While thinking about what to write for my next post, I sat here finishing up my latest “Cool Ranch” Doritos chip and thought it would be great to find out what makes Doritos so successful. After doing more research, I was amazed at what I discovered about this amazing brand, which is why I decided to share my findings with everyone. Frito-Lay is a renowned conglomerate in the snack industry and the owner of Doritos brand chips. As one of the largest snack food companies in the United States, part of the company’s success is attributed to the company’s effective marketing strategies and tactics. The company is not only involved in national and global marketing, but also understands the influence that environmental factors could have on the success of any product or service. Environmental factors such as global economic interdependence, business practices, demographics, physical infrastructure, ethics, culture, technology, and even political systems that influence international relations affect a company’s marketing strategies.
To illustrate, here are some examples of internal and external environmental factors that could affect organizations’ marketing decisions and strategies:
Internal environmental factors
Organizational resources
Existing product line (s)
Management and support
Capabilities and philosophies
External environmental factors
Technological
Political and legal
Economy
Social and cultural
By having a general understanding of the environment, we could now examine how it relates to marketing decisions at Frito-Lay. As a proud member of the PepsiCo family, the company understands the importance of demographics and physical infrastructure and incorporates them effectively into the company’s marketing strategies.
With an abundant supply of resources and a renowned brand at stake, Frito-Lay must ensure that all employees remain ethical and socially responsible in their daily activities. Not only does the firm require annual recertification in ethics courses for all employees, but the management team constantly preaches ethics and social responsibility. For example, Frito-Lay has a “zero landfill” initiative in which the company partners with TerraCycle for recycling purposes. Customers are encouraged to collect and send used potato chip bags to TerraCycle for recycling after consumption. In return, they will receive $ 0.02 for each bag of chips sent that will be donated to a school or non-profit organization of their choice. This is a very smart marketing strategy on behalf of Frito-Lay because the company reduces the cost of producing products due to recycling, as well as helping the environment and society in parallel.
In addition, the firm also offers exceptional training programs for all interested parties. The company’s website helps ensure that stakeholders stay up-to-date on the latest news affecting products, technology, quality, ethics, marketing, etc. For example, customers can visit the company’s website to find the latest updates on new Frito-Lay products and provide crucial feedback on those new products through customer surveys. This, in turn, would allow the company to review the obtained market research data and adjust the company’s marketing strategies accordingly. These are just a few examples that show how Frito-Lay continues to understand how internal environmental factors could affect marketing strategies and company image. Therefore, the firm continues to demonstrate a strong organizational culture by acting in an ethical and socially responsible manner in an effort to improve products, services, training, society and the environment.
Frito-Lay has also taken advantage of the external environmental factors listed above to provide the company with a competitive advantage. From a technological standpoint, Frito-Lay has incorporated the latest technologies to assist with online marketing and promotions of the products offered. For example, the company’s website is packed with flash media and other marketing tactics that help highlight the deliciousness of the variety of snacks offered at Frito-Lay. The website allows customers to navigate to any product of their choice in an effort to obtain more details about that particular product before purchasing. Details such as calories, price, and even promotions related to those products are displayed daily to consumers online. Additionally, Frito-Lay also uses technology to strengthen the company’s brand. By using renewable energy, such as biofuels, solar energy, recycled heat and steam from plants, the company estimates that it will use 45% less energy per bag of chips by 2017.
Personally, what I found most interesting is the company’s effective understanding of social, demographic and cultural environmental factors and the use of obtained market research data to produce certain products designed for specific target markets. For example, Frito-Lay conducted market research on the external environmental factors listed above and determined that the Japanese had a different taste. To cater to this specific target market, Frito-Lay began producing a variety of different flavored Doritos corn chips specifically for Japan. Flavors, like coconut curry, wasabi mayo, tuna mayo, and even sausage-flavored Dorito chips.
To me, this is very smart on behalf of Frito-Lay, especially with the global economic interdependence and trade because organizations could reach new target markets in an effort to promote and sell their products to different end users. As we know, international trade creates opportunities for businesses and exposes consumers to products and services that may not be available in their own country. International trade also gives consumers more options in terms of price and the quality of the goods offered due to the multiplicity of producers. With international trade, companies like Frito-Lay have a competitive advantage because the products or services are offered globally. Therefore, increased consumer demand could help the company because the cost of production is reduced as a result of economies of scale.
Although I have consumed Frito-Lay products for decades, I have never done research to realize the company’s amazing ability to analyze internal and external environmental factors and create product and marketing strategies tailored to customer needs. Whether to meet the national or international marketing mix, Frito-Lay ensures proper market research is conducted that takes into account environmental factors such as culture, ethics, technology, physical infrastructure, demographics, and the environment. legal environment. Doing so would allow the company to continue improving the products offered based on the market research data obtained.
David Ogilvy, an advertising guru, wisely said “never stop testing and your advertising will never stop improving.” Frito-Lay continues to test markets in an effort to produce products tailored to specific tastes and cultural preferences. This would allow the company to satisfy current markets, in addition to reaching new global markets, hence the astronomical success of the company.
Keep removing Frito-Lay – Bravo!
