Marketing Strategy and SWOT analysis of Lay’s

The majority of us have probably devoured a bag of what is called Lay’s chips. But did you know that for over 88 years, Lay’s has been successfully serving flavored potato chip snacks to its consumers? As of today (2020), Lay’s dominates about 59% of the snack market in the U.S. The secret success lies beneath the approach to providing the highest quality at the most affordable prices. But is the pricing strategy the sole success factor for the company? To answer this question, I will dive deeper into the marketing strategy of Lays and the SWOT analysis. 

To begin with, let’s get a closer look at the Mission and Vision statements of Lay’s.

Mission Statement:

Lays’ Mission statement is “At Frito-Lay, delighting our consumers is job No. 1. To us, that means putting consumers first in every decision we make – from the quality and care that goes into making our snacks to how we give back to the community and care for our environment. Our associates take pride in their jobs because our consumers deserve nothing less.”

The statement clearly expresses the company’s customer-centric approach, where Lays goes to great lengths to learn about and understand the wants, needs, and demands of customers. It focuses on the value proposition that will eventually derive customer satisfaction and manages to coincide it with the societal marketing orientation.

Vision Statement:

Lays’ Vision statement is, “That is, winning in the marketplace, accelerating growth and keeping our commitment to the planet and our communities. A clear set of strategies that will make us Faster, Stronger, and Better, define this vision.” 

This statement shows Lays’ ultimate motivation for constant improvement, which focuses on staying true to its commitment to the consumer and society. This approach will eventually lead them to the top. 

Let’s look at the branding strategies that the company utilizes.

This Instagram post represents the emotional connection that the company aims to establish. With an inbound marketing approach, the company engages its target audience by offering a bag of chips to watch the fourth of July fireworks. This is done through lead nurturing tactics by monitoring consumer behavior.

As a result, customer satisfaction is consolidated, which contributes to effective consumer relations. Those described above can be observed in the comments section where an Instagram user comments her reaction as laughing and tags someone else with the hashtag #maisfeliz, which can be translated into “happier” in English. 

Initially, Lay’s focused its attention on the quality and the taste of the potato chips snacks, which was later repositioned. What the company then prioritized was the consumers’ satisfaction. Thus, it branded Lays’s as a snack that makes its customers smile and enjoy every little moment of their lives. This brand repositioning leads me straight to the idea that Lay’s belongs to the Jester Brand Archetype. 

Desire: To savor every little moment of life.
Aim: To embrace the good times and fill the world with light.
Strategy: Joking around, playing, and just being funny.

Here are the messaging levels of Jester. 

• Level One: Being boring
• Level Two: Picturing life as a game that requires fun in the process.
• Level Three: This is where the fun and wittiness collide. More practical jokes and finding ways out of trouble.
• Level Four: Living each day to its fullest, enjoying life and living in the moment.

The Jester is a promising archetype to yield an identity for brands:

• That provide people a good time.
• The use of which contributes people to the feeling of belonging.
• With low to moderate pricing.
• That needs differentiation from an established and overconfident brand.

Brand Archetypes. Why do we need them in practice?

All of us know that many companies have problems in presenting their key values and attitudes. Sometimes our messaging leads to misunderstanding or it does not represent what we aimed to say in reality. Here of course the importance of the brand archetypes is very crucial. How to create a good company culture? 

What are its values? Here are some questions that need to be answered properly. “8 steps to a complete archetypal branding” e-Book tells us a lot.  We have written a book that goes deeper in these notions and reveals archetypes in specific ways. Just uncover the brand archetypes with “8 steps to a complete archetypal branding” eBook.

Brand Archetypes. Why do we need them in practice?

Being a leader in the industry also requires proper branding and messaging tactics. Here I want to mention the importance of the branding based on the archetypes. Nike says “Just do it”. What do they want to tell us? They just emphasize the inner heroes inside of us. Here it is, famous brands like Nike and their rivals Adidas have adopted branding tactics based on archetypes.

And it’s up to you to dive in and learn better the following directions. We have written a book “8 steps to a complete archetypal branding” that shows you clear ways to reach your target and conquer their hearts immediately.  Just try archetypal branding on any of the brands you are working on.

It’s time to conduct a SWOT Analysis of Lay’s.

Strengths

Strong Distribution Channel: Lay’s actually has a competitive advantage by having a parent company like PepsiCo, which is one of the largest companies in the world with a very high investment possibility for the brand. This also leads to an advantage in terms of distribution since it is a part of Pepsico’s distribution system.

Global and Local Presence: Lay’s produces flavors that are available and extremely famous throughout the world. However, one differentiating factor is their specific flavors specific to the local area such as “Magic Masala” in India or “Spanish Tomato Tango” in Spain.

Brand Positioning and Target Segment: What makes Lay’s unique is their accurate positioning in the minds of their target, young adults. Through the use of marketing campaigns, advertisements, and branding, it has been able to win the hearts of millions of youngsters. 

