Market Visit Analysis

Cheetos

Group Members
S. Batool Fatima
Hamna Usman
Isra Imtiaz Ali
Ayesha Arshad

Table of Contents
P a g e 1 | 13

Introduction:........................................................................................................... 4

In IMTs and LMTs:.................................................................................................... 4

Store layout:.............................................................................................................. 4
Product:...................................................................................................................... 4
Pricing (discounts):.................................................................................................... 5
Placement:................................................................................................................. 5
Distribution:............................................................................................................... 5
Promotion:................................................................................................................. 5

In HFS A Stores:...................................................................................................... 6
Store layout:.............................................................................................................. 6
Product:...................................................................................................................... 6
Pricing (Discounts):.................................................................................................... 6
Placement:................................................................................................................. 6
Distribution:............................................................................................................... 6
Promotion:................................................................................................................. 6

In HFS B Stores:...................................................................................................... 7
Store layout:.............................................................................................................. 7
Product:...................................................................................................................... 7
Pricing:....................................................................................................................... 7
Placement:................................................................................................................. 7
Distribution:............................................................................................................... 7
Promotion:................................................................................................................. 8

In HFS C Stores:...................................................................................................... 8
Store layout:.............................................................................................................. 8
Product:...................................................................................................................... 8
Pricing:....................................................................................................................... 8
Placement:................................................................................................................. 8
Distribution:............................................................................................................... 8
Promotion:................................................................................................................. 8

In Bazaar:................................................................................................................ 9
Store layout:.............................................................................................................. 9
Product:...................................................................................................................... 9

Survey Results:....................................................................................................... 9

.................................................................................................................................... 10

 Introduction:

Cheetos is a brand of cheese-flavored, puffed cornmeal snacks produced by Frito-Lay

which a subsidiary of PepsiCo. Previously Cheetos Pakistan offered 3 flavors including
Bites, Ketchup and Crunchy. Ketchup flavor is the most popular flavor which is commonly
found in both 28 mg and 85 mg packs. An year ago Cheetos launched a new flavor with
the name of Ocean Safari. In our visits, we found Cheetos to be available in all store
categories i.e. IMTs, LMTs, HFS A, B & C stores. However not all HFS C stores stocked it.
We have also identified Lays, Wavy, Kurkure and Catty Chins as the competitors. Though
Lays, Wavy and Kurkure belong to the same company and collectively Frito Lays chips
brands dominate the segment but the choice of a customer usually varies between these
brands hence we listed them as competitors. Kurkure and Catty Chins also compete with
Cheetos on the basis of ingredients. At the end, the results of a survey are presented to
analyze the positions of these brands.

In IMTs and LMTs:

Store layout:
The IMTs and LMTs are designed to improve the shopping experience of customer and the
store layout reflected this approach. The stores were well lit, centrally air conditioned and
organized according to sections. The trollies and baskets were available at the main
entrance and at every floor. We also observed that the arrangement of products on
different floors was done according to the frequency of the products bought. Grocery and
other food items were available at ground floor (Mov n Pick) and basement (Naheed)
while Cosmetics, Stationary, Electric appliances were present at second and third floors.
Even among grocery items, the allocation of products to aisles was based on frequency of
items bought. Bread, Biscuits, Spices, Ketchup were given the shelf space in front aisles
while Oil, Detergents were given the shelf space in aisles at the back. This arrangement
facilitated those consumers who visit frequently such as on weekly basis to buy grocery
items. The barcode system has reduced the waiting time but it has also reduced the
bargaining power of customers in LMTs. Moreover a factor which provides a differentiation
point is helpful and welcoming sales people. As commented by one customer when she
was questioned about her preference for Naheed instead of any other LMT, she said that
the sales people at Naheed have a pleasant attitude and they dont follow you around
unlike other stores which is a relief. These stores also provide a large number of imported
and national items with more variety and people usually come to buy those items which
are not commonly available. This provides the customers with many options for one
product category and therein lies the challenge for the company to make its product
stand out. Furthermore as these stores attract a larger number of customers, the
promotional tools were also observed to be more active at these stores. For instance Mov
& Pick, a LMT in Gulistan e Johar was rearranged and redesigned by Nestle recently and
the store exhibited the red theme of Nestle with large balloons, hangings and inside storestall.

