Cheetos Marketing ResearchApplication Case 4

GROUP 2

Sarah Mooiweer sam239@pitt.eduDevin Goudey drg31@pitt.eduJaclyn Montgomery jem215@pitt.eduKelsey McConville kam281@pitt.eduKyle Boronky kjb87@pitt.edu

INTRODUCTION

After determining the interests of consumers and the specifics of our real

cheese Cheetos product, the final step is to promote, price and place our product. It

is vital to properly position and price our product in order to compete in the

marketplace. In order to make decisions we will recall on consumer behavior theory

to help us properly execute the 3 additional “P’s” (Price, Place, Promotion). Our

product presents a large challenge: deciding where properly display and sell our

real cheese product. In the following paragraphs we will outline our overall plan

and begin implementation. By backing our price, promotion and place decisions

with theory we feel that our decisions will help our new product succeed against

competitors.

PROMOTION

From the results of our multi-attribute attitude model (MAAM), we can see

that consumers heavily value a product based on taste and satisfaction. From the

results of our laddering exercises we were also informed that health and variety

play an important part in how consumers perceive a product. With these

characteristics in mind, we can use different marketing techniques to manipulate

how consumers perceive our product and incorporate them into our promotional

campaign.

We can also reinforce customers’ attitudes about the product by adding a

new attribute: real cheese. By emphasizing in our promotional campaign that our

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queso is made with real cheese, we can reach a larger amount of consumers who

may be health conscious or who pay attention to ingredients.

Lastly, by promoting the many flavors of our queso, we can show consumers

that we offer variety. Some consumers become bored with the options that are

available to them. This is known as need recognition. By emphasizing that we offer a

variety of flavors, we can fulfill need recognition for bored and novelty-seeking

consumers.

AD DESIGN

When planning our print advertisement design, we decided to create an ad

that was simple and vivid. The limited writing on our ad and the picture of the jar of

queso allows customers to draw conclusions about our product right away. The

sombrero above the jar communicates a party atmosphere as well as the ethnic

aspect of the cheese dip. They can see that it is made with real cheese from the jar as

well as the tagline at the bottom corner. This tagline was actually used in another

Cheetos advertising campaign so we thought if we integrated it into this new

product launch, it would make the product seem more familiar and relevant to the

brand. The “K, So?” joke is also a way to engage the consumer to try and understand

the joke punch line. Finally, the vividness of color in our ad is also appealing to

customers as it catches attention and relates the orange back to the Cheetos brand.

We know that imagery processing is more memorable than discursive processing;

therefore, we went with an ad that has a clear, vivid image of the queso and relates

our product back to the Cheetos brand, which customers are aware of. There is a

copy of this ad in the appendix.

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PROMOTIONAL EVENT

For our promotional event we want to interact with consumers in stores.

Incorporating important consumer behavior concepts into our event will help us

understand the consumer and satisfy their needs. Specifically, we will focus on

social influence theories in the execution of our promotional event.

Our event will focus on a taste test of our real Cheetos Queso product. We

will set up a display and table at the end of the snack aisle to help consumers make

the connection between our queso and the Cheetos snacks. We will also set up a

branded refrigerator in the snack aisle for easy access to our real cheese queso

product that requires refrigeration. Next we will set out our three flavors with what

we believe is going to be our best seller in the middle (Original Chester Cheddar).

We want to focus on the compromise effect. This idea explains that a consumer

tends to favor the middle option. If we can have consumers choosing and enjoying

our original flavor this may increase the likelihood of them trying the other flavors

in the future. We now turn our attention to social influence factors involved with

our store displays and samples.

At our in-store events we will be giving out samples of each of our flavors

while focusing in on direct social influence principles. This demonstrates

reciprocation. People may be more likely to buy when they receive something for

free. Even if they do not buy, this may spark their interest in the product and they

may ask questions about it. This also includes the gift-before-favor technique

through free samples and promotions that we are offering.

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Next we will work to incorporate actions to promote indirect social influence.

Understanding that consumers perceive people around them without interacting

with them, when consumers gather around our booth they will look for cues on how

to react. Consumers have a need for affiliation and if we can set an anchor on how to

act - people should follow suit. Using discoveries from the ‘T-shirt Study’, we must

make sure consumers do not feel their sample is contaminated. By individually

portioning out samples and letting consumers enjoy and gain information by

touching the product this may help to induce sales. Finally on each bag of Cheetos in

each store we will include a coupon detailing our new Cheetos Queso product.

ASSUMPTIONS/LIMITATIONS

Our promotion strategy will also present us with limitations as well as follow

our assumptions from learned concepts. A major limitation to us will be making sure

to select correct mediums to run our print advertisement. We need to focus on

choosing the best newspapers, magazines and other print media to reach our

desired audience. A limitation presented by the promotional event will also be

making sure to choose the correct stores and locations to set up booths. We will lose

money if we select low traffic stores where we are not exposed to a high number of

consumers. Potential limitations center around the extent to which our use of CB

theories in our promotion are affective. Our efforts will be useless if they do not

meet our objectives and spread the word about our Cheetos Queso product.

