Doritos Marketing Strategy

11
Are you bold enough
for the Dorito
PROPOSAL AND
MARKETING
PLAN
Arpan Kumar
s3696599

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Table of Content
Executive Summary
Segmentation and Brand Strategy
1) Consumer Segmentation
2) Primary and Secondary target market
2.1) Personas
2.2) Consumer journey map
3) Positioning/Perpetual Market
4) Brand Strategy
Objective
5) Marketing Objective
Marketing Program
6) Product development, pricing and distribution plan
6.1) Product development
6.2) Pricing
6.3) Distribution plan
7) Integrated market communication plan
7.1) Advertising and Promotions
7.2) Price Promotions
Scheduling, Controlling and forecasting control
8) Marketing Schedule and Budget
9) Forecasting
10) Control

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Appendix
References
Executive Summary
The objective of this report is to address the product techniques and mechanism
through which Doritos’ new bold product will position and going to align itself with
the market domestically in Australia.
With the intentions to try this, the report incorporates a realistic recommendation
putting forward logical and applicable ways in which Doritos’ new bold product can
establish itself in the Australian domestic market.
This report will systematically unfold the different prospects of Doritos’ new bold
product internal marketing techniques from a marketing mix and value creation
perspective for a customer to be served and working around those strategies to
develop on those values.
The primary focus of this report is to shape the foundation value of Doritos by
offering a convenient and a healthy alternative to its consumers at a large scale.
Additionally, the new product will also be marketed as a new and healthy stand-
alone snack promoted to target health conscious audience and coping up with the
changing trend in snacking industry.

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This report will also reflect the ideas used behind the marketing of the new product
from how $AU 6million budget is used and how it has been effectively and efficiently
used for the product’s marketing and promotions

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Segmentation and Brand Strategy
1.Consumer Segmentation

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Source: Community and Economic profile for Australia from profile.id.com.au

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2. Primary and Secondary Target market
In Australia, Savory Snacks accounts for ~7.5% of the market share within Packaged Foods Industry. It has grown at
rate of 5.2% annually, outpacing Australia’s Packaged Foods Industry which in last five years has grown at a rate of
3.3% annually.
Refer to appendix 2.1
Australian Consumers’ snack market and choices at a glance:
 ~96% of the Australians consume snack food regularly
 ~63% of the population prefers snack food which contains ‘no artificial colors’ or ‘flavors’. Among those
almost 55% opts for snacks that are ‘low in fat’ and 33% among those prefer gluten -free snacks.
 Australian consumers prefer savoury snacks over confectionary or sweet snacking. This is primarily driven by
younger demographics in Australia as well by those who are health conscious.
 Salty Snacks has been the major contributor to the savoury snack category in past decade with value sales
contribution up to 58%.
Demographics
The marketing for Doritos would be primarily gender neutral and focused towards a population aged between 14-
39 which comprises of ~51% of Australia’s population. For the population aged above 39 marketing won’t play a
significant role as marketing campaign and Doritos is more inclined towards younger demographic of Australia
which consists of our primary and secondary target both.

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However, Income of the primary and secondary market will be much more of a limiting factor. Generally, as income
of the family member increases, the family member working outside the house also increases resulting in less time
available at home for domestic activities like cooking and packing lunch for themselves. For the middle -income
families with median income of $AU5,752 and for the individual who has monthly income of ~$AU2,000 (as per 2016
census Quickstats data for Australia) Doritos new product would be heavily targeted towards these consumers. Because of
this segmentation of the marketing, Doritos is made for health-conscious consumers seeking nutrition leading to
little more flexibility in pricing allowing the base cost of new product.
Geographic characteristics
Target market would be well within Australian continental borders, but only specific to locations like Sydney, Perth,
Melbourne, Adelaide, Canberra, Hobart and other cities which are densely populated at the onset of product launch.
Therefore, product warehousing or storage, promotion and advertising would be adjusted relative to marketing
locations. For example, storage and supply of the product in a low population city/town will be lot more different
than the supply in highly populated location because most of the work-force population works in major Australian
cities and have limited time in hand thus prefers to ready-to-go snacks while commuting, entertainments or being
at home. This assumption will encourage direct marketing in major cities than rural areas.
Psychographic profile
More than one components of our product’s campaign advertising will reach out to :

