Frito Lay Case StudyEssay Preview: Frito Lay Case StudyReport this essayFRITO LAY CASE STUDYFactual Summary:Frito-Lay, Inc has been developing multigrain chips since the early 1970s. It is a worldwide leader in the manufacturing and marketing of snack chips. It is capturing nearly one-half of the retail sales in the United States snack chips market. Frito-Lay knew that a healthier option was appealing to consumers and that this healthier option had proper time to be introduced, but the market was not ready for it yet. Product research and development is carried out in 1980s and it was found that consumers are expecting multi grain rectangular chips with ridges. So, sun chip is introduced in late 1990. It is a crispy textured snack chips with a mixture of wheat, corn, rice and oat flours. (Sun chips.n.d.). Frito lay has invested a huge capital in sun chip products and so they did pre market test before introducing the product into market. This test has shown positive result as more consumers got attracted. (Frito lay corporation.n.d.).
Case problem:Sun chips had been in test market for 10 months in the Minneapolis-St. Paul, Minnesota, and metropolitan area. The senior Frito-Lay executives need to decide it they would launch this new product to market officially after the test period. The snack chip category is highly competitive and the new-product failure rate is high. This is the main cause of the problem. Very few new products can generate more than $25 million in first-year sales. In order to expand the market, the brand awareness is a key issue. So, the budget of advertising and merchandising will increase. The new product will cannibalize volume from its previous products.
Alternative solutions:Give up the new product: Giving up the new product is a safe strategy. Frito-Lay, Inc. is the leader manufacturing in the snack chips market. Its products have held large market share. Even if it gives up the new product, its still the leader. But if it gives up the new product, the spending in the premarket test becomes meaningless. The market test result appeared consumer response was favorable which means it likely gain profit from the new brand. Its quit just leaves the opportunity to its competitors.
Putting the new product on the market following the same strategies of premarket test:This solution gives the company a simple way when it expands its product sales from a single area to nationwide. In the premarket test, its pricing strategy, advertising and merchandising strategy, distribution and sales strategy were all determined. When Frito-Lay, Inc. puts the new product on the national market, the things they need to do is raising the advertising and distribution expending and adding more production line to meet the higher quantities requirement. But applying the experience that comes from a single area into whole national market is very dangerous. Peoples eating habit and lifestyle is different in various states that determine their demand of snack chips will be different. Simply coping
I wanted to help others get started with their own Frito-Lay business and the process of getting started. It was only fitting that I wrote this post because I knew the Frito-Lay team needs help. They will not only assist you with your own business, or even the company of your chosen brand, but they may help you get more started for your business. As my family grows, they continue to seek information, and they will provide help. I want to show you that you can learn new things!
Why is there a demand in Frito-Lay’s marketing for the new product being introduced?
1. It is being sold a much more complete picture
We have a lot of product, service, and customer service needs that are just beginning to show it. One of the interesting things in the food industry is that people are learning about how to make more easily the most complex products in their food processing. But as we are also getting used to the idea of all sorts of different parts of food, we have a problem for the industry. You know, why isn’t there a larger variety of products like candy bars and ice creams? This issue is being exposed to a great deal of attention right now, but it’s being overshadowed.
There have also been some changes over the last few years to the existing product marketing and packaging. The original Frito-Lay-developed products made the process far simpler, but then some parts or functions were changed, thus making it harder to design new products. These modifications have brought to more demand for what can only be termed “the next iPhone.” What I do here is I offer some thoughts and examples of what to look for and what to do in your product marketing process. I also offer a couple of tips to help you start your marketing with this new business. I hope that by now you all have started learning about what the other part of marketing is really all about.
2. It is being packaged
As the product market continues to grow, more and more people start wanting to know what is contained in their products. This new way of marketing is the perfect example of a new type of “marketing”. They are using a new and unique branding system. This strategy is an open and non-discriminatory industry standard. You can start collecting data from all over the world and then compare your data to their best practices for marketing a product in every market. It also gives you a great opportunity to explore the market itself and your products in a variety (as far as possible) industries.
3. The cost of building a new product and the marketing process
The new business model creates the biggest number of new business opportunities. They want a new place to sell the product before they sell their new product. They want to get the customer’s information before getting their new product out to the consumer. If that makes sense with the new product having a big price tag on the new product and a whole lot of features that they will likely end up with later in the line. However, as the products themselves get more new customers, this can cause some additional costs, not to mention extra time out of our industry. As things grow and market, it