Marketing and Dip

Topics: Marketing, SWOT analysis, Economic growth Pages: 5 (1511 words) Published: November 16, 2006
Table of Contents

Purpose and Overview3

Analysis of Our Past and Current Situations3

External Opportunities We Could Exploit4

External Threats That May Impeded Success4

Internal Strengths on Which to Capitalize5

Internal Weaknesses to Overcome6

Assumptions on Which the Strategies are Based6

Marketing Strategies That Emerge from the SWOT7

Summary and Request for Action7


Case Analysis of Frito-Lay Company
Purpose and Overview
Frito-Lay's net sales of over 8 billion dollars in 1985 amounted to a 190% increase in sales growth from 1981 (Kerin, Peterson, pg.131). This success leads the company to a major issue of how the company can be further developed. The company's options lead to two different viewpoints. The first is the chip dip category or secondly, the newer vegetable dip category. Analysis of Our Past and Current Situations

Frito-Lay is a nationally recognized leader in the marketing and manufacturing of salty snack foods. The company began introducing dips in the 1950's as a complement to the chip market. Frito-Lay has introduced many other cheese type dips to add to their product line due to the increase popularity of Mexican food. In 1986, its first sour cream-based, shelf-stable dip was introduced as an accent to the company's potato chips (Kerin, Peterson, pg. 134). Currently, 33% of dip sales are linked to vegetables. Only one fourth of the dollar volume is associated with vegetable dipping with relatively no major competitors in this market area (Kerin, Peterson, pg. 141). Furthermore, research has indicated that sour cream-based dips are the most popular dip type (Kerin, Peterson, pg. 132). With an increased trend moving to healthier eating options, an increased preference for vegetable dipping would exist. Promoting this market area would strengthen an already strong market growth of 18% in this segment (Kerin, Peterson, pg. 132). Following are the internal and external factors affecting the market opportunities for Frito-Lay. Strengths, weaknesses, opportunities, and threats (SWOT) serve as the basis for identifying appropriate marketing strategies for Frito-Lay. External Opportunities That Could Be Exploited

There are several external marketing opportunities within the food dip industry. First, increased grazing trends in the United States have caused popularity in the dip market (Kerin, Peterson, pg. 131). Refrigerated salad dressing market is growing at a compounded annual rate of 18% because of the use with vegetables. Also, Mexican food popularity has caused growth in cheese based dips (Kerin, Peterson, pg. 132). Next, 33% of dip sales are linked to vegetable usage. However, only two main brand names are located in the produce section. In additional, the brand names are sold on a regional basis (Kerin, Peterson, pg. 132). The dip industry is a highly marketable segment. A survey shows than 90% of Americans dip with their chips with sour cream based dips being the favorite (Business New Publishing Company, 2001). The main market segments in the industry include 80% in prepared dips and 20% dip bases (Kerin, Peterson, pg. 132). Next, there are several competitors in the dip industry. A major competitor in this field is Campbell Soup, which introduced a nacho soup/dip and a line of vegetable dip mixes in 1985. Lipton also expanded its line of vegetable dip mixes and upgraded its packaging in 1985. In addition, Bordon, Kraft, Velveeta, regional dairies, and numerous store brands offer increased competition in the chip dip lines (Kerin, Peterson, pg. 134). External Threats That May Impede Success

There are several external marketing threats that should be considered within the food dip industry. First, many brand name companies are expanding their product line while other well financed companies are entering the dip market and expanding. Numerous brands are located in store section. The intensity of competition has...

References: Business News Publishing Co. (2001). When the chips are down: The last bite - dips and sauces. Retrieved November 5, 2004 from
Kerin, R & Peterson, R. (2004). Strategic marketing problems (10th ed.). Upper Saddle River, New Jersey: Prentice Hall.
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