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Lay's NPP Corrected FINAL PRINT

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Chandler Shipley
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Lay’s Sofia Shoffner, Wei Dai, Mariana Aristizabal, Chandler Shipley New Product Proposal
Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 2 Nature of Competition Class: Food Category: Snack Type: Chips Target Market Age group: 18-25 Main Competitors Doritos Tostitos Positioning Positioning Statement : Lay’s is the only classic chip that provides the widest variety of flavors to satisfy the snack cravings of millennials.
3 Mental Maps Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
4 Emotional Descriptive Function Classic: Lay’s has been perfecting its potato chips for more than 75 years and is perceived as very traditional. Its products and brand image have remained mostly unchanged throughout the years so their customers know to expect practiced quality. Social: Lay’s are consumed mostly at social gatherings. Their most common purchase situations include parties, BBQ’s, and sports viewing events. Snack: As opposed to a meal, Lay’s are meant to be eaten in between meals, for those times when you want something light, something that keeps your hunger at bay, something to be munched on, something to be shared among family, friends, and guests Brand Mantra Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
Opportunity Identification: Chips Market ● Chips and dip industry grew 7% between 2013-15 and it reached $16.4 billion in 2015. ● Mintel predicts chip industry will grow 17% from 2015- 20, reaching $19.2 billion ● Those ages between 22-39 (Millennials) are more likely to buy chips ● 53% of respondents said the brands of chips they ate as a kid are still their favorite. This gives Lay’s an advantage because parents buying snacks will be more open to buying Lay’s new products → brand loyalty ● 66% of Chip and Dip consumers take nutrition into account when selecting chips → increasingly health conscious consumers ● 85% of consumers agree that it is okay to indulge from time to time → vegetable chips = perfect marriage between health trend & snack satisfaction (Topper) Key Health Drivers When Buying Chips Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 5 (Topper)
6 Baked organic chips made with real vegetables “Veggies never tasted so good” ­ Healthy, organic snack Variety! → → ● Made from real whole vegetables ● Natural flavor, no additives ● Gluten free ● Baked instead of fried ● Offered in several types of vegetables ○ Beet, kale, carrot ○ Mixed Bag Attributes → Benefits Lay’s Veggie Chips Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
7 70% of Respondents viewed it as a product Lay’s would offer 100% of Respondents would purchase again if completely satisfied Most consumers would consider purchasing 2x/month 86% of Respondents Would Consider Purchasing 9% Would Definitely Buy 36% Would Probably Buy 41% Would Maybe Buy 14% Would Probably Not Buy 0% Would Definitely Not Buy Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Concept Evaluation: Primary Research 1. 2. 3. 4.
8 Degree to which respondents associated Lay’s Veggie Chips with the following adjectives: Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Reasons respondents would purchase Lays Veggie chips over a competitor (POD’s) 6. 7.5. Common likely purchase situations: Concept Evaluation: Primary Research
9 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 3 Factor Model: Salience, Favorability, Uniqueness Key Red : Lay’s (Parent) Yellow : Veggie Chips (Ext) U: Unique to new category U U U
10 4 Factor Model: Compelling Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion After seeing Lay's Veggie Chips, your opinion of Lay's regarding the following: 1: Greatly Worsened → 5: Greatly Improved Key Red : Lay’s (Parent) Yellow : Veggie Chips (Ext) U: Unique to new category U U U
11 4 Factor Model: Relevant After seeing Lay’s Veggies Chips how did these feelings about lays veggie chips change for you? After seeing Lay’s Veggie Chips how did you opinions regarding the following statements change for you? Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
Moderate Fit. 70% of respondents felt that this is a product Lay’s would offer. This is most likely due to consumer awareness and expectation of the health trend in food. 12 4 Factor Model Parent Brand Mantra Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Consistent: Strength: Weak-moderate. Unfavorable mental map associations from parent brand were too strong (ie. unhealthy) and respondents rated “healthy” and “dieting” as the 2 weakest associations for Veggie chips in a list of 14. However, respondents averaged “somewhat agree” to the Lay’s brand for being perceived as more “socially acceptable” after seeing Veggie Chips.
