Frito-Lay has an impressive house-of-brands that together, account for over 60% of the salty snack market! When the company approached us four years ago they were seeking a solution to their primary challenge – their house was over-crowded. At the time, most of Frito-Lay’s $14B+ in revenue was generated by highly substitutable brands sitting side-by-side in 40 feet of space, distinguished by little other than taste preferences, and competing for the same 3-4pts. of category growth.
All the while, brands like Special K & Nike were expanding with more brand-centric innovation strategies, stretching into new categories with 7-14% CAGR while their base categories crept along at 1-3%. Management issued a challenge for Frito-Lay to replicate this approach, so they conducted traditional, survey-based research from which they drew the following important but costly conclusions:
- No matter the question, almost every response was biased by whether the respondent thought the new brand/category combination would yield an appealing product.
- Categories that consumers considered a “fit” were so closely related to the current category that the brand often didn’t confer any unique benefits.
To overcome these pitfalls, Frito-Lay began looking for more advanced methods, but had just ended a multi-year relationship with a neuro-marketing firm who measured what happens with the brains, but not the minds of consumers. Accordingly, Sentient Decision Science was chosen specifically because we offer scaled technology that reveals what consumers implicitly think, and more importantly how that contributes to decision-making. Frito-Lay & Sentient partnered on a landmark extendibility study involving 11 brands, 100+ category extensions, 30,000 respondents and 14,000,000+ subconscious measures.
While multiple methods were used, the centerpiece for this research was Sentient Prime®, a proprietary web-based platform that combines behavioral science & mobile technology to uncover consumers’ subconscious perceptions & emotions. It works by recording minuscule changes in mental processing that results from exposure to stimuli which can then be analyzed to reveal specifically what’s in the mind of the consumer.
Ultimately, Sentient’s advanced implicit methods not only generated a pipeline of demonstrated successes, but also established the following behavioral principles to formulate better future extension strategies:
- Hold on loosely to your guardrails. As brands move to new categories, fewer attributes will always be implicitly associated with the brand.
- Fit is not enough. Brand fit provides the necessary credibility for a new product to be considered, but doesn’t guarantee sufficient differentiation to drive preference.
- Know what you’re implying. Consumer appeal will be based on subconscious inferences about which characteristics the brand will transfer from its current product portfolio into the new category (which, if not understood can lead to product failure).
- Manage your “brand constant.” With every added category, consumers will implicitly understand what is always true of the brand – making future extensions easier.
Sentient’s implicit extendibility research has now spawned multiple highly successful launches, including Mac & Cheetos and Cheetos Chicken Fries. Additionally, Doritos followed up Doritos Locos Tacos with Doritos Loaded, both at 7-Eleven (where it was 2nd best-selling SKU) and Walmart where it has helped reinvigorate the Frozen Foods category – all of which has enabled Frito-Lay to extend several of its megabrands well beyond the salty snack aisle.
Visit Sentient Decision Science at sentientdecisionscience.com.
Read more innovative case studies in the Insights That Work eBook.