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Lay's Brand Strategy in Hungary

Lay's potato chips brand in Hungary has low brand awareness, image, and purchase intent compared to competitors who entered the market earlier. The document discusses recommendations to improve this, including spending 45% of the marketing budget on mass media like TV and radio to generate awareness, communicating Lay's quality potato production process to build brand association, and offering consumer promotions and discounts to leverage impulsive buying behavior and create purchase intent. Cross-promotion with PepsiCo's beverage portfolio is also recommended. The goal is to enhance brand awareness and identity to ultimately enhance purchase intent of Hungarian consumers.

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shreyanshagrawal
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947 views16 pages

Lay's Brand Strategy in Hungary

Lay's potato chips brand in Hungary has low brand awareness, image, and purchase intent compared to competitors who entered the market earlier. The document discusses recommendations to improve this, including spending 45% of the marketing budget on mass media like TV and radio to generate awareness, communicating Lay's quality potato production process to build brand association, and offering consumer promotions and discounts to leverage impulsive buying behavior and create purchase intent. Cross-promotion with PepsiCo's beverage portfolio is also recommended. The goal is to enhance brand awareness and identity to ultimately enhance purchase intent of Hungarian consumers.

Uploaded by

shreyanshagrawal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Cover Page: Displays the project title and group members involved.
  • Brand Image in Hungary: Introduces the key dilemma of improving brand awareness, image, and purchase intent for Lay's in Hungary.
  • Key Points of Discussion: Lists the main discussion topics including marketing budget, advertising strategies, and promotional strategies.
  • Pepsico Inc. History: Provides a timeline of significant events in Pepsico's history, highlighting its growth and acquisitions.
  • Pepsico in Hungary – An Overview: Presents the entry strategy, marketing approach, and initial challenges faced by Pepsico in Hungary.
  • Hungarian Potato Chips Market Overview: Explains the market segmentation and shares by category, focusing on the salty snack market.
  • Consumer Behaviour: Analyzes consumer preferences, buying behavior, and factors influencing purchase decisions in the potato chips market.
  • Competitor Analysis: Compares market positions, strategies, and product offerings of major competitors in Hungary.
  • Consumer Perception: Examines consumer opinions, taste preferences, and brand perception for Lay's versus competitors.
  • Marketing Problems: Identifies shortcomings in current marketing strategies and their impact on brand awareness.
  • SWOT Analysis: Outlines the strengths, weaknesses, opportunities, and threats related to Lay's positioning and strategy.
  • Alternatives Available: Presents potential marketing strategies and consumer offers to enhance brand perception and sales.
  • Recommendations: Provides strategic recommendations to increase brand awareness and purchase intent through marketing modifications.
  • Closing: Concludes the presentation with an expression of gratitude.

LAY'S

Group 4
Aashima Garg (19P001)
Ayushi Garg (19P013)
Ishita Jain (19P021)
Shreyansh Agrawal (19P052)
Tarun Lahoti (19P058)
Siddharth Maroo (20EDHEC01)
LAY'S POTATO CHIPS:
BRAND IMAGE IN
HUNGARY 

Key Dilemma
How to improve Brand
Awareness, Brand Image &
Purchase Intent among
Hungarian Consumers
KEY POINTS
OF
DISCUSSION
• The Marketing Budget Split
– Media Advertising &
Consumer Promotion
• Advertising Channel
Strategy – Outdoor vs Mass
Media
• Communication Strategy –
What to convey to the
consumer?
• Promotion Strategy 
PEPSICO INC. HISTORY
1965 1978 1990s
Pepsi-Cola and Frito Lay were Acquired Taco Bell Products in over 160 countries;
merged to form PepsiCo Inc. Revenues exceeding $30 billion

1977 1986 1995


Acquired Pizza Hut Acquired KFC. Entered Hungary with an initial
green field investment of $10
million.
PEPSICO IN HUNGARY
– AN OVERVIEW
• PepsiCo Snacks entered Hungary in 1995
• Major Product: Lay’s Potato Chips
• Competitors had first mover advantage of at least 2 years
• Marketing Strategy: Outdoor billboard campaign (costing over
US$130,000) – proved ineffective in building the brand
• By Dec 1995, 10% market share – promotion along with the
soft drinks
• Lay’s suffered from weak Brand Awareness, Brand Image
and Purchase Intent
HUNGARIAN POTATO CHIPS MARKET