13 4 Factor Model: Conclusions Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Advantages: ● Reduce risk ● Decrease cost ● Refresh brand ● Permit consumer variety seeking ● Expand Meaning ● Bring new customers ● Increase market coverage ● Avoid cost (and risk) for new brand elements Disadvantages: ● Cannibalize sales ● Forgo the chance to develop a new brand
14 Purchase Intent and ATAR Projections Definitely Buy 9% Probably Buy 35% Awareness 20% Availability 100% Repeat % 44% Repeat Frequency 33.8 Households 131 Million Penetration % 93% Retail Price $1.75 Retail Margin 25% Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Trial Rate (.09*.8)+(.35*.3)= 17.7% Repeat Rate (.44*33.8)= 1487% Trial Units (.2*1*.177*131MM*.93 = 4.3 MM Repeat Units (4.3 MM*14.87)= 64.1 MM Total Units (4.3MM+64.1MM)= 68.4 MM Retail Sales Volume (68.4MM*1.75)= $119.75 MM Wholesale Sales Volume (119.75MM*.75)= $89.8 MM
15 Recommendation: Veggie Chips Recommendation for Lay’s Veggie Chips: The intent of this product was to expand brand meaning and change the consumer perception that Lay’s only offers unhealthy snacks. However, surveys showed consumers still perceive the product and the brand as “unhealthy”. There was evidence of the parent brand being seen as more “socially acceptable” and “innovative” after introducing this new product, but the impact was weak (averaged just under ” somewhat agree”). This leads us to believe that this product idea is a good but needs more development and a refined positioning strategy for a greater impact and resonance. We recommend that Lay’s conducts more extensive research to better develop a position that fulfills consumers’ preferences for a healthier snack, and establishes market credibility and trustworthiness by improving packaging and promotion. Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
Branding Strategy Sub-brand (Creates own identity and POD’s) Extension Type Line Extension (Same category-- Chips, different ingredients = POD’s) Extension strategy Products that capitalize on the firm’s expertise Products that capitalize on the distinctive prestige of the brand Products that expand the meaning of the brand Attracting new market segments 16 Recommendation: Veggie Chips Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
Frozen Snack Market ● Sales of frozen food snacks are expected to reach $5.1 billion by 2020 ● 64% of Millennials say snacks are an affordable way to replace meals ● Snacking is a guilty pleasure (69%), and it is a good way to reward yourself (63%) (Roberts) 17 Opportunity Identification Lay’s Potato Skins Opportunities ● Over one third of households, especially those with children, think a familiar brand is one of the most important factors when buying frozen foods. ● Consumers would be more open to buying frozen snacks if they were convenient and tasty, which Lay’s is addressing by making prep time under 12 minutes and using fresh, well known ingredients. (Robberts) Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
18 Lay’s Potato Skins “We Know Potatoes” Frozen, unpeeled potato halves, hollowed and fully loaded with cheddar, bacon and chives. ● Bakes in just 12 minutes ● Filled with real, genuine ingredients (including Sargento cheese) ● ­Source of protein, fiber, and calcium ● 75 years of potato loving history and experience Convenient→ → Attributes → Benefits Substantial food→ Quality Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
19 40% of Respondents viewed it as a product Lay’s would offer 100% of Respondents would purchase again if completely satisfied Most consumers would consider purchasing 1-2 times /month 63% of Respondents Would Consider Purchasing 9% Would Definitely Buy 28% Would Probably Buy 26% Would Maybe Buy 23% Would Probably Not Buy 14% Would Definitely Not Buy Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Concept Evaluation: Primary Research 1. 2. 3. 4.
20 Degree to which respondents associated Lay’s Potato Skins with the following adjectives: Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Reasons respondents would purchase Lay’s Potato Skins over a competitor (POD’s) 6. 7.5. Common likely purchase situations: Concept Evaluation: Primary Research
21 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 3 Factor Model: Salience, Favorability, Uniqueness Key Red : Lay’s (Parent) Yellow : Potato Skins (Ext) U: Unique to new category U U U
22 4 Factor Model: Compelling Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Key Red : Lay’s (Parent) Yellow : Potato Skins (Ext) U: Unique to new category After seeing Lay's Veggie Chips, your opinion of Lay's regarding the following: 1: Greatly Worsened → 5: Greatly Improved U U U
23 4 Factor Model: Relevant Feeling: Social approval Stays the Same Feeling: Excitement Stays the Same Feeling: Gross Stays the Same Feeling: Adventurous Stays the Same Feeling: Happy Stays the Same Feeling: Calm Stays the Same Judgment: Credibility Stays the same Judgment: Consideration Stays the Same Judgment: Quality Stays the Same Judgment: Superiority Stays the Same After seeing Lay's Potato Skins, how did these feelings about Lay's change for you? After seeing Lay’s Potato Skins how did you opinions regarding the following statements change for you? Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
24 4 Factor Model: Relevant (Continued) Inexpensive Lay’s has experience creating products that are accessible to consumers from varying economic backgrounds. Yes Easy to prepare Lay’s has experience with products that are convenient and good for quick snacks Moderate Durable Goods (Long lifespan before spoiling) Lay’s makes products that do not expire quickly. Moderate Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Category Extension:
25 Parent Brand Mantra Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 4 Factor Model Consistent: Moderate Fit. Only 60% of respondents felt that this is a product Lay’s that would offer, and that Lay’s expertise with potatoes had little impact: respondents averaged between “neither agree or disagree” and “somewhat agree” when asked if Lay’s potato expertise is a reason they would be inclined to buy Lay’s vs other potato skin brands. Parent brand knowledge did not create POD in the new category as we had hoped.Weak. Potato Skins have little impact on the meaning or perceptions of the parent brand. Strength:
