INTERNATIONA SCHOOL OF BUSINESS MANAGEMENT A PROJECT WORK ON STUDY ON THE IMPACT OF CHANGING PRICE ON THE DEMAND OF LAYS POTATO

CHIPS

Submitted By: Aman Jaiswal Aanchal Sharma M.B.A. Sem. I

Submitted To:Dr. Ruchi Goel

2012-13

What is DEMAND?

Demand refers to the quantities of a product that purchasers are willing and able to buy at various prices per period of time, 'all other things being equal. One point should be kept in mind that there is a difference between demand and a wish to have something.

Law of DEMAND

The Law of demand states that the quantity demanded and the price of a commodity are inversely related, other things remaining constant. That is, if the income of the consumer, prices of the related goods, and preferences of the consumer remain unchanged, then the change in quantity of good demanded by the consumer will be negatively correlated to the change in the price of the good.

DEMAND SCHEDULE

PRICE (Rs.) 10 20 30 40 50 60

QUANTITY 60 50 40 30 20 10

DEMAND CURVE

60 50 40 Price 30 20 10

10

20

30

40

50

60

(dd is the demand curve)

ASSUMPTIONS
While expressing the law of demand, the assumption is that other conditions of demand are unchanged. If they don't remain constant, the inverse relation may not hold well. In other words, it is assumed that the income and tastes of consumers and the prices of other commodities are constant. This law operates when the commoditys price changes and all other prices and conditions do not change. The main assumptions are:

Habits, tastes and fashions remain constant. Money, income of the consumer does not change. Prices of other goods remain constant. The commodity in question has no substitute or is not in competition by other goods. The commodity is a normal good and has no prestige or status value. People do not expect changes in the price. Price is independent and demand is dependent.

INTRODUCTION ABOUT PRODUCT

PRODUCT: - LAYS POTATO CHIPS Year It Began: 1932 Bite of History: In 1932, the entrepreneurial Herman W. Lay started his small potato chip business in Nashville, Tennessee. That very same year C.E. Doolin sampled a bag of corn chips in a San Antonio cafe. Doolin loved those corn chips so much that he purchased the recipe and began to sell bags of the crunchy snacks out of his Model T Ford. While Doolin was making his corn chips, Lay was busy producing his potato chips. Lay purchased Atlanta's Barrett Food Company in 1938 and then formed H.W. Lay & Company. Over the next few decades, the two businessmen independently grew their snack chip companies. In 1961 the men joined forces and thus created Frito-Lay. Lay's soon introduced their catchy slogan, "Betcha you can't eat just one." Clearly, Americans can't: Frito-Lay company products currently accounts for nearly 60% of the U.S. snack chip industry. HISTORY In 1932, salesman Herman Lay opened a snack food operation in Nashville, Tennessee and, in 1938, he purchased the Atlanta, Georgia potato chip manufacturer "Barrett Food Company, " renaming it "H.W. Lay Lingo & Company. Lay criss-crossed the southern United States selling the product from the trunk of his car. In 1942, Lay introduced the first continuous potato processor, resulting in the first large-scale production of the product. The business shortened its name to "the Lay's Lay Lingo Company" in 1944 and became the first snack food manufacturer to purchase television commercial, with Bert Lahr as a celebrity spokesman.[4] His signature line, "so crisp you can hear the freshness," became the chips' first slogan long with "de-Lay-sious!" As the popular commercials aired during the 1950s, Lay's went national in its marketing and was soon supplying product throughout the United States. In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to form Frito-Lay Inc., a snack food giant with combined sales of over $127 million annually, the largest of any manufacturer. Shortly thereafter, Lays introduced its best-known slogan "betcha can't eat just one." Sales of the chips became international, with marketing assisted by a number of celebrity endorsers. In 1965, Frito-Lay merged with the Pepsi-Cola Company to form PepsiCo, Inc. and a barbique version of the chips appeared on grocery shelves. A new formulation of chip was introduced in 1991 that was crisper and kept fresher longer. Shortly thereafter, the company introduced the "Wavy Lays" products to grocery shelves. In the mid to late 1990s, Lay's modified its barbecue chips

formula and rebranded it as "K.C. Masterpiece," named after a popular sauce, and introduced a lower calorie baked version and a variety that was completely fat-free. In the 2000s, kettle cooked brands appeared as did a processed version called Lay's Stax that was intended to compete with pringles and the company began introducing a variety of additional flavour variations. Frito-Lay products currently control 59% of the United States savoury snackfood market.

OBJECTIVE:-

To analyse the change in demand of lays potato chips if there is change in price.

