorsDoritosTostitos

Positioning

Positioning Statement :Lay’s is the only classic chip that provides the widest variety of flavors to satisfy the snack cravings of millennials.

3

Mental MapsLay’s Brand Audit Info





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Emotional Descriptive Function

Classic: Lay’s has been perfecting its potato chips for more than 75 years and is perceived as very traditional. Its products and brand image have remained mostly unchanged throughout the years so their customers know to expect practiced quality.

Social: Lay’s are consumed mostly at social gatherings. Their most common purchase situations include parties, BBQ’s, and sports viewing events.

Snack: As opposed to a meal, Lay’s are meant to be eaten in between meals, for those times when you want something light, something that keeps your hunger at bay, something to be munched on, something to be shared among family, friends, and guests

Brand MantraLay’s Brand Audit Info





Opportunity Identification: Chips Market

● Chips and dip industry grew 7% between 2013-15 and it reached $16.4 billion in 2015.

● Mintel predicts chip industry will grow 17% from 2015-20, reaching $19.2 billion

● Those ages between 22-39 (Millennials) are more likely to buy chips

● 53% of respondents said the brands of chips they ate as a kid are still their favorite. This gives Lay’s an advantage because parents buying snacks will be more open to buying Lay’s new products → brand loyalty

● 66% of Chip and Dip consumers take nutrition into account when selecting chips → increasingly health conscious consumers

● 85% of consumers agree that it is okay to indulge from time to time → vegetable chips = perfect marriage between health trend & snack satisfaction(Topper)

Key Health Drivers When Buying Chips






5

(Topper)

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Baked organic chips made with real vegetables

“Veggies never tasted so good”

Healthy, organic snack

Variety!

→

→

● Made from real whole vegetables

● Natural flavor, no additives● Gluten free● Baked instead of fried

● Offered in several types of vegetables

○ Beet, kale, carrot○ Mixed Bag

Attributes → Benefits

Lay’s Veggie ChipsLay’s Brand Audit Info





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70% of Respondents viewed it as a product Lay’s would offer

100% of Respondents would

purchase again if completely satisfied

Most consumers would consider purchasing

2x/month

86% of Respondents Would Consider Purchasing

9% Would Definitely Buy36% Would Probably Buy

41% Would Maybe Buy14% Would Probably Not Buy0% Would Definitely Not Buy






Concept Evaluation: Primary Research1. 2.

3. 4.

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Degree to which respondents associated Lay’s Veggie Chips with the following adjectives:






Reasons respondents would purchase Lays Veggie chips over a competitor (POD’s)

6. 7.5.

Common likely purchase situations:

Concept Evaluation: Primary Research

9






3 Factor Model: Salience, Favorability, Uniqueness

KeyRed : Lay’s (Parent)Yellow : Veggie Chips (Ext)U: Unique to new category

U

U

U

10

4 Factor Model: CompellingLay’s Brand Audit Info





After seeing Lay's Veggie Chips, your opinion of Lay's regarding the following:

1: Greatly Worsened → 5: Greatly Improved

KeyRed : Lay’s (Parent)Yellow : Veggie Chips (Ext)U: Unique to new category

U

U

U

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4 Factor Model: RelevantAfter seeing Lay’s Veggies Chips how did these feelings about lays veggie chips change for you?

After seeing Lay’s Veggie Chips how did you opinions regarding the following statements change for you?






Moderate Fit. 70% of respondents felt that this is a product Lay’s would offer.

This is most likely due to consumer awareness and expectation of the health

trend in food.

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4 Factor Model

Parent Brand Mantra






Consistent:

Strength:

Weak-moderate. Unfavorable mental map associations from parent brand were too strong (ie. unhealthy) and respondents rated “healthy” and “dieting” as the 2 weakest associations for Veggie chips in a list of

14. However, respondents averaged “somewhat agree” to the Lay’s brand for being perceived as more “socially acceptable” after seeing

Veggie Chips.