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Physically active “Experiencers” who will be centered or targeted with “healthy” messaging and advertising
highlighting the benefits of maintaining a healthy life-style when they are occupied in their busy work. (classified
ads might consist of a runner in a park running after a pack of new product).
“Believers” who will be targeted by messages of fat and gluten free Doritos helping in meeting his/her nutritional
goals.
At the same time “Achievers”, our number one consumers will be attracted towards the new product with the idea
of meeting something helpful and nutritional in lifestyle.
Purchase Behavior
As we can see from the graph, households in Australia spend ~16% of their income on food and beverages
purchases, but this proportion accounts for a much smaller proportion of overall family purchases.

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The smaller percentage allows more flexibility in family’s spending habits. With the increase in health awareness
among consumers, Australia’s diet and their purchasing patterns leaves a space of improvement when it comes to
savory snacks consumption.
As per the segmentation matrix we identified the primary target market for Doritos to be University students
While the secondary market targets are Public Transport Commuters
2.1 Personas

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2.2 Customer journey map

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3 Positioning/perpetual map
Clearly as per the perpetual or positioning map featured above. There are lot more competitors for Doritos in
savory snacks category in Australia. When it comes to monitoring nutritional profile for Doritos’ peers. “Smith’s”
clearly takes a lead outperforming other Doritos’ competitor. Whereas Doritos stands last because of one of the

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important factors that it’s not gluten free. However, when it comes to pricing Doritos is priced below par to other
premium snacks brands like Red Rock Deli, Kettle and Smith’s but is priced above CC’s (a tortilla chips brand).
4 Brand strategy
Snack industry in Australia is facing a lot more challenge with the changing consumers preferences. Even though
industry is anticipated to increase at a CAGR of 4.9% in next five years, refer to appendix 4.1
There is still an increase in demand for healthy and gourmet snacks food because of growing influence of
millennials towards healthy snacking. If this continues, then Doritos will struggle to cope with the snacks industry.
Brand development strategy for Doritos comprises of redesigning itself and techniques so it could pace up with the
changing mindset of the Australian consumers towards healthy snacking. Earlier the brand Doritos believed in the
following strategy like:
1) Consumer Acceptability
2) Availability across all distribution channel
3) Flavors
4) Purchasing ability
Brand Pyramid:
However, now we would reshape the brand strategy for Doritos on the following instead:

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1) Preference
2) Nutritional Value
3) Targeting in untapped market
Being a challenger, appendix 2.1 and competing against market leader like Smiths’ it will create a potential
opportunity for Doritos, as it’s difficult for a market leader to be in that position for a very long time and with
Doritos changing the perception of consumers towards health snacking will become a trend setter and will take
itself to the position of a market leader. To compete against the market leader, Doritos is going to adopt guerilla
attack strategy, making occasional attacks on the market leader. For this, distinctive strategies will be used to
confuse Smiths’ and saving ourselves from any retaliation.
To do so Doritos should begin exploring a new product line that fits with its brand logo. The new product should
cater today’s health conscious consumers. However, Doritos consumers care not only about quality of food and
health, but also, they care about Doritos maintaining its real and base USP i.e., corn-based tortillas chips that are
crunchy, tasty and widely accepted by people with convenient packing, refer to appendix 4.1 and appendix 2.1

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In this regard, Doritos’ competitive marketing strategic technique for a new product will be based on a wide
differentiation strategic technique highlighting:
1) Secondary consumers would become much more open towards purchasing Doritos if it comes with nutritional
values, customers may see themselves lot more closely associated with the new nutritional product.
2) Also, this would lead to an increase in nutritional awareness among the primary consumers as well creating
demand for healthier options.
3) It will be as convenient as it is now i.e., meeting consumers expectations, backed up with its conventional fine
crunchy appeal

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Brand Map:
In this case there are two distinctive marketing strategies at play for the new product.
1) Product development and diversification, it will be targeting or messaging my secondary targets who are seeking
nutritional values like less on fat from Doritos’ new product.

