Marketing Research Strategies at Frito$-$Lay

This activity is important because marketing research is a critical function in successful firms. 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 activity is to demonstrate your understanding of the marketing research process in the savory snack industry.

In $1932,$ C$.$E$.$ Doolin purchased a bag of corn chips at a small San Antonio caf$.$ 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 $37$ percent of the savory snack industry in the United States. Currently, the company has about $55,000$ employees in the United States and Canada.

Read the case and answer the questions that follow.

Recently, Frito$-$Lay management noticed that its market share in the savory snack category was declining. To investigate, Frito$-$Lay managers reviewed its monthly sales data and discovered 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 and organic foods. To gather more information, the company utilized its existing warehouse of scanner data and determined that consumers were purchasing more popcorn, pretzels, as well as other organic, healthy snack options. In response, product managers developed an organic kale$-$based snack chip and an organic seaweed snack chip. The marketing managers then worked with the research and development department to run several taste tests to determine which, if any, snack consumers preferred.

Frito$-$Lay's first research objective was to

Multiple Choice

determine the most effective advertising plan.

understand why Lay's potato chip sales are flat.

add a new flavor of Fritos.

determine new pricing objectives.

increase promotional spending on Lay's.