CPGmatters: Frito-Lay Outlines ‘Extreme’ Shift in Marketing Approach
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
"We all look at trends on how to be predictive, but in this day and age, it’s not about trends. It’s about disruption."
That’s the view of Ann Mukherjee, SVP and chief marketing officer of PepsiCo’s Frito-Lay North America division, who spoke recently in a keynote presentation at the IRI Summit in Las Vegas. The executive was detailing the often unconventional and creative methods Frito-Lay uses to capture "pockets of demand" at the "tails" or extreme ends of the market.
Quoting Bob Johansen, a research fellow at the Institute for the Future, Ms. Mukherjee painted a challenging future for marketers: It will be a volatile, uncertain, complex and brutal world. All resources — whether people, environment, agriculture — will be stretched.
"But there is hope," she said, "because the next decade will also be defined by new technologies and new ways of connecting. It’s about understanding how to get to better insights to leverage growth. The smartest people who come up with the smartest solutions will make that happen. And in those new solutions will come new demand. The question is: Can you get out in front of it? Can you predict where the pockets of demand will come so you can take advantage of this new world?"
She offered a few examples of how Frito-Lay is targeting the "Young and Hungry," a group of younger males described as "promiscuous snackers," loyal to nothing and motivated by metabolism.
One success was Frito-Lay’s partnership with Taco Bell to create Doritos Locos Tacos, featuring a shell made of Nacho Cheese Doritos Chips.
"We understood that the true demand moment and one of the biggest places for demand was away from home," she said. "In a world when anyone can get anything they want when they want it, you got to disrupt."
Another involved a 56-foot-tall vending machine installed last year at the South by Southwest festival in Austin to debut Doritos Jacked Tortilla Chips. The contraption doubled as a stage for bands and a dispenser of samples and prizes. She said, "We needed a strategy that created context that was so cool. We telecasted it globally."
For more traditional marketing, Frito-Lay delivers a demand-based solution depending on the channel.
"So what we do in a Costco versus in a Kroger is driven by demand and how it is expressed in that channel," she said. "We also know that all these moments are not created equal. That’s because in today’s world we don’t live in a melting pot; we live in a mosaic."
She called for collaborating with trading partners to find solutions. "We have to disrupt together. We must learn as fast as the world is changing around us. Only then, will we be transformed."
Is “disruptive” the right term to describe the approach required by marketers in the years ahead? What can other brands learn from the increasingly unconventional marketing approaches taken by Frito-Lay?