26 4 Factor Model: Conclusions Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Advantages: ● Refresh brand ● Permit consumer variety seeking ● Add Meaning (moderate) ● Bring new customers, ● Avoid cost (and risk) for new Brand Elements Disadvantages: ● Could Dilute brand meaning ● Create/Reinforce negative associations (unhealthy)
27 Definitely Buy 9% Probably Buy 28% Awareness 20% Availability 40% Repeat % 37% Repeat Frequency 28.1 Households 131 Million Penetration % 66% Retail Price $6.00 Retail Margin 25% Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Trial Rate (.09*.8)+(.28*.3)= 15.6% Repeat Rate (.37*28.1)= 1040% Trial Units (.2*.4*.156*131MM*.66) = 1.1 MM Repeat Units (1.1MM*10.4)= 11.22 MM Total Units (1.1MM+11.22MM)= 12.3 MM Retail Sales Volume (12.3MM * 6)= $74.1 MM Wholesale Sales Volume (74.1MM*.75)= $55.58 MM Purchase Intent and ATAR Projections
28 Recommendation: Potato Skins Recommendation for Lay’s Potato Skins: According to survey respondents, introducing Lay’s Potato Skins would have little impact on the perception of the parent brand. Similarly, the transfer of expertise brand equity from the parent to the extension was also weak. Only 9% answered “would definitely buy,” and 28% answered “would probably buy,” leading to ~$18 million in profit. This response isn’t deplorable, however, it is not best. Therefore, we recommend that Lay’s does not pursue this extension. We do, however, recommend further research on creating a whole new brand for frozen snacks or research on a product such as frozen french fries which customers may see as more closely associated with its current products, thus providing more equity transferred to the extension, and greater reinforcement of parent brand meaning. Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
29 Recommendation: Potato Skins Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Branding Strategy Sub-brand (Creates own identity and POD’s) Extension Type Category Extension (New category - Frozen snack, new POP’s) Extension strategy Products that contain the brand’s distinctive taste, components, or ingredients Products that capitalize on the firm’s perceived expertise Products that reflect the brand’s distinctive benefit, attribute or feature (easy, convenient, good for parties) Products that capitalize on the distinctive image or prestige of the brand Products that expand the meaning of the brand Attracting new market segments
Lay’s Collisions Opportunities ● Millennial are more adventurous when eating chips so they prefer bolder flavors and new ingredients and non-traditional bases. ● Millennials are more likely to mix products together to get different flavors. ● Brands that encourage mixing of chips and dips or variety pack appeal to them. ● 52% of respondents are always looking for new chip flavors. (research citation) (Topper) 30 Opportunity Identification Chips Market ● Chips and dip category grew 7% between 2013-15 and it reached $16.4 billion in 2015. ● Mintel predicts it will grow 17% from 2015-20, reaching $19.2 billion. ● People between 22-39 (Millennials) are more likely to buy chips. ● Potato chip segment represents half of the category’s market share. (Topper) Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
Lay’s Collisions 31 ● Come in various sizes ● 2 flavors, 1 bag: Flamin’ Hot + Honey BBQ Cheddar + Sour Cream & Onion Barbecue + Ranch → Attributes → Benefits → The awesome potato chip flavors you love, now packaged in heavenly pairings. “Why just one, when you can have two” Great for parties or as an individual snack Tasty Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
32 86% of Respondents viewed it as a product Lay’s would offer 100% of Respondents would purchase again if completely satisfied Most consumers would consider purchasing 1-2 times /month 74% of Respondents Would Consider Purchasing 14% Would Definitely Buy 37% Would Probably Buy 23% Would Maybe Buy 16% Would Probably Not Buy 9% Would Definitely Not Buy Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Concept Evaluation: Primary Research 1. 2. 3. 4.
33 Degree to which respondents associated Lay’s Collisions with the following adjectives: Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Reasons respondents would purchase Lay’s Collisions over a competitor (POD’s) 6. 7.5. Common likely purchase situations: Concept Evaluation: Primary Research
34 3 Factor Model: Salience, Favorability, Uniqueness Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Key Red : Lay’s (Parent) Yellow :Collisions (Ext) U: Unique to new category U U U
35 Key Red: Lay’s Yellow : Potato Skins Key Red : Lay’s Yellow : Lay’s Collisions 4 Factor Model: Compelling Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Key Red : Lay’s (Parent) Yellow : Collisions (Ext) U: Unique to new category After seeing Lay's Veggie Chips, your opinion of Lay's regarding the following: 1: Greatly Worsened → 5: Greatly Improved U U U
36 Equity Impact Feeling: Social approval Stays the Same Feeling: Excitement Stays the Same Feeling: Gross Stays the Same Feeling: Adventurous Slightly Increases Feeling: Happy Stays the Same Feeling: Calm Stays the Same Judgment: Credibility Stays the same Judgment: Consideration Slightly Increases Judgment: Quality Stays the Same Judgment: Superiority Stays the Same After seeing Lay's Collisions, how did these feelings about Lay's change for you? After seeing Lay’s Collisions how did you opinions regarding the following statements change for you? Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 4 Factor Model: Relevant
37 Parent Brand Mantra Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 4 Factor Model Consistent: Strength: Fit rating: High. 86% of respondents felt that this is a product that Lay’s would offer. A strong association that the parent brand has a “variety of flavors” which fits hand in hand with this extension. Moderate-high level of influence. Collisions successfully reinforced Lay’s image of having a great variety of flavors (rating 4.14 on a scale to 5 on how it improves Lay’s image), as well as its expertise in flavors.
