FINAL PROJECT Consumer Behavior LAYS SNACKS PAKISTAN
Submit to: Sir, Imran Sadiqe Syed Ali Yaser Bukhari 084621002 Naeem Sharif Mehmood Waheed
Submission Date:
Acknowledgement
At the completion of this project we are grateful to Almighty Allah who has bestowed upon us the vision to complete this assignment. We are also thankful to my honorable teacher Mr. Imran Sadiq & Brand Mana Manage gerr Lays Lays MR, MR, Saad Saad Muna Munawa warr who who gave gave us clea clearr guid guidan ance ce for for completion of this assignment?
“Executive Summary”
This is the detailed report about PepsiCo Snacks products in Pakistan Lays, Cheetos, Kukure, Cravys. It covers the detailed product introduction with respect to the four Ps of the marketing, brief brief histor history y of the compan company, y, market marketing ing enviro environme nment nt of the compan company y in Pakist Pakistan, an, product & consumer evaluation that affect the workings of the company. It also includes the detailed competitor’s analysis. This report also covers the marketing objectives, marketing strategies such as target market, pricing and product strategies & SWOT analysis. At the end we gave some recommendations which may be useful in the growth and progress of the company. We have tried our best to cover all the topics of report and provide maximum information about the organization.
Frito-Lay, Inc. and PepsiCo, Inc. In 1945, the Frito Company granted the H.W. Lay & Company an exclusive franchise to manufacture and distribute Fritos in the Southeast. The two companies worked toward national distribution and developed a close business affiliation. In September 1961, The Frito Company and H.W. Lay & Company merged to become Frito-Lay, Inc.
In February 1965, the Board of Directors for Frito-lay, Inc. and Pepsi-Cola announced a plan for the merger of the two companies. On June 8, 1965, the merger of Frito-Lay and PepsiPepsi-Col Colaa Company Company was approved approved by shareh sharehold olders ers of both both compani companies, es, and a new company called PepsiCo, Inc. was formed. At the time of the merger, Frito-Lay owned 46 manufacturing plants nationwide and had more than 150 distribution centers across the United States. Today, Today, PepsiCo PepsiCo is organized organized into four divisions: divisions: Frito-Lay Frito-Lay North America, PepsiCo Beverages Beverages North America, America, PepsiCo PepsiCo Internatio International nal and Quaker Foods North America. America. Although products sold in the United States under the Frito-Lay brand name are also sold internationally, international sales are reported by the PepsiCo International division.
PepsiCo Mission and Vision At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do, but the right thing to do for our business.
Our Mission Our mission mission is to be the world' world'ss premi premier er consume consumerr Product Productss Company Company focused focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.
Our Vision "PepsiCo's responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today."
Our Our visi vision on is put put into into acti action on thro throug ugh h prog progra rams ms and and a focu focuss on envi enviro ronm nmen enta tall stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.
OVERVIEW OF SNAKE INDUSTRY IN PAKISTAN Snacks Snacks are a part part of Consum Consumer er Conveni Convenienc ence/ e/ Package Packaged d Foods Foods segmen segment. t. Snack Snack is described as a small quantity of food eaten between meals or in place of a meal. Snack food generally comprises bakery products, ready-to-eat mixes, chips, namkeen and other light processed foods According to the ministry of food processing; the snack food industry is worth over 150,000 tons in terms of volume.
Though very large and diverse, the snacks industry is dominated by the unorganized sector. According to an SMEDA survey almost 800 snack items and 170 types of savories are sold across Pakistan. The branded snacks are sold at least 25% higher than the unbranded products. Savory snacks have been a part of Pakistani food habit, since almost ages. Though there is no particular time for snacks, normally they are consumed at teatime. The variety is almost mind-boggling with specialties from all regions, which have gained national acceptance.
The industry has been growing around 30% for the last three years, while the branded segmen segmentt is growin growing g around around 25% per annum, due to variou variouss reason reasonss like like Multi Multiple plex x culture, snacking at home while watching TV, pubs and bars (where they are served free). AC Nielsen's retail audit shows that the large sales volumes are due to a marked preference for ethnic foods, regional bias towards indigenous snacks and good value-formoney perception. Of course the branded segment is much smaller, which is what makes it so attractive to food Companies that are looking at bigger shares. Growth rate of ready made snack (Potato chips / Namkeens) industry.
Year
Potato Chips/ Namkeens Growth
rate 1990-91 1996-97 2001-02 2004-05 2009-10
to to to to to
1996-97 2001-02 2006-07 2009-10 2014-15
07.06 06.80 11.67 30.63 25.58
MAJOR PLAYERS In case of chips manufacturing, Frito-Lay Pakistan is the market leader in the country with 85% market share in Potato snacks category. The Snack city, which has made a late entry in to chips processing market, has managed to get a market share of 08% with its potato chips "Kurleez". There are also the Kolson, Bunnys, Golden, super Crisp, etc in the competition.
