Channels
Frito-Lay, Inc.'s biggest problem, as stated in the text, is how to further develop their dip line as to increase the company's sales and profits. 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 preferenceThe 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 a
Frito-Lay dips were promoted jointly with same brand salty snacks; Doritos in particular. They continue to steal sales away from dips and are doing so at an annual rate of 18 percent. Increased competitive activity may have stemmed from the "complimentary" product placement as part of their promotion. At that point in time, large companies, such as Campbell's and Lipton, began taking an active interest in the dip market. Sour cream-based dips are the most popular flavor among consumers. Pursuing an entirely new market seems like a large and costly risk; I would recommend this alternative for Frito-Lay, Inc. New products and more costly advertising led to an increase in competitive activity between 1984 and 1985. Although this text may be dated, expansion has always been an essential part of success in the market. Their current distribution system is working toward their benefit in addition to having an already known product and loyal customers. These refrigerated substitutes are often located in the produce section, as opposed to placement with salty snacks. The more products you have, the more recognition you receive, and the more profits will soar. Although there are numerous alternatives that Frito-Lay can choose from, I chose two that seemed to be the most relevant to their aim for success.
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Acceptance Essays