Local Sourcing: One of the critical advantages of Lay’s is that it manages to connect with their customers on a deeper level by introducing them to the supplier farmers who are growing fresh potatoes for the company.

Weaknesses

Reduced Consumption of Snacks: A major weakness for Lay’s is that with time, people are becoming more aware of their health, meaning less consumption of chips. Since chips are high-calorie snacks containing high cholesterol and fat, people worldwide reduce their intake of chips for health concerns.  

Competition and Poor Margins: Another serious concern for Lay’s is the high competition between the Pepsico brands, leaving Lay’s less of a role in the market share. As a result, Lay’s has a very low or none at all capacity for differentiation. Additionally, considering the fact that consumers are extremely price-sensitive, brands like Lay’s have to keep their prices as low as possible, leaving the margins low too. 

Packaging Full of Air: Even though it is scientifically essential to fill the packets with Nitrogen to keep the chips from going bad, there have been many jokes and sometimes even actual complaints about Lay’s being deceitful. 

Opportunities:

Brand expansion: Companies like Lay’s need to stay up to date with the trends, this way making sure to increase revenues. Since customer preferences are changing to more health-conscious decisions, one thing Lay’s can do is to make use of product development strategy by introducing baked or organic snack types. 

Exposure: With the sudden increase of globalization, people nowadays are becoming more aware of the brands that are famous all over the world. With few changes to make Lay’s even more globalized, it sure can increase its profits. 

Increasing Disposable Income: Annual growth rate of disposable income of households is rising, leading to more consumption. Lay’s, in this case, can benefit from this situation since the demand for snacks like Lay’s will increase. 

Threats:

The threat of New Entrants: Besides current competitors that are already considerably many, new brands are emerging in different parts of the world, harming the market presence of Lay’s.

Increase in input costs: One of the major threats that Lay’s is facing is about the increase of input costs that include corn, potato and spices. Because of inflation there is a decline in consumer buying power resulting in less sales of Lay’s chips.

Plethora of local substitutes: The chips market is full of competition thus harming brands like Lay’s. Since local distributors generate higher margins than brands do, this presents a threat to the Lay’s company.

Now let’s move on to the segmentation strategy of Lay’s.

To understand the company’s target segment, I want you to check out this Lay’s commercial if you haven’t done so already.

The commercial takes place in the supermarket, near the big isles of various flavors of Lay’s chips. The guy featured in the commercial faces a dilemma of what flavor to choose. One thing that makes this commercial stand out is the catchy song about the guy trying out different flavors like sour cream and onions, barbecue, cheddar, salt, and vinegar.

Since they all taste extremely good, the guy tries out every flavor after contemplating too much. In the video, the guy is licking his fingers after having a bag full of chips, running around in happiness between isles, riding shopping carts full of lays.

These scenes clearly show the inner traditionalist coming out of his comfort zone and rebelling around by tasting his favorite snack of choice. In the end, he doesn’t worry about leaving his wallet at home.

There is a turn of events when the security guy stands there in awe after a bite of a Lay’s chip even though the guy might have gotten arrested or charged for his foolish behavior. Thereby, this leads me to one conclusion. The behavior that is represented in the commercial is typical to people, who belong to the Nesters segment.

So who are Nesters?

Lifestyle and Values: 

It is essential to note that enthusiastic and family-oriented Nesters have a favorite room in the house. That’s right; it is the kitchen. They enjoy cooking a lot. Family and traditions are a vital part of their lives. They are faithful, always believe in people.

These people put comfort ahead of everything, which is reflected in their choice of clothing. Security and stability are things that cannot be traded with any financial reward or surprises. 

Brand Usage and Adoption: 

Apparently, Nesters are always looking for cheap deals and promotions. They hate car rides to the supermarket, so they often go for a bike. They enjoy shopping with the whole family and always plan their shopping trips ahead.

Here are other interesting facts about Nesters:

• Home is where they belong, so their favorite job is taking care of the house. They love upgrading and fixing things in the house, gardening, growing fruits, vegetables and flowers, neighborhood gossip, and family movie sessions. 
• Their media usage is limited to family-related topics like gardening or child care. They use the internet only for work or emails.
• Since they love being around family, TV is their friend only when there is no one around.
• Cultural and arts events do not interest them either. They like watching, but rarely do exercises and are satisfied with a pleasant daily walk. 

16 Personalities (why do you need them in your business?)

Overall Nesters are traditionalists, family and traditions are the most important things in their life. They aren’t self-centered at all, they always share everything(even secrets) with their families. 

You should choose the right target (ideal buyer persona) for your business and in this context, you should research all 16 Personalities, 16 types of clients that you may meet during your daily business and marketing activity.

Here is the book “16 Personalities” (eBook version),which includes all these types of clients. This book will give you a key to the heart of your dream client. By recognizing all 16 Personalities, you will easily find a target customer that matches your brand.

So, I hope this information helped you get a more in-depth look at the marketing strategy and specific business approaches that make this company stand out. I hope you were able to find answers to the questions you were looking for. For more similar posts, you can check out the main page of our website.