38 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Disadvantages: ● Could possibly create/Reinforce negative associations (unhealthy weird flavors) ● Cannibalize sales 4 Factor Model: Conclusion Advantages: ● Permit consumer variety seeking ● Reinforce Meaning ● Avoid cost (and risk) for new Brand Elements
39 Definitely Buy 14% Probably Buy 37% Awareness 20% Availability 100% Repeat % 51% Repeat Frequency 39.3 Households 131 Million Penetration % 93% Retail Price $1.00 Retail Margin 25% Trial Rate (.14*.8)+(.37*.3)= 22.3% Repeat Rate (.51*39.3)= 2004% Trial Units (.2*1*.223*131MM*.93) =5.4 MM Repeat Units (5.4MM*20.04)= 108.9 MM Total Units (5.4MM+108.9MM)= 114.3 MM Retail Sales Volume (114.3MM*1)= $114.3 MM Wholesale Sales Volume (114.3MM*.75)= $85.7 MM Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Purchase Intent and ATAR Projections
40 Recommendation: Collisions Recommendation for Lay’s Collisions: We would advise Lay’s to begin distributing Lay’s collisions. According to Mintel, flavor is the highest weighted factor when selecting chips. A regional, small scale release to test to the market would be best. Then, with feedback from consumers, a national and eventually worldwide release would be appropriate. Important to its success is a strong Integrated Marketing Campaign (IMC), detailed in the following pages. Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
Branding Strategy Modified (Does not create own identity differentiated from parent brand) Extension Type Line Extension (same category-- Chips) Extension strategy ● Same product in a different form. ● Products that contain the brand’s distinctive taste, components, or ingredients. ● Products relevant to the customer franchise of the brand. ● Products that capitalize on the firm’s perceived expertise. ● Products that reflect the brand’s distinctive benefit, attribute or feature (easy, convenient, good for parties) ● Products that capitalize on the distinctive image or prestige of the brand. 41 Recommendation: Collisions Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
Winning Concept: Lay’s Collisions 42 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Rationale: Lay’s Collisions offers high profit opportunities and low risk. Additionally, of the three extensions, Collisions gave greatest influence to expanding and reinforcing brand meaning.
Positioning 43 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Classic Trendy (3,3) Variety of Flavors 6 6 0 0 (3.84, 4.14) Positioning Statement : Lay’s Collisions is the only combination chip product that provides the widest variety of flavors to satisfy the snack cravings of millennials. Nature of Competition: Class: Food Category: Snack Type: Chips Target Market Age group: 18-25 Main Competitor Doritos . 43
Positioning 44 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Attribute Associations to Collisions Strongly Disagree→ Strongly Agree
Product 45 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion → → → → → → → -Flavor Combo → complimentary/enhanced taste Chips -Flavor Variety→ to meet a plethora of flavor preferences -Small, round chip shape→ easy to eat in one bite, kid friendly -Salty→ makes for a perfect side to your savory dish
46 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion $1.00 Classic 7.75 oz $3.00 Family 10.5 oz $3.50 Party 13.75 oz Price Value Price Economy Pricing Strategy: Ideal for Lay's target market of 18-24 year olds - a market comprised primarily of students and young, entry level professionals who want inexpensive snack food. Lay’s Collision will be sold at the same price as regular Lay’s potato chips.
Placement 47 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Pull Strategies - Advertising and mass media - Sales promotions (coupons) Push Strategies - Merchandising - Quantity discounts - Stocking support for retailers Indirect Channels: - Wholesale retailers: Costco, Sam’s Club - Discounters: Wal- Mart, Target - Retailers: grocery stores, convenience stores, gas stations, delis, office supply stores - E-retailers: Amazon, Google Express - Vending machines - Schools Manufacturer/ Distributor: Frito-Lay Direct Channels: Shop online at fritolay. com/snacks/buy-online.html
● Social network campaign: “Mix your Flavors” Select your favorite combos and see how many people share the same idea and what your friends think. The most popular combo to be released subsequent year. ● TV commercials: “Why have one, when you can have two” User Profile: Someone facing the challenge to choose between two different flavors, suddenly the collision appears and solves the problem. Commercials to air during prime-time television hours and major TV events (Super Bowl) ● Targeted Online Advertising: social media websites, online web/music streaming sites (Pandora, Spotify) ● Radio commercials : Audio version of the TV Commercials. ● Print Media: Magazine advertisements ● Support media: billboards, large posters at bus stops Promotion: Integrated Marketing Communication 48 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion “Why have one, when you can have two?”
Promotion: Integrated Marketing Communication 49 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion ● Television/music/movie personalities, Kevin Hart and Ice Cube, will co-star in strategic integrated marketing campaigns. ● As in hit film, “Ride Along,” both strong personalities will epitomize “distinct yet complimentary” flavor profiles of the Lay’s Collisions bags ● Campaigns will be comedic and will be shown across online, television, movie, mobile, and print platforms Celebrity Endorsers
Sources Roberts, William, Jr. "Frozen Snacks - US - April 2016." Mintel. N.p., Apr. 2016. Web. 16 Apr. 2016. Topper, Amanda. "Chips and Dips - US - February 2016." Mintel. N.p., Feb. 2016. Web. 16 Apr. 2016. United States. Census Bureau. Quick Facts United States. N.p.: n.p., n.d.United States Census Bureau. Web. 19 Apr. 2016. 50
Appendix 51 Primary Research Overview ● Target Market: Students between the ages of 18 and 25. ● Methods used: ○ Focus Groups (8 participants) ○ Survey (43 qualified responses)
52 Survey Responses: Filter Questions *All unqualified and unfinished surveys were deleted for simplicity and clarity.
53 Survey Questions
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65 Focus Groups

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Lay's NPP Corrected FINAL PRINT

  • 1. Lay’s Sofia Shoffner, Wei Dai, Mariana Aristizabal, Chandler Shipley New Product Proposal
  • 2. Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 2 Nature of Competition Class: Food Category: Snack Type: Chips Target Market Age group: 18-25 Main Competitors Doritos Tostitos Positioning Positioning Statement : Lay’s is the only classic chip that provides the widest variety of flavors to satisfy the snack cravings of millennials.
