MILWAUKEE (AP) -- Bearing in mind that consumers will remain focused on low prices even when the recession ends, soft drink and snack maker PepsiCo Inc. said Thursday that it's creating new products at lower prices and plans to continue offering discounts in its Frito-Lay and beverage businesses.

The effort seems to be working for PepsiCo's Frito-Lay business, which posted revenue and volume gains in the third quarter. But the beverage business, with brands like Pepsi cola, continued to slump as consumers cut their spending and continued switching to healthier juices and teas.

Overall, the Purchase, N.Y.-based company said its fiscal third-quarter profit rose 9 percent, thanks in part to cost-cutting, even as revenue slipped 1 percent.

Chief Financial Officer Richard Goodman said PepsiCo has been offering more promotions at the end of each month, when consumers' budgets become more constrained. For instance, bags of chips may be promoted at two for $5 early in the month but fall to $2 each by the end of the month.

"We want to be able to make sure that at the beginning of the month or at the end of the month, they're buying our products," Goodman told reporters in a conference call after the company released its earnings report Thursday.

Consumers are so focused on cost they are willing to forgo getting more for a given price. PepsiCo's promotion to boost volume -- with no price increase -- on certain chips failed to gain traction and will be