The purposes of this creative platform are to understand the product and target market, to aware of the current promotional mix, to develop the IMC objectives and to discuss a creative strategy and major selling idea that suitable the best with this product. To expand and develop the promotions of the current product so that it increases the sales and has better image for the consumer to consume the product.
This creative platform have the limitations of time and limitations of information of the writer can gain since we can not contact the company and only can access from the public materials, therefore it may contains some errors due to the limitations of the writer as well.
This report is created for Indofood company to discuss about the current product of Lays as well as to improve the promotion and creative strategy in order to maintain its competitive advantage in the market. This report is commissioned by Thomas Thjie, CEO of Indofood Fritolay Makmur
1.4 Scope of operations
The scope of the operations would be in discussing the specific snack product from Indofood which is Lays potato chips seaweed flavor in various elements of company background, product description, competitor analysis, and target market in Indonesia region. The informations of this report is gathered from public materials, corporate website, web articles and text book. This report also contains current description of promotional mix, IMC objectives and response hierarchy as well as creating a new promotional tool and suitable creative strategy that would suit best to sell this product to the target market.
2. Background of Company
PT Indofood Fritolay Makmur started commercial operations since 1990. The company hold the brand of Lays, Cheetos, Chitato, Chiki, and JetZ brands manufactures and markets snack food. (Bloomberg Businessweek, 2014) The company also offers cassava chips under Qtela brand. PT Indofood is based in Jakarta, Indonesia. Since March 17, 2010, PT Indofood Fritolay Makmur has been a joint venture with PT Indofood CBP Sukses Makmur Tbk and Pepsico, Inc. PT Indofood CBP Sukses Makmur Tbk (“ICBP” )is an established market-leading producer of packaged food products with a diverse range of products providing everyday food solutions for consumers of all ages. According to PT Indofood (2010) Many of its products brands are among the strongest brands with significant Top-of-Mind status in Indonesia and have gained the trust and loyalty of millions of consumers in Indonesia for decades. (PT Indofood , 2010)
ICBP was established as a separate entity in September 2009 and listed on the IDX on 7 October 2010. It was established by means of internal restructuring of the CBP Group of Indofood, the parent company, listed on the IDX since 1994. Following the listing, Indofood remains the majority shareholder of ICBP with 80% ownership. Hence, ICBP continues to enjoy synergies with other Indofood Group companies to maintain its competitive advantages. Most of ICBP’s business operations and product brands have been well-established for many years, with many of them enjoying leading positions in their respective market segments. Its various business operations are noodles (Indomie, Supermi, Sarimi, Sakura, Pop Mie, Mi Telur Cap 3 Ayam and Pop Bihun), dairy (Indomilk, Cap Enaak, Indoeskrim and Orchid Butter), food seasonings (Sambal Indofood, Sirup Indofood Freiss and Bumbu Racik Indofood) , nutrition & special foods (Promina, SUN, Govit and Provita) , and snack foods (Chitato, Lays, Qtela, Cheetos and Trenz) which produces and markets a range of western and modernized traditional snacks which will be focus on this report. Here is the vision, mission and values of Indofood Company.
A Total Food Solutions Company
To provide sustainable solutions for food needs
To continuously improve our people, processes and technologies To contribute to the welfare of the society
To continuously improve stakeholders’ values
“With discipline as the basis of our way of life; We conduct our business with integrity; We treat our stakeholders with respect; and together we unite to strive for excellence and continuous innovation.”
2.1. Product Description
Brief History of Lays, it all started when chip was found by C.E. Doolin in 1932. Tanenbaum (2014,) Doolin loved those corn chips so much that he purchased the recipe and began to sell bags of the crunchy snacks. While Doolin was making his corn chips, Lay was busy producing his potato chips. Lay purchased Atlanta’s Barrett Food Company in 1938 and then formed H.W. Lay & Company. FritoLay (2014) Years later, in 1961, the Frito Company and the H.W. Lay company merged to become Frito-Lay, Inc. Today, Frito-Lay brands account for 59% of the U.S. snack chip industry.
Lays started selling products in Indonesia around mid year of 2009. Lays (2013), Before Lay’s entry into the Indonesian market, the brand had already gained worldwide recognition. In Indonesia, Lay’s is marketed and produced as a joint venture between Indofood and Fritolay International, and becoming PT Indofood Fritolay Makmur. Fritolay International itself is also being owned by Pepsico Inc. Lays present their products in 6 flavors, there are Pizza, BBQ Fiesta, Classic Salty, Grilled Chicken Paprica, Salmon Teriyaki and Seaweed Flavor. In this report, the focus will be Lays Seaweed flavor which contains natural fresh potato with seaweed seasonings.
