Public gets to choose next Lay's flavor

People can vote online for versions that taste like garlic bread, Sriracha and chicken and waffles. What could possibly go wrong?

By Jonathan Berr Feb 13, 2013 10:14AM
Lay's chips on a supermarket shelf at Kings Food Market in Midland Park, New Jersey (James Leynse/30127183A/Corbis)PepsiCo's (PEP) Frito-Lay snack business is letting consumers vote on its next potato chip flavor, becoming the latest company to tap into the "wisdom" of social networks.  

Consumers can vote on Facebook or Twitter for the Lay's Cheesy Garlic Bread, Chicken & Waffles and Sriracha flavors in the "Do Us A Flavor" contest.

These varieties were chosen from nearly 3.8 million fan submissions gathered between July 20 and Oct. 6 of last year. The winning entries are eligible for a prize of $1 million or 1% of the flavor's net sales, whichever is higher.

The announcement of this marketing effort two days before the company reports fourth-quarter results is no accident. PepsiCo is under pressure from investors to boost returns at Frito-Lay. During the third quarter, operating profit at Frito-Lay's North American unit was little changed. 

Facebook (FB) and Twitter are trying to convince advertisers that they mean business, and companies are increasingly incorporating social media into their marketing plans. Hasbro (HAS), for instance, got lots of buzz when it enabled the public to chose to replace the iron Monopoly game piece with a cat.  

Relying on the public to help formulate products is no guarantee of success, however.

New Coke, one of the greatest marketing flops in history, was test marketed. As Coca-Cola (KO) noted on its website, the formula for New Coke was preferred in taste tests of nearly 200,000 customers, so it seemed the time was right to change the formula of its flagship product. The Atlanta company, of course, couldn't have been more wrong.

"What these tests didn't show, of course, was the bond consumers felt with their Coca-Cola -- something they didn't want anyone, including The Coca-Cola Company, tampering with," Coke says.

Some companies, though, are glad they solicited views before making an important decision.

For instance, 20th Century Fox came within days of selling its stake in "Star Wars" as a tax shelter because it was afraid that George Lucas' science fiction classic would be a flop.  Positive feedback from advance screenings convinced executives to drop the idea, and the film saved the studio from bankruptcy, according to IMDB.

The real test for Frito-Lay's potato chip marketing gimmick will come once the hoopla around the contest fades in a few months. You can bet that other companies thinking of giving this a try will be paying close attention, too.

--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

More on moneyNOW

Tags: Food
Feb 13, 2013 9:22PM

I won't be eating any but,... Cyanide Surprise gets my vote.


Bon Appétit!

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