Lay's Potato Chips in Hungary:: The Second Money in The Bag' Promotion
Lay's Potato Chips in Hungary:: The Second Money in The Bag' Promotion
Lay's Potato Chips in Hungary:: The Second Money in The Bag' Promotion
Hungary:
Prizes
The prize insertion rate in 90g Lay’s bags (Salt, Paprika, Cheese & Onion) averaged 1-in-2
packets at the start of the promotion. This was later changed to 1-in-4 (giving an average
insertion rate over the course of the promotion of 1-in-3). A blue sachet indicated if the
consumer had won the grand prize, a cash prize, or a coupon for a free product (any other
PepsiCo snack product in 22g or 30g bags). Four grand prizes were awarded. The grand prize
winners would be invited to the national Mint and given two minutes each to scoop as many
coins as they could from an enormous container filled with new 100 HUF coins (US$0.57 at
the time). Reminiscent of fairy tales, adventure movies and the Gold Rush, the winners were
allowed to keep all the coins they could scoop up in the time available. (See Exhibit 2 for an
overview of the prize pool.)
The media support included TV, radio, movie and print advertising along with POS material
and displays. The grand prize was heavily advertised with famous personalities endorsing the
promotion. For instance, the highlight of the press event at the launch of the promotion was
the presence of Olympic gold medallists Istvan Kovacs (boxer) and Attila Czene (swimmer)
competing to win the ‘trial scoop’ in the Mint. (See Picture 1)
Pricing
The relative prices of the main competitors are depicted in Exhibit 3. Over time, Lay’s prices
increased relative to its main competitors.
Other Promotions
The year 1997 was characterized by fierce competition among sales promotions. During the
MIB2 promotion in April and May, Chio ran its ‘Sour Cream and Onion’ promotion, which
was a standard cents-off coupon promotion introducing a new flavour to the market. From
August through November 1997 Chio followed up with a ‘Home Movie Party’ promotion
whereby consumers who sent in three empty bags of Chio products had a chance to win a
home movie system and a party for their friends hosted by Chio. During the same time, Lay’s
countered with its ‘Car Mania’ promotion. Consumers had to mail in three Lay’s bags to enter
in a lottery where they could win a new car. A car could be won each week.
Sales volume of the potato chip market in 1997 was very similar to that of the previous year,
suggesting that the various promotions did not grow the market (Exhibit 4). Even seasonal
patterns of consumption were practically identical – the bi-monthly sales volumes for 1996
and 1997 correlating almost perfectly (annual sales volume correlation, r = .94). Hence, any
gain in market share was achieved at the expense of a competitor’s sales volume. Competition
was fierce.
Lay’s market share increased to 48% during the MIB2 promotion and rose above 50% in the
two months following the promotion, outperforming Chio. In the two months preceding the
promotion (February-March), Lay’s share had been 32%. However, four months after the
MIB2 promotion ended its market share slipped to pre-promotion levels (see Exhibit 4). Chio,
in comparison, continuously grew its market share.
During and after the MIB2 promotion, aided brand strength of Lay’s improved considerably
but not quite to the degree of Chio (see Exhibit 5). Aided brand awareness of Lay’s was 80-
90%, Chio’s close to 100%. On unaided brand awareness Lay’s had improved a little, but not
as much as Chio. Advertising awareness of Lay’s had not increased, but it had for Chio,
which was ahead of Lay’s on that measure, too.
Consumption intention (also an aided measure) had been high for Lay’s and remained so after
the MIB2 promotion. Chio had caught up and both brands were in the 90-100% range.
Whereas few respondents had had a favourite potato chip brand before the MIB2 promotion,
now 50% indicated Chio and 30% indicated Lay’s as their favourite brand, suggesting that
stable brand preferences had started to develop.
Continuous blind taste tests showed that during and after the MIB2 promotion Lay’s had a
better taste than Chio potato chips (Exhibit 6). Most of the time, the regular Lay’s chip was
indistinguishable in taste from the Gold Standard, the best potato chip Lay’s could produce
without compromising costs. What looked like a decrease in Lay’s perceived taste during the
first promotion did not re-appear in these data.
Despite Lay’s taste advantage, Chio steadfastly maintained its lead in quality image (Exhibit
7a) and in value-for-money image (Exhibit 7b). Lay’s quality image reached its lowest point
during the MIB2 promotion. In fact, it was lower at that time than after the first MIB
promotion although it subsequently recovered to its previous level. Its value-for-money image
started a small but steady decline at that time.
Discussion Question:
Was MIB2 a success keeping in mind the strategic objectives of brand awareness, brand
image and purchase intent?
Exhibit 1
PepsiCo Memo Describing the Plan for ‘Money in the Bag 2’
OBJECTIVE: - Build further awareness and distribution, promote trial of Frito Lay products,
broaden current consumer base, build brand equity.
- Achieve 30% sustainable volume growth and 300% promotional uplift.