2.2. Target Market
Even though Snack Lays is categorized as undifferentiated marketing, it still needs target market so that it can build the best way to advertise to its perspective costumers. The segmentations of Lays are divided into Geographical, Demographical, Psychographic and behavioral segmentation. The geographical segmentation is about the region or area of the target market. Lays choose Indonesia region especially in Java Islands with the area of City, Urban, Suburban accross Indonesia the size of population: 250,585,668 people (World Population Review, 2014). The Demographic Segmentation is about to targeted the people with both gender whose age between 10 – 25 years old with any family size, but especially a family consists of parents and children. Because It is targeted more to young people or in school age, therefore the education background is children from elementary school to students in the university with any ethnic or racial background in Indonesia . On the other hand, the Psychographic Segmentation which based on the lifestyle preferences will using VALS framework (VALS, 2014). There are 4 types of people Lays want to target. They are first, Experiencers, with the personality of young, excitement, still open to the new, and have a lot social activities.
They are potential because they are tend to be an impulsive consumers. Second, is Achievers, they have many needs and wants, goal oriented, like prestige products, predictability. Thy are active self-discovery in consumer marketplace. Third, Believers, people who are idealist, have concrete beliefs, religious, community. They are potential because they are predictable consumers, choose familiar product,and loyal customers.Fourth, Makers are motivated by self-expression, organized, practical people who have constructive skills and value self-sufficiency. They prefer a practical or functional purpose, and buy basic products. Furthermore, Behavioral Segmentation is about the behavior of the target market. Behavioral consists of the occasions of special and regular occasions such as hang out with friends, watch movies, snacks time with The Degree of use in Light use and medium use. The Brand Loyalty of target market vary into Not loyal, loyal to very loyal . The Benefits target market can have is Lays serve as snacks, good quality, crispy and delicious, convenience, easy to access, enjoyable. Whereas, the Readiness stage is All people who know Lays and the attitudes toward product are neutral, positive attitude toward Lays.
2.3. Positioning Strategy
Based on Foote, Cone &Belding (FCB) model, Lays Seaweed Flavo is positioned as Habit Formation (the doer) which in the thinking grid and considered as low involvement. It is habitual purchase and marketers does not have to market the product, yet creating an advertisement to act as a reminder about the product According to Belch& Belch (2009) Positioning can be defined as the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition. Market positioning is the most important factor in establishing a brand in marketplace. Positioning strategy that would suit best with Snack Lays is Positioning by Product Attributes and Benefits. This strategy is to set the brand apart from competitors on specific characteristic or benefit offered. In this case, out of other competitors, Lays offer a unique quality of characteristic of potato chip with seaweed flavor. Lays has been very strategically positioned within the snack food industry, the salient attributes which important to consumers and are the basis for making a purchase decision. One of the salient attributes is its international recognition and worldwide brand makes Lays trusted and worthy in the mind of consumers. Moreover, the taste, the brand prestige, and communicating a fun delicious snack brand to the consumers makes the Lays has positive positioned in the mind of target market.
3. Promotional Mix Elements
Lays has been using several promotional mix, there are:
“Advertising is any paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor and usually being used by companies whose products and services are targeted at mass consumer markets” (Belch&Belch, 2009). Lays was using TV advertisement to promote its product, the advertising was about the deliciousness and irressistible Lays Seaweed flavor. The advertisement can be seen widely in youtube It was an effective nonpersonal communication because it can transmit a message to large number of groups of individuals (mass coverage) at the same time efficiently. It shows an immediate popularity from consumers who tried this new product and most people admit that they are satisfied with Lays Seaweed flavor.
Moreover, Lays also had done print advertising in several female indonesian magazine such as citacinta and gogirl (Sulung, 2010) Print media play an important role, in earning the right to carry the Lays’s message of enjoyable and delicious potato chip. Haight (2005) Advertised in Print media can make consumers go backward to consume an advertisement, so it is an amazing alignment between advertiser transmission of Lays message and consumer consumption.
