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DKSH Singapore: turning salty snacks into sweet success

Frito Lay, a division of PepsiCo International, is the world’s No. 1 convenience food business with an annual turnover of USD 24 billion. Frito Lay appointed DKSH in mid-1993 to introduce and establish Frito Lay’s presence and products in the Singapore market. Since then, the two companies have worked together closely making Frito Lay the No. 1 salty snack thanks to long-term and creative marketing efforts, skillfully tailoring the brand’s global appeal to local needs.

Frito Lay
Challenge
In 1993, DKSH was up against a daunting task. The pack size of Frito Lay products at the time was too big, weighing 185g compared to existing products in Malaysia, which were only around half the size. The products also seemed overly expensive costing in some cases nearly five times as much as those of competitors’. Finally, shelf life was extremely short with only six months on production and merely four to five months to sell on arrival. This resulted in high returns from the trade and write offs from our warehouse. Consequently, only a handful of outlets wanted to sell Frito Lay products.
 
Approach
Faced with these challenges, DKSH Singapore decided to identify and focus on the relevant retail sector, which it defined as teenagers and young working adults. Centered on the fact that convenience food is an impulse purchase, we developed a marketing strategy aimed at dominating the convenience food sector with unconventional and creative measures, such as van sales.
 
A key element of our strategy was the development of bright and attractive temporary merchandising display stands (TMD) and locating them at strategic non-conventional points, such as the fresh produce, bread, beverage, and rice sectors. The loud and attractive TMD stands worked and soon consumers started buying Frito Lay products.
 
To further grow the business and extend the customer base, we launched attractive and targeted promotion activities to different consumer segments throughout the year. We start out the year with a Chinese New Year promotion targeted at older consumers. In March, families are offered a free KFC meal with the purchase of two Frito Lay packs, for instance. During the school holidays in June, we offer special promotions to kids and families, rounding off the year in September offering the latest and hottest gadgets to young adults.
 
Results
Over time, the steady progress of our strategy and successful collaboration with our supplier have given rise to double-digit year-on-year growth. Today, Frito Lay is the market leader in the salty snacks category overtaking Pringles in 2003 with a 33% share. Frito Lay’s market share has since been growing yearly, clearly taking the No. 1 spot in 2009 with an estimated 45% market share.
 
Market Expansion Services at work: blending creativity with passion and commitment
In addition, Frito Lay products have been named the leading brand of snacks by 7-Eleven for five consecutive years from 2005 to 2010. Recognizing our team’s effort, four DKSH team members were accorded in recent years with PepsiCo’s highest distinction, the Ring Of Honour, for outstanding achievement in market sales.