Apply: Signature Assignment: Frito-Lay Case
Marketing research is a critical function in successful firms. Marketing research objectives are specific, measurable goals the decision maker seeks to achieve in conducting the marketing research. In setting these research objectives, marketers have to be clear on the purpose of the research that leads to marketing actions. The goal of this exercise is to demonstrate your understanding of the marketing process in the snack industry.
In 1932, C.E. Doolin purchased a bag of corn chips at a small San Antonio café. He liked them so much that he purchased the recipe and began selling them from his Model T Ford. He named them FRITOS. Also in 1932, Herman W. Lay began a potato chip business in Nashville, calling it the H.W. Lay Company. In 1961, the two companies merged to form Frito-Lay, Inc. Today, Frito-Lay’s main brands are Fritos, Lay’s, Doritos, Tostitos, Cheetos, Ruffles, and Sun Chips. Together, Frito-Lay brands account for almost 60 percent of the snack chip industry in the United States. Currently, the company has about 48,000 employees in the U.S. and Canada.
Frito-Lay management recently identified that it was losing market share. To further investigate, Frito-Lay managers reviewed its monthly sales data and found that sales of its Lay’s potato chips were stagnant. In order to understand how consumers felt about potato chips and snacking in general, it held small group discussions with customers and learned their preference was for lower-fat snacks. To gather more information, the company utilized its existing scanner data and determined that consumers purchase more popcorn, pretzels, and other healthy snack options. In response, marketing managers are considering developing and introducing a new ultra-low-fat potato chip. The marketing managers have worked with the research and development department to create several prototypes to determine which, if any, consumers prefer.
Imagine you have been hired in the marketing research department for Frito-Lay, and you learn that chip sales are flat. You are tasked with developing a plan to conduct market research to better understand the issue.
Write a memo of approximately 525 words to your supervisor in which you detail the following:
- Explain the situation.
- Define the objective.
- Choose and explain an approach for next steps.
- Recommend the best way to research consumer attitudes towards snacking.
- Suggest 2 additional types of data that could be analyzed, in addition to scanner data, to further understand the consumer behaviors.