3.2. Sales Promotions
Sales promotion provides extra values or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales (Belch & Belch 2012). Lays had done sales promotion in several local supermarkets in carrefour, hypermart, indomaret and alfamart by giving consumers discount, buy1get1 event, and bundles promotion. Recent sales promotion from Lays was related to price promotions in Circle K where consumers can buy two Lays seaweed flavor and additional drink with cheaper price which only IDR 12000 (Circle K, 2014). Lays also had a promotional event in several public holiday event in big supermarkets periodically such as (Lays, 2013) in christmas event when the discount and buy 1 get 1 available widely for consumers.
Last, but not least, Lays also created competitions for consumers to win the prize. For instance, last year on March 2013 Lays held Lays Taste Adventure which is a competitions for consumers to post their photo eating lays, in order to win iphone 5, ipod nano, exclusive vouchers and hampers exclusive lays. In 2012, Lays Irressistible Moments Indonesia, (2012), on December 2012 also a contest which offer the opportunity to win exciting prizes by submitting their moments with lays. (Lays Indonesia, 2014)The competitions held in social media by Lays Indonesia, called Harpitdays where the winner can win voucher gift valued of IDR 200,000 for six winners.
3.3. Interactive or Internet Marketing
“It allows for a back and forth flow of information whereby users can participate in and modify the form and content of the information they receive in real time” (Belch&Belch, 2009,p. 12) Lays Indonesia connect and relate with their consumers through internet media with social media sites which is facebook. It is the only official page of Lays Indonesia where directly speaks to Indonesian consumers about the products and promotions and create a platform where people can communicate to Lays. The social media page allows the brand to pay attention or care to the consumers mind by asking their opinions, encouraging their life, giving fun status, games, and more. Compliment and complaing about the brand also can handle well with the use of social media. In addition Lays Indonesia also create website contains basic informations to provide some information about Lays.
4. IMC Objectives
According to (Reid, 2001) “Integrated Marketing Communication (IMC) has been promoted both as an emerging communications philosophy and as a strategic management process for creating and managing the development of strong brands.” “It is also considered as the planning and execution of all types of marketing communication needed for a product, brand, idea, company or place in order to satisfy a common set of objectives and support the positioning of promotion” (Zimuto, 2013, p. 95). The DAGMAR approach suggest a logical process for advertising and promotion planning. Using DAGMAR approach in IMC objectives would focues the advertisers’attention on the value of using communications based objectives to measure advertising effectinveness and encouraged the measurement of stages in response hierarchy to asses a campaign’s impact (Belch & Belch, 2012).
Therefore, the element of SMART (Specific, Measurable, Achievable, Rational, Time-Limit) must be considered in order to create an effective communication with consumers. The advertisement can be done in small space ads, point of sale, and short spots For the IMC Objective, Lays Seaweed Flavor use print or media advertising therefore hierarchy of effects model would fit the best to show the work process. Here is the IMC Objective for Lays: 1. To create brand awareness of Lays Seaweed Flavor among non user young people of the target market in Indonesia region to 75% by next year. 2. Create a positive feelings toward Lays Seaweed Flavor to 55% and preference of choosing this product to 45% especially by young people age between 12-20 years old who are still in studying in school by next year. 3. To increase sales of Lays Seaweed Flavor by 20% in next year and maintain customers to repurchase and regularly consume the product, to become consumers favorite seaweed snack.
New Promotional Tool
5.1. Public Relations
In order to reach the objectives and gain more competitive advantage in the market, a new promotional tool is created to able target the market. A new promotional tool that Lays Seaweed have not done before is using public relations. Public Relations defined as “the management function which evaluater public attitudes, identifies the policies and procedures of a organization with the public interest, and executes a program o action and communication to earn public understanding and acceptance” (Belch&Belch, 2009, p.559). The public relation activity that Lays seaweed will go through is sponsorship. It is strenghten by the opinion of Riley (2012) that Sponsorship is a specialised kind of public relations and increasingly popular, particularly with larger businesses.
A business will sponsor an event, team or individual in order to build brand awareness. Because the target is young people especially those who are still in school, so Lays will sponsor a school events at several schools and universities in Indonesia. In the event, Lays will place a fun-catchy advertisement in the place of event to gather attention of the students and create interests and positive feelings to people who see. In the event, Lays can participate by creating some fun games for students to do to create more positive feelings toward Lays. There also may be opportunity to sell products, so Lays can use this opportunity to give free trials to student, young people, it is a good way to grab young non user consumer. The period of doing this public relation suggests in 3 – 6 months.
