Laws & regulation

 

 

Laws on advertising- Policies as stated below can be a huge threat for Pringles.

 

•  Provisions of the Code of Advertising Practice

             These provisions prevent:  marketing to children that uses promotional offers, licensed   characters or celebrities in food                    advertisements other than for fruit and vegetables; food advertisements that condone or encourage poor nutritional habits or              dietary practice; and food advertisements that encourage pester power or use hard sell or high pressure techniques

 

• In WHO’s (World Health Organization) 2010 recommendations on marketing to children (13), the approach is primarily one of reducing health risks while not constraining responsible marketing. Specifically, the document calls on Member States to adopt policies that reduce the extent of exposure to, and the power of, marketing messages which promote the consumption of foods high in saturated fats, trans-fatty acids, free sugars or salt in order to reduce the risk of non communicable diseases.

 

 

 

Obesity

 

 

Obesity has caused many problems to the snack industry. Increase in obesity means that customers will move out from such high fat snack foods to low fat foods. Hence snack foods such as Pringles are at a much threat.

 

According to the researchers done by the Institute for Health Metrics and Evaluation(IHME,2014) at the University of Washington, nearly two third of men and women in UK suffer from Obese which is much higher compared to the past three decades. United Kingdom has a high obese rate of 66.66% as shown in figure 1. (Guardian,2014)

 

This means that the UK market for Pringles has a higher rate of being affected.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demographic Structure

 

 

Figure 2 shows the population structure of United Kingdom.(Index mundi,2014 & CIA World Fact Book)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The above structure shows that the adult population is much higher. Hence this can be a threat for Pringles as their main customer base are children & teenagers. As the adults are much more health conscious, snack foods such as Pringles, find such a population structure unfavorable for their business.

 

 

 

Substitutes

 

 

There has been an increase in substitutes for snacks. E.g.:- chips, lollipops, chocolate, etc.

 

 

 

Recessions

 

 

Recessions means lower disposable income. Hence there can be a reduction of sales in countries which Pringles are sold.

 

 For example, Japan has been undergoing a recession recently. Therefore a chance of pringles being affected is possible, as they do have their customer base built up in Japan. (Guardian, 2015)

 

 

 

Campaigns for minimizing snack food consumption

 

 

There are many campaigns carried out in order to promote the avoidance of high calorie and unhealthy snack foods.

 

Examples of such campaigns are the EU school fruit campaign.                                                                                                     A research was carried out to find the effects of the EU School Fruit campaign. A sample from the primary schools in the city of Rome during 2010 and 2011 were taken to find the consumption of unhealthy snacks. They allocated supermarkets to treatment and control groups depending on whether they are located or not near treated schools and estimate the causal effect of the program by comparing the changes in the sales of snacks in treated stores with the changes in control stores. They found evidence that the campaign reduced the consumption of unhealthy snacks bought in stores located in high income areas. (European Union,2012)

 

Hence such campaigns act as a major threat to snack manufacturing companies such as Pringles.

 

 

 

Competitors

 

 

Competitors are a major threat for any business. Pringles as well have many competitors.

 

Due to the existence of brands producing similar products at lower prices.                                                                                     Snack industry has low barriers to entry. Hence Pringles has threat of high competition from the major competitors, like lays and small upcoming competitors.