PRICE

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We began our research in pricing out our new product at a few local grocery

stores in Pittsburgh. We traveled to Giant Eagle and Shop’n Save to gather some

information on prices of local competitors as explained in the chart below:

Grocery store Tostitos (Brand Name) Generic Brand

Giant Eagle $3.49 $2.99

Shop’n Save $3.69 $4.26 ($3.99 on sale)

As explained above, each store prices the same product differently.

Therefore, we recognize a range for which we can price our Cheetos Queso. We

wanted to set a price that satisfies both Giant Eagle and Shop’n Save in different

ways. We decided to price the product at $3.39 initially as a penetration technique

before setting a normal price of $3.59. Our initial price is a little lower than our

previously estimated price of $3.50, but we are confident this price fits within the

appropriate price range.

A number of considerations were made when pricing our new product. The

first was recognizing the potential for internal reference prices being set by those

already familiar with the Cheetos brand. Any sort of association made in conjunction

with the brand can have either a positive or negative perception, depending on the

consumer. Next, we looked at the anchoring affect that the brand may have on the

perception of our new product. Consumers may anchor on the quality of the Cheetos

chips or on the quality and price of our competitor’s products.

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We wanted to focus our attention on the left digit effect and the heuristic

relating to price and quality. Recognizing our competitors also use precise number

pricing, attempting to round the price of our product would result in the perception

of higher price. In Giant Eagle, we will rely on the heuristic between price and

quality. Consumers will recognize that a Cheetos branded product of a higher price

must equal higher quality. On the other hand, Shop’n Save consumers tend to spend

more money on our competitors products already. A final price of $3.59 would allow

consumers to apply the compromise effect and choose our product over our

competitors once the promotional price has expired.

ASSUMPTIONS/LIMITATIONS

There are of course a number of assumptions and limitations that must be

made when deciding the price of our product. First, our research on competitors

pricing was limited to two stores in the Pittsburgh region. Second, we assume that

we must price our product the same in all stores. This played a crucial role in the

determination of an exact price. Lastly, we were forced to assume that consumers

would rely on the specific heuristics and theories we stated above.

PLACE

Our product will be introduced in supermarket chains across United States,

but some chains are only prevalent in certain regions of the country. The stores that

our queso will be sold in are: Walmart, Sam’s Club, and Target (national);

Albertson’s and Safeway (west); BI-LO, Food Lion, Piggly Wiggly, and Winn-Dixie

(south); Giant Eagle, Giant Food, Shop’n Save, and ShopRite (east). We believe that

the strategy of placing our product in these large supermarket chains will have two

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benefits. It will reach and give exposure to the greatest number of potential target

consumers and will align with current Cheetos products that are already in those

stores. The queso will be placed in the cheese aisle between the generic lowest

priced brand and highest priced Tostitos brand. As stated above, this is because we

believe that our consumers will partake in the compromise effect where they pick

the middle option in a set.

Since this is a product extension of an already established line of cheese

products, it is crucial that we have a display at the end of the cheese aisle that

contains both the Cheetos puffed cornmeal snacks and the new queso. We decided

to do this endcap strategy for two reasons. This will attract a consumer that does

not go down the cheese aisle but rather passes by the end of the aisle. On the other

hand, a consumer that already went down the cheese aisle will most likely exit via

the end aisle and will pass by the queso once more. The theory behind this is rooted

in the perceptual process where a consumer is first exposed to the product, then the

display will grab the consumer’s attention and finally the consumer will assign a

meaning to the display. The amount of times that the consumer comes in contact

with the display will increase the likelihood that the consumer will begin to create

an association with Cheetos two products, the puffed cornmeal snacks and queso.

ASSUMPTIONS/LIMITATIONS

Due to travel limitations, we were only able to check out the placement of

queso in local supermarket chains (Shop’n Save and Giant Eagle). We also only

visited two stores across the Pittsburgh metropolitan area, so displays and product

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placement may differ in the same chain throughout this region and in different

chains throughout different regions.

CONCLUSION

Now that we have determined the “3 P’s”, it is all about proper execution. We

have identified the best price for our product through research from the market and

stores where we would like to sell our product. After determining pricing we then

moved to identify place and where we think this new product can succeed. Finally

we designed what we believe to be the best print advertisement and promotional

event for attracting consumers. All of these “3 P” decisions were focused on

important CB theories we have learned and discussed throughout the semester. We

backed these decisions with information gathered from our laddering and MAAM

exercises performed during each phase of the application case. From the first steps

of primary research and product development, to this final step, we feel this Cheetos

Queso is a great brand extension and new product for the Cheetos brand.

APPENDIX

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A

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