5.2. Sales Promotions
The sales promotions is given to the consumers in the public area, such as supermarket retailer, shop groceries and also can be given while doing the public relations. This will attract buyers to buy more and consuming Lays Seaweed. Because most people attract to any sales promotions in the market, highly effective if there is any event of the moment such as Public Holiday or Weekend days. The type of sales promotions would be discounts, giving 10% discounts for students who buy Lays Seaweed, buy 1 get 1 free promotion and bundles promotion such as it is cheaper if consumers buy 3 Lays at once and valied with multiple purchases. Vouchers and Gifts also can be given if consumer buy certain numbers of Lays Seaweed, for example 3 and they will be given a gift or if they buy 6 they will be given vouchers. This sales promotions should have limitations of time 1 – 3 months of availability.
5.3. Print Advertising
To gain an effective promotional campaign, Lays will also do print media advertising to gain awareness and attention from the urban city people. Although print advertising looks a passive advertising yet it considered effective. Lays Seaweed will do the print advertising in the popular magazines like females magazine such as gogirl!, citacinta, gadis, femina. Food magazine such as sedap, selera,and nova.
5.4. Point of Purchase
Moreover, for the other months of not doing sponsorship, Lays can advertise in outdoor advertising to gain mass coverage of attention and point of purchase (pop) by display largely in supermarket retailer, groceries shop and supermarket mall to attract young people who live in urban city. Traffic flows in the grocery store greatly influence grocery shopping behavior. In fact, consumers often buy products that are placed on display simply because they are on display. Retailers use the “brand-lift index” to measure the incremental sales that occur when a product is on display. In fact, one study indicated that POP displays in convenience stores can increase product sales by nearly 10% (Babin & Harris, 2012). The trials and sales promotions also are provided to ensure effective communication with consumers.
5.5 Internet/Interactive Marketing
To develop and maintain current social media promotion with facebook and to make a new internet or interactive marketing for consumers to persuade them to be active and engaged more with Lays brand from their own place and time. Lays can be updated more informations in the Website as it is considered as inactive and has uninterested layout website. The website should be updated at least once in a month to give audience the new information about Lays activities in sponsorship and promotions. Moreover, giving others useful information such as facts, opinions and ideas will become more interesting and attractive website to let young people experience with Lays from their gadgets and phones.
6. Major Selling Idea
Major selling idea is the basis for the central theme or message idea in an advertising campaign (Belch & Belch, 2012). Major selling idea is important part in creative strategy. The competitive advantage Lays have over other competitors are differential advantages, it is created when a company’s products or services differ from its competitors and are seen as better than a competitor’s products by customers. Lays Seaweed have differential advantage in which it has an international recognition and worldwide coverage, with historical background of creating the potato chips and excellent leadership over the years, made it possible for the leaders to work their way up the corporate ladder. More advantages are being owned by a larger corporation like PepsiCo has advantages in its own like mass advertising and an established name.
One word to describe the key characteristic that can be used as competitive advantage for Lays Seaweed is “happiness” because eating the crispy and crunch potato chip would make the consumers feel joy and happy to taste the delicious seaweed potato chip which is unique as a snack. This “happiness” is strong and meaningful to appeal the target audience. It has positive and good meaning in many ways and all people wants to be happy. Therefore, The selling idea with theme of happiness will be interesting and draw people to know more about Lays Seaweed by consuming it. This major help positioning the brand and creating a brand image because it creates unique selling position in promoting a happiness product.
6. Creative Strategy
7.1. Advertising Appeal
Lays Seaweed advertisement is emotional appeal with happines and joy. The idea of the advertisement comes from the magic tree that can produce fresh potato. It called the magic tree because it has sparkles of firework to create delicious potato to become a fresh-cut- crispy potato chip that Lays use to the consumers.
7.2. Execution Style
The execution style of this advertisement is dramatisation, because it is dramatized the pictured with a tree and form a firework and potato which burst out to become the potato chip with seaweed seasonings.
7.3. Creative Tactics
The headline of this advertising is “Happiness is closer than you think ” This headline is leading position of the ad therefore it placed in the center of the advertisement with a portion of bigger writings than others. The purpose is to gain attention with the happiness in the capital size as it is the main word of the advertisement. It is considered as indirect headline because it provokes curiosity and motivates involvement of people to consume this Lays Seaweed. The headline is indirectly persuade people to eat Lays because it can create happiness, and happiness is easy to get as closer to the local groceries to buy Lays Seaweed.
