Frito-Lay Inc.
Memo
Date: March 19, 2007
Re: Frito-Lay's French Onion Dip Analysis
Frito-Lay has decided to introduce a new product; sour cream based French Onion dip. However, there are two markets this new dip can be marketed in; the chip dip market along with all other Frito-Lay products or the vegetable dip market, an entirely new market for the company.
There are certain assets and/or resources, as well as capabilities, that the company possesses that may help to uncover the best market for the new French Onion dip product.
One of Frito-Lay's best assets is its brand. The company has a national reputation for being a quality salty food manufacturer. Strong channels of distribution exist for the brand as well. Physical assets of the brand include distribution centers and the trucking fleet. This brand channel also has very powerful capabilities; new products of similar distribution type can be placed in both mom and pop shops and supermarkets across the nation with ease.
Other market factors to asses while looking at the best market for the new French Onion dip product include industry size, growth potential, and profit levels.
The overall market size for chip dip is potentially very large. 97% of households use salty snacks, most of which can be supplemented by some product in the dip category. That fact, coupled with the fact that currently, only 45% of households use dips, could signal not only a potentially a very large market, but a large amount of market growth possibility. However, the total sales of company dips have declined in the past year possibly providing evidence that the market is saturated and there is not as ...