  • 3. 3 Mental Maps Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 4. 4 Emotional Descriptive Function Classic: Lay’s has been perfecting its potato chips for more than 75 years and is perceived as very traditional. Its products and brand image have remained mostly unchanged throughout the years so their customers know to expect practiced quality. Social: Lay’s are consumed mostly at social gatherings. Their most common purchase situations include parties, BBQ’s, and sports viewing events. Snack: As opposed to a meal, Lay’s are meant to be eaten in between meals, for those times when you want something light, something that keeps your hunger at bay, something to be munched on, something to be shared among family, friends, and guests Brand Mantra Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 5. Opportunity Identification: Chips Market ● Chips and dip industry grew 7% between 2013-15 and it reached $16.4 billion in 2015. ● Mintel predicts chip industry will grow 17% from 2015- 20, reaching $19.2 billion ● Those ages between 22-39 (Millennials) are more likely to buy chips ● 53% of respondents said the brands of chips they ate as a kid are still their favorite. This gives Lay’s an advantage because parents buying snacks will be more open to buying Lay’s new products → brand loyalty ● 66% of Chip and Dip consumers take nutrition into account when selecting chips → increasingly health conscious consumers ● 85% of consumers agree that it is okay to indulge from time to time → vegetable chips = perfect marriage between health trend & snack satisfaction (Topper) Key Health Drivers When Buying Chips Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 5 (Topper)
  • 6. 6 Baked organic chips made with real vegetables “Veggies never tasted so good” ­ Healthy, organic snack Variety! → → ● Made from real whole vegetables ● Natural flavor, no additives ● Gluten free ● Baked instead of fried ● Offered in several types of vegetables ○ Beet, kale, carrot ○ Mixed Bag Attributes → Benefits Lay’s Veggie Chips Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 7. 7 70% of Respondents viewed it as a product Lay’s would offer 100% of Respondents would purchase again if completely satisfied Most consumers would consider purchasing 2x/month 86% of Respondents Would Consider Purchasing 9% Would Definitely Buy 36% Would Probably Buy 41% Would Maybe Buy 14% Would Probably Not Buy 0% Would Definitely Not Buy Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Concept Evaluation: Primary Research 1. 2. 3. 4.
  • 8. 8 Degree to which respondents associated Lay’s Veggie Chips with the following adjectives: Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Reasons respondents would purchase Lays Veggie chips over a competitor (POD’s) 6. 7.5. Common likely purchase situations: Concept Evaluation: Primary Research
  • 9. 9 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 3 Factor Model: Salience, Favorability, Uniqueness Key Red : Lay’s (Parent) Yellow : Veggie Chips (Ext) U: Unique to new category U U U
  • 10. 10 4 Factor Model: Compelling Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion After seeing Lay's Veggie Chips, your opinion of Lay's regarding the following: 1: Greatly Worsened → 5: Greatly Improved Key Red : Lay’s (Parent) Yellow : Veggie Chips (Ext) U: Unique to new category U U U
  • 11. 11 4 Factor Model: Relevant After seeing Lay’s Veggies Chips how did these feelings about lays veggie chips change for you? After seeing Lay’s Veggie Chips how did you opinions regarding the following statements change for you? Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 12. Moderate Fit. 70% of respondents felt that this is a product Lay’s would offer. This is most likely due to consumer awareness and expectation of the health trend in food. 12 4 Factor Model Parent Brand Mantra Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Consistent: Strength: Weak-moderate. Unfavorable mental map associations from parent brand were too strong (ie. unhealthy) and respondents rated “healthy” and “dieting” as the 2 weakest associations for Veggie chips in a list of 14. However, respondents averaged “somewhat agree” to the Lay’s brand for being perceived as more “socially acceptable” after seeing Veggie Chips.
  • 13. 13 4 Factor Model: Conclusions Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Advantages: ● Reduce risk ● Decrease cost ● Refresh brand ● Permit consumer variety seeking ● Expand Meaning ● Bring new customers ● Increase market coverage ● Avoid cost (and risk) for new brand elements Disadvantages: ● Cannibalize sales ● Forgo the chance to develop a new brand
  • 14. 14 Purchase Intent and ATAR Projections Definitely Buy 9% Probably Buy 35% Awareness 20% Availability 100% Repeat % 44% Repeat Frequency 33.8 Households 131 Million Penetration % 93% Retail Price $1.75 Retail Margin 25% Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Trial Rate (.09*.8)+(.35*.3)= 17.7% Repeat Rate (.44*33.8)= 1487% Trial Units (.2*1*.177*131MM*.93 = 4.3 MM Repeat Units (4.3 MM*14.87)= 64.1 MM Total Units (4.3MM+64.1MM)= 68.4 MM Retail Sales Volume (68.4MM*1.75)= $119.75 MM Wholesale Sales Volume (119.75MM*.75)= $89.8 MM
