Fritolay Case Study

1519 Words7 Pages
1. How would you characterize the snack chip category and Frito-Lays competitive position in the category? * The United States snack food industry recorded retail sales of $37 billion in 1990, a 5 percent increase from the year before. A large source of growth results from increased per capita consumption. Consumers are buying more snack chips per person, an increase of 2 pounds over four years. * Frito-Lay is the worldwide leader manufacturing and marketing of snack chips. Frito-Lay is a national brand firm that distributes products nationwide. Frito-Lay accounts for 13 percent of snack-food sales in the United States, with about one half of retail sales in the snack chip category. Also, Frito-Lays has eight of the top ten selling snack chips. However, the industry is extremely competitive with over 650 new snack chip products introduced each year. Less than one percent of new products generate more than $25 million in sales in the first year. 2. What specific challenges and risks does Frito-Lay face in marketing Sun Chips and what are their implications? * Previous ventures into the whole wheat chip category by Frito-Lay were only mildly successful despite advertising and merchandising support. It was determined that this ‘Sun-Chip-like’ product generated appeal among too narrow a target market. In 1978, it was said this product may have been invented and introduced before its time. The brand name SunChips was also given to a puffed corn product that was unsuccessful and removed from the market in 1985. * In 1981, the harvest project re-investigated interest in a multigrain snack due to the growing baby-boomer population. They concluded that the market for wholesome snacks was not yet fully developed to accept these products. Frito Lay must thoroughly investigate if the market is ready for a multigrain snack. * Studies
Open Document