Case Study: Parle G

Name

Roll Number

Mustafa Rokreya

140301011

Narendra Kumar
Singh

140301012

Nitesh Kumar
Pandey

140301013

Prateek Jha

140301015

Introduction
Parle had started operations in 1929 as a

confectionary manufacturer, and a decade

later diversified into biscuit-making.
It has 40% of the market share of the total
biscuit industry with a turnover of Rs. 35
billion, as of 2009.
Its offering in the glucose segment is ParleG which accounts for 68% of its total
revenues. Also, the Rs. 4 SKU accounts for
50% of the total of Parle-G sales.

Brand Position
Parle-G is known for its

Value for Money (VFM)

Proposition.
This perception is
strengthened by the
fact that Parle-G prices
had remained constant
since 1990.

Pricing
In 2009, due to increase in raw material prices, the

margins for Parle-G have dipped to below 10%.

In Jan 2004 the company tried to raise the price of
its 100 gms packet from Rs 4 to Rs 4.5, which
resulted in a massive decline of 40% sales within a
period of 6 months only.
To maintain their margins while maintaining price
levels the company has taken the following cost
control measures;
1) By bringing manufacturing units closer to wholeseller by franchising production.
2) By consolidated buying and entering into
forward
contracts with vendors of raw
materials
Parle-G is sold in 46 SKUs at 12 price points.

Porters 5 Forces

Recommendation
We recommend that the price of Rs 4 for

the 82.5 gram SKU be replaced by Rs. 4 for

the 72.5 gram SKU. This would give the
company an advantage as the number of
biscuits shall be reduced to 13.
We recommend that all other SKUs reduce
their gram-mage by 12.7% in order to
provide for better margins.
Also, certain SKUs will need to be
discontinued: Rs. 3, Rs. 5 and Rs 12 pack
as the differences in weight from the next
SKU are negligible.

Marketing Strategy
The company needs to leverage its long term affiliation

with customers and goodwill in the market to be able to

increase the prices of its products in the near future.
The marketing campaign will have to be designed in a
way as to help the company improve its margins by
raising prices while retaining its dominant market share.
We recommend that the company spend a considerable
amount of its Rs. 700 million on positioning the Parle-G
brand as one associated with a long standing tradition
quality and fit for consumption by adults as well as kids.
This is supported by the fact that the projected
demographic of the country in 2011 forecasts almost a
25% growth in the age group of 15-34.

Target Segment
As of 2009, the brand penetration for Parle-

G is strongest in the rural segments R2, R3

and R4, accounting for almost 67.4% of the
glucose biscuits sold in this market.
Also, the consumer profile is predicted to
change by
2015.
Annual
%age
Category

Income

Seekers

No. Of House Holds

Change

2005

2015

201-500

10.9

55.1

505.50%

Aspirers

91-200

91.3

106.1

116.21%

Deprived

<90

101.3

74

73.05%

Conclusion
This increasing consumer income would

result in an increase in consumption.

The demand curve will see a shift due to an
increase in income which leads to an
increase in prices.
This justifies a price hike in the near future
along with a market campaign to sustain
the same.

Thank You