The subheadline is placed under the headline with the yellow banner to support the headline. It is smaller the headline and larger than a copy And telling the product of the advertisement. Body Copy
Body copy is the main text portion of a print ad. The body copy support the headline and subheadline to perform a good and effective advertisement. The body copy is persuading people to buy the product now and promise they will not regret to taste the Lays Seaweed. Visual Elements
The visual elements of this advertisement is considered as colorful and fun with the elements of the potatoes tree and firework sparkle. The lays seaweed is placed on the down right of the advertisement to make consumers focus on the advertisement as much as the product. The visual elements compliment to each other with the background of a sunny day with green grass. The visuals convey a strong meaningful image and compliment the headline, subheadline and body copy. Layout
Layout is the physical arrangement of the various parts of the ad – headline, copy and visual The layout of the advertisement is blended together to perform a finished advertisement. The layout is centered to enhance the focus of the people, so as the people see they will focus on the headline, the products image, the subheadline and the body copy as all of them are complimenting each other elements. The layout if full image and has no white space to let people focus on visual and enhance the use of effective advertisement.
7.4. Media Vehicle
Media vehicle is the specific carrier, publication or promotional piece used to carry an advertising mesage (Belch & Belch, 2012). The advertisement will be exposed in a print media of popular magazine in Indonesia, in the big mall as an advertisement and as the point of purchase in groceries retailer. In the magazine, the advertisement will be placed on the back cover of magazine as it has more exposure rather than inside the pages of magazine. The reach of potential buyers exposed to the message are expected to be 60% of audiences who see the advertisement. The audience will be exposed to the message for several times, but not too much to ensure the customer attention and not as a disturbing advertisement. So, the frequency of being exposed to the media is from 3 – 10 exposures. While the coverage of the advertisement is people who live in urban city where the advertisement is placed, especially in the public places where people are passing by.
The advantages of using this strategy are it is surely will gather consumer’s attention about the advertisement as it is unique, colorful and interesting. The placement of this advertisement in public spaces where people move a lot and passed by will increase the brand awareness and store the brand advertising in their memory so that when they go to groceries shop, they want to buy and try the Lays Seaweed Flavor. The disadvantages is it is a passive advertising and some people may feel disturbed or dislike towards the advertisement because it did not match their perception. The company’s financial position is strong enough and capable to make this advertisement campaign works because it is a top company in Indonesian which are place in the top as the one of the company which having high gross profits and income in Indonesia 8. Conclusion & Recommendation
Lays as one of brand under the PT Indofood company has been known as an international potato chip brand that is sold in many countries, especially in Indonesia. Lays comes in many flavors but the focus of the promotional campaign is the product of Lays Seaweed Flavor because it is a potential product to gain consumers interests and consumption. To create a creative IMC Plan, the target markets are divided into demographic, geographic, behavioral and psychographic. The IMC objectives of Lays Seaweed are determined through the response hierarchy and DAGMAR approach and focus urban and suburban market area with people aged between 10 -25 years old. The positioning strategy is product attributes and benefits with a new IMC mix of Public relations, and Point of Purchase which will strengthen the product position in the market. The creative strategy and the advertisement is created to enhance the creative platform in order to develop Lays Seaweed in new and different ways. Furthermore it is recommended for the company to develop the public relations activities that benefits the development of young people physically and emotionally by creating an event such for teenagers such as bike for fun, competitions and contests other than sponsorships in order to create stronger values in the eyes of the target market.
List of References
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Lays Indonesia, 2014. Lays Indonesia Facebook, viewed 10 May 2014
Lays, 2013. Lays., viewed 5 May 2014
PT Indofood , 2010. Indofood CBP. , viewed 6 May 2014
Reid, D. M., 2001. Building Strong Brands through the Management of Integrated Marketing Communication. International Journal of Wine Marketing, vol. 14, no.3, pp. 37-50. Review, W. P., 2014. Indonesia World Population Review., viewed 8 May 2014 < http://worldpopulationreview.com/countries/indonesia-population/> Riley, J., 2012. Promotion – public relations & sponsorship, viewed 10 May 2014
Strategic Business Insights, 2014. Stragegic Business Insights, viewed 10 May 2014
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Tanenbaum, K., 2014. Snack Food Rewind: A History of Our Favorite Treats. , viewed 8 May 2014
Zimuto, J., 2013. The Perception Of Small And Medium Enterprises (SMES) Marketing Managers on IMC Strategy in Zimbabwe. Journals of Arts, Science & Commerce, vol. 4, no. 3, pp. 95-100.
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