Sunchips Case

Introduction

Dwight R. Riskey is the vice-president of marketing research and new business at Frito Lay Inc., a company regarded for its plethora of popular snack food items. The main brands of the Frito Lay enterprise consist of Cheetos, Fritos, Doritos, and Tostitos. Seeing that Dwight is in charge of making sure Frito Lays is constantly acquiring new business, there is pressure when it comes to introducing a new brand of snack food because Frito Lay does not want to invest time and money into a project if it does not yield more than $100 million in the first year. Back in the 1970s, Frito Lay found a consumer insight that called for a more nutritious snack food that was different than the everyday potato chip. In response, Frito Lay launched a healthier snack called Prontos due to fear that the baby boomer generation would stop consuming their normal weight in salty snacks. However, Prontos was soon pulled off the shelves in 1978, not too far after its release date due to several complications: non-committal copy, confusing brand name, too narrow of a market segmentation, and difficulty when it came to manufacturing. With that being said, it is no wonder that Frito Lays is unsure about launching “Sun Chips, another product under the health snack food category, which too faces the same risks.

Recommendation Explained

We recommend that Frito Lays move forward with a nationwide launch of the Sun Chips Multigrain snacks. We formulated this recommendation based upon the pretest market as well as the test market in Minnesota St. Paul area, yielding successful results. The pre-test exceeded the $100 million dollar sales requirement for new products and the market test yielded about $94 million dollars in sales. With more consumer awareness as we pick up nationally and two months left after the testing stage we believe we can meet the 100 million dollar goal set by Frito Lays