Industry And Competitive Analysis Running Head

Industry And Competitive Analysisrunning Head Industry And Competitiv

Industry and Competitive Analysis 1 INDUSTRY AND COMPETITIVE ANALYSIS 2 Dominating the snack food industry with their chips, pretzels, and party mixes, Frito-Lay, an entity of PepsiCo, has been relentlessly focusing on launching a new health conscious chip for those seeking a greener alternative (Fox News, 2016). While building one company inside of another, Frito-Lay has taken a proactive approach to creating high-end snacks that would appeal to customers with a healthy lifestyle (Harris, J. 2014). In effort to launch this new chip successfully, Frito-Lay’s marketing team must consider any marketplace changes, consumer needs, and snack food competitors. Describe in detail your product/service offering.

Frito-Lay believes that snacking should be satisfying and fun, but snacks aren’t just snacks anymore. For instance, more families are beginning to include chips as side dishes to their meals. As more people are choosing chips over fries, consumers are increasingly looking for chips that are healthier, satisfying, and inexpensive. While customers navigate the chip aisles, Frito-Lay is strategically planning the launch of their new low-fat, organic chips— Skinny Chip. These chips are similar to the original Lay’s potato chips but are made of wheat and all-natural ingredients.

The gluten-free, non-GMO, and organic Skinny Chips align with the company's sustainability goals. Additionally, Skinny Chip is packaged in Frito-Lay’s first re-sealable bags, targeting value-conscious, health, and environmentally aware consumers. The product aims to meet the evolving consumer demands for healthier snack options that are convenient, affordable, and align with a sustainable lifestyle.

Determine market needs (justification for your choice of product)

As dieting and healthier snacking trends gain momentum, there is a significant shift towards products with organic, natural, and locally sourced ingredients. Consumers increasingly prefer snacks that support their health-conscious lifestyles while maintaining taste and convenience. Market research and surveys conducted by Frito-Lay reveal preferences for low-fat, organic, gluten-free, and GMO-free snacks, driven by a desire for transparency and health benefits in food choices (Fox News, 2016; Harris, J. 2014).

The demand for such products is substantiated by the rising number of health-conscious consumers who seek snack foods that complement their dietary restrictions, lifestyle choices, and environmental values. The inclusion of flavors, packaging that emphasizes health benefits, and affordability are critical factors influencing consumer purchase decisions. These insights justify the launch of Skinny Chip as a response to the market's increased demand for healthier snack options.

Review market history and estimate future growth potential

Since their inception in 1932, Frito-Lay has established itself as a dominant force in the snack industry, growing through innovation and strategic mergers, including the merger with Pepsi-Cola to form PepsiCo in 1965 (Harris, 2014). Over the decades, Frito-Lay's market penetration has expanded globally, with their products holding significant market shares in the United States and international markets (Ireland and UK, 2009). The company's diverse product portfolio includes iconic brands such as Lay's, Cheetos, Doritos, and Ruffles, each generating annual sales exceeding one billion dollars globally (Fox News, 2016).

The trend toward healthier snacks presents substantial future growth potential for Frito-Lay, especially as consumers increasingly seek organic and low-fat options. Market research indicates that the global healthy snack market is projected to grow at a Compound Annual Growth Rate (CAGR) of over 5% from 2020 to 2027 (Grand View Research, 2021). The North American market, in particular, exhibits rising demand for organic, gluten-free, and non-GMO snack foods (Nielsen, 2020). Additionally, emerging markets like China and India offer expansion opportunities owing to their rising disposable incomes and evolving consumer preferences (Euromonitor, 2022). Therefore, launching Skinny Chip aligns with future growth strategies, leveraging the increasing global demand for healthier snacks.

Analyze your company's strengths and weaknesses as they pertain to this product launch, as well as any external opportunities, threats, and trends

Frito-Lay, as a subsidiary of PepsiCo, possesses considerable strengths for the Skinny Chip launch, including a strong brand reputation, extensive distribution channels, and significant consumer trust built over decades. Their global reach allows rapid market penetration and product availability across various retail formats. The company's marketing expertise and ability to adapt strategies quickly are additional assets (Harris, 2014). Moreover, their commitment to innovation and sustainability enhances their appeal to environmentally conscious consumers (PepsiCo Sustainability Report, 2022).