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4 Factor Model: ConclusionsLay’s Brand Audit Info





Advantages: ● Reduce risk● Decrease cost● Refresh brand● Permit consumer variety seeking● Expand Meaning● Bring new customers● Increase market coverage● Avoid cost (and risk) for new

brand elements

Disadvantages: ● Cannibalize sales● Forgo the chance to develop a

new brand

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Purchase Intent and ATAR ProjectionsDefinitely Buy 9%

Probably Buy 35%

Awareness 20%

Availability 100%

Repeat % 44%

Repeat Frequency

33.8

Households 131 Million

Penetration % 93%

Retail Price $1.75

Retail Margin 25%






Trial Rate

(.09*.8)+(.35*.3)=17.7%

Repeat Rate

(.44*33.8)= 1487%

Trial Units

(.2*1*.177*131MM*.93= 4.3 MM

Repeat Units

(4.3 MM*14.87)=64.1 MM

Total Units

(4.3MM+64.1MM)=

68.4 MM

Retail Sales Volume

(68.4MM*1.75)=$119.75 MM

Wholesale Sales Volume

(119.75MM*.75)=$89.8 MM

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Recommendation: Veggie Chips

Recommendation for Lay’s Veggie Chips:

The intent of this product was to expand brand meaning and change the consumer perception that Lay’s only offers unhealthy snacks. However, surveys showed

consumers still perceive the product and the brand as “unhealthy”. There was evidence of the parent brand being seen as more “socially acceptable” and “innovative” after

introducing this new product, but the impact was weak (averaged just under ”somewhat agree”). This leads us to believe that this product idea is a good but needs

more development and a refined positioning strategy for a greater impact and resonance.

We recommend that Lay’s conducts more extensive research to better develop a position that fulfills consumers’ preferences for a healthier snack, and establishes

market credibility and trustworthiness by improving packaging and promotion.






Branding StrategySub-brand (Creates own identity and POD’s)

Extension TypeLine Extension (Same category-- Chips, different ingredients =

POD’s)

Extension strategyProducts that capitalize on the firm’s expertise

Products that capitalize on the distinctive prestige of the brandProducts that expand the meaning of the brand

Attracting new market segments

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Recommendation: Veggie ChipsLay’s Brand Audit Info





Frozen Snack Market

● Sales of frozen food snacks are expected to reach $5.1 billion by 2020

● 64% of Millennials say snacks are an affordable way to replace meals

● Snacking is a guilty pleasure (69%), and it is a good way to reward yourself (63%)(Roberts)

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Opportunity Identification

Lay’s Potato Skins Opportunities

● Over one third of households, especially those with children, think a familiar brand is one of the most important factors when buying frozen foods.

● Consumers would be more open to buying frozen snacks if they were convenient and tasty, which Lay’s is addressing by making prep time under 12 minutes and using fresh, well known ingredients.(Robberts)






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Lay’s Potato Skins

“We Know Potatoes”

Frozen, unpeeled potato halves, hollowed and fully loaded with cheddar, bacon and chives.

● Bakes in just 12 minutes● Filled with real, genuine

ingredients (including Sargento cheese)

● Source of protein, fiber, and calcium

● 75 years of potato loving history and experience

Convenient →

→


Substantial food→

Quality






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Most consumers would consider purchasing

1-2 times /month


9% Would Definitely Buy28% Would Probably Buy26% Would Maybe Buy

23% Would Probably Not Buy14% Would Definitely Not Buy







3.4.

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Degree to which respondents associated

Lay’s Potato Skins with the following adjectives:






Reasons respondents would purchase Lay’s Potato Skins over a competitor (POD’s)

6. 7.5.



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3 Factor Model: Salience, Favorability, Uniqueness

KeyRed : Lay’s (Parent)Yellow : Potato Skins (Ext)U: Unique to new category

U

U

U

22






KeyRed : Lay’s (Parent)Yellow : Potato Skins (Ext)U: Unique to new category



U

U

U

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4 Factor Model: RelevantFeeling: Social approval

Stays the Same

Feeling: Excitement Stays the Same

Feeling: Gross Stays the Same

Feeling: Adventurous Stays the Same

Feeling: Happy Stays the Same

Feeling: Calm Stays the Same

Judgment: Credibility Stays the same

Judgment: Consideration

Stays the Same

Judgment: Quality Stays the Same

Judgment: Superiority Stays the Same

After seeing Lay's Potato Skins, how did these feelings about Lay's change for you?