  • 15. 15 Recommendation: Veggie Chips Recommendation for Lay’s Veggie Chips: The intent of this product was to expand brand meaning and change the consumer perception that Lay’s only offers unhealthy snacks. However, surveys showed consumers still perceive the product and the brand as “unhealthy”. There was evidence of the parent brand being seen as more “socially acceptable” and “innovative” after introducing this new product, but the impact was weak (averaged just under ” somewhat agree”). This leads us to believe that this product idea is a good but needs more development and a refined positioning strategy for a greater impact and resonance. We recommend that Lay’s conducts more extensive research to better develop a position that fulfills consumers’ preferences for a healthier snack, and establishes market credibility and trustworthiness by improving packaging and promotion. Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 16. Branding Strategy Sub-brand (Creates own identity and POD’s) Extension Type Line Extension (Same category-- Chips, different ingredients = POD’s) Extension strategy Products that capitalize on the firm’s expertise Products that capitalize on the distinctive prestige of the brand Products that expand the meaning of the brand Attracting new market segments 16 Recommendation: Veggie Chips Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 17. Frozen Snack Market ● Sales of frozen food snacks are expected to reach $5.1 billion by 2020 ● 64% of Millennials say snacks are an affordable way to replace meals ● Snacking is a guilty pleasure (69%), and it is a good way to reward yourself (63%) (Roberts) 17 Opportunity Identification Lay’s Potato Skins Opportunities ● Over one third of households, especially those with children, think a familiar brand is one of the most important factors when buying frozen foods. ● Consumers would be more open to buying frozen snacks if they were convenient and tasty, which Lay’s is addressing by making prep time under 12 minutes and using fresh, well known ingredients. (Robberts) Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 18. 18 Lay’s Potato Skins “We Know Potatoes” Frozen, unpeeled potato halves, hollowed and fully loaded with cheddar, bacon and chives. ● Bakes in just 12 minutes ● Filled with real, genuine ingredients (including Sargento cheese) ● ­Source of protein, fiber, and calcium ● 75 years of potato loving history and experience Convenient→ → Attributes → Benefits Substantial food→ Quality Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 19. 19 40% of Respondents viewed it as a product Lay’s would offer 100% of Respondents would purchase again if completely satisfied Most consumers would consider purchasing 1-2 times /month 63% of Respondents Would Consider Purchasing 9% Would Definitely Buy 28% Would Probably Buy 26% Would Maybe Buy 23% Would Probably Not Buy 14% Would Definitely Not Buy Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Concept Evaluation: Primary Research 1. 2. 3. 4.
  • 20. 20 Degree to which respondents associated Lay’s Potato Skins with the following adjectives: Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Reasons respondents would purchase Lay’s Potato Skins over a competitor (POD’s) 6. 7.5. Common likely purchase situations: Concept Evaluation: Primary Research
  • 21. 21 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 3 Factor Model: Salience, Favorability, Uniqueness Key Red : Lay’s (Parent) Yellow : Potato Skins (Ext) U: Unique to new category U U U
  • 22. 22 4 Factor Model: Compelling Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Key Red : Lay’s (Parent) Yellow : Potato Skins (Ext) U: Unique to new category After seeing Lay's Veggie Chips, your opinion of Lay's regarding the following: 1: Greatly Worsened → 5: Greatly Improved U U U
  • 23. 23 4 Factor Model: Relevant Feeling: Social approval Stays the Same Feeling: Excitement Stays the Same Feeling: Gross Stays the Same Feeling: Adventurous Stays the Same Feeling: Happy Stays the Same Feeling: Calm Stays the Same Judgment: Credibility Stays the same Judgment: Consideration Stays the Same Judgment: Quality Stays the Same Judgment: Superiority Stays the Same After seeing Lay's Potato Skins, how did these feelings about Lay's change for you? After seeing Lay’s Potato Skins how did you opinions regarding the following statements change for you? Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 24. 24 4 Factor Model: Relevant (Continued) Inexpensive Lay’s has experience creating products that are accessible to consumers from varying economic backgrounds. Yes Easy to prepare Lay’s has experience with products that are convenient and good for quick snacks Moderate Durable Goods (Long lifespan before spoiling) Lay’s makes products that do not expire quickly. Moderate Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Category Extension:
  • 25. 25 Parent Brand Mantra Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 4 Factor Model Consistent: Moderate Fit. Only 60% of respondents felt that this is a product Lay’s that would offer, and that Lay’s expertise with potatoes had little impact: respondents averaged between “neither agree or disagree” and “somewhat agree” when asked if Lay’s potato expertise is a reason they would be inclined to buy Lay’s vs other potato skin brands. Parent brand knowledge did not create POD in the new category as we had hoped.Weak. Potato Skins have little impact on the meaning or perceptions of the parent brand. Strength:
  • 26. 26 4 Factor Model: Conclusions Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Advantages: ● Refresh brand ● Permit consumer variety seeking ● Add Meaning (moderate) ● Bring new customers, ● Avoid cost (and risk) for new Brand Elements Disadvantages: ● Could Dilute brand meaning ● Create/Reinforce negative associations (unhealthy)