- Increase total aided brand awareness to 55%
- Adoption1: 15%
- Market Share: 50%
MECHANICS: - Prize insertion* in 90g Lay’s (Salt, Paprika, Cheese & Onion)
* Insertion rate average at 1/3 (1/2 to start, later 1/4.)
- Blue sachet contains main prize**, cash prize, or coupon for free product
(any other Frito Lay product in small –30g or 22g bags),
** Main Prize: 4 x 2 mins scooping in the Mint (new 100 HUF coins)
- Retailers redeem consumer coupons and exchange for Frito Lay product.
1 Percentage of respondents who mention Lay’s when asked which snack products they
consumed last week. (See Case B1 – Exhibit 6 – Last Eaten Chips Brand). In July through
September 1996 that figure was 17%.
Exhibit 2
PepsiCo Memo Entitled ‘Prize Pool for Money in the Bag 2’
Competitors’ prices relative to Lay’s prices (in %). Prices are estimated by dividing sales volume by
monetary value of sales.
10-11/96
10-11/97
2-3/96
4-5/96
6-7/96
8-9/96
12/96-
2-3/97
4-5/97
6-7/97
8-9/97
1/97
Note. Each data point represents the average of a two-month time interval. The Money in the Bag 1 promotion
ran April to September 1996; the Money in the Bag 2 promotion ran 3 April to 6 June 1997.
Exhibit 4
Market Shares and Sales Volumes of Potato Chips
Hungária
Exhibit 5
Brand and AdVertising Awareness, Attitudes,
and Consumption Intentions for Lay's and Chio
Per Cent Respondents
100%
40%
20%
0%
12/96
2-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
12/96
2-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
10-
10-
Per Cent Respondents
60%
40%
20%
0%
12/96
2-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
12/96
2-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
10-
10-
Per Cent Respondents
100% 100%
80% 80%
60% 60%
40% 40%
20% 20%
0% 0%
12/96
12/96
2-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
2-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
10-
10-
Note. The Money in the Bag 1 promotion ran April to September 1996; the Money in the Bag 2 promotion ran 3
April to 6 June 1997.
Unaided brand awareness: Percentage of respondents who listed the brand in response to the question which
snack brands they knew.
Aided brand awareness: Percentage of respondents who check marked which snack brand names they knew on a
list of names.
Favourite snacks brand: Percentage of respondents who listed a given brand in response to the open-ended
question "What is your favourite chips brand?"
Last eaten snacks brand: Percentage of respondents who listed the brand in response to the open-ended question
"What kind of snacks did you consume last week?"
Consumption intention: Percentage of respondents who checked marked on a list of brands the given brand in
response to the question "What kind of snacks are you going to consume next week?"
Advertising awareness: Percentage of respondents who listed the given brand in response to the question "What
kind of snack advertisement to you know?" While the question was open-ended, previous questions had
provided lists of brands making this question somewhat closed-ended.
Exhibit 6
Blind Taste Tests
70
Per Cent Respondents Choosing
ng
i
s
o 60
o
h
C
50
nts
Lay's
40
onde Chio
p
s
R 30
e
nt
e
C 20
r
e
P 10
0
10-12/96
10-12/97
1-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
3/96 6/96 9/96 3/97 6/97 9/97
1- 4- 7- 1- 4- 7-
10-12/96 10-12/97
Three Month Time Periods
Lay'sLay's
Versus
Versus
GoldChio
Standard
BlindBlind
TasteTaste
Test Test
MIB 1 MIB 2
70
g 60
Per Cent Respondents Choosing
n
i
s
hoo 50
C
nts 40
Lay's
nde
o
s 30 Gold Standard
p
e
R
nt 20
e
C
r
Pe 10
10-12/97
1-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
1-3/96
1-3/964-6/96
4-6/967-9/96
7-9/96-12/96
-12/961-3/97
1-3/974-6/97
4-6/977-9/97
7-9/97-12/97
-12/97
0 0
1 1
Three Month Time Periods
Note. Respondents blind to which of two potato chips they tasted chose the one they preferred. Each data point
represents the average of a three-month time interval. The Money in the Bag 1 promotion ran April to
September 1996; the Money in the Bag 2 promotion ran 3 April to 6 June 1997.
Exhibit 7a
DeVELOPment of Quality Image for Lay's and Chio
MIB 1 MIB 2
100
90
80
70
60
Per Cent
Lay's
50
40
30
20
10
10-12/96
10-12/97
2-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
Note. Each data point represents the average of a three-month time interval. The Money in the Bag 1 promotion
ran April to September 1996; the Money in the Bag 2 promotion ran 3 April to 6 June 1997.
Exhibit 7b
DEVELOPment of Value-for-Money Image for Lay's and Chio
Respondents (%) Agreeing with Value-for-Money Claims
70
60
50
Per Cent
40
Chio
30
20
10
10-12/96
10-12/97
2-3/96
4-6/96
7-9/96
1-3/97
4-6/97
7-9/97
Note. Each data point represents the average of a three-month time interval. The Money in the Bag 1 promotion
ran April to September 1996; the Money in the Bag 2 promotion ran 3 April to 6 June 1997.