CONSUMER BEHAVIOR
The job of marketer is to meet and satisfy target customer’s requirements and desires. “Knowing customer" is not a simple task. Understanding the buying behavior of the target market for the product is the essential task of the marketing plan. The job of the marketers is to “think customer” and to guide the company into developing offers, which are meaningful and attractive to target customers and creating solutions that deliver satisf satisfact action ion to the custom customers ers,, profi profits ts to custom customer er and benefit benefitss to the stakeho stakeholde lders. rs. Market Marketers ers must must study study the custom customer er taste, taste, prefer preferenc ences, es, wants, wants, shoppi shopping ng and buying buying behavior behavior because such study provides the clues for developing the new products, price, product changes, messages and other marketing mix elements. Consumer has various types types of behavior patterns. Few of them are explained as follows; follows;
Picking involves a random choice, here the buyer picks a brand from the available brands, and is indiff indiffere erent nt to the brand he buys. buys. Picki Picking ng occurs occurs when the consumer consumer has (a) low involvement in the purchase, (b) there is little uncertainty with untried brands and (c) there are few differences between the brands.
anotherr exampl example, e, also also involv involves es low consum consumer er involv involveme ement, nt, but it Variet Var iety y seekin see king g, anothe requires significant differences between the brands. Variety seeking was also found when (a) purchases are made for more than one consumption period and (b) when the timing of purchase and the timing of consumption were different.
Impuls Impulsee buying buy ing : Impulse buying occurs when a consumer experiences a sudden, often powerful and persistent urge to buy something immediately. It is more likely to involve grabbing a product than choosing one.
Habitual behaviour: Habit generally forms when the consumers are satisfied with the outc outcom omes es of the the earl earlie ierr purch purchas ases es.. Habi Habitu tual al buyin buying g is char charac acte teri rise sed d by abse absenc ncee of information search and evaluation of alternate brands. b rands.
purchase is of importance importance to the Extended problem solving : This occurs when the purchase buyer. buyer. Assael Assael found this process to occur during during the purchase of complex, complex, high priced
products where brands are perceived to be different and are associated with high degree of uncertainty. Under the complex decision making, the buyer evaluates the brands using choice criteria. Various types of choice criteria are used to evaluate the different brands. O'Shaughnessy (1988) classified the various choice criteria under technical performance criteria or generated functions.
Pakistani consumer buying behavior analysis Before 1990, most of Pakistani was in Picking or impulsive buying behavior regarding the snack industry, as there was not many choices around. I recall that during my childhood potato chips was considered as Fasting Food (people used to eat during the day when food was not available). After economic liberalization, multinational companies such as Pepsi Co and Coke have entered into Pakistani FMCG market and changed the equation. The major task to market items as potato chips is to bring Consumer from Picking to Variety seeking and then to Problem solving behavior, to change fasting Food to Fast Food . Specially Pepsi Co launched Lays in Pakistan in June 2005 and
creates a sense of snacking and also made the consumer flavor conscious.
Picking/Imp ulse
Pepsi Snacks Pakistan
Variety Seeking
Extended Problem Solving
Habitual
PepsiCo established its snacks business operations in Pakistan in June 2005 and has grown to become one of the country’s leading food and beverage companies. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in Pakistan. Peps Pe psiC iCo o Pa Paki kist stan an has in inves veste ted d mo more re th than an US USD1 D1 bi bill llio ion n si sinc ncee th thee co comp mpan any y wa wass established in the country. PepsiCo Pakistan provides direct and indirect employment to 50,000 people including suppliers and distributors.
PepsiCo's food division Frito-Lay is the leader in the branded salty snack market and all Frito-Lay's products are free of trans-fat and MSG. It manufactures Lay's Potato Chips; Cheetos extruded snacks, Kukure and Cravys. The company’s high fiber breakfast cereal, Quaker Oats enhances the healthful choices available to consumers.
PEPSICO SNACKS SNAC KS BRANDS BRAN DS IN PAKISTAN
1. Lays
2. Ku Kurk rkur uree
3. Chee Cheeto toss
4.
Cravys
We are taking here only one brand (Lays) of PepsiCo snacks Pakistan and our whole project will on this brand.
LAYS Flavors in Pakistan
French Cheese Masala Ketchup Tango Salt & Vinegar Salted
External Influences 4 P,s of Marketing 1.
Product
2.
Promotion
3.
Price
4.
Plac Placee (Cha (Chann nnel elss of of dis distr trib ibut utio ion) n)
Product Product Attributes: 1. Quality: Lays are following the concept of Siemens (quality is when customer come back and our product don’t) as far as quality is concerned. They also not neglect the two dimensions of quality (performance & conformance) to gain the satisfaction of the consumer.
2. Features: 3. All the feature featuress (like spicin spiciness ess)) and charac character terist istics ics of Lays are compile compiled d by the company on the need and want of the customer. 4. Desi Design gn : 5.
Style Style and design design matter matter a lot on the the outcome outcome and response response of of the product product (inside (inside the pack & outside the wrapper) has much attractive and catchy color style and design design which which attract attract custom customer. er. Differ Different ent product product variet varieties ies have have been been given given different designs and styles according to their flavor and ingredients.
6. Branding: 7. Lays has a strong strong brand brand image image and also also brand brand name name is very very easy. easy. 8. Size iz e: 9. Lays Lays is avail availabl ablee in five five differe different nt sizes sizes..
•
Lays 10 gm in Rs, 5
•
Lays 19 gm in Rs, 10
•
Lays 48 gm in Rs, 25
•
Lays 120 gm in Rs, 50
•
Lays 200 gm in Rs, 75
Nutritional Information Energy 218 kj, Protein 0.9 gm, Carbohydrate 4.9 gm, Of which sugar 0.2 gm, Fats 3.2 gm, Fiber 0.4 gm, Sodium 0.1 gm.
