Procter & Gamble Italy: The Pringles Launch

Samantha Redding & Cecilia Mercado

PROCTER & GAMBLE ITALY: THE PRINGLES LAUNCH

PLACE & DATE

Italy, 1998

IMPORTANT FACTS

• The idea of Pringles was born for the first time in 1957, when the American snack market promises great growth potential.
• In 1990 P&G expanded into Western Europe and en 1994 was the time for Italy.
• The Italian market was characterized by a lower degree of penetration of salty snacks than in other European countries, not even Frito Lay has establish presence there.
• Snacks represented the fourth largest segment of the Italian grocery market although it was heavily tipped in favor of sweet products, which represented two-thirds of sales, some 2,250 billion lire.
• The sweet snack sector was characterized by a constant innovation of products and packaging.
• About 70 companies served the Italian snack market, but the top 4 companies were responsible for more than 70% of sales and the top eight accounted for almost 95% of volume
• There is an Italian brand already in the market very similar to Pringles that has not be very successful.
• The target for Italian consumers are 13 to 44 year of age where two groups emerge: the hedonists (very heavy snack consumers) & the health freaks (see snacks as unhealthy).
• They did a market test in which it tested excellent acceptance level for Pringles, in terms of both product concept and the appeal of the product itself in taste test.
• The data were stronger than those in all the other countries in which the product has been tested.
• The highest value was given for intention to purchase.
• They tested paprika and barbecue flavors as well as a smaller package.
• On the other side, Italy has been a failure for US leading products.

SWOT ANALISIS

PROBLEMS

What the launch strategy should be?

1. Target market: aiming the product at mothers and fathers with children from 5 to 17 years old, or choose another target?
2. Positioning: a mass product to be introduced as rapidly as possible or different?
3. Distribution: to traditional/mass already covered by P&G or choose others?
4. Retail price: the retail prices that would satisfy the profitability are 3,190 lire for the large package and 2,000 for the smaller one, isn’t too much?
5. Flavors: aside “original” and “sour cream & onion”, was it better to offer paprika or launch something more unusual?
6. Communication: using existing add or create new ones?

RECOMENDATIONS

1. Target market: aim for young people, same as used in the ads “young people expressing their vitality and joy”.
2. Positioning: a mass product to be introduced as rapidly as possible but with a strong positioning with the youth.
3. Distribution: use traditional/mass already covered by P&G and then expand to other channels such as hotels and bars.
4. Retail price: the retail price should be a little higher than competitors but not as much as to be unobtainable.
5. Flavors: aside “original” and “sour cream & onion”, was it better to offer paprika since it was accepted by the Italian market research
6. Communication: use existing add translate to Italian, as it already talked to the youth.

CONCLUSIONS

We think that Italy is a great opportunity for Pringles, it is a growing market and it has a lot of potential, besides they have done extensive research and they really know their business, asides from the experience they have with launching new products in apparently difficult markets.