After seeing Lay’s Potato Skins how did you opinions regarding the following statements change for you?






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4 Factor Model: Relevant (Continued)

Inexpensive Lay’s has experience creating products that are accessible to consumers from varying economic backgrounds.

Yes

Easy to prepare Lay’s has experience with products that are convenient and good for quick snacks

Moderate

Durable Goods (Long lifespan before spoiling)

Lay’s makes products that do not expire quickly.

Moderate





5P’s for Collisions






Category Extension:

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Parent Brand Mantra






4 Factor ModelConsistent:

Moderate Fit. Only 60% of respondents felt that this is a product Lay’s that would

offer, and that Lay’s expertise with potatoes had

little impact: respondents averaged between “neither

agree or disagree” and “somewhat agree” when

asked if Lay’s potato expertise is a reason they would be inclined to buy Lay’s vs other potato skin

brands. Parent brand knowledge did not create

POD in the new category as we had hoped.Weak. Potato Skins have

little impact on the meaning or perceptions of

the parent brand.

Strength:

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4 Factor Model: Conclusions






Advantages: ● Refresh brand ● Permit consumer variety

seeking● Add Meaning (moderate)● Bring new customers,● Avoid cost (and risk) for

new Brand Elements

Disadvantages: ● Could Dilute brand

meaning● Create/Reinforce

negative associations (unhealthy)

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Definitely Buy 9%

Probably Buy 28%

Awareness 20%

Availability 40%

Repeat % 37%

Repeat Frequency

28.1


Penetration % 66%

Retail Price $6.00

Retail Margin 25%






Trial Rate

(.09*.8)+(.28*.3)=15.6%

Repeat Rate

(.37*28.1)=1040%

Trial Units

(.2*.4*.156*131MM*.66)= 1.1 MM

Repeat Units

(1.1MM*10.4)=11.22 MM

Total Units

(1.1MM+11.22MM)=12.3 MM

Retail Sales Volume

(12.3MM * 6)=$74.1 MM


(74.1MM*.75)=$55.58 MM

Purchase Intent and ATAR Projections

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Recommendation: Potato Skins

Recommendation for Lay’s Potato Skins:

According to survey respondents, introducing Lay’s Potato Skins would have little impact on the perception of the parent brand. Similarly, the transfer of expertise brand equity from the parent to the extension was also weak. Only 9% answered “would definitely buy,” and 28%

answered “would probably buy,” leading to ~$18 million in profit. This response isn’t deplorable, however, it is not best. Therefore, we recommend that Lay’s does not pursue this

extension.

We do, however, recommend further research on creating a whole new brand for frozen snacks or research on a product such as frozen french fries which customers may see as

more closely associated with its current products, thus providing more equity transferred to the extension, and greater reinforcement of parent brand meaning.






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Recommendation: Potato Skins






Branding StrategySub-brand (Creates own identity and POD’s)

Extension TypeCategory Extension (New category - Frozen snack, new POP’s)

Extension strategyProducts that contain the brand’s distinctive taste, components, or ingredients

Products that capitalize on the firm’s perceived expertiseProducts that reflect the brand’s distinctive benefit, attribute or feature (easy, convenient, good for parties)

Products that capitalize on the distinctive image or prestige of the brandProducts that expand the meaning of the brand

Attracting new market segments

Lay’s Collisions Opportunities

● Millennial are more adventurous when eating chips so they prefer bolder flavors and new ingredients and non-traditional bases.

● Millennials are more likely to mix products together to get different flavors.

● Brands that encourage mixing of chips and dips or variety pack appeal to them.

● 52% of respondents are always looking for new chip flavors.(research citation)(Topper)

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Opportunity Identification

Chips Market

● Chips and dip category grew 7% between 2013-15 and it reached $16.4 billion in 2015.

● Mintel predicts it will grow 17% from 2015-20, reaching $19.2 billion.

