Frito Lay introduces a new variety of Doritos initially in Ft. Worth, Texas; Columbia, South Carolina; Peoria, Illinois; and Spokane, Washington. After its initial success, Frito Lay markets the Doritos in the whole of the selected states, then in the adjacent states, and finally in the entire country. Frito-Lay is using a rollout approach for its new variety of Doritos.
a. multi-stage introduction
b. rollout approach
c. test-market expansion
d. mass commercialization
e. trickle-down approach
The correct answer and explanation is :
The correct answer is b. rollout approach.
Explanation:
The rollout approach is a method of introducing a new product gradually to different regions or markets in stages. Initially, the product is launched in a small, select area to gauge its performance and customer response. Based on the results, the company expands distribution to other regions, starting from nearby locations and eventually rolling out to the entire country. This approach is often used for new products that require testing before a full-scale nationwide release.
In the case of Frito-Lay, the company first introduces the new variety of Doritos in specific cities such as Ft. Worth, Texas; Columbia, South Carolina; Peoria, Illinois; and Spokane, Washington. After observing its success in these areas, the product is then expanded to other parts of the state, followed by adjacent states, and eventually the entire country. This gradual, step-by-step expansion aligns with the principles of the rollout approach.
This approach provides several advantages:
- Risk Management: By testing the product in smaller markets, the company can identify and address any issues or improvements before full-scale distribution.
- Feedback Collection: It allows the company to gather customer feedback from different regions and adjust marketing strategies accordingly.
- Efficient Resource Allocation: The company can allocate marketing and distribution resources more effectively by focusing on specific areas at a time.
A multi-stage introduction (option a) could also refer to the gradual introduction of a product, but it does not specifically emphasize the geographical rollout strategy that the rollout approach entails. Test-market expansion (option c) typically refers to a similar strategy but is more focused on testing the product in different markets rather than rolling it out in stages. Mass commercialization (option d) refers to launching a product nationwide or in large-scale distribution immediately, which is different from the gradual approach of a rollout. The trickle-down approach (option e) generally refers to the introduction of a product to high-income consumers before gradually reaching lower-income segments, which does not apply here.
