Lay’s General Manager’s Campaign Objectives
Lay’s primary goals in the new Hungarian market should be to raise awareness among potential buyers and encourage their purchase behavior. Only 7% of Hungarians know the brand’s products (Brandl & Malaviya, 2006). Awareness of the competitor’s product is kept at almost 60% (Brandl & Malaviya, 2006). To successfully compete with Chio, raising awareness to at least 40% is necessary—Lay’s needs to spend 50% of its budget on advertising and marketing. An essential tool for developing awareness should be an advertising slogan that allows customers to remember Lay’s at the time of an impulsive purchase.
Tools for Achieving Objectives
Pricing Strategy
Stimulation of purchase behavior should be based on a pricing strategy. Only 18% of customers are ready to buy Lay’s products, and the company needs to set a goal to raise this figure to at least 50% (Brandl & Malaviya, 2006). Lay’s is one of the cheapest manufacturers, offering a price 2% cheaper than the leading competitor (Brandl & Malaviya, 2006). Since Hungarian buyers are sensitive to price changes, the price is one of the main selection criteria when buying (Brandl & Malaviya, 2006). A way to stimulate purchase behavior could be a slight price reduction of 2-3% while maintaining the taste and quality of the packaging.
TV Advertising
To raise awareness of Lay’s, it is necessary to use advertising on television. Chio’s main competitor is using this strategy, relying on a catchy slogan (Brandl & Malaviya, 2006). In the television space, consumers do not see other chip manufacturers. Running flashy TV ads will boost awareness, and, at the same time, with a slightly lower price point, Lay’s can count on the loyalty of price-sensitive, impulsive consumers. This campaign must be allocated a budget comparable to competitors’ strategy, at least $500,000.
Large-Scale Promotions
Stimulation of purchasing behavior can be achieved through the introduction of large-scale promotions. Promotions with the collection of codes and prizes for participants will allow more consumers to try Lay’s and opt for this brand due to improved taste (Brandl & Malaviya, 2006). In addition, a significant part of the budget should be allocated to a slight price reduction; the total cost of stimulating purchasing will be $500,000. Such budget distribution is justified by the need to capture a larger market share with price-dependent buyers and a successful main competitor.
Reference
Brandl, M., & Malaviya, P. (2006). Lay’s potato chips in Hungary (A): Creating awareness and building brand image at product launch. Harvard Business Review Case Studies. Web.