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2) Market penetration, it will be targeting my current primary consumers and at the same time steering them
towards nutritional awareness in conjunction with far more better savory snack among peers, this would be
possible after extensive marketing and increasing sales force’s activities which would encourage more
consumers to buy our product.
Objective
5 Marketing Objective

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What is the market potential for the new and bold Fat and Gluten free Doritos?
 With the shift towards healthy snacking, growing awareness towards healthy well-being the potential buyers
for the new Fat and Gluten free Doritos would be health-conscious consumers like Public Transport
Commuters, Independent travelers and Urban Entertainers. However, end consumers are highly influenced by
branding and the new product backed by Doritos will play an important role.
 Most of the consumers anticipated that Doritos would take a step towards healthy snacking, based on
primary research.
 Majority of the health-conscious consumers would buy this product again if they are satisfied completely,
providing healthy snacking without compromising on its original taste.
 When it comes to degree at which consumers would associate themselves with the new product would be
based on many data points like Convenience, Taste, Nutritional Value, Branding, Quality, Dieting, Inexpensive
and Flavors
 The new product would have same purchase situations as original Doritos like post-office snack, individual
treat, side meal, on the go.
 When it comes to competitive advantage we can say that it’s a Healthier option with variety of flavors, better
taste and quality, crunchy and its Gluten free which would be widely accepted among millennials in this
changing economy.
 When it comes to evaluating this product, we can say that the new product would offer an increase in market
share by bringing new customers with a refreshed brand.
 The new bold Doritos will be consumed in common situations like: Sports, gathering, treat for an individual,
House Parties, Post work snack, On-the-go, side meal.

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 The new and bold fat and gluten free Doritos will be introduced in June 2018.
Marketing Program
6 Product development, pricing and distribution plan
6.1 Product development
Doritos will lengthen its product line by using down market stretching and line filling strategies:

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Down market stretching, the new product would be a new and bold ‘Fat and Gluten free” Doritos, especially
designed for health-conscious audience attracting a larger and growing number of audience who wants value-
priced goods.
Line filling strategy, Giving the same consumers a variety of products within the new range, to be introduced in 3
conventional flavors (Cheese Supreme, Mexicana and Original Salted) but needs to be mindful that overdoing line-
filling may lead to self-cannibalization and customer confusion.
Based on market data and research, we can say that Doritos is at maturity stage, as there are no distribution
channels to be filed. Market share in Australia for Doritos hasn’t increased much even though when tortilla category
has been increasing at good pace, pricing has become competitive and intense.
Levels of product

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Product life cycle
appendix 6.1

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Brand pyramid
6.2 Pricing
Since consumer-packaged goods industry is price sensitive market. The threat of competition is expected to be
very high as compared to other comparable products. In this case the ideal pricing strategy for Doritos would be
value pricing in order retain loyal consumers by charging them at value price for a high-quality product.

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[Euromonitor, Key Trends and development in Australia] As consumer demand for products that promote health
and wellbeing has remained strong in 2017. Therefore, Doritos will be initially priced low to penetrate the targeted
market quickly attracting large number of buyers and at the same time capitalizing quickly to gain market share
and lately will allow Doritos to increase the price as demand increases, it will also create a goodwill for the early
adopters and rapid adoption & diffusion will help taking up with competition by surprise.
As per the exercise performed, appendix 6.2. we can say that there is elasticity in demand suggesting that with the
change in price of the product consumer tends to switch to a substitute product.
Therefore, the price would be set at a moderate range. The price range would be $2.0 for 90gms, $3.3 for 150gms
-170gms, $5.5 for 330gms (family pack). To compete with the peers, Doritos new product must keep the pricing
somewhat in a similar range of Doritos’ established products, appendix 6.2
6.3 Distribution plan