Product:

It was observed that mostly all SKUs (28 mg and 85 mg) of all flavors of Cheetos were
present in large quantity with the exception of Bites in Hyper Star and Crunchy in Metro.
Bites, Ocean Safari and Ketchup flavors were available at the price point of Rs 15 while
Crunchy was available at Rs 20. Bites with the price point of Rs 10 wasnt present. The
larger SKU in Ketchup flavor with price Rs 50 was also present. Other than the local
variants and SKUs International flavors were also present with high prices for example
Cheetos puffs (Hyper Star).
However the representation of Cheetos in LMTs was low compared to the market leader
Lays which had its most flavors in SKUs of 5 different sizes. Its top 3 flavors Masala,
Salted and French Cheese were available at prices of Rs 10, 15, 30, 50 and 100. Other
than Lays, Wavy with its interesting new flavors of barbecue, sour cream and onion and
vinegar was also present with SKUs of prices Rs 25, 50 and 100. Kurkure was available in
Imtiaz Super Market in almost all flavors such as Dahi Baray, Chutney, Chilli etc but it was
absent in Mov & Pick.
In general the brands of Frito Lay were dominating the chips section as compared to
Kolsons brands. Lays being the market leader, an indirect competitor, was holding a
bigger share on the shelves, all variants were present with prominent placement and all
SKUs. All other competitors were given smaller shelves and placed together in a one rack
(hyper star). In Metro catty chins were placed in cages only but Kurleez was prominently
placed.

Pricing (discounts):
According to the retailers Cheetos never really give discounts. Generally all variants were
sold at Rs3-4 less than the actual price; Rs 47 at Metro, Rs 13 at hyper star.

Placement:
Cheetos was placed in separate whole rack in hyper star which was very prominent with
bigger packets in the front, set right beside Lays. It also held a prominent position in
Metro, First Rack set beside Lays and wavy but not as prominently placed as in hyper star.
Packs of 6 were kept in cages on the floor (Metro). In case of LMTs, it was placed in a
separate aisle (Imtiaz). In Mov & Pick however, an interesting measure was taken by the
management to increase the sales of chips. While placing the larger SKUs inside the
store, a permanent portion for the chips was set up outside the entrance to save
customers the hassle of getting trolly or basket for only the purchase of impulsive items
such as chips. The smaller SKUs of Lays and Cheetos dominated the shelf space in that
portion. This also made it easier for the children to buy chips on their own while walking
to their institutions.

Distribution:
According to the retailers the distribution was quick and effective. The level of distribution
is high and is carried out twice weekly ranging from 100-120 cartons per week i.e. 400480 Cartons per month. No complaints were heard.

Promotion:

Whole rack was given to Lays and Cheetos giving them a clear edge in attracting more
customers especially kids (Hyper star). No such Promotional strategy was applied in
Metro. Separate aisle and portion was observed in LMTs. (Imtiaz, Mov & Pick)

In HFS A Stores:
Store layout:
These stores were brightly lit, organized with trollies and basket facility for customers to
roam around and choose, bar code scanner with more than 10 salesmen to help the
consumers. HFS A stores mostly stock FMCGs and like IMTs and LMTs allow customers to
choose from a number of options. However the variety is observed to be comparatively
less than IMTs and LMTs and generally many product categories are represented in one
aisle. For example unlike Naheed which has an entire portion for hair care products, hair
care products were stocked in one single aisle in Home Needz Mart. This reduces the
number of SKUs available under different variants and also results in less space available
for the customers. Most of the HFS A stores which were visited comprised of only ground
floors but few also had first floors. Promotion was observed on a moderate level involving
posters, shelfs and some occasional discounts.