Pricing When Lays launched in Pakistan in 2005, there was the Rs, 5 price points in potato chips category but 1st time Lays introduced the Rs, 15 price points. This price point became failed and PepsiCo had been changed its price and came at Rs, 10. So this price point became successful. After it company introduced bulk packs and family packs in the price point of Rs, 25 to Rs, 75 but 80% contribution of Rs, 10 products. p roducts.
PepsiCo can’t follow the single strategy straightly because in FMCG product markets their fluency of competitors based pricing along with a bit effect of customer value. Their cost includes: •
Manpower
•
Machinery
•
Electricity
•
Raw Material
Lays has priced its product to achieve certain c ertain percentage return on its sale.
Promotion
Advertising: Lays advertises through various channels: •
•
Media (FM Media, TV channels, etc) News Papers & Magazines
•
Billboards & Banners
•
Sponsoring various & Matches
•
Free Samples
Sales Promotions: Lays does sales on following promotions. •
Trade promotions
•
Consumer promotions
Place Lays is available almost in all over the Pakistan. Lays distribution channels are very strong. Lays is operating by the directly PepsiCo. Distributors supply the finished goods to the market.
SWOT Analysis: Lays
STRENGTH Distribution
Pepsi Co has launched Lays potato chips in 2005 in Pakistan. By that time, Pepsi Co has strong distribution network of Pepsi Cola beverages. So PepsiCo snacks have a very strong distribution network in Pakistan.
Experience
Pepsi Pepsi Co is backed by vast vast experie experience nce in snack snack indust industry ry world world wide. wide. In Pakist Pakistan, an, PepsiCo had already experience of beverages.
Brand Promotion
PepsiCo’s Lay’s brand is a very popular brand globally. The visibility and position as Family Product of Lays in Pakistan. Range
PepsiCo has a very vast range of its snacks in Pakistan. Lays is available in all price points Rs, 5 to Rs, 75. R&D / Quality
PepsiCo has a very unique research and development department. Second thing that quality of product which is the best quality in the snacks category.
WEEKNESS White Space
Term White space is referred to area where parent organization has never ventured before. Pakistan food market was white space p roduct for Pepsi Co.
Market Appeal
With With Lays Lays is promot promoted ed as law fat snack. snack. It is uncert uncertain ainty ty about about Law fat appeal’s appeal’s credibility to traditional Pakistani consumer, for whom Lays is made.
Availability of raw material and season
Being made by agricultural items as potato, Lays supply chain depends on irregular monsoon.
Price
PepsiCo’s products are expensive the regional snack products due to its high production and marketing costs.
Brand Loyalty
Typically Pakistani consumer is having la ow brand loyalty for ready made food products.
OPPORTUNITIES Changing life styles
Famil Families ies have become become nuclear. nuclear.
Double Double income income earnin earning g famil families ies have led to higher higher
penetration of the snacks in food eating habits, packaged ones though.
Globalization Due to market globalization, PepsiCo is operating in 55 countries. Product such as Lays can be launched in other potential countries as Sri lanka, Pakistan, Morrocco, Chili.
Emerging Pakistan Internet and TV media has increased the awareness of different world culture and their food habits. Pakistani consumer is started looking for new tastes and willing to pay bit extra price price for that. Expanding Expanding Mall culture culture multiplexes multiplexes and other avenues create create new marketing opportunities for snack industry.
Brand awareness Due to innovative marking strategies and available platforms for advertisement (TV channel channels, s, news news media, media, Commer Commercial cial radio radio channel channels), s), Pakist Pakistani ani consum consumer er is slowly slowly changing, his buying behavior from seeking to problem solving. Brand awareness in FMCG marketing is increasing.
THREAT Multinational Product
Being a MNC product, Lays has impact of relationship between host and parent country. Bad relationship may have adverse impact on Lays brand.
Government legislation
Any harsh government legislation/tax/policy change can disturb the PepsiCo’s products’ business case and profit.
Energy Constraint In Pakistan there is constraint of energy as well. We can see that there is no electricity and gas properly available in Pakistan. These both things are the back bones of any industry.
MARKET UNIVERSE Market universe defines the targeted audience for the product. It is very essential for marketer to target specified audience/consumers for the product to keep the product away from from pick pickin ing g buyi buying ng behav behavio ior. r. For For this this produ product ct shoul should d be posi positi tion oned ed as brand brand differentiator
to
its
competitors.
Product
should
bring
some
kind
of
functional/technical/others advantage to consumer then its competitors. In our example, following are the attributes that have impact on consumer decisionmaking process, while buying snack product. ITC and Pepsi Co have to study each of
these attributes.
1. Free from pesticides 2. Freshness 3. Good for health 4. Clean place of of sale 5. Value for Money 6. Overall quality 7. Taste 8. Variet Variety y Products availabili availability ty at same same place 9. Seasonality 10. Flavor 11. Good display displa y of products 12. Nearby Availabilit Availability y 13. Good ambience 14. Locally Produced 15. Packaging 16.Advertising 17. Personall Personally y known by b y shopkeeper 18. Shape 19. Promotiona Promotionall offer 20. Country of Production
PROFILE
The Pakistani consumers are noted for the high degree of value orientation . Such orientation to value has labeled Pakistanis as one of the most discerning consumers in the world. Even, luxury brands have to design a unique pricing strategy in order to get a foothold in the Pakistan market.
