Essay, Research Paper: Frito-Lay Tostistos

Marketing

Free Marketing research papers were donated by our members/visitors and are presented free of charge for informational use only. The essay or term paper you are seeing on this page was not produced by our company and should not be considered a sample of our research/writing service. We are neither affiliated with the author of this essay nor responsible for its content. If you need high quality, fresh and competent research / writing done on the subject of Marketing, use the professional writing service offered by our company.


In 1932, Elmer Doolin, who was in the ice-cream business, bought a recipe for
corn chips from a Mexican man who was eager to leave the states and return home.
From him Doolin acquired 19 accounts and old manufacturing equipment in hopes to
start an entirely new industry in America. The first manufacturing plant for
Fritos Corn Chips started out in Doolin’s mother’s kitchen. With a lot of
hard work, Elmer’s sales increased and new equipment and packaging were soon
needed. After WW II he would grant H.W. Lay and Company, a source of potato
chips and snack foods, an exclusive franchise to manufacture and distribute
Fritos Corn Chips. The two companies would work close together and in 1961 they
would merge. Four years later, Pepsi-Cola Company would also combine with
Frito-Lay, but with separate operating divisions, to form a new company called
PepsiCo. Consumers in 1995 spent an estimated $13.2 billion on Frito-Lay snacks,
up $1.8 billion in 1994. (PepsiCo. 1995 Annual Report). Currently, Frito-Lay is
still expanding its sales and serves all of the US markets. In 1989 they
reconstructed their business into 4 regional divisions to strengthen its channel
distribution. Their growth has continued and as of 1991 they had 22 Sales and
Marketing areas in order to bring the decision process closer together.
Currently they are continuing to grow nationally and globally with distribution
reaching nearly 400,000 in retail, vending, and food service accounts around the
country (PepsiCo. 1995 Annual Report) They offer more than 100 product lines and
several brand names such as Lay’s, Ruffles, Doritos, Rold Gold, and Tostitos.
The overall market share for tortilla and corn chips in 1993 accounted for 25.8%
of retail sales and 27.8% of pound volume of the salted snacks market.
Frito-Lay’s market coverage involves intensive distribution by placing its
products in convenience stores, mass merchandisers, supermarkets, grocery
stores, and vending machines. Today's average for the company's distribution
amongst grocery and supermarkets has risen to about 56% (PepsiCo.1996 Facts).
Frito-Lay’s closest competition in size for snack foods is Nabisco, who doesn't'
have a snack chip to compete with Tostitos corn chip. Golden Flake Enterprises
is Frito’s biggest competitor in size and markets served that has a tortilla
chip, but they compete in an indirect way through limited product lines. Some
companies that compete serving smaller markets are Philadelphia’s Utz, Herrs,
and Bravo. They try to compete with Frito-Lay, but most of them have to add a
degree of differentiation to gain a slight competitive advantage in a market
that is to easy to copy. Companies selling in small local markets try to compete
and differentiate through targeting their audiences more directly which is hard
for Frito Lay to do. However smaller companies resources are limited, so it is
hard to compete directly with the big distributor in markets served. Frito has
also used the strategy of forward integration, which means they have used their
earnings to gain ownership or control over distributors and retailers which
makes it hard for small companies to gain distribution channels. Frito’s snack
products are available in 40 countries and believes that the majority of its
growth will come from establishing new markets. Frito-Lay owns most of their
operations but some operations are joint ventures. The company works hard at
keeping its market share and has brought in outside firms to look at their
supply chain from manufacturing to distribution, to logistics and transportation
planning. This past year the company won an award for its seasoning and
packaging program. It works to get full truckloads by utilizing unique carrier
management technology systems which are projected to save 20% in transportation
costs, reduce inventory carrying costs, and enable deliveries twice a week to
production facilities which is expected to decrease transportation time. They
are also using what is called a back-haul program to fill empty miles in
Frito-Lay's private fleet, generating over $250,000 in incremental revenue for
its traffic centers. They have also spent big money on an integrated system
which provides visibility and productivity tools to optimize Frito-Lay's
distribution network (www.markvii.com/news/frito.htm). Tostitos success is due
to Frito Lay’s capabilities to capture opportunities to enhance a competitive
advantage. Through decades of hard work and expansion, the company is moving
forward expanding its markets. Their profits are high and they've worked hard
over the years to create and maintain relationships with its channel members
which has led to their success.
0
0
Good or bad? How would you rate this essay?
Help other users to find the good and worthy free term papers and trash the bad ones.
Like this term paper? Vote & Promote so that others can find it

Get a Custom Paper on Marketing:

Free papers will not meet the guidelines of your specific project. If you need a custom essay on Marketing: , we can write you a high quality authentic essay. While free essays can be traced by Turnitin (plagiarism detection program), our custom written papers will pass any plagiarism test, guaranteed. Our writing service will save you time and grade.




Related essays:

0
0
Kellogg’s strategy was to produce a web site provided specific product line and brand information to interested consumers. The page displays particular product descriptions, nutrition information, an...
2929 views
0 comments
0
0
Marketing / K-mart Management
K-mart's upper management is attempting to bring K-mart "upmarket" without losing the chain's discount image. The goal is to change the store's image from a no-frills discount store to a re...
3861 views
0 comments
0
0
Marketing / Kellogg`s Company
Objective: Our goal in composing a financial statement is to construct the most comprehensive, thorough document possible, in order to attract investors and to confirm that we have taken the time to ...
3717 views
0 comments
1
0
In the article "Schools Profit From Offering Pupils for Market Research", Mary Tabor explains the new relationship between schools and businesses. During the school day, businesses use chil...
4212 views
0 comments
0
0
"Marketing ideas have made singularly little penetration into the centres of influence of the construction industry. To some extent this follows from the character of the industry as an agglomer...
4413 views
0 comments