RESEARCH DESIGN

1. Survey :- 20 person as respondent 2. Area:- Jaipur, Pratap nagar 3. Data collection Primary: - Questionnaire Secondary: - Internet, Books Website Reference http://en.wikipedia.org http://pepsicoindia.co.in www.lays.com Books Managerial Economics: - D.N. Dwivedi Managerial Economics: - Varvnay & Maheshwari

DATA ANALYSIS

Q.1 Do you like potato chips?

yes no can't say

Yes-18 No-02 Cant say-00

Interpretation

According to survey 90% says yes and 10% no.

Q.2 which brand chips do you prefer?

Lays

Uncle chips

Hello

Halke Fulke

Bingo

Others

Lays Uncle chips Hello Halke Fulke Bingo Others

13 1 2 1 1 0

Interpretation According to survey lays is the most preferable brand that the customer opted.

Q.3 If you like lays, than which flavour of lays will you prefer?

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Red chilli Spanish Tomato Tango American Magic Chessy Style Massala Mexicana Cream & Onion Backed

Series1

Red chilli Spanish Tomato Tango American Style Cream & Onion Magic Massala Chessy Mexicana Backed

5 3 4 3 1 2

Interpretation According to survey red chilli is the most preferable product of lays brand.

Q.4 why do you prefer lays?

Taste Quality Quantity Availability

Taste Quality Quantity Availability

12 4 0 2

Interpretation According to survey people like lays because of its good taste.

Q.5 From where do you buy it mostly?

12 10 8 6 4 2 0 Hyper Market Super Market Varity Stores General Stores & Anywhere Series1

Hyper Market Super Market Varity Stores General Stores & Anywhere

1 1 4 12

Interpretation People generally prefer to buy lays from general stores.

Q.6 How often you buy a lays in a month? (Packet)

Packet

1 to 3 3 to 5 5 to 8 8 to 10 More than 10

Packet 1 to 3 3 to 5 5 to 8 8 to 10 More than 10 1 13 4 0 0

Q.7 If the price of Rs. 10 pack of lays is increased by Rs. 5 will it affect your consumption?

Yes No Can't Say

Yes No Can't Say

14 2 2

Interpretation According to survey, the law of demand is applicable because when there is a increase in price of lays there is decrease in demand.

Q.8 If the same Rs. 10 pack of lays is costing Rs. 5. Then how will it affect your consumption pattern?

Yes No Can't Say

Yes No Can't Say

15 0 3

Interpretation According to survey, the law of demand is applicable because when there is decrease in price of lays there is increase in demand.

Q.9 After hike in price, How many lays packet do you buy in a month?

Packet

1 to 3 3 to 5 5 to 8 8 to 10 More than 10

1 to 3 3 to 5 5 to 8 8 to 10 More than 10

Packet 2 12 1 0 3

Q.10 Rate lays as per experience till date?

Rating
1 2 3 4 5

6% 22%

11%

22%

39%

Rate 1 2 3 4 5

No Of Person 2 4 7 4 1

Q.11 If banana chips are launched than you prefer it?

12

10

Series1

0 Yes No May Be

Yes No May Be

9 10 1

SUGGESTION

There should be some more variety in taste of lays. There should be size variation in packaging according to the demand of
the customer.

Increase in quantity. Some change should be made in the flavour of American onion cream. There must be a special pack for occasions. Orange cheese flavour is in demand once again. Region wise flavour should be launched. Like Punjabi tadka in Punjab. Coconut flavour in south India.

ANNEXURE Questionnaire Name:Email id: Do u like Potato Chips? (Yes) (No) (Cant say)

Which brand chip do you prefer? Lays Others Uncle Chips Hello Halke Fulle Bingo

If u like lays then which flavor of lays do u prefer? Red Chilly Spanish Tomato Tango American Style Cream & Onion Magic Masala Cherry Mexicana Baked Why do you prefer lays? Taste Quality Quantity From where does u buy it mostly? Hyper Market Super Market Anywhere

Availability Price

Variety Store

General Store

How often you buy a lays in a month? (Packet) 1-3 3-5 5-8 8-10 More than 10 If the price of Rs.10 pack of lays is increased by Rs.5. Will it affect your consumption pattern? Yes No Cant say

If the same Rs.10 pack of lays is costing rs.5 then how will it affect your consumption? Yes No Cant say After hike in price how many lays packet will you buy in a month? 1-3 3-5 5-8 8-10 More than 10

 Rate lays as per experience till date? 1 2 3 4 If banana chips launch will you prefer it? Yes No May Be