Industry and Competitive Analysis Running head: INDUSTRY AND COMPETITIVE ANALYSIS 1 INDUSTRY AND COMPETITIVE ANALYSIS 2 Dominating the snack food industry with their chips, pretzels, and party mixes, Frito-Lay, an entity of PepsiCo, has been relentlessly focusing on launching a new health conscious chip for those seeking a greener alternative (Fox News, 2016). While building one company inside of another, Frito-Lay has taken a proactive approach to creating high-end snacks that would appeal to customers with a healthy lifestyle (Harris, J. 2014). In effort to launch this new chip successfully, Frito-Lay’s marketing team must consider any marketplace changes, consumer needs, and snack food competitors. Describe in detail your product/service offering. Frito-Lay believes that snacking should be satisfying and fun, but snacks aren’t just snacks anymore. For instance, more families are beginning to include chips, as side dishes to their meals. As more people are choosing chips over fries, more consumers are looking for chips that are healthier, satisfying, and inexpensive. While customers are pacing up and down the chip aisles, Frito-Lay is strategically planning and taking a proactive approach to launch their new low-fat, organic, chips— Skinny Chip. Skinny Chip is similar to the original Lay’s potato chip; except it is made of wheat and all-natural ingredients. The gluten-free, no GMO, and organic Skinny Chips describes the company’s sustainability. Not only is Skinny Chip, Frito-Lay’s new flavor, Skinny Chip is packaged in Frito-Lay’s first re-sealable bags. The chips will target valued customers, health and environment conscious consumers, as well as meet the ever-changing consumer needs. Determine market needs (justification for your choice of product). As dieting and healthier snacking has become a fad, more and more consumers are preferring healthier, organic, and locally sourced ingredients in their snacks. Marketers at Frito-Lay, struggled whether to produce a new chip to meet the changing consumer preferences or just continue with a low fat version of their popular Lay’s potato chips. To meet market demands, PepsiCo will launch its “Skinny Chip” program in 2016, to help consumers identify healthier snack food choices (Harris, J. 2014). In order for them to be successful with the launch of Skinny Chip, they determine their consumer and market needs, by conducting market researches and surveys. These tools will allow customers the opportunity to give feedback and share their ideas for flavors of chips, cost, and ingredients for Skinny Chip. While keeping the composition of their original Lays chips, there were several factors that affected consumers’ relationships with snack foods. Some factors included the cost of the chips, chip packaging lacking healthy sight words, and a sense of convenient freshness. For instance, surveys resulted how more consumers preferred chips packages that are re-sealable; displ.

1. Industry and Competitive Analysis
Running head: INDUSTRY AND COMPETITIVE ANALYSIS
1
INDUSTRY AND COMPETITIVE ANALYSIS
2

2. Dominating the snack food industry with their chips, pretzels,
and party mixes, Frito-Lay, an entity of PepsiCo, has been
relentlessly focusing on launching a new health conscious chip
for those seeking a greener alternative (Fox News, 2016). While
building one company inside of another, Frito-Lay has taken a
proactive approach to creating high-end snacks that would
appeal to customers with a healthy lifestyle (Harris, J. 2014). In
effort to launch this new chip successfully, Frito-Lay’s
marketing team must consider any marketplace changes,
consumer needs, and snack food competitors.
Describe in detail your product/service offering.
Frito-Lay believes that snacking should be satisfying and fun,
but snacks aren’t just snacks anymore. For instance, more
families are beginning to include chips, as side dishes to their
meals. As more people are choosing chips over fries, more
consumers are looking for chips that are healthier, satisfying,
and inexpensive. While customers are pacing up and down the
chip aisles, Frito-Lay is strategically planning and taking a
proactive approach to launch their new low-fat, organic, chips—
Skinny Chip.
Skinny Chip is similar to the original Lay’s potato chip; except
it is made of wheat and all-natural ingredients. The gluten-free,
no GMO, and organic Skinny Chips describes the company’s
sustainability. Not only is Skinny Chip, Frito-Lay’s new flavor,
Skinny Chip is packaged in Frito-Lay’s first re-sealable bags.
The chips will target valued customers, health and environment
conscious consumers, as well as meet the ever-changing
consumer needs.
Determine market needs (justification for your choice of
product).
As dieting and healthier snacking has become a fad, more and
more consumers are preferring healthier, organic, and locally
sourced ingredients in their snacks. Marketers at Frito-Lay,
struggled whether to produce a new chip to meet the changing
consumer preferences or just continue with a low fat version of

