Cracker Jack/Frito Lay Case Analysis

1622 Words Oct 29th, 2014 7 Pages
Frito Lay Company – Cracker Jack Case Analysis
Carl James

MBA:Marketing Strategy
September 19, 2014

Frito Lay Company- Cracker Jack Case Analysis

Case Recap
Frito Lay, a division of PepsiCo Inc, has just purchased the Cracker Jack brand from Borden Inc. The company is a worldwide leader in the manufacturing and marketing of snacks, with products such as Ruffles Potato Chips, Fritos Corn Chips and Doritos found among its product mix. These well known company brands have seen it capture over 50 percent of the retail sales, and company officials envisage Cracker Jack can only but add to the richness of its product line and profits. Borden, because of its strategic decision to concentrate resources elsewhere, discontinued aggressive
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While a nationally recognized trade mark with 97% brand name recognition, it found itself with a market share of 26% — the same as its second biggest competitor. However its chief rival International Food Homes Inc, controlled 32% market share (Kerin & Peterson, 2010). Because of stagnant sales and stiff competition resulting in lower contribution margins, Cracker Jack found itself severely under marketed, with its parent company spending substantially less than that of its chief competitor. This storm of events has resulted in the vicious circle of consumers perceiving the brand as stagnant, stale and not desirable for hip new generation of consumers and thus fewer sales are realized.

Root problem components

Cracker Jack is one of the most recognized consumer food brands in the United States. The brand possesses virtually universal awareness, holding steady at 97 percent among persons between the ages of 15 and 60. It also has an enviable 95 percent brand name awareness among heavy users of caramel popcorn. In spite of this gold mine, it is still regarded as traditional, stale, old fashioned, a product from a bygone era and less hip and less contemporary than its major rival, Crunch ‘n Munch. To add to this dilemma, the product diversification strategy that led to the development of several other versions such as Cracker Jack Fat Free, Butter Toffee, and Nutty Deluxe, in the hopes of…

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