● People between 22-39 (Millennials) are more likely to buy chips.

● Potato chip segment represents half of the category’s market share.(Topper)






Lay’s Collisions

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● Come in various sizes● 2 flavors, 1 bag:

Flamin’ Hot + Honey BBQCheddar + Sour Cream & OnionBarbecue + Ranch

→


→

The awesome potato chip flavors you love, now packaged in heavenly pairings.

“Why just one, when you can have two”

Great for parties or as an individual snackTasty






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Most consumers would consider purchasing 1-2

times /month


14% Would Definitely Buy37% Would Probably Buy23% Would Maybe Buy

16% Would Probably Not Buy9% Would Definitely Not Buy







3. 4.

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Degree to which respondents associated Lay’s Collisions with the

following adjectives:






Reasons respondents would purchase Lay’s

Collisions over a competitor (POD’s)

6. 7.5.



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3 Factor Model: Salience, Favorability, UniquenessLay’s Brand Audit Info





KeyRed : Lay’s (Parent)Yellow :Collisions (Ext)U: Unique to new category

U

U

U

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KeyRed: Lay’s

Yellow : Potato Skins

KeyRed : Lay’s

Yellow : Lay’s Collisions






KeyRed : Lay’s (Parent)Yellow : Collisions (Ext)U: Unique to new category



U

U

U

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Equity Impact

Feeling: Social approval Stays the Same

Feeling: Excitement Stays the Same

Feeling: Gross Stays the Same

Feeling: Adventurous Slightly Increases

Feeling: Happy Stays the Same

Feeling: Calm Stays the Same

Judgment: Credibility Stays the same

Judgment: Consideration Slightly Increases

Judgment: Quality Stays the Same

Judgment: Superiority Stays the Same

After seeing Lay's Collisions, how did these feelings about Lay's change for you?

After seeing Lay’s Collisions how did you opinions regarding the following statements change for you?






4 Factor Model: Relevant

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Parent Brand Mantra






4 Factor ModelConsistent:

Strength:

Fit rating: High. 86% of respondents felt that this is a product that Lay’s would offer. A strong association that the parent brand has a

“variety of flavors” which fits hand in hand with this

extension.

Moderate-high level of influence. Collisions successfully reinforced Lay’s image of having a great variety of flavors (rating 4.14 on a

scale to 5 on how it improves Lay’s image), as well as its expertise in flavors.

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Disadvantages:

● Could possibly create/Reinforce negative associations (unhealthy weird flavors)

● Cannibalize sales

4 Factor Model: Conclusion

Advantages:

● Permit consumer variety seeking

● Reinforce Meaning● Avoid cost (and risk) for

new Brand Elements

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Definitely Buy 14%

Probably Buy 37%

Awareness 20%

Availability 100%

Repeat % 51%

Repeat Frequency

39.3


Penetration % 93%

Retail Price $1.00

Retail Margin 25%

Trial Rate

(.14*.8)+(.37*.3)=22.3%

Repeat Rate

(.51*39.3)=2004%

Trial Units

(.2*1*.223*131MM*.93)=5.4 MM

Repeat Units

(5.4MM*20.04)=108.9 MM

Total Units

(5.4MM+108.9MM)=114.3 MM

Retail Sales Volume

(114.3MM*1)=$114.3 MM


(114.3MM*.75)=$85.7 MM






Purchase Intent and ATAR Projections

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Recommendation: Collisions

Recommendation for Lay’s Collisions:

We would advise Lay’s to begin distributing Lay’s collisions. According to Mintel, flavor is the highest weighted factor when selecting chips. A regional, small scale release to test to the market would be best. Then,

with feedback from consumers, a national and eventually worldwide release would be appropriate.

Important to its success is a strong Integrated Marketing Campaign (IMC), detailed in the following pages.






Branding StrategyModified (Does not create own identity differentiated from parent brand)

Extension TypeLine Extension (same category-- Chips)

Extension strategy● Same product in a different form.

● Products that contain the brand’s distinctive taste, components, or ingredients.● Products relevant to the customer franchise of the brand. ● Products that capitalize on the firm’s perceived expertise.