3. their popular Lay’s potato chips. To meet market demands,
PepsiCo will launch its “Skinny Chip” program in 2016, to help
consumers identify healthier snack food choices (Harris, J.
2014). In order for them to be successful with the launch of
Skinny Chip, they determine their consumer and market needs,
by conducting market researches and surveys. These tools will
allow customers the opportunity to give feedback and share
their ideas for flavors of chips, cost, and ingredients for Skinny
Chip.
While keeping the composition of their original Lays chips,
there were several factors that affected consumers’ relationships
with snack foods. Some factors included the cost of the chips,
chip packaging lacking healthy sight words, and a sense of
convenient freshness. For instance, surveys resulted how more
consumers preferred chips packages that are re-sealable;
displaying words such as, “whole-grain,” “all-natural,” and
“organic” (Fox News, 2016). These consumer needs gave Frito-
Lay’s marketers a better idea of new customer targets,
marketing ideas, packaging for on-to-go snackers for Skinny
Chip.
Review market history and estimate future growth potential.
Although the original Lay’s potato chip was discovered by
accident, Frito-Lay potatoes have been a beloved brand since
1932. The company started as two different companies which
later merged in 1961 and later in 1965, Frito-Lay, Inc.
combined with the Pepsi-Cola Company, ensuing in the
formation of PepsiCo, Inc. Since then, Frito-Lay has worked as
a totally owned subordinate of PepsiCo. Through Frito-Lay,
PepsiCo is the biggest internationally dispersed snack food
business in the world, with revenues of its products in 2009
consisting of 40 percent of all "spicy snacks" sold in the United
States and 30 percent in the non-American market. Frito-Lay
North America is responsible for 31 percent of PepsiCo's yearly
sales (Harris, 2014). The company has been producing,
marketing and selling potato chips, corn chips and other snack
foods. The main snack food brands manufactured under the

4. Frito-Lay brand include Cheetos cheese-flavored snacks, Fritos
corn chips, Lay's and Ruffles potato chips, Tostitos and Doritos
tortilla chips, walkers and Rold Gold pretzels potato crisps
(Ireland and UK), each of which produced annual global sales
of over 1 billion dollars in 2009.
Today, Frito-Lay continues to be one of the largest and most
popular producers of potato chips, and related snack foods (Fox
News, 2016). The company is alert on coming up with healthier
products across its food business to provide to the shift in
customer preferences in the direction of healthier products.
Competitors are challenging Skinny Chip market dominance in
the form of large scale manufacturers owned by large national
brands, to small natural foods upstarts that market more through
word of mouth versus national retailer displays. This puts
Skinny Chip in a unique position to not only continue to strive
to be relevant to its core consumers, but appeal to changing
tastes and new consumers that may not have had any affinity
with Skinny Chip previously. As such, there is tremendous
growth potential in healthier and organic snacks.
Frito-Lay's rebranded an existing chip as a fat-free, Skinny
Chip. The new chip is expected to have an effect on the
company’s future growth potential. Declining volumes of potato
chips in the North America region have made the business focus
on small or no calorie alternatives as well as grow products
such as like fat free potato chips. The growing populations,
rising throwaway incomes and superior standards of living in
up-and-coming economies are some of the constructive factors
that will make possible the demand for their products (Fox
News. 2016). The per capita expenditure of such products are
still is still quite low in up-and-coming economies such as
China and India as compared to the Unites States. This gives
considerable growth opportunity for Frito-Lay’s potato chips
business.
Analyze your company's strengths and weaknesses as they
pertain to this product launch, as well as any external
opportunities, threats and trends.

5. Skinny Chip is the product of Frito-Lay, which is a group of
Pepsi Co. The market slogan for Lays products is “You can’t eat
just one” and Frito-Lay is challenging themselves to live up to
their own slogan, with Skinny Chip. As Frito-Lay is working
towards re-branding and launching their low-fat potato chips
line, a SWOT analysis is performed as it pertains to the project.
The strengths of the Frito-Lay’s product is well established in
branding, marketing, and advertising. This organization has
consumer preference with their line of products. The Frito-Lay
brand is distributed globally, and has wide-range availability.
As the marketplace changes, Frito-Lay’s marketing managers
changes their marketing strategies, tactics, and improved their
competitive position. Prior to deciding whether or not to
change or capitalize on Skinny Chip, Frito-Lay re-evaluated the
company’s tangible and intangible capabilities. In other words,
the company observed all of their marketing and customer care
processes, systems, people any change affected (Harris, J.
2014). The company able defend their market share by helping
stakeholders understand the company’s mission and vision for
Skinny Chip.
With a consistent and loyal customer base, Frito-Lay foresee the
launch of Skinny Chip as a successful one. For instance, their
consumers trust the quality and price of their products
(www.maskool.com, 2016). According to the article, Lays
Market, Frito-Lay’s goal in the campaign is to “show their
consumers that they aren’t a purveyor of “junk food” loaded
with unhealthy artificial ingredients, but rather, a company
whose core products were natural” (Slideshare, 2014).
The current weakness of Frito-Lay’s brand potato chips are the
ability to attract the health conscious audiences that avoid high
fat and cholesterol food or snacks (www.slideshare.net, 2014).
Another weakness Frito-Lay’s face as they attempt the Skinny
Chip launching is product positioning; which is the process
marketers use to determine how to best communicate their
products attributes to their customers based on their needs
(www.smallbusiness.chron, 2016).

