In 1997, Frito-Lay acquired the 104 year old snack, Cracker Jack from Borden Foods Inc. Coupling its $10.9 billion in worldwide sales with the marketing power of parent company, PepsiCo Inc., and Frito-Lay clearly is king of the snack world. . The average American now eats nearly 22 pounds of snacks each year, according to the Snack Food Association. Frito-Lay, which controls two-fifths of the world market for salty snacks, generated more than half of PepsiCoÆs profits. Pepsi's recent acquisition of Cracker Jack gives a sense of the possibilities. The classic brand, which had annual sales of $40 million and was owned by Borden Foods Co., had not had serious advertising behind it since the late 1970s and had been losing money for five straight years when Pepsi picked it up in 1997. The acquisition was a perfect fit. PepsiCo left Cracker Jack's iconic box package but also developed 4-ounce bags. In response to consumer complaints, PepsiCo added 10 percent more peanuts, upgraded the prizes, and added a Web site. The company then used its vast Frito-Lay distribution network to roll it out. Cracker Jack turned a profit in its first year, and today has about $100 million in annual sales from the new four-ounce bags alone.
Competition forces companies to invest intensively in brands in order to hold their market positions. Hence, a company's market competitiveness can be estimated based on an assessment of its brand equity. According to an article in the Journal of Comparative International Management by Wendy Wilson, Ming Ouyang, Shelley Rinehart and Stephen Grant, Aaker defined brand equity as a set of brand assets and liabilities linked to a brand, its name, and symbol that add to or subtract from the value provided by a product or service to a firm or to that firm's customers. Brand awareness is the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category. It is a continuum that rang...