Quality and Value are Key to Thriving in a Tight Economy

Many people agree that the worst course of action during this economic crisis is no action at all.  But when you start talking solutions, any agreement quickly unravels, since we are in unchartered territory.

When it comes to how businesses should respond to the current situation, I agree with the solutions advocated in February's Harvard Business Review in an article called "Seize Advantage in a Downturn".  The writers, David Rhodes and Daniel Stelter, advise companies to:

"First, stabilize your business, protecting it from downside risk and ensuring that it has the liquidity necessary to weather the crisis. Then, and only then, can you identify ways to capitalize on the downturn in the longer term, partly by exploiting the mistakes of less savvy rivals."

They go on to say that: "The best companies do more than survive a downturn.  They position themselves to thrive during the subsequent upturn." 

At Frito-Lay we're working hard to continue thriving -- and one of the first things we're doing is improving consumer value. In my Dec. 23 post, "Why 90% of U.S. Households Eat Frito-Lay Snacks," I talked about how, historically, Frito-Lay has improved consumer value through the balance of price and quality.

And now, we're taking some additional steps to improve price and value.  

First, this week Frito-Lay introduced a line of $2 snacks to provide consumers with great-tasting products at an affordable price.  There will be six products at this price point -- Santitas White Corn, Santitas 50/50 Blend, Munchos Regular, Chester's Puffcorn Cheese, Chesters Hot Fries and Chester's Puffcorn Butter.

And, second, in a few weeks Frito-Lay will introduce a line of bonus bags -– snacks with 20 percent more chips at no additional cost -- for some of our corn-based snacks to give shoppers more value.  There will be 27 products in bonus bag sizes -- various sizes and flavors of Doritos, Tostitos, Fritos and Cheetos -- and the bags will be available for six months.

Lastly, as PepsiCo leaders announced last week at the Consumer Analyst Group of New York meeting, Frito-Lay will promote our smaller and lower-priced items in stores at the end of the month, when money is scarce for many people who live paycheck to paycheck.

The combination of these three actions shows our commitment to value and quality and, I think, will really help us better meet our consumers’ needs and enable us to continue to thrive. What steps do you believe companies need to take to weather the economic storm?

Comments

[Ron]

I think that the bonus bag is a great idea. Other brands are making smaller portions and selling them at the same price as before. Have you checked the size of the ice cream that you buy.
I purchased some Tostitos dip and found it to be a knockoff of refried bean dip. There is no reason to have both products on the market.

[carl hansen]

hi i would just like to say munchos is my fav snack it so light and crispy it gives you the snap of a chip and then melts in your mouth but with more of the flavor then a reg. chip it makes you feel full eating half the the chips you would eating reg. chips thank you oh and you may want to think of sea salt on your chip