Pakistani consumers have a high degree of family orientation . This orientation in fact, extends to the extended family and friends as well. Brands with identities that support family values tend to be popular and accepted easily in the Pakistani market.
Pakistani consumers are also associated with values of nurturing, care and affection . These values are far more dominant that values of ambition and achievement. Product which communicate feelings and emotions gel with the Pakistani consumers.
Apart from psychology and economics, the role of history and tradition in shaping the Pakist Pakistani ani consumer consumer behavio behaviorr is quite unique. unique.
Perhap Perhaps, s, only in Pakistan Pakistan,, one sees
tradit tradition ional al produc products ts along side modern modern produc products. ts. powder existing with shampoos and toothpaste.
Consumer Evaluation
For example, example, hair oils and tooth tooth
Marketing Segmentation
1. Geographic Segment: Concerning geographical factor, Frito-Lay is trying to expand its wings to cover cover towns, towns, villag villages, es, cities cities;; making making it availa available ble to everyb everybody ody.. The product Frito-Lay Snacks are specially designed for the Gulf & South Asian region specially India & Pakistan considering the taste & style of the traditional foods & flavors.
2. Demographic Segment: Concerning Concerning demographical demographical environment, environment, Frito-Lay Frito-Lay will focus on several several variables such as age, gender and income level. Age: Frito-Lay will focus heavily on children and young people. Gender: Frito-Lay is generalized product for any sex, male or female. Income level: Frito-Lay packs are easily affordable and company is trying to give more for less making it best value of money.
3. Psychographic Psychographic Segment: Consid Consideri ering ng psychog psychograp raphic hic factor factors, s, Frit Frito-L o-Lay ay will will heavil heavily y focus focus on customer’s life style, tastes, and personal values that best math with the product usage and distinctive from competitors. Making an image of style, standardized taste and variety of flavors, Frito-Lay will impact positively on individual customer satisfaction.
Cultural Factors
As Pakistan is the agriculture based country, 70% of our population is connected directly or indirectly with the agriculture sector. Potatoes, rice, Corn, Gram & Spices are the main & basic ingredients of our food. In fact Frito-Lay is such type of item which is specially designed for this region but it does not have any threat from the subculture of this region. Market in this region and its culture is extremely favorable for such type of snacks, which come in the head of extruded item, and people buy snacks frequently in this region. By understanding the culture company is advertising their product for all age groups because because their product is for everybody’s everybody’s use. This understanding understanding is also very important for their purchasing patterns and use. The company is mainly concentrating on upper & middle class.
Social Factors The target market of Frito-Lay is generalized including children, young and old people. In precise target market, Frito-Lay is focusing heavily in children and young segment. Frito-Lay is such kind of product which is easily affordable for every class of the market either quality conscious or price conscious, excluding lower lowers and upper lowers. The main focus of the company is the middle class along with a bit b it of elite class and also working class. Middle class is the best responding class for Frito-Lay products.
Economic Factors The price of the small Frito-Lay products pack is Just Rs.5/-, so it is affordable to every class of the country although those are not who are below working class (labors).
Political Factors
Frito-Lay is a legally registered company and applying labor laws and mark market et laws laws of Paki Pakist stan an.. But it is known known to them them that that Gover Governm nmen entt interaction got much importance in every business and if there are some restrictions on them then it may be a hurdle in their way to success. That’s why some harsh Government rules may influence a wrong impact on company’s goals and achievements in future.
Technological Factors Lays being the product of PepsiCo International and having a good repute in international market are already using modern technology to enhance the production and the quality.
Buying Decision Process (Five Stage Model)
CONSUMER BEHAVIOUR ON LAYS There are several factors affecting consumer behavior. Consumer behavior is ma jo r ch alle al le ng e fo r every every product product.. Some factor factorss which which affect affect the consum consumer er behavio behavior r on Lays are:
Consumers & Buyers Basically the Lays is launched for children and teen age but because of its taste and variety, everyone is fan for Lays. It has fats, soft and crisp. The older people like those can’t eat hard snacks, are prefer to Lays. The consumer of Lays is not only for children and also everyone. The buyer’s are almost parents. They prefer the
Lay s rat her tha n oth er chi ps. Par en ts beli believ evee that that Lay Layss is is not not bad bad for for heal health th,, whic which h does not mean that, it is good for health.
Influencer& factors Even though Lays is suitable to everyone, the children are major influencer. The children mainly influenced by social factors that are friends, family. Perception is also one of the influencing factors. In this, the people perceived as, it’s made up of corn, rice meal and others. So that it is not bad for health. Brand is one of the factors. It is come from PepsiCo. So that people have confident about quality. The following data shows the influencer. Influencer Children Parents
Yes 80 % 55 %
No 13 % 40 %
No Idea 7% 5%
From the above table we can understand the influence of children rather than parents. It implies that t h e c h i l d r e n h a v e p e s t e r e d p o w e r . W e c a n u n d e r s t a n d t h a t , a c c o rd i n g t o F o o d c o m m is si o n a n d Adve Adverrtisem isemen entt Boar Board, d, the Lays Lays does doesn’ n’tt full ull the children by its advertisement. Its advertisement is major part of its success. It believes that, parents are the main factor and buyer. It is come with different advertisement for each flavor.
