Frito Lay

To analyze the environment, I chose the following internal and external factors that I believe play an essential role:

Internal Factors External Factors

Sales effort Customer preference

The income statement that was shown on page 112 in the case shows that although Frito Lay's Mexican Dip has lower net sales, its overall profit contribution is higher in comparison to its Cheese Dip. In addition, dollar sales of Mexican Dips have gradually increased from 1981 to 1986 whereas Cheese Dip sale decreased from 1984 to 1985 and stayed constant the following year. This decline, according Product Manager, Ann Mirabito, was caused by three factors: 1) novelty of shelf-stable cheese dips passed; 2) increased competitive activity; 3) discontinuance of Enchilada Bean Dip.

Frito-Lay's distribution system covers the entire country and is organized into four geographical zones. Each zone has distribution centers that are responsible for carrying inventory

. . .
In addition, Frito-Lay started incorporating television and radio into their marketing plans. R&D costs, as well as advertising and manufacturing costs, would have to increased tremendously at first in order for Frito-Lay to gain a conceptual understanding of its new industry.

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**Bibliography**

. The first possible alternative would be to remain in the production of its chip dip and take a more aggressive marketing position.

With the introduction of cheese dips in 1983, Frito-Lay began promoting dips with the focus of marketing and promotion geared toward retail-store snake food buyers. On the other hand, Frito-Lay can opt to produce a new product line consisting of vegetable dips. The more products you have, the more recognition you receive, and the more profits will soar. However, the gears shifted in 1985 to consumer promotions such as product sampling and coupons to generate "trial" of new products. They have already developed an understanding for the industry as well as the technological "know-how" of survival within it. As stated earlier, there is no real growth in their current industry and they risk the chance of incurring significant losses by staying where they are.

New products and more costly advertising led to an increase in competitive activity between 1984 and 1985. Campbell Soup, for example, introduced a nacho dip in addition to a new line of vegetable dips. These companies altered the competitive environment by introducing dips of their own. Cheese-based dips are the second most popular.

Common topics in this essay:
Dip Frito-Lay's, IV Choosing, Campbell Soup, Inc Companies, Frito-Lay Inc's, Ann Mirabito, Cheese Dip, Campbell's Lipton, Location Shelf, Mexican Dip, vegetable dip, distribution system, dip market, cheese-based dips, 1984 1985, competitive activity, vegetable dips, increased competitive activity, market share, cheese dip, cheese dips,

Approximate Word count = 943
Approximate Pages = 4 (250 words per page double spaced)

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