  • 27. 27 Definitely Buy 9% Probably Buy 28% Awareness 20% Availability 40% Repeat % 37% Repeat Frequency 28.1 Households 131 Million Penetration % 66% Retail Price $6.00 Retail Margin 25% Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Trial Rate (.09*.8)+(.28*.3)= 15.6% Repeat Rate (.37*28.1)= 1040% Trial Units (.2*.4*.156*131MM*.66) = 1.1 MM Repeat Units (1.1MM*10.4)= 11.22 MM Total Units (1.1MM+11.22MM)= 12.3 MM Retail Sales Volume (12.3MM * 6)= $74.1 MM Wholesale Sales Volume (74.1MM*.75)= $55.58 MM Purchase Intent and ATAR Projections
  • 28. 28 Recommendation: Potato Skins Recommendation for Lay’s Potato Skins: According to survey respondents, introducing Lay’s Potato Skins would have little impact on the perception of the parent brand. Similarly, the transfer of expertise brand equity from the parent to the extension was also weak. Only 9% answered “would definitely buy,” and 28% answered “would probably buy,” leading to ~$18 million in profit. This response isn’t deplorable, however, it is not best. Therefore, we recommend that Lay’s does not pursue this extension. We do, however, recommend further research on creating a whole new brand for frozen snacks or research on a product such as frozen french fries which customers may see as more closely associated with its current products, thus providing more equity transferred to the extension, and greater reinforcement of parent brand meaning. Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 29. 29 Recommendation: Potato Skins Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Branding Strategy Sub-brand (Creates own identity and POD’s) Extension Type Category Extension (New category - Frozen snack, new POP’s) Extension strategy Products that contain the brand’s distinctive taste, components, or ingredients Products that capitalize on the firm’s perceived expertise Products that reflect the brand’s distinctive benefit, attribute or feature (easy, convenient, good for parties) Products that capitalize on the distinctive image or prestige of the brand Products that expand the meaning of the brand Attracting new market segments
  • 30. Lay’s Collisions Opportunities ● Millennial are more adventurous when eating chips so they prefer bolder flavors and new ingredients and non-traditional bases. ● Millennials are more likely to mix products together to get different flavors. ● Brands that encourage mixing of chips and dips or variety pack appeal to them. ● 52% of respondents are always looking for new chip flavors. (research citation) (Topper) 30 Opportunity Identification Chips Market ● Chips and dip category grew 7% between 2013-15 and it reached $16.4 billion in 2015. ● Mintel predicts it will grow 17% from 2015-20, reaching $19.2 billion. ● People between 22-39 (Millennials) are more likely to buy chips. ● Potato chip segment represents half of the category’s market share. (Topper) Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 31. Lay’s Collisions 31 ● Come in various sizes ● 2 flavors, 1 bag: Flamin’ Hot + Honey BBQ Cheddar + Sour Cream & Onion Barbecue + Ranch → Attributes → Benefits → The awesome potato chip flavors you love, now packaged in heavenly pairings. “Why just one, when you can have two” Great for parties or as an individual snack Tasty Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 32. 32 86% of Respondents viewed it as a product Lay’s would offer 100% of Respondents would purchase again if completely satisfied Most consumers would consider purchasing 1-2 times /month 74% of Respondents Would Consider Purchasing 14% Would Definitely Buy 37% Would Probably Buy 23% Would Maybe Buy 16% Would Probably Not Buy 9% Would Definitely Not Buy Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Concept Evaluation: Primary Research 1. 2. 3. 4.
  • 33. 33 Degree to which respondents associated Lay’s Collisions with the following adjectives: Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Reasons respondents would purchase Lay’s Collisions over a competitor (POD’s) 6. 7.5. Common likely purchase situations: Concept Evaluation: Primary Research
  • 34. 34 3 Factor Model: Salience, Favorability, Uniqueness Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Key Red : Lay’s (Parent) Yellow :Collisions (Ext) U: Unique to new category U U U
  • 35. 35 Key Red: Lay’s Yellow : Potato Skins Key Red : Lay’s Yellow : Lay’s Collisions 4 Factor Model: Compelling Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Key Red : Lay’s (Parent) Yellow : Collisions (Ext) U: Unique to new category After seeing Lay's Veggie Chips, your opinion of Lay's regarding the following: 1: Greatly Worsened → 5: Greatly Improved U U U
  • 36. 36 Equity Impact Feeling: Social approval Stays the Same Feeling: Excitement Stays the Same Feeling: Gross Stays the Same Feeling: Adventurous Slightly Increases Feeling: Happy Stays the Same Feeling: Calm Stays the Same Judgment: Credibility Stays the same Judgment: Consideration Slightly Increases Judgment: Quality Stays the Same Judgment: Superiority Stays the Same After seeing Lay's Collisions, how did these feelings about Lay's change for you? After seeing Lay’s Collisions how did you opinions regarding the following statements change for you? Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 4 Factor Model: Relevant
  • 37. 37 Parent Brand Mantra Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion 4 Factor Model Consistent: Strength: Fit rating: High. 86% of respondents felt that this is a product that Lay’s would offer. A strong association that the parent brand has a “variety of flavors” which fits hand in hand with this extension. Moderate-high level of influence. Collisions successfully reinforced Lay’s image of having a great variety of flavors (rating 4.14 on a scale to 5 on how it improves Lay’s image), as well as its expertise in flavors.
