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Chipsy Case Study

Chipsy has been Egypt's leading potato chip brand since 1985. Through extensive market research using focus groups, Chipsy gained valuable customer insights that helped them develop strong customer relationships. Chipsy learned that Egyptians saw eating chips past age 40 as unusual, so they launched a premium "Lays Delights" line targeting older customers. When health concerns rose, Chipsy emphasized their products contained no artificial ingredients. They consulted customers on new flavors and launched a voted-on "shrimp" flavor. By involving customers in product development, Chipsy created brand loyalty. Their success demonstrates that understanding customer needs through research leads to meaningful relationships and growth.

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Omar.mohammed
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562 views

Chipsy Case Study

Chipsy has been Egypt's leading potato chip brand since 1985. Through extensive market research using focus groups, Chipsy gained valuable customer insights that helped them develop strong customer relationships. Chipsy learned that Egyptians saw eating chips past age 40 as unusual, so they launched a premium "Lays Delights" line targeting older customers. When health concerns rose, Chipsy emphasized their products contained no artificial ingredients. They consulted customers on new flavors and launched a voted-on "shrimp" flavor. By involving customers in product development, Chipsy created brand loyalty. Their success demonstrates that understanding customer needs through research leads to meaningful relationships and growth.

Uploaded by

Omar.mohammed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Chipsy :

Deep customer insights lead to meaningful customer relationship

Twenty five years ago tasty foods Egypt introduced Chipsy


the first packaged potato product in the country this was
achieved by forming a joint venture company in 1996 with
frito-lay the well-known maker of salty snacks the factory
was built in Obour City and started producing lays chips.
however two years later in 1998 frito-lay realized that it
had to be more in control since the local brand was doing
extremely well and was starting to threaten the sales of the
original lay product frito-lay then decided to acquire a
controlling stake in tasty foods Egypt the solution to that
problem was to use its prestigious holding company
PepsiCo to acquire 83 percent of tasty foods leaving only 17
percent to the local owners.

Since it was introduced for the first time in Egypt in 1985 Chipsy has been the star of Egypt’s
potato chip industry. Since it was ubiquitous and inexpensive the product became so well known
that Egyptians adopted it as the generic name for all chips. The reason behind Chipsys success
lies in the company’s efforts to understand its customers’ needs and to develop a strong
relationship between customers and the Chipsy brand

To develop a strong customer-brand relationship tasty foods conducted extensive market


research and used focus groups to identify what customers are looking for in chips the research
produced remarkable consumer insights the Chipsy marketers learned that local consumers
considered eating chips after the age of 40 as unusual behavior and so Chipsy had to come up
with a solution to this problem the company successfully overcome the challenge by introducing
lays delights in December 2005 at part of a new marketing strategy that caters to both an
untapped higher socioeconomic class and an order age group lays delight came in two flavors :
exotic BBQ sauce and thai sweet Chilli sold in two different bag sizes 5LE (around $1) for the big
bag and 2LE (less than $.50) for the small bag. Both are pricier than the Chipsy brand which sells
for LE2.5 (about $.50) for the big bag and 50 piaster (about $.10) for the small bag. The reason
behind this price gap is that everything in lays delights is premium quality and composed of
imported complex flavors which are two important features that appeal to an older age bracket.
The company made it a point not to use the Chipsy brand for this new older / higher
socioeconomic market which regard Chipsy as the brand of the masses. In addition marketers
did not know how their new target market would react to a more expensive Chipsy brand so
they released the new strategy with the name lays delights.

Chipsy faced another challenge when due to ever present media messages warning against the
health hazards of junk food the public became more health oriented and aware of the
disadvantage of artificial flavors and preservatives again Chipsy had to respond to its customers
concerns immediately. The company began promoting the product on television, radio,
billboards, and in the press, stressing that Chipsys products contain no preservatives or artificial
flavoring and very little fat. To stress this message further Chipsy changed the packaging of the
bags completely and introduced more eye-caching designs with no preservatives added printed
on all the bags.

Seeking further insight into the market Chipsy marketers spoke directly with their customers
and asked if they would be interested in eating chips with oriental flavors such as shish kebab
grape leaves shish tawook and so on after learning what they could about their customers
opinions concerning a wide range of flavors, the preferred flavors were introduced to the
market and Chipsy created print, radio, and television advertisement featuring famous Egyptian
actors, such as Ahmed El Sakka, to inform the public that Chipsy had successfully satisfied their
wishes.

To cater even more to customers’ needs Chipsy came up with a revolutionary idea whereby it
invited customers to submit their idea for a new Chipsy flavor by logging on to
www.chipsyegypt.com

Customers who were not internet savvy were given the opportunity to vote by text message
sent from their mobile devices Chipsy then announced to the public that the majority had voted
for the shrimp flavor which is now sold in every single grocery and supermarket in Egypt

By implementing this innovative strategy which gave its customers a sense of involvement in the
development of a new product Chipsy created a strong relationship with its customers and the
Chipsy brand

As the Chipsy story demonstrates product creation and effective marketing program begin with
extensive market research and a deep understanding of Customers’ needs and concerns

Campaigns must also be innovative to differentiate themselves from their competitors.

More importantly campaign must utilize the information gathered from customers in the best
way possible to gain beneficial customer and market insights.

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