Depends on Availability of product to customers It is food products. So the product should be very hygienic and available to everywhere. everywhere. It is major task for every product. In this case, Lays is available everywhere in market. That is the major success factor. Lays is available from small petty shop, small bakery to big malls and mult ultiple iplexe xes. s. When When I met met the people for survey, I can realize that it is available everywhere. I met the people who purch purchase ase the the product product from from relian reliance ce fresh fresh and small small baker bakery y shop. shop. T he re is no sp ec ific if ic season or time for to purchase the Lays. Most of the people purchase as the daily evening snakes. But, during any special program like watching cricket matches, then the sale may increase. Otherwise it is available product to everyone.
Perception about the product
The perception perception is different different for everyone. Perception Perception means that how the person receive the da data an and how he use in different different situations. situations. In this case, the perception perception var ied ac cor din g to peo ple , cu ltu re, demo demogr graph aphic ic.. Some Some peopl peoplee beli believe eve that that,, it is made up of corn, rice meal. So, it is healthier than other products.
Social factors on product The social factors are mainly family and friends. According to me, the initial advertisement advertisement and promotions were attracting the parents and all age peoples. But, the product is more dependent on the children. From that we can understand the influence of the the family on product. Sim ila rly , fri en ds are al so ma jo r s o c i a l i n f l u e n c e f a c t o r s . T h e y a r e t h e r e a l p r o m o t e r s o f t h e product.
Life style influences the product A c co r di ng t o u s t h e l if e s ty le m u st i n fl ue n ce t h e p r od u ct . W h e n I w e n t t o s t o r e , t h e o l d e r generation people go for low cost snacks, more more quant quantit ity y produ product cts. s. But, But, youn younge gerr gene genera rati tion on does does not not wo r r y a b o u t t h e p r i c e o r q u a n t it it y . T h e y a l w a y s p r e f e r t a s t e . E v e n t h o u g h o l d g e n e r a t i o n l i k e Lays than other packed snacks, they give first preference to local or other product whic h satisf ies the the nee needs ds..
Demographic factors We already mentioned that different flavors like French Cheese, Salted, Tango Tango and etc. etc. why they they give give diff differe erent nt things things becaus becausee of demogr demograph aphic ic factors. factors. Normally the people in Karachi prefer very spicy and hard. For them, plain plain Masala Masala or Tomato Tomato Tango is suitabl suitable. e. Simila Similarly, rly, the Punjabi Punjabi people people prefer differ from others. Lays is mostly fulfilling the needs according to demo grap hic this not only for thos thosee stat statee peop people le,, it’s it’s also also uses uses all all othe otherr peopl peoplee Launched as a national brand, it was a challenge for the company to d e v i s e f l a v o r s t h a t w o u l d a pp pp ea ea l t o r e gi gi on on al al t as as te te b ud ud s. s. H ow ow ev ev er er , t he he focus on developing hot and tangy flavors that suit Pakis akista tani ni tas taste te pal palet etttes has has helped win the hearts of Pakistani consumers.
MOTIVATION
Maslow's hierarchy of needs
As a consum consumer er we put our produc productt Lays Lays in two stages stages of Maslow Maslow's 's hierar hierarchy chy.. 1st is Belonging / Love & 2nd is Self Actualization.
Love and belonging After physiological and safety needs are fulfilled, the third layers of human needs are social and involve feelings of belongingness. The need is especially strong in childhood and can over-ride the need for safety as witnessed in children who cling to abusive parents which is sometimes called Stockholm syndrome. The absence of this aspect of Maslow's hierarchy - due to hospitalize, neglect, shunning, ostracism etc - can impact individual's ability to form and maintain emotionally significant relationships in general, such as:
•
Friendship
•
Intimacy
•
Family
Self-actualization “What a man can be, he must be.” This forms the basis of the perceived need for selfactualization. This level of need pertains to what a person's full potential is and realizing that potential. Maslow describes this desire as the desire to become more and more what one is, to become everything that one is capable of becoming. This is a broad definition of the need for self-actualization, but when applied to individuals the need is specific. For example one individual may have the strong desire to become an ideal parent, in another it may be expressed athletically, and in another it may be expressed in painting, pictures, or inventions. As mentioned before, in order to reach a clear understanding of this level of need one must first not only achieve the previous needs, physiological, safety, love, and esteem, but master these needs. Lays is an impulse buying product and we often consume it or eat it on picnic or entertainment. When we go out with family or children we show our love or cool belonging with them. So with our friends during the studies when we eat snacks (Lays) we show again our love or belonging. Before 2000 AC there is no much trend of snacking in Pakistan. But with the passage of time public places developed in Pakistan and the awareness of snacks product became happened so, now its become the part of hospitality which shows thee love and belonging as well. Due to freshness of Lays and being a multinational brand of PepsiCo we feel self actualization when we eat it. Almost all the potato snacks are available in Rs, 10 but when we buy a best brand of the world we feel proud on it and self actualization.
A Trio of Needs Here are the three elements of Trio Needs Theory.
Power
Power need relates to an individuals desire to control his or her environment.
Affiliation Affiliation is a well-known and well-researched social motive that has far-reaching influence on consumer behavior.
Achievement Thee achi Th achiev evem emen entt need need is clos closel ely y rela relate ted d to both both the the egoi egoist stic ic need need and and self self-actualization need. We see as a consum consumer er that Lays is matchin matching g with Affiliati Affiliation. on. In Pakista Pakistan n Lays Lays is market leader in the potato snacks category. Physiologically every person wants to buy premium product. Lays is a best product of the world in the snacks so, we are affiliated with this product as well.