  • 38. 38 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Disadvantages: ● Could possibly create/Reinforce negative associations (unhealthy weird flavors) ● Cannibalize sales 4 Factor Model: Conclusion Advantages: ● Permit consumer variety seeking ● Reinforce Meaning ● Avoid cost (and risk) for new Brand Elements
  • 39. 39 Definitely Buy 14% Probably Buy 37% Awareness 20% Availability 100% Repeat % 51% Repeat Frequency 39.3 Households 131 Million Penetration % 93% Retail Price $1.00 Retail Margin 25% Trial Rate (.14*.8)+(.37*.3)= 22.3% Repeat Rate (.51*39.3)= 2004% Trial Units (.2*1*.223*131MM*.93) =5.4 MM Repeat Units (5.4MM*20.04)= 108.9 MM Total Units (5.4MM+108.9MM)= 114.3 MM Retail Sales Volume (114.3MM*1)= $114.3 MM Wholesale Sales Volume (114.3MM*.75)= $85.7 MM Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Purchase Intent and ATAR Projections
  • 40. 40 Recommendation: Collisions Recommendation for Lay’s Collisions: We would advise Lay’s to begin distributing Lay’s collisions. According to Mintel, flavor is the highest weighted factor when selecting chips. A regional, small scale release to test to the market would be best. Then, with feedback from consumers, a national and eventually worldwide release would be appropriate. Important to its success is a strong Integrated Marketing Campaign (IMC), detailed in the following pages. Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 41. Branding Strategy Modified (Does not create own identity differentiated from parent brand) Extension Type Line Extension (same category-- Chips) Extension strategy ● Same product in a different form. ● Products that contain the brand’s distinctive taste, components, or ingredients. ● Products relevant to the customer franchise of the brand. ● Products that capitalize on the firm’s perceived expertise. ● Products that reflect the brand’s distinctive benefit, attribute or feature (easy, convenient, good for parties) ● Products that capitalize on the distinctive image or prestige of the brand. 41 Recommendation: Collisions Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion
  • 42. Winning Concept: Lay’s Collisions 42 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Rationale: Lay’s Collisions offers high profit opportunities and low risk. Additionally, of the three extensions, Collisions gave greatest influence to expanding and reinforcing brand meaning.
  • 43. Positioning 43 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Classic Trendy (3,3) Variety of Flavors 6 6 0 0 (3.84, 4.14) Positioning Statement : Lay’s Collisions is the only combination chip product that provides the widest variety of flavors to satisfy the snack cravings of millennials. Nature of Competition: Class: Food Category: Snack Type: Chips Target Market Age group: 18-25 Main Competitor Doritos . 43
  • 44. Positioning 44 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Attribute Associations to Collisions Strongly Disagree→ Strongly Agree
  • 45. Product 45 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion → → → → → → → -Flavor Combo → complimentary/enhanced taste Chips -Flavor Variety→ to meet a plethora of flavor preferences -Small, round chip shape→ easy to eat in one bite, kid friendly -Salty→ makes for a perfect side to your savory dish
  • 46. 46 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion $1.00 Classic 7.75 oz $3.00 Family 10.5 oz $3.50 Party 13.75 oz Price Value Price Economy Pricing Strategy: Ideal for Lay's target market of 18-24 year olds - a market comprised primarily of students and young, entry level professionals who want inexpensive snack food. Lay’s Collision will be sold at the same price as regular Lay’s potato chips.
  • 47. Placement 47 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion Pull Strategies - Advertising and mass media - Sales promotions (coupons) Push Strategies - Merchandising - Quantity discounts - Stocking support for retailers Indirect Channels: - Wholesale retailers: Costco, Sam’s Club - Discounters: Wal- Mart, Target - Retailers: grocery stores, convenience stores, gas stations, delis, office supply stores - E-retailers: Amazon, Google Express - Vending machines - Schools Manufacturer/ Distributor: Frito-Lay Direct Channels: Shop online at fritolay. com/snacks/buy-online.html
  • 48. ● Social network campaign: “Mix your Flavors” Select your favorite combos and see how many people share the same idea and what your friends think. The most popular combo to be released subsequent year. ● TV commercials: “Why have one, when you can have two” User Profile: Someone facing the challenge to choose between two different flavors, suddenly the collision appears and solves the problem. Commercials to air during prime-time television hours and major TV events (Super Bowl) ● Targeted Online Advertising: social media websites, online web/music streaming sites (Pandora, Spotify) ● Radio commercials : Audio version of the TV Commercials. ● Print Media: Magazine advertisements ● Support media: billboards, large posters at bus stops Promotion: Integrated Marketing Communication 48 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion “Why have one, when you can have two?”
  • 49. Promotion: Integrated Marketing Communication 49 Lay’s Brand Audit Info Veggie Chips Opportunity ID Concept Generation Concept Evaluation Recommendation Potato Skins Opportunity ID Concept Generation Concept Evaluation Recommendation Collisions Opportunity ID Concept Generation Concept Evaluation Recommendation 5P’s for Collisions Positioning Product Price Placement Promotion ● Television/music/movie personalities, Kevin Hart and Ice Cube, will co-star in strategic integrated marketing campaigns. ● As in hit film, “Ride Along,” both strong personalities will epitomize “distinct yet complimentary” flavor profiles of the Lay’s Collisions bags ● Campaigns will be comedic and will be shown across online, television, movie, mobile, and print platforms Celebrity Endorsers
  • 50. Sources Roberts, William, Jr. "Frozen Snacks - US - April 2016." Mintel. N.p., Apr. 2016. Web. 16 Apr. 2016. Topper, Amanda. "Chips and Dips - US - February 2016." Mintel. N.p., Feb. 2016. Web. 16 Apr. 2016. United States. Census Bureau. Quick Facts United States. N.p.: n.p., n.d.United States Census Bureau. Web. 19 Apr. 2016. 50
  • 51. Appendix 51 Primary Research Overview ● Target Market: Students between the ages of 18 and 25. ● Methods used: ○ Focus Groups (8 participants) ○ Survey (43 qualified responses)
  • 52. 52 Survey Responses: Filter Questions *All unqualified and unfinished surveys were deleted for simplicity and clarity.
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