6. Frito-Lay has to market their low-fat potato chips to the health
conscience audience, and make the product something they can
consume and still have healthy eating habits. Last, as Skinny
Chip’s launch date close in, the company is faced with making
difficult marketing decisions (Slideshare, 2014). For instance,
Frito-Lay’s marketing team must determine how to continue to
grow their core business when some of their mainstream brands
are losing share to some of the smaller top and quality brands;
as well as, to other snack competitors (Harris, J. 2014).
Analyze the company’s SWOT as it pertains to the product
launch
The opportunities for Frito-Lay’s low-fat, organic Skinny Chip
potato chips, are to market them world-wide, and gain a larger
distribution force. The threats are the non-acceptance from
health conscience people, availability of healthy products (Fox
News. 2016). The potential impact of government regulations as
it pertains to the manufacturing, marketing, and distributions
food products can also produce threats (www.marketing
teacher.com, 2014). The trends are the healthy snacks on the go,
therefore, the product should appeal to the health conscience
trend that is the rave of the consumers.
Analyze potential competition for your product - provide an
overview of the competitive landscape, and assess your
competition's strengths and weaknesses.
Popchips is key competitor to Frito-Lay’s, Skinny Chip.
Popchips has been owned by Coca-Cola since 2007 and
produces potato-based chips that are lower in fat than most
traditional potato chips Fox News. (2016). Popchips’ ability to
cook their chips without oil, but with pressure and heat to pop
them, much like popcorn, makes them less heavy and attractive
to health-conscious consumers. In addition to traditional salted
flavors, Popchips has a number of flavor options to choose from
and has been able to gain wide distribution through major
retailers across the United States (Casserly, 2013)
A major turnoff to Popchips is that several competitors
have begun duplicating Popchips’ manufacturing process. This

7. disadvantages, leaves room for consumers to choose between
multiple snack producers—leaving Frito-Lay as a main choice.
In addition, Popchips has been continuing to maintain their
relevance through promotional advertising involving celebrity
personalities like Katy Perry, Jillian Michaels, Heidi Klum and
Sean Combs (Casserly, 2013) In short, Lays is seeing
competition from companies like Popchips as well as smaller
startups focusing on the health and wellness spectrum of the
snack business (Harris, J. 2014).
10 Question Survey - Market Search
1. What are customer needs, and wants?
2. What are the customer buyer motivations?
3. How is our competitor different?
4. Do our prices create value for the customer?
5. What can we do to keep the customer happy?
6. What will make us #1 in your home?
7. Would you like samples of our product?
8. What would make you notice our products in the stores?
9. Who are the primary shoppers in your household?
10. Where is your geographic market location?
References
Casserly, M. (2013). Forbes. Popchips: The next billion snack
food, or just hot air? Retrieved from:
http://www.forbes.com/sites/meghancasserly/2013/01/24/popchi
ps-the-next-1-billion-snack-food-or-just-full-of-hot-
air/#6fd8cf7f2e3a
Fox News. (2016). The surprising history of potato chips.
Retrieved from:
http://www.foxnews.com/leisure/2016/03/14/surprising-history-
potato-chips/
Harris, J. (2014). Lays Potato Chips: The Crunch is on.
Retrieved from: https://ideas.darden.virginia.edu/2014/02/lays-
potato-chips-the-crunch-is-on/

8. Lays SWOT Analysis, USP & Competitors. (2016). Retrieved
from http://www.mbaskool.com
Pepsi SWOT. (2014). Retrieved from
http://www.marketingteacher.com
Richards, L. (2016). The Importance of Product Positioning to
the Marketing Plan. Retrieved from
http://www.smallbusiness.chron
Slideshare. (2014, June 4). Lays Market. Retrieved from
http://www.slideshare.net