PERCEPTION
Positioning In marketing, marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, product, brand, or organization. Re-positioning involves changing the identity of a product, relative to the identity of
competing products, in the collective minds of the target market. Positioning: the essence of successful marketing is the image that a product has in the minds of consumer. That is its positioning. Positioning is more important to the ultimate success of a product then or its actual character. Although the product that are poorly made will not succeeded in the long run on the basis of image alone. The core of effective positioning is unique position that the product occupies in the minds of the consumer.
As for as the lays is concerned, we position it under the umbrella positioning technique. Where a product can be featured individually, its ingredients product and packaging. PepsiCo is a company and Frito-Lay its business unit. PepsiCo is using Frito-Lay as an umbrella brand, under this there is lot of brands in different countries. For example in India and Pakistan LAYS, in South Africa SIMBA, in England WALKERS and in USA there is DORITOS.
In Pakistan Lays position it self “Khao or ruk k dikhao”. Its main focus on quality and freshness.
2 Packaging as a positioning positioning element : Packaging conveys the image that the brand communicate to the buyer, like color, weight weight,, attrac attractiv tivee packag packaging ing,, and shape shape or all import important ant.. Lays Lays packagi packaging ng is very very convenience for the customers and specially the colors scheme of the package is very attractive and customer feel very familiar with the packaging of the lays.
Lays give different colors for different flavors. For example French Cheese in Orange color, Salted in Yellow color, Masala in Redish Maroon color, etc. If any illiterate person wants to buy Lays he or she can judge the flavors on the color basis.
Second the sizes of packaging are different according the price point. It also play very important role in this element.
3 Perceived price and perceived quality: Perceived Price
How a consumer perceives a price as high, as low, as fair has a strong influence on both purchase intentions and purchase satisfaction. like what did the lays customers think about the price of Lays whether it is high h igh or low price.
Before 2005 AC there is almost 90% contribution of Rs, 5 price points but Lays came in to Rs, 15 price points. Lays realized that he should come back on Rs, 10 and than it clicked. Now almost 70% share in the snacks is Rs, 10 price point.
Lays positioned it self at the low price or economical price with premium product.
Perceived quality: Consumer Consumer often judges the quality of a product product on the basis of a variety of informational cues that they associate with the product. Lays positioned on the premium premium product. Lays freshness and crispiness crispiness is the key of success. success. Consumer wants good and quality product. Lays ran his advertisement ad on different channels in which production process had been shown. Lays use 100% Hilal raw material, fresh potato, Malaysian palm oil, etc. As a consumer quality is very important and it act positive role on buying behavior.
LEARNING
Reinforcement Reinforcement increases the likelihood that a specific response will occur in the future as the result of particular cues or stimuli. If a consumer is reward, by enjoying a product or service purchase, that consumer has learned to associate the purchase with a pleasant felling and therefore, is likely to repeat the learned behavior and become a loyal customer Now we relate above concept with our product like lay, initially in Pakistan lays come with few few flavors flavors like like salt and and Masala Masala so these these flavors flavors give better better enjoyment enjoyment to the the customers and in return good response to company sale that’s why lays launch new flav flavor orss like like Fren French ch chee cheese se ketc ketchu hup, p, vine vinega gar, r,et etcc as a rewa reward rd and and for for posi positi tive ve reinforcement
Classical conditioning
Classical conditioning is consist of Unconditioned stimulus (food) Conditioned stimulus (bell) Unconditioned response (salivation
In Consumer behavior context an unconditioned stimulus might consist of a well known brand brand symbo symboll and condit condition ioned ed respons responsee would would be consum consumer er trying trying these these product productss because of the beliefs that embody the same attributes Now we apply classical conditioning concept co ncept on lays, as we discus lays is used mostly all types of people like children, Parents and old age people. When matches series started all segments mostly children and teen agers enjoying matches or events with lays so when matches starting children and teen agers need for Lays with Pepsi or Coke So we can say lays is an unconditioned uncond itioned stimuli while match is conditioning stimuli Same case with teen agers when they meet together in their friend’s home or in an other enjoy able places So finally if we talk about the after repeated pairings when matches series or events start (conditioned stimulus) then conditioned response (salivation) starts.
Instrumental (operant) conditioning A behavioral theory of learning learning based on trial –and-error –and-error process, with habits habits forced as the result of positive experience (reinforcement ) resulting from certain response or behavior In consumer behavior context, the consumer who tries several brands that fits with consumer and he or she will continue to buy e.g. lays, now we are going to relate this theory with our brand like lays
We apply
lays in above model let suppose Ahmed is a customer, health plus quality conscious and need for snakes so he try fist brand which is not crispy so he will try second brand which is not having good taste, he will shift towards third brand which having huge amount of fats and showing threat for his health so finally he decided to purchase lays snakes and it full fill his requirement and he give preference and repeat purchase in future.
PERSONALITY
Consumer Innovativeness Some consumers are who that open to new ideas and be among the first to try new product. For example when Lays launch any new flavor or new product in the market than almost customer buy it and this is the innovation by the customer because Lays is impulse buying product. Consumer Ethnocentrism
Lays is non Muslim Muslim company brand. Pakistan is a Muslim Muslim country but our nation is not more Ethnocentric. But in some factors we can see the case of Telenor in Pakistan when we boycotted the Danish products. Another element in our nation that we are too much brand conscious so we feel proud and self satisfaction when we buy any imported brand as like Nike, Levies, etc. we observed that the consumer takes Lays with o pen mind.
