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 refers to the method a company uses to introduce a new product to the market gradually, starting with a limited geographical area and then expanding progressively over time. In the case of Frito Lay introducing a new variety of Doritos, the product was first launched in a few select cities (Ft. Worth, Texas; Columbia, South Carolina; Peoria, Illinois; and Spokane, Washington). After initial success, the brand then expanded its availability to the whole state, followed by adjacent states, and eventually nationwide. This is a clear example of a rollout approach, as the product is being introduced in stages, starting small and gradually increasing its distribution as the company assesses the product’s performance and demand in each area.
This approach allows the company to test the market on a smaller scale, manage risks, and adjust marketing strategies or production based on consumer response in different regions before making a nationwide push. It’s often used to ensure that the product has the potential to succeed in various markets and to optimize the distribution process.
Let’s look at why other options don’t fit:
- a. Multi-stage introduction: This option is similar to the rollout approach but doesn’t capture the idea of geographical expansion as effectively as the rollout approach.
- c. Test-market expansion: Test marketing refers to introducing the product in a limited area to test consumer response. While this is similar, the rollout approach goes beyond testing and focuses on staged market expansion.
- d. Mass commercialization: This implies a national or widespread launch all at once, which contradicts the gradual approach of the rollout strategy.
- e. Trickle-down approach: This typically refers to a marketing strategy that targets higher-income or more influential groups before gradually reaching broader audiences, which doesn’t apply here.
