Chippin Away Like Frito-Lay – Environmental Factors

As I was thinking about what to write for my next post, I sat here and finished my latest Doritos “Cool Ranch” tab and thought it would be great to find out what makes Doritos so successful. After further research, I was amazed at what I found out about this amazing brand, so I decided to share my findings with everyone. Frito-Lay is a renowned conglomerate in the snack food industry and owner of Doritos brand potato chips. As one of the largest snack food companies in the United States, part of the company’s success is attributed to the company’s effective marketing strategies and tactics. The company is not only involved in national and international marketing, but also understands the influence that environmental factors can have on the success of any product or service. Environmental factors such as global economic interdependence, business practices, demographics, physical infrastructure, ethics, culture, technology, and even political systems that influence international relations affect company marketing strategies.

To illustrate, here are some examples of internal and external environmental factors that could affect organizations’ marketing decisions and strategies:

Internal environmental factors

organizational resources

Existing product lines

Management and Support

Capabilities and philosophies

External environmental factors


political and legal


social and cultural

With a general understanding of environmental factors, we can now examine how it relates to marketing decisions at Frito-Lay. As a proud member of the PepsiCo family, the company understands the importance of demographics and physical infrastructure and effectively incorporates it into the company’s marketing strategies.

With an abundant supply of resources and a renowned brand name at stake, Frito-Lay must ensure that all employees remain ethical and socially responsible in daily activities. The firm not only requires annual recertification in ethics courses for all employees, but also the management team constantly preaches ethics and social responsibility. For example, Frito-Lay has a ‘zero waste’ initiative where the company partners with TerraCycle for recycling purposes. Customers are encouraged to collect and send used potato chip bags to TerraCycle for post-consumer recycling. In return, they will receive $0.02 for each bag of chips sent that will be donated to a school or non-profit organization of their choice. This is a very smart marketing strategy on behalf of Frito-Lay because the company reduces the cost of producing products due to recycling, as well as helping the environment and society in parallel.

In addition, the firm also offers exceptional training programs for all interested parties. The company website helps ensure that stakeholders are kept up to date on the latest news affecting products, technology, quality, ethics, marketing, etc. For example, customers can visit the company’s website to find the latest updates on new Frito-Lay products and provide crucial feedback on those new products through customer surveys. This, in turn, would allow the company to review the market research data obtained and adjust the company’s marketing strategies accordingly. These are just a few examples that show how Frito-Lay continues to understand how internal environmental factors could affect marketing strategies and the company’s image. Therefore, the firm continues to demonstrate a strong organizational culture by acting in an ethical and socially responsible manner in an effort to improve products, services, training, society and the environment.

Frito-Lay has also taken advantage of the external environmental factors listed above to give the company a competitive advantage. From a technological point of view, Frito-Lay has incorporated the latest technologies to help with the online marketing and promotions of the products offered. For example, the company’s website is replete with flash media and other marketing ploys that help highlight the deliciousness of the variety of snacks offered at Frito-Lay. The website allows customers to navigate to any product of their choice in an effort to obtain more details about that particular product prior to purchase. Details like calories, price, and even promotions related to those products are listed daily for online consumers. In addition, Frito-Lay also uses technology to strengthen the company’s brand. By using renewable energy such as biofuels, solar power, and recycled heat and steam from plants, the company estimates that it will use 45% less energy per bag of chips by 2017.

Personally, what I found most interesting is the company’s effective understanding of social, demographic and cultural environmental factors and the use of the obtained market research data to produce certain products tailored to specific target markets. For example, Frito-Lay conducted market research on the external environmental factors listed above and determined that the Japanese had a different taste. To cater to this specific target market, Frito-Lay began producing a variety of different flavored Doritos corn chips specifically for Japan. Flavors, like coconut curry, wasabi mayonnaise, tuna mayonnaise, and even sausage-flavored Dorito chips.

To me, this is very smart on behalf of Frito-Lay, especially with global economic interdependence and trade because organizations could reach new target markets in an effort to promote and sell their products to different end users. As we know, international trade creates opportunities for businesses and exposes consumers to products and services that may not be available in their own country. International trade also gives consumers more choice in terms of price and quality of the goods offered due to multiple producers. With international trade, companies like Frito-Lay have a competitive advantage because products or services are offered globally. Therefore, the increase in consumer demand could help the company because the cost of production is reduced as a result of economies of scale.

Although I have consumed Frito-Lay products for decades, I have never done the research to realize the company’s amazing ability to analyze internal and external environmental factors and create marketing strategies and products tailored to customer needs. Whether satisfying the marketing mix domestically or internationally, Frito-Lay ensures proper market research is conducted that takes into account environmental factors such as culture, ethics, technology, physical infrastructure, demographics, and the legal environment. Doing so would allow the company to continue to improve the products offered due to the market research data obtained.

David Ogilvy, an advertising guru, wisely said “never stop testing and your advertising will never stop improving.” Frito-Lay continues to test markets in an effort to produce products tailored to specific tastes and cultural preferences. This would allow the company to satisfy current markets, as well as reach new global markets, hence the astronomical success of the company.

Keep Cutting Frito-Lay – Bravo!

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