However, weaknesses also exist. Frito-Lay's traditional products are often associated with mass-market, less-healthy options, which could hinder acceptance among niche health-conscious consumers. Additionally, the challenge of effectively repositioning a well-known brand within the health-oriented segment may pose marketing difficulties, including breaking consumer perceptions tied to artificial ingredients and high-calorie snacks (Slideshare, 2014). The company's existing product portfolio might also create internal competition, potentially diluting focus or branding efforts.

Externally, opportunities abound in the expanding market for organic, gluten-free, and low-fat snacks, especially in North American and emerging economies. Consumer trends favor convenience, health, and sustainability, aligning well with Skinny Chip’s features. The increasing shift towards online retail and direct-to-consumer channels offers additional avenues for growth (Grand View Research, 2021).

Threats include intense competition from innovative brands like Popchips, which offer similar low-fat, pressure-cooked chips; small natural food startups leveraging word-of-mouth marketing; and larger competitors that may introduce their own healthier lines rapidly. Regulatory changes concerning food labeling, health claims, and manufacturing could also pose compliance challenges. Moreover, consumer skepticism about “healthy” claims, if not properly substantiated, could damage brand credibility (Nielsen, 2020).

Current trends indicating increased health awareness, environmental consciousness, and demand for on-the-go snack foods support Skinny Chip’s market entry. Leveraging these trends through targeted marketing campaigns emphasizing natural ingredients, environmental benefits, and taste will be crucial for success.

Analyze potential competition for your product - provide an overview of the competitive landscape, and assess your competition's strengths and weaknesses

Popchips stands out as one of Skinny Chip’s primary competitors. Owned by Coca-Cola since 2007, Popchips manufactures potato-based chips that are lower in fat due to their unique popping process, which involves pressure and heat instead of frying (Casserly, 2013). Their ability to produce a less greasy, more health-friendly snack has gained popularity among health-conscious consumers and is widely distributed in major retail outlets nationwide (Fox News, 2016).

Popchips' strengths include their innovative manufacturing process, strong branding with celebrity endorsements, and diverse flavor options that appeal to a broad consumer base (Casserly, 2013). Their marketing efforts have successfully emphasized health, convenience, and taste, creating a competitive advantage in the healthy snack segment. Nonetheless, their weaknesses involve potential duplicity of their manufacturing process, which risks commoditization and reduced differentiation over time. Additionally, their premium pricing may limit access for cost-sensitive consumers.

Other competitors include smaller natural snack startups and established brands expanding into healthier options. These companies often leverage grassroots marketing, emphasizing authentic, natural ingredients, and personal health stories, which resonate well with specific consumer segments (Euromonitor, 2022). Large traditional snack brands like Lay's are also attempting to innovate with healthier offerings, making the competitive landscape increasingly dynamic.

10 Question Survey - Market Search

• 1. What are customer needs, and wants?
• 2. What are the customer buyer motivations?
• 3. How is our competitor different?
• 4. Do our prices create value for the customer?
• 5. What can we do to keep the customer happy?
• 6. What will make us #1 in your home?
• 7. Would you like samples of our product?
• 8. What would make you notice our products in the stores?
• 9. Who are the primary shoppers in your household?
• 10. Where is your geographic market location?

References

• Casserly, M. (2013). Forbes. Popchips: The next billion snack food, or just hot air?
• Fox News. (2016). The surprising history of potato chips. Retrieved from https://www.foxnews.com/
• Harris, J. (2014). Lays Potato Chips: The Crunch is on. Retrieved from https://www.entrepreneur.com
• Ireland, C., & UK Market Report. (2009). Frito-Lay’s global market overview.
• Grand View Research. (2021). Healthy Snack Market Size & Share Report.
• Nielsen. (2020). The Rise of Organic and Natural Snacks.
• PepsiCo. (2022). Sustainability & Corporate Responsibility Report.
• Richards, L. (2016). The Importance of Product Positioning to the Marketing Plan. Slideshare.
• Euromonitor. (2022). Emerging Markets Outlook for Snack Foods.
• Teacher.com. (2014). Food Industry Regulations and Trends.