Product:
The recently launched Ocean Safari and Ketchup was the most widely present flavor in
HFS A Stores at price points of Rs 15 and Rs 10. The larger SKU of Ketchup flavor at Rs 50
was also observed in most of the stores. The less found flavor was bites. Similar to the
IMTs and LMTs the representation of Cheetos if compared to the market leader Lays was
found to be less in HFS A stores as well. Lays was available in 5 different SKU sizes of all
3 flavors. Some new flavors Tango Ketchup and Greek was also noted in few shops at
price point of Rs 10. Catty chins were present in some stores (Continental Bakery etc.)
and were not common in some other (Universal Mart). All variants of Kurleez were
present.

Pricing (Discounts):
No such discounts were given. All SKUs were being sold at the written price on the
package. Rs50 for 85 mg (only for Ketchup flavor), Rs 20 for 28 mg (Crunchy) Rs 15 for
28mg (Bites, Ocean Safari, Ketchup) and Rs 10 for more smaller SKU of Bites.

Placement:
The chips were placed near the entrance to facilitate frequent purchase and can be
bought without going inside the store. Bigger SKUs were placed on the first rack mostly.
After them, Lays was usually placed on the first rack and Cheetos was usually present on
second last shelf (continental bakery) or second shelf (Universal Mart, 786). This showed
Cheetos was placed according to kids eye level. All snack items were mostly placed in
Lays chip stands. It was also observed that as the chips fall in the category of the
impulsive products, they were placed near counter in most of the stores and bought at
the end of shopping.

Distribution:
The level of distribution was moderate ranging from 200-300 Cartons per month.

Promotion:
The chips were placed in special racks with brand names. As Lays, Kurkure, Cheetos and
Wavy are owned by Frito Lay, we also came across a combined shelf for these brands in a
HFS A store (Mr. Khan Mini Mart).

In HFS B Stores:
Store layout:
They were all well cleaned and dimly lit. These stores provided over-the-counter service
with the cashier and usually one or two other salesmen to help the customers. Customers
were required to take the name of the brand/item and salesperson was the supposed to
bring it out. Items were stocked properly. These stores usually stock limited number of
items in selective product categories. The selection is mostly based on the demand and
preferences of the customers in the respective areas. Both shopkeepers and customers
depend on each other as they reside in the same area and need to develop a relationship
which also plays crucial role in bargain purchase relation. Both exercise a certain level of
control. Usually one product category is represented in one rack with 2-3 SKUs of different
variants of popular brands.

Product:
Mostly only 28 mg packs were available with two variants; Ocean Safari and Ketchup. In
case of Lays, its top 3 flavors i.e. Masala, Salted, French Cheese were present in at the
price points of Rs 10, 20, 30 and 50. Kurkure Chilli and Chutney flavors were also
commonly found at price points of Rs 15 and 20 . Catty chins were not that common in
these stores (Bahar-e-Madina Gulistan e Johar etc) Kurleez was the third most common
brand in the racks after Cheetos and Lays. Optp chips, the store brand was observed to
be the new and popular entrant and was available in many stores.

Pricing:
In case of Cheetos, no such discounts were given. All SKUs were being sold at the written
price on the package. Rs50 for 85 mg and Rs 15 for 28mg.

Placement:
An interesting fact observed about the placement of chips was that though HFS B Stores
face a shortage of space in comparison to HFS A stores, this shortage didnt have much
impact on the placement of chips because these are placed outside the shop in stands. In
almost 99% areas, the shelves had the brand name of Lays. However some had Cheetos
chips stand as well (Bahar Madina). On average 2-3 stands were observed with 4-5 racks
in each. The topmost rack was occupied by the largest SKUs of Rs 50 and 100 and this
area was dominated by Lays. Cheetos only had one large SKU of ketchup flavor at Rs 50.

The middle space was acquired by Wavy and Lays while Cheetos was placed in the lower
middle area.

