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Word Count: 966
I Frito-Lay Incs biggest problem as stated in the text is how to further develop their dip line as to increase the companys sales and profits II To analyze the environment I chose the following internal and external factors that I believe play an essential role Internal FactorsExternal Factors Sales effortCustomer preference DistributionSubstitutes AdvertisingCompetition Limited budgetLocation Shelf stabilityIndustry growth The income statement that was shown on page 112 in the case shows that although Frito Lays Mexican Dip has lower net sales its overall profit contribution is higher in comparison to its Cheese Dip In addition dollar sales of Mexican Dips have gradually increased from 1981 to 1986 whereas Cheese Dip sale decreased from 1984 to 1985 and stayed constant the following year This decline according Product Manager Ann Mirabito was caused by three factors 1 novelty of shelf-stable cheese dips passed 2 increased competitive activity 3 discontinuance of Enchilada Bean Dip Frito-Lays distribution system covers the entire country and is organized into four geographical zones Each zone has distribution centers that are responsible for carrying inventory for the 10000 members of the sales force Each Frito-Lay sales representative follows a specific assigned route and is responsible for selling company products to present and potential customers Frito-Lay uses a front-door store delivery system which is suited mainly for their non-chain outlets This type of distribution system requires sales team members to carry out the tasks of delivery as well as selling With the introduction of cheese dips in 1983 Frito-Lay began promoting dips with the focus of marketing and promotion geared toward retail-store snake food buyers However the gears shifted in 1985 to consumer promotions such as product sampling and coupons to generate trial of new products In addition Frito-Lay started incorporating television and radio into their marketing plans This mixed with increased industry activity resulted in an increase in the forecasted levels of advertising and promotion Increased
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