● Products that reflect the brand’s distinctive benefit, attribute or feature (easy, convenient, good for parties)

● Products that capitalize on the distinctive image or prestige of the brand.

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Recommendation: CollisionsLay’s Brand Audit Info





Winning Concept: Lay’s Collisions

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Rationale:

Lay’s Collisions offers high profit opportunities and low risk. Additionally, of the three extensions,

Collisions gave greatest influence to expanding and reinforcing brand meaning.

Positioning

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Classic Trendy

(3,3)

Variety of Flavors

6

6

0

0

(3.84, 4.14)

Positioning Statement :Lay’s Collisions is the only combination chip product that provides the widest variety of flavors to satisfy the snack cravings of millennials.

Nature of Competition:

Class: Food Category: Snack

Type: ChipsTarget MarketAge group: 18-25Main Competitor

Doritos

.

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Positioning

44






Attribute Associations to CollisionsStrongly Disagree→ Strongly Agree

Product

45






→

→

→

→

→

→

→

-Flavor Combo → complimentary/enhanced taste

Chips-Flavor Variety→ to meet a

plethora of flavor preferences-Small, round chip shape→ easy to eat in one bite, kid

friendly-Salty→ makes for a perfect

side to your savory dish

46






$1.00Classic7.75 oz

$3.00Family 10.5 oz

$3.50Party

13.75 oz

Price

Value

PriceEconomy Pricing Strategy:

Ideal for Lay's target market of 18-24 year olds - a market comprised primarily of students and young, entry level professionals who want

inexpensive snack food. Lay’s Collision will be sold at the same price as regular Lay’s potato chips.

Placement

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Pull Strategies

- Advertising and mass media - Sales promotions (coupons)

Push Strategies

- Merchandising- Quantity discounts

- Stocking support for retailers

Indirect Channels:

- Wholesale retailers: Costco, Sam’s Club- Discounters: Wal-

Mart, Target- Retailers: grocery stores, convenience stores, gas stations, delis, office supply

stores- E-retailers: Amazon,

Google Express- Vending machines

- Schools

Manufacturer/ Distributor:

Frito-Lay

Direct Channels:

Shop online at fritolay.com/snacks/buy-online.html

● Social network campaign: “Mix your Flavors”Select your favorite combos and see how many people share thesame idea and what your friends think. The most popular combo to be released subsequent year.

● TV commercials: “Why have one, when you can have two”User Profile: Someone facing the challenge to choose between two different flavors, suddenly the collision appears and solves the problem.Commercials to air during prime-time television hours and major TV events (Super Bowl)

● Targeted Online Advertising: social media websites, online web/music streaming sites (Pandora, Spotify)

● Radio commercials : Audio version of the TV Commercials.

● Print Media: Magazine advertisements

● Support media: billboards, large posters at bus stops

Promotion: Integrated Marketing Communication

48






“Why have one, when you can have two?”

Promotion: Integrated Marketing Communication

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● Television/music/movie personalities, Kevin Hart and Ice Cube, will co-star in strategic integrated marketing campaigns.

● As in hit film, “Ride Along,” both strong personalities will epitomize “distinct yet complimentary” flavor profiles of the Lay’s Collisions bags

● Campaigns will be comedic and will be shown across online, television, movie, mobile, and print platforms

Celebrity Endorsers

SourcesRoberts, William, Jr. "Frozen Snacks - US - April 2016." Mintel. N.p., Apr. 2016. Web. 16 Apr. 2016.

Topper, Amanda. "Chips and Dips - US - February 2016." Mintel. N.p., Feb. 2016. Web. 16 Apr. 2016.

United States. Census Bureau. Quick Facts United States. N.p.: n.p., n.d.United States Census Bureau. Web. 19 Apr. 2016.

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Appendix

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Primary Research Overview

● Target Market: Students between the ages of 18 and 25.

● Methods used:○ Focus Groups (8 participants)○ Survey (43 qualified responses)

52

Survey Responses: Filter Questions

*All unqualified and unfinished surveys were deleted for simplicity and clarity.

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Survey Questions

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Focus Groups

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