Distribution:
The level of distribution was relatively low ranging from 50-180 cartons per month.
Complaints: Some of the shopkeepers complained that the company is reluctant
in taking the damaged goods back. (United sweets and bakers, Gulistan-e-Johar)
Another shopkeeper complained that he ordered 5 cartons and they brought 15,
upon asking them to take the extra back they said, either take all of them or leave
all of them, he eventually had to send back all of them (Bahar-e-Madina). Despite
of the complaints, shopkeepers agreed that Cheetos is the 2nd most selling brand.
But according some retailers the distribution of Cheetos i.e. Frito-lays is excellent
and they usually buy in as the demand for Frito-lays brand is high

Promotion:
The promotional activity only involved branded chips stands in few places. No additional
promotional activity was observed. However one retailer added that the company
occasionally launched an offer for the retailers which states that if the retail outlet puts
up any display poster, the company will give an extra free carton or free 1 litre Pepsi
bottle.

In HFS C Stores:
Store layout:
We observed that all the stores in this category, were essentially characterized by a very
jammed retail space, sacks of wheat, grain, pulses and 1 (mostly a kid) or no helper. Most
of these shops were dimly lit and had one fan. Some had a grill in front of them. Items
were stocked over one and another. These stores usually stock only 1-2 SKUs of a brand.
Customers were required to take the name of the brand/item and salesperson was the
supposed to take it out for them.

Product:
Most of the HFS C stores dont stock Cheetos because according to them, their customers
mostly cant afford to buy them. They instead stock top pops, Finz and smaller brands. In
some stores however Ocean Safari and Ketchup flavors were found at price points of Rs
15. The large SKU wasnt found. The presence of Lays and Kurkure was more prominent
in some stores.

Pricing:
All SKUs are sold at printed price. No discounts are given.

Placement:

In HFS C stores, the chips were either stocked inside the store or jumbled up in one single
stand. In case of stand, Lays was placed on the first rack and Cheetos was usually
present on the second or third shelf.

Distribution:
The level of distribution was very low i.e. 10-20 cartons per month. Moreover it was
selective and many HFS C Stores didnt stock chips.

Promotion:
No promotional activity was observed.

In Bazaar:
Store layout:
We visited a Wednesday bazar near Aladdin Park, Gulshan e Iqbal block 7. It was observed
that the bazaar was extremely crammed with short stalls and products were often placed
in the paths as well. It is due to the reason that the focus in this case is on providing good
quality products at low prices and not on providing an experience to the customers.

Product:

It was observed that no brand of chip were available for sale. Although the bazaar
offered FMCG items on whole sale, the category of chips wasnt among them. The reason
may include limited profit margin, published prices on the package or company policy.

 Survey Results:
This survey was conducted to understand the position of different brands according to
consumer review. 78 people took part in the survey among which 65 were between ages
16-25. As the results indicate, Lays received the most favorable reviews followed by
Wavy. Cheetos was ranked as the 3rd. 91% of the consumers regarded taste as the
primary reason behind their choice.

We also questioned them about the TVC and 52% remembered the Lays Song
Commercial Best Day of My Life. This may indicate a reason behind the leadership
position of Lays. When specifically asked about Cheetos, 59% consider it an occasional
choice which is made just for the change of taste. 22% considered it their favorite and
19% would never opt for it. These mixed reviews about the position of Cheetos therefore

agree with the stance of retailers who ranked Lays as the market leader and Cheetos at
3rd or 4th position

Statement of Contribution:

Group Member
Batool Fatima

Isra Ali

Hamna Usman

Ayesha Arshad

Contribution
Visited 12 stores including IMT, LMTs and HFS A, B, C.
Contributed in Analysis
Conducted the Survey
Edited and formatted the analysis.
Visited 12 stores including IMT, LMTs and HFS A, B, C.
Compiled and edited the Excel sheet.
Contributed insights for analysis.
Visited 12 stores including IMT, LMTs and HFS A, B, C and
Bazaar
Wrote and compiled analysis.
Designed the survey
Designed Excel sheet
Visited 12 stores including IMT, LMTs and HFS A, B, C.
Contributed insights for analysis.