Frito-Lay Inc. - Wow Chips! Research

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Frito-Lay Inc. - Wow Chips! Research

WOW! Chips
In 1998 Frito-Lay, Inc. released its new product line WOW! Chips. This new product line consists of WOW! Lays, WOW! Ruffles, WOW! Tostitos, and WOW! Doritos. WOW! chips are meant to be a healthy alternative to ordinary potato chips and other snacks. The outlook was great for this new product. Americans are the largest people on the planet. People are obsessed with eating, often times eating when they are not even hungry. But the trend lately is turning toward a more healthy diet. Most people don't intend to stop eating they become more fat conscious. Looking into the future Frito-Lay wisely produced a healthy alternative snack for this growing trend. WOW! chips are cooked in an olestra based oil called Olean. This new oil developed by Proctor & Gamble is the building block upon which WOW! chips are based. It is Frito-Lay’s hope that the public accepts this new product and what it stands for. The initial acceptance by the public has not been what Frito-Lay has expected. The areas that will be discussed in report are consumer opinion, marketing problems/opportunities, and financial performance along with a brief conclusion to follow.
Consumer Opinion
With a relatively new product such as Frito-Lay’s WOW! potato chips, the focus needs to be on the current opinion of consumers. The following information comes from individual consumers as well as the research from scientific professionals and medical doctors.
Let’s first look at the current consumer response. Obviously the interest in fat free snacks with the same taste as original snacks is overwhelming. Information Resources Inc. shows that Frito-Lay’s WOW! chips registered $347 million dollars in sales in 1998, despite reports of possible digestive problems associated with the chips. This reported sales figure out performed most analyst that said sales would average $250 million per year. A key factor that has led to these sales are the so called “baby boomers” and their “concern with appearance and health as they grow older”1.
Studies of the affects from Olestra based products have produced very different results. However, the endorsement by the FDA is the key factor in WOW! chips' success. A quote from the American Medical Association says, “approximately 150 studies, including 43 clinical trials, have been conducted on this product (Olestra) in advance of FDA approval, making it one of the most thoroughly tested foodstuffs to come to market in America. The...

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