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C ASE - FRITO-LAY TARGETS THE HISPANIC MARKET;Frito Company was founded in 1932 in San Antonio, Texas, by Elmer Doolin. H. W. Lay;Company was founded in Atlanta, Georgia, by Herman W. Lay in 1938. In 1961, the two;companies merged to form Frito-Lay, Inc., with headquarters in Texas. Frito-Lay produced;distributed, and marketed snack foods with particular emphasis on various types of chips. In 1965;the company merged with Pepsi-Cola to form PepsiCo, Inc. Three decades later, Pepsi-Cola;combined its domestic and international snack food operations into one business unit called FritoLay Company. Today, Frito-Lay brands account for 59% of the U.S. snack chip industry, and there;are more than 45,000 Frito-Lay employees in the United States and Canada.;In the late 1990s, despite its overall popularity, Frito-Lay faced a general lack of appeal to;Hispanics, a fast-growing U.S. market. In an effort to better penetrate that market, Frito-Lay hired;various market researchers to determine why Hispanics were not purchasing their products as often;as company officials had hoped and what could be done about the problem. In the studies, market;researchers discovered that Hispanics thought Frito-Lay products were too bland, Frito-Lay;advertisements were not being widely viewed by Hispanics, and Hispanics tended to purchase;snacks in small bags at local grocery stores rather than in the large family-style bags sold at large;supermarkets.;Focus groups composed of male teens and male young adultsa group that tends to consume a lot;of chipswere formed. The researchers determined that even though many of the teens spoke;English at school, they spoke Spanish at home with their family. From this discovery, it was;concluded that Spanish advertisements would be needed to reach Hispanics. In addition, the use of;Spanish rock music, a growing movement in the Hispanic youth culture, could be effective in some;ads.;Researchers also found that using a Happy Face logo, which is an icon of Frito-Lay's sister;company in Mexico, was effective. Because it reminded the 63% of all Hispanics in the United;States who are Mexican American of snack foods from home, the logo increased product;familiarity.;As a result of this research, Frito-Lay launched its first Hispanic products in San Antonio, in 1997.;Within a few of years, sales of the Doritos brand improved 32% in Hispanic areas. In May 2002;Frito-Lay teamed up with its Mexican affiliate, Sabritas, to launch a new line of products to further;appeal to Hispanic customers. Included in these offerings are Sabritas Adobadas tomato and chile;potato chips, Sabritones Churrumais fried corn strips with chile and lime seasonings, Crujitos;queso and chile flavor puffed corn twists, Fritos Sabrositas lime and chile chips, El Isleno;Plantains, and others.;More recently, Frito-Lay has been relying on input and guidance from the Adelante employee;network, which is a multicultural Latina/Hispanic professional organization associated with;PepsiCo. At Frito-Lay, the organization's mission is to help develop a diverse, inclusive culture;accelerating growth opportunities for associates while providing a competitive advantage in an;increasingly diverse marketplace. As part of this effort, Adelante has been used to help develop;new flavors and advertising programs for Hispanics. Based on information gleaned from Adelante;members, new Frito-Lay snack products are being test marketed in several states, and guacamole-;flavored Doritos became one of the most successful new-product launches in the company's;history.;Discussion;In the research process for Frito-Lay Company, many different numerical questions were raised;regarding Frito-Lay products, advertising techniques, and purchase patterns among Hispanics. In;each of these areas, statisticsin particular, hypothesis testingplays a central role. Using the case;information and the concepts of statistical hypothesis testing, discuss the following;1. Many proportions were generated in the focus groups and market research that were conducted;for this project, including the proportion of the market that is Hispanic, the proportion of;Hispanic grocery shoppers that are women, the proportion of chip purchasers that are teens, and;so on. Use techniques presented in this chapter to analyze each of the following and discuss how;the results might affect marketing decision makers regarding the Hispanic market.;a. Suppose that in the grocery shoppers w changing cultural v Hispanic men are n randomly sample 6;shoppers from around are women. Does t;evidence to conclu;Hispanic grocery s;b. What proportion of;advertisements in S;says that in the pas;about.83. We wan;this figure is true. A;Hispanics is selecte;testing this hypothe;and explain this ou;this study using;2. The statistical mean can be used to measure various aspects of the Hispanic culture and the;Hispanic market, including size of purchase, frequency of purchase, age of consumer, size of store, and so on. Use techniques presented in this chapter to analyze each of the following and discuss how the results might affect marketing decisions.;a. What is the averag Doritos Salsa Verd;indicate that the me;really correct? To t;randomly contacts;Salsa Verde with re;Excel output. Discu;hypothesis test to d;age is actually 31.;of purchasers are n;population.;b. What is the averag;customer on chips;hypothesized that t;researcher who kno;believes that this fi;prove her case. She;Hispanics, has them;purchases for one y;following figures. A;techniques from th;Assume that expen;normally distribute


Paper#19725 | Written in 18-Jul-2015

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