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In Australia supermarkets like Coles, Woolworths and discounter Aldi continued to be the main distribution channel
and they will help in gaining consumer credence and sensory information with respect to the quality, assurance and
safety of the product.
New Doritos will be seamlessly distributed, Omni-channel design, to these supermarkets across locations in the
major cities and suburbs within a range of 20Kms and will be displayed in their savory snack shelving at the end of
the June 2018. Doritos will be closely working with its supermarket distribution channels like Coles, Woolworths,
Aldi and IGA, convenience stores, gas stations with each different price strategy for each one of these alongside to
deliver the new and bold Fat and Gluten free Doritos to the targeted audience.

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We would also be leveraging online distribution channel like Amazon, which would further intensify the competition
in near future having a significant impact on online retail shopping, appendix 6.2
7 Integrated marketing communication plan
7.1 Advertising & Promotions
As it’s a new product line targeting a much broader consumer base, therefore, it becomes very important that
people are made aware of it. Hence, we have planned for the product to be seen everywhere i.e., Cinema Halls,
Television, Radio, Billboards, transit advertising on metro stations and bus stops in major cities during the
inception period (July-Oct). Thus, we have dedicated a much higher budget in first 4 months and are going for
activities with larger visibility and high impact to create both product awareness and brand reinforcements.
Digital advertising, one of the most cost-effective way to increase brand awareness is through Social Media. Doritos
can highly rely on this marketing tool to target its audience. A correct use of the channels like Facebook, YouTube
and Instagram will encourage brand perception and the key brand message along with it. For e.g., running a video
ad on YouTube for 15 seconds, launching a promotional event (like and Share) on Facebook and rolling out
freebies, promoting Instagram community while working with popular instagrammers emphasizing on specific
hashtag “#bolddoritos” driving awareness and creating customer base.

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Traditional advertising, since majority of Australia’s population lives in city, it’s a good idea to install an
informative billboard in those cities which has heavy traffic, working population and university student. For e.g., a
billboard installed around Flinders Street, Southern Cross station or Melbourne Central.
Most of our campaign will have humor as a focal point to reach our targeted audience. We will be positioning our
witty TV promotion in such a manner that they are broadcasted at that time of the day when people are in front of
their TV set. This time is generally around between 6PM – 9PM. Frequency of these TV ads will be higher initially at
the beginning of the campaign.
Radio ads are reliable and constant source of information for majority of its audience. On an average people spend
almost 14 hours of commercial every week. We can leverage the top radio station’s on-air personality endorsing
our product. The radio ads will be broadcasted in the morning and in the evening when people are commuting to
their offices while listening to the radio. This will help engage the audience and influence them towards the
product. This will be aired in the month of August, October, December and May.
The POP(Point of purchase) advertisements like super 6 will be utilized via print media. These will be Strategically
located near supermarkets like Woolworths, Coles and Aldi, and gas stations where people tend to do impulse
shopping. However, over the course of our marketing campaign, magazines and other print media will be chosen
based on our target segmentation.

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7.2 Price Promotion
Price promotions are major category of sales promotion allowing a business to attract more customers and driving
revenues. Companies generally reduce the prices of their product to entice a customer in impulse purchasing.
Unlike advertising, sales promotions not always show upfront costs associated with it.
Since most of the pricing promotions are effective at achieving quicker sales, but the sales effect may be just for a
shorter term.
Few sales promotions that we are going to use in our marketing plan:
 Free Samples, by providing samples to the audience in supermarkets, regardless of any purchase they make.
This would encourage the existing as well as new consumers to buy products that they haven’t considered
before. This would be done during July, August and September (2018).
In conclusion more than one components of our product’s campaign advertising will reach out to :
Physically active “Experiencers” who will be centered or targeted with “healthy” messaging and advertising
highlighting the benefits of maintaining a healthy life-style when they are occupied in their busy work. (classified
ads might consist of a runner in a park running after a pack of new product).
“Believers” who will be targeted by messages of fat and gluten free Doritos helping in meeting his/her nutritional
goals.
At the same time “Achievers”, our number one consumers will be attracted towards the new product with the idea
of meeting something helpful and nutritional in lifestyle.

