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:
A rollout approach is a strategy used by companies to gradually introduce a product into the market instead of launching it nationwide all at once. This method allows companies to assess product performance, gather customer feedback, and refine marketing strategies before a full-scale launch.
In the case of Frito-Lay, they first introduced the new Doritos variety in four cities: Ft. Worth, Texas; Columbia, South Carolina; Peoria, Illinois; and Spokane, Washington. After achieving success in these locations, they expanded the product availability to the rest of the selected states, then to neighboring states, and eventually to the entire country. This step-by-step expansion aligns with the rollout approach, as it allows the company to manage risk, adjust production based on demand, and optimize distribution strategies.
Benefits of the Rollout Approach:
- Market Testing & Feedback: By starting in a few locations, Frito-Lay can gauge customer reactions and make adjustments if necessary.
- Cost Efficiency: Instead of spending on a nationwide launch all at once, the company spreads out costs over time.
- Risk Mitigation: If the product fails in the test markets, the company can halt expansion before investing in a larger launch.
- Scalability: The approach ensures that production and distribution systems are capable of meeting growing demand.
Why Other Options Are Incorrect:
- Multi-stage introduction (a): While this may sound similar, it refers to a structured plan for different aspects of product launch, such as advertising, sales, and distribution, rather than geographic expansion.
- Test-market expansion (c): This refers to selling in one or two test markets to gauge interest before deciding on further expansion.
- Mass commercialization (d): This involves launching the product nationwide all at once, which is not the case here.
- Trickle-down approach (e): This typically applies to economic or fashion trends, not product rollout strategies.
Thus, “rollout approach” is the best choice for this scenario.