Brand Personality Lays is a brand of PepsiCo. Lays has a strong brand image in all over the world. Almost we copy the culture of India and also in India the Lays is very strong brand in the snacks category. Tag line of lays in Pakistan is “Khao or ruk k dikhao”. Lays is focusing on quality and freshness. So Lays has a very strong image in the Pakistan. In a recent research by Ac Nilsson the Lays is 5 th largest brand in Pakistan in all over the categories. The affiliation of customer with this brand is very high.
Lays Personality and Gender Lays is a strong strong brand and have a healthy healthy personality. personality. Lays is a product product which is for all genders. Even children, male or female all types of gender eat it.
Product Personality and Geography Lays product matches with the geographically condition of Pakistan. Pakistani culture almost matches with India so geographically its raw material also available in Pakistan as like potato.
Personality and Color We can take the example of Pepsi Max which had been flopped in Pakistan due to the color of bottle. Its color was black and in our culture it is our habit that when we drink any thing we see it. But in Max Pepsi it was not possible. Lays colors are very attractive and beautiful and also matches with our culture. So there is no issue regarding the colors of lays packaging.
Self-Image There are four kinds of self images. 1. Actu Actual al Sel Selff-Im Imag agee 2. Idea Ideall-Se Self lf Imag Imagee 3. Soci Social al Sel Selff-Im Imag agee 4. Idea Ideall Soci Social al Sel Selff-Im Imag agee
Lays is falls in to the Actual Self-Image. Lays is a food item and in food we often like to eat what we want. So customer or consumer see them infect they want to see them.
ATTITUDE
Attitude of consumer toward Lays To understand the buyer and to make a customer out of him is the main ain purp purpos ose e of the the stud study y of cons consum umer er beha behavi vior ors. s. Thou Though gh this this problem has been analyzed from different view points under different premises, it still remains a complex one. On the other hand the buyer is a riddle. He is a highly complex entity. His needs & desires are innumerable. Some are latent, some manifest and some others are highly highly domina dominant. nt. These These have have differ different ent prior prioriti ities es in the schem scheme e of things. The buyer has his own ideas & plans about realizing these needs & desires. The first & foremost task of the marketer is to get close to the buyer and understand his need-structure & priorities.
Attitude Definition: Attitude is defined as a mental, emotional or rational predisposition with regard to a fact, state, person or an object. In the context of consumer behavior we are studying the attitude of buyers towards all the relevant attributes of a product or services as well as the marketer and markets. The study includes the following major areas.
Tri-component Tri-component model According to the tri-component model, attitudes consist of three major comp compon onen ents ts
–
(1) (1)
cogn cognit itiv ive e
(kno (knowl wled edge ge,,
leer leerin ing) g),,
(2) (2)
affe affect ctiv ive e
(feelings, emotions), & (3) co native (tendency, intention or inclination)
1. Cognitive component – The first part of the tri-component attitude model cognitive component consists of a person’s cognitions,
i.e., the knowledge & perceptions that are acquired by a combination of direct experience with the attitude object & related information from various various sources. sources. This knowledge knowledge & resulting resulting perceptio perceptions ns commonly commonly take the form of beliefs, i.e., the consumer believes that the attitude object processes various attributes and that specific behavior will lead to specific outcomes. The tri component model is a good for lays because it explains every aspect of it from the consumer side and from the marketer side. If we see in the model in the first of cognition they are tell tellin ing g about about the the know knowle ledg dge e and expe experi rien ence ce peop people le have have a good good knowledge about lays and also have a good experience. Lays advertise him very well and the customer has a good experience because they provide every thing what they communicate to his customer in the aid and they provide the taste which the customer likes.
2. Affective component – The The seco second nd part part of the the tritri-co comp mpon onen entt atti attitu tude de mode modell affe affect ctiv ive e comp compon onen entt cons consis ists ts of a pers person on’s ’s emot emotio ion n or feel feelin ings gs abou aboutt a particular product or a brand. These emotion & feelings are frequently treated by consumer researchers as primarily evaluative in nature, i.e., they can be rated with degrees of an attribute – good/bad, favorable / unfavorable. Additionally the state of mind (emotionally charged states like happiness, sadness, anger, disgust, distress, shame, guilt, surprise etc.) etc.) also also affects affects the attitu attitudes des by enhanc enhancing ing positi positive ve or negati negative ve emotions or feelings. In the the seco secon nd case ase the they are are tell elling ing abo about the the customer feeling and emotion .mean what the customer feel and what is the emotion of him about the product or brand so the customer feelin feeling g and emoti emotion on are very very positi positive ve about about the lays lays becaus because e they they
provide according to the choices and taste of customer mean what cust custom ome er
want ant and and
like the they prov provid ide e
it
they hey stud study y cust custom omer er
preferences mean what they want and what they like ,what kind of taste they prefer, these are the all thing which is doing by lays and gettin getting g a good good feed back from from the customer customer we can take a recent recent example of lays that some one start propaganda against that they are not using Halal which effect them very much much but they replied replied in a very polite way and offer his formula on net and also bring some religious people on media to tell people about it which show that what they are doing for customer and how they are handling it These are the some model which is best suited with lays and them using it for achieving his goal and getting good result.