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P
Scheduling, Controlling and forecasting control
8.Marketing Schedule and Budget

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Appendix
2.1 Packaged Foods Industry vs Savoury Snacks Category

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3.1 Positioning and perpetual map

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4.1 Brand Strategy

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To achieve a market share of 3.7% in 2018 or increase its market share by 0.1%, Doritos must achieve revenue
growth of 8.5% in FY2018-19.

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Product Life Cycle
Product development: Initial stage
In the initial stage, Doritos will seek to build product awareness and develop a market for the consumers seeking
“healthy snack”. This will change the perception among the consumers who considered Doritos as an unhealthy
snack.
In the past years Doritos has been successful in shifting its product-mix to value added snacks categories. Since
Doritos has been widely accepted in Australia by generating higher profit margin and at the same time creating a
larger market into which PepsiCo’ Australia and New Zealand can expand. Therefore, it’s the perfect platform to
launch bold “Fat and Gluten free Doritos” on the product line:
When it comes to impact on the marketing mix this how it will look in the initial stage:
 A well-established product branding and level of quality will be there
 Pricing for the new product will be as same as Doritos or may be low, helping us penetrating and building the
market rapidly. If high, then it will help us recover the cost invested in development.
 Promotions will be targeted at innovators and early adopters
 Until there’s a consumer’s acceptance of the product distribution will be selective initially
 With the help of the marketing communication there will be a product awareness to educate potential
customers about the new product

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The Target introductory market for the new and bold fat and gluten free Doritos is comprised of population aged
between 14-39 with the prime goal of offering a healthy snacking and simultaneously incorporating a trend of
healthy eating habits into Australian’s diet.
Product development: Growth Stage
In growth stage, Doritos will seek to increase its market share and fire on its brand performance. After the
successful implementation and completion of the initial stage the next stage will propel Doritos into the growing
stage by building on its current competitive strengths which includes brand name recognition, processing and
distribution while making a significant investment on its R&D and production.
However, constant and persistent delivery of highest quality product to the consumers at all different stages of the
product life cycle plays an important role in helping to grow a product, but it’s this stage where we would be
introducing new flavors of Doritos like BBQ, Ranch, Supreme Cheese, Mexican, Jumpin’ Jack, Toasted corn and
many more that will be added on the product line in order to make an effort in maintaining consumer’s interest,
rise in demand and reaching a larger consumer base and coupled together with nutritional education and providing
health benefits into one’s dietary plans:
Growth Stage’s important points on the marketing mix are mentioned below:
 The distribution channels will become more concentrated and incentive based as the demand increase to
encourage preference over other competitive products.
 Promotions will be levied and targeted towards a broader audience.
 Product feature will be improvised and enhanced to add a competitive strength in our new product with
respect to other competitors giving us an edge over others.
 Pricing may be on a lower side because of the new and current competition.

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Product development: Maturity stage
This new level is market maturity stage, where the first signal is market saturation. Sales will be now at par with the
population as most of the households or consumers or the sales prospects will be using the product. Distribution
pipelines are already filled, pricing would become competitive and intense. Now bringing more and finer
refinements in the customer experiences towards the product, in the new product and in the promotional practices
would help us achieve competitive advantage.
Product development: Decline stage
With the increase in competition overtime there will be no longer product differentiation apparently to the
consumers. In the declining stage where volumes and sales will decrease over time, Doritos would have multiple
options for its new product line.
The new product line would deploy on the following strategies:
Re-marketing Doritos specifically towards the primary and secondary market or towards the loyal consumers using
aggressive marketing strategies. As competition would dictate it would allow more flexibility for Doritos to do more
aggressive promotions, advertising and sales-force efforts.

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Consumer demand elasticity working

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6.3 Distribution plan

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