To: Frito Lay
From: Reena Childers
RE: Sun Chip Marketing Strategy
Frito Lay is introducing their new product, Sun Chip. I believe that they should offer their product to customers by offering them for free for the testing. With this being said, Frito Lay should give out the smallest bag, 2.5 oz out as free samples and in turn gain sales from those who would like to be repeaters and keep buying the product. This new strategy will be able to attract new customers and gain a larger sales volume. I believe that by this strategy, Frito Lay will be able to achieve 100 million dollars in their first year of sales and obtain loyal customers.
Sun Chip is a new product released from Frito Lay that is a multigrain chip….
The initial volume is expected to rise 7.1%. This will lead to more sales volume longer down the road (exhibit 2). The free samples are a very easy way to eliminate any possible risks for failed flavors or for extending geographical areas. Free samples are a more affordable way to increase sales by avoiding major increases in advertising (exbihit 3).
Assumptions and Uncertainties
It is assumed that the free samples should be given out to those customers who would be most assumed to purchase the product. A risk would be that some potential customers interested in the product do not get notified based off of their decreased availability to the free samples.
At the end of the month, Frito Lay should look into the calculations behind this possible marketing strategy and react based on their findings. If the calculations show that the profit is possible then they should act instantaneously on the marketing strategy. The faster the product is launched, the more likely it is that Frito Lay would come on top as the number one multigrain chip manufacturer.
Exhibit 1 (Sales before marketing…