MARKET OVERVIEW – SALTY SNACK


5 major categories:
MARKET
• Traditional Snacks (49%)
• Potato Chips (17%)
• Extruded Corn Products (17%)
• Nuts (14%)
• Other salty snacks (2%)
HUNGARIAN POTATO CHIPS MARKET

 CONSUMER BEHAVIOUR
• Target Segment for Lay's: 8 to 54-year olds
• Snacking habits differed significantly from Western European markets
• High inflation (over 28%) + rising unemployment (about 12%) -
rapid decline in consumer buying power
• Price conscious consumers
• Bought traditional snacks and homemade cookies and biscuits
• Taste most important consideration for 68% consumers
• Snack purchase driven by impulse buying
• Consumer and trade promotions were important
HUNGARIAN POTATO CHIPS MARKET – COMPETITOR ANALYSIS

Chio United Biscuits, Bahlsen  Zweifel 


 Market leader - 46% volume share  Market share – 28%, 8%  Market share – 10%

 High brand awareness through   Competed on quality  Competed on price


 Heavy marketing (USD 1m) -  Premium products - 12% and 10%  5-7% cheaper than Lay's
Mass media (44%), Consumer costlier than Lay's
 Small marketing budget on
promotions
 Metalized color foil packaging- high promotions
 Catchy jingle - "Chio, Chio,
quality
Chio Chips"  Limited distribution
 Marketing spend on TV and radio 
 Mid-price segment product- 2%
costlier than Lay's

 Transparent packaging- medium


quality

 Strong distribution network


CONSUMER PERCEPTION
• Intention to consume: Lay’s 18% vs Chio 59% – weak
intent
• Blind Taste Test: 69% consumers preferred Lay’s taste
over Chio
• Lay’s was of higher quality, but the consumers didn’t
know that
• Contrasting consumer perception: 81% said Chio was
of good quality compared with only 47% for Lay’s 
• So, just having higher quality wasn’t enough – need for
stronger marketing 
MARKETING PROBLEMS
• Lay's mostly spent on Outdoor advertising (Billboards) -
94% of marketing budget in 1995
• Only 7% of consumers were aware of Lay’s initial
billboard campaign – Ineffective strategy
• 42% of consumers who had unaided awareness of Chio
advertising – captured mind share using jingle
• Total Share in advertising for potato chips by Lay's
was low (9%)
• Chio was heavily spending on Mass media like TV &
Radio
SWOT

Helpful Harmful

Strength Weakness
c
• Strong International Parentage of PepsiCo • Low unaided Awareness
• •
Internal

Better performance with respect to Taste in Blind Test Weak Brand Image & low purchase intent
• Competitive Pricing  • Low Market Share
• High Quality Packaging • Late Market Entry

Opportunities
SWOT Threat
• Aggressive Tactics by competitors
• Better performance with respect to Taste in Blind Test
• First mover advantage to the competitors
External

• Targeting quality customers 


• Switching to more favored channels of promotion
ALTERNATIVES
AVAILABLE
Split between Consumer Consumer offers Advertising strategy
Promotion and
advertising? 

Choice between- Choice between- Choice between-


1. 60-40 with more on 1. BOGO 1. Generate impulse buy
consumer offers? (Maaza, Thumps-up)
2. Sample trials at
2. Budget for Radio supermarkets 2. Communicate superior
& outdoor? quality
3. Coupons (Dove, Harpic)
RECOMMENDATIONS
Enhanced Brand Awareness + Stronger Brand Identity =
Enhanced Purchase Intent

Core Value Proposition to be communicated:


High Quality at affordable prices!

Advertising Strategy – 
Aggressively focus on mass media channels like
TV & Radio to create awareness capture & mind
share – Spend about 45% of the marketing
budget on mass media; reduce outdoor spending
RECOMMENDATIONS

Communication Strategy –
Unique potato production process
must be communicated through
advertising – buidling brand
association with quality

Blind Tests & Trials - 


Increase frequency of trials to reinforce taste
& quality – increased awareness
RECOMMENDATIONS

Consumer Promotions –
The Consumer must be offered
discounts & coupon promotions to
leverage the impulsive buying behavior
– create purchase intent

Cross Marketing –
BOGO schemes should be offered to
promote Lay's Potato Chips with
PepsiCo's existing beverage portfolio
– create purchase intent
THANK YOU

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