Marketing Mix

Case Study: A-maize-ing Retail Marketing-Mix Test

22% jump in retail sales after one test of 10 in-store advertising, display, and promotional elements

Introduction

Supermarkets are a battleground for packaged goods. Competition for shelf space and the cost of instore promotions make retail a tough market for even the largest companies. A-maize-ing Foods*, a small producer of corn chips and snacks, had some initial success with their unique products and packaging. Their blue corn chips and sweet potato and other vegetable chips had solid sales and growing acceptance among supermarket chains and convenience stores. However, A-maize-ing Foods’ president, Jonathan Gibson, worried about market pressures as their sales grew. Their foods needed the visual appeal and unique flavor to entice people to buy a bag and keep coming back for more. The company also had to fight for shelf space with penny-pinching retailers. And greater market exposure increased the threat from competitors who had large marketing budgets and skill in knocking-off successful brands. The company regularly tested new products, prices, and promotions. One winner was their A-maize-ing Blue Corn Chips, a new product in the segment for healthier natural foods. The chips came in a brightcolored bag with a quirky creative image and the chips had a unique spicy flavor that proved to be popular. The management team believed this product (that they nicknamed ABC Chips) had immense potential, so they decided to test new ways to increase sales and profitability. The team had a long list of marketing-mix changes they wanted to test, but money was tight, so Jon decided to keep the test small. After some heated debate about which one or two changes they should test, the director of database marketing suggested an alternative. He suggested that they use advanced testing techniques to give them the freedom to test more variables at the same speed and cost of testing one or two variables alone. After agreeing on...