Pepsi Reveals Secret to Selling More Corn Chips

There's nothing coincidental about the way grocery stores display and price their merchandise. Focus groups used to be the go-to resource for such market research, but today manufacturers like beverage behemoth PepsiCo find virtual simulation technology to be the cheaper, faster option.

When Pepsi was trying to decide whether it was more profitable to offer one sale price for several bags of Frito-Lay chips (a practice called multiple pricing) or individually priced bags at a discount, the company used Decision Insight's SimuShop, a 3D store-simulation technology, to allow a select group of consumers to "shop" the aisles of a virtual grocery store. The research showed that grocery retailers sell 23 to 30 percent more merchandise using multiple pricing.

"It seems like a simple idea, but it has huge implications for the business," says Michelle Adams, vice president of shopper insights at Pepsi.

There's nothing coincidental about the way grocery stores display and price their merchandise. Focus groups used to be the go-to resource for such market research, but today manufacturers like beverage behemoth PepsiCo find virtual simulation technology to be the cheaper, faster option.

When Pepsi was trying to decide whether it was more profitable to offer one sale price for several bags of Frito-Lay chips (a practice called multiple pricing) or individually priced bags at a discount, the company used Decision Insight's SimuShop, a 3D store-simulation technology, to allow a select group of consumers to "shop" the aisles of a virtual grocery store. The research showed that grocery retailers sell 23 to 30 percent more merchandise using multiple pricing.

"It seems like a simple idea, but it has huge implications for the business," says Michelle Adams, vice president of shopper insights at Pepsi.

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