3. Co native nati ve component compon ent – The The thi third par part of the tri-co i-comp mpo onent nent att attitud itude e mode odel co nati native ve component component consists consists of a person’s person’s likelihoo likelihood d or tendency to undertake undertake a specific action or behavior towards the attitude object. Often this means the actual action or behavior itself, or the intention to buy a particular product. Buyer intention scales like – “How likely one is to buy” buy” or “The “The chan chance ce that that one one will will buy” buy” are are us used ed to asse assess ss the the likelihood / chances that a person buying a product. In the third model they are telling about the consumer mood mean attitude attitude about the purcha purchasing sing of a product. product. that when consume consumerr like the product he purchase it and use it frequently so if we relate with lays ays
you
see that the
consumer
attitude
towa toward rd lay lays
is
posi positi tive ve
cons consum ume er
like
it
purchase purchase it
frequentl frequently y in
and and
a routine life .the main advantage of lays it that it is available in different packaging and in different t taste and you can purchase that one which you want and which is needed for you
Factors Affecting Consumer Buying Behavior Consumer purchase is influenced strongly by the following three factors. •
Cultural
•
Social
•
Personal
Above mentioned factors are explained in the details as fallows.
Cultural factors
Cultural factors are fundamental determinants for consumer needs and behavior such as values, perceptions; preferences differ from family to family, region to region, country to country. Cultural factors include three important factors which affect making decision. There are: 1. Culture 2. Sub Cu Culture 3. Soci Social al Clas Classs
Culture & sub culture factors as explained above also include social class factors such as occupation, Income, wealth, education, brand preferences, leisure activities/habits and media preferences. All these factors effect the buying decision of buyer and marketing decision of marketer, as Lays is a snack food product and there are huge varieties are available in the market for the customer.
Social Factors Social factors like references groups, family, roles and status affect consumer buying behavior.
Buying behavior of consumer toward snacks Lays is affected by Primary Groups, as usually the buying of this product is influenced by even interacting with family, friends, neighbors, co-workers.
Family is most important consumer buying organization in society, number of members constitute the most influential primary reference group, Age group of members are all the factors to be taken into consideration by Lays for marketing its product.
Personal Factors
Personal factors such as occupation and economic circumstances, lifestyles and values affect buying of Lays. Economic circumstances such as spend able income, saving and market situations i.e.
like recession recession brought steep down in sales of product product because people lost their jobs, jobs, cut off their salaries so, the buying decision was greatly affected.
Life style is a pattern of living in the world as expressed activities, interests and opinions, price conscious shoppers’ i.e. i.e. “whole person ” interacting with the with the environment, so the buying decision is affected greatly.
Customer Perceived Value
Customer perceived value is the difference between the total customer benefits and
total customer cost.
Total consumer value is to the perceived monitory value of the bundle of economic, functional and physiological benefit expects from product service, personnel and image involved.
Total customer cost is the perceived the bundle of costs customer expect to incur in evaluating, obtaining, using and disposing of the product.
Image value Image value refers to the brand value of the product. Lays is very old and international brand which give consumers image value.
Personnel Value
Social value given by product or brand to the consumers. Lays is preferred outing snacks or tea time snacks as well. Lays has no brand ambassador in Pakistan but in India Saif Ali Khan and Dhoni are their brand ambassadors. But when there were the issue of Hilal Haram than than Lays endorsed endorsed the Junaid Jamshed. Jamshed. In Pakistan Pakistan Lays made its ad in which all the Lays making process had been shown. It also develops a personnel value in the mind of customer and consumer.
Product value Products value refers to the functionality of the product and the feature of product. Lays is available in lot of flavors and price points like as French Cheese, salted, Masala, and Tango, also available in World Cup flavors.
Monitory Cost Monitory cost refers to the price paid to buy a product. Lays is available in Rs, 5, 10, 25, 50 and 75 so it is monitory cost for consumer.
Customer Development Process Potentials Those customers who are willing and have capacity to buy product. For lays all are customers who can afford to buy.
Prospectus As the price of Lays are available to wide range, so it is the rare that prospectus are disqualified. They are accepted.
First Time Customer As the person who are willing to have Lays and trying the first time is first time customer for the company.
Repeat Customer Once the customer had started consuming the Lays snacks and again buys then he or she is repeated customer.
Clients To who Lays give some special treatment are the clients of the company.
Pre-Purchase Decision We observed from these following stores. 1. Rehm Rehman an Mart Mart 2. Askar Askarii Stor Storee 3. Ahsa Ahsan n Mart Mart 4. Ibra Ibrarr Stor Storee 5. Rash Rashee eed d Stor Storee 6. Groc Grocer erss 7. Ammy Ammyss Baker Bakerss 8. Raheem Raheem Store Store 9. Akbari Akbari Store Store 10. Sachi Chaki
Khoka Khokarr Chowk Chowk Coll Colleg egee Road Road M Ali Ali Chowk Chowk M Ali Ali chow chowk k Coll Colleg egee Road Road PIA PIA Soci Societ ety y Samn Samnab abad ad Allama Allama Iqbal Iqbal Town Town Allama Allama Iqbal Iqbal Town Town Allama Allama Iqbal Town
Lays is the best option for salty snacks customer due to its attributes.
Post-Purchase Behavior After the purchase, the consumer might experience dissonance, or may be not happy with the product which he actually wants. As Lays is a FMCG product, after sales services is not available for these products but the company provides forums and consumer care on toll free number on which the consumer can present their views or complaints regarding quality, price and packaging. And the company would be able to come up with the best product as preferred by the customer.
