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Determinants of Strategic Options

Determinants of Strategic Options. History: Prontos introduced in 1974 O’Grady’s introduced in 1983 Mid 1980s - flavor line extensions In 1988 - different product formulations. Strategy: Strategy and pricing was modeled after the company’s Doritos product.

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Determinants of Strategic Options

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  1. Determinants of Strategic Options • History: • Prontos introduced in 1974 • O’Grady’s introduced in 1983 • Mid 1980s - flavor line extensions • In 1988 - different product formulations. • Strategy: • Strategy and pricing was modeled after the company’s Doritos product. • The advertizing messages would be fun, wholesome and simple. • Distribution - Frito Lay’s “store-door delivery system.” • Variety of products with high quality. • Packaging of Sun Chips. • Approval for new production line.

  2. Alternative Analysis • Continue testing in the Minneapolis St. Paul market for 6 months. • National launch with a $22 million marketing campaign.   • National launch with a $30 million marketing campaign.

  3. Recommendation • The product should be Nationally launched. • A Marketing Investment of 22 million is preferred. • 1st year projections show better Net Sales after cannibalization and Marketing Expenses are subtracted.

  4. References • http://www.sunchips.com/ • Kerin, Roger, “Strategic Marketing Problems,” 12th ed., Pearson Publishing • Walker, Orville, “Marketing Strategy,” 7th ed., McGraw-Hill Pub., 2011. • http://www.fritolay.com/your-health/from-farm-to-store.html

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