Businesses can either succeed or fail. Sadly, a lot of really good businesses fail because they failed to take any number of factors into account. What begins as a great idea soon gets lost in the unanticipated second and third orders effects of running a business. Proper market research may not eliminate all the pitfalls, but it can provide a clear and negotiable path for a business to make informed decisions. This paper will discuss one such company who has seen sales dwindle in one of its products and is looking for ways to bolster sales.
The Company
Frito-Lay North America, Inc. is experiencing a drop in product sales covering the last three quarters on their Tostitos Bite Size Tortilla chips. Tostitos have been on the market since 1990 and initially enjoyed tremendous success. At the present time there are 16 different types/flavors of Tostitos and Frito-Lay has over 30 separate products on the market. The other products range from tortilla chips to Cracker Jacks. “For more than 75 years, we have enjoyed making the best snacks on earth, starting with simple, farm-grown ingredients”
The focus of this market research was on the bite size chip due to its dwindling sales.
The Objective
The overriding objective of market research is to obtain data on customers and potential customers. The collected data will provide valuable information for business decision making. Thereby, reducing the risks involved in making these decisions. There were a number of factors we looked at; was taste an issue, did the size and type of ingredients of the chip cause the drop in sales, and was there a competitor’s brand tortilla chip people preferred? Individually, these factors might not cause a drop in sales. However, when combined with multiple factors a drop in sales could and has happened.
Research Method
“There are many types of studies which could be defined as observational research including case studies, ethnographic studies, ethological studies, etc. The primary characteristic of each of these types of studies is that phenomena are being observed and recorded. Often times, the studies are qualitative in nature. For example, a psychological case study would entail extensive notes based on observations of and interviews with the client. This measure of time would be qualitative” ("Research Methods", 2012). For this research a taste test was used in a grocery store followed with a short thirteen question survey. Personnel placed Tostitos Bite Size Tortilla chips on a table and allowed any customer who wanted to taste them do so. After tasting them, the customer was asked to fill out the previously mentioned survey. The questions ranged from the sex of the participant, how many times they purchased this type of chip. The taste, texture, color and size of the chip were among a few of the questions asked. One of the questions also asked was, what other competitor’s brand of chips the participants buy and how often they purchase tortilla chips. Once all the participants had completed the survey, the data was gathered and the result grouped by question.
The Data
There were 13 questions asked on the survey. Gender, primary shopper, purchasing regularity, and tortilla chip preference (including packaging, size, shape, taste, texture, and color). Favorite brand, whether the chip was round, triangular, square, or scoop type chips. The final question was, if you had to make changes to the chip what would it be? Customers were allowed to make comments in response to the final question. Nine males and four females participated in the research. Ten of the thirteen participants were the primary grocery shopper in the household. Six of the participants buy tortilla chips 1-2 times a month, with the next closer being 3 who buy them 3-4 times a month. Nobody surveyed preferred flavored tortilla chips. The packing was rated “5” on a scale of 1-5 by 5 participants, as a “4” by 5
