The case deals with the dilemma that the CEO of Parle had to face with Parle G, one of its best selling product, and how to keep his company's profit margin at 15%

1. - R Chandrasekhar

2.  Introduced in 1939
 16383600 Parle-G biscuits are consumed per hour
 Offers Value for Money
 46 SKU’s at 12 price points (Exhibit 1)
 Average Price of Parle-G was approximately US$ 1 per kg
 Largest selling biscuit brand by volume in the world in 2002
 Parle’s best selling SKU(100gm-INR4) generated 50% of brand revenues
 Price hike from INR4.00 to INR4.50 – sales dropped by 40% in 2004
 Price was rolled back

4.  Reducing the grammage - January 2008 – 100g to 92.5g
May 2008 – 92.5g to 88g
January 2009 – 88g to 82.5g
 Number of biscuits reduced from 16 to 15
 Cost Control measures undertaken
 To reduce distribution costs manufacturing centers were brought closer to the
wholesalers by franchising production
 Forward Contracts with vendors of raw materials to reduce supply chain costs
 Wax-coated paper replaced by bi-axially oriented polypropylene (BOPP) paper

5.  Rise in Input prices. (Sugar & Wheat)
 Margin decreased from 15% of revenue to less than 10%.
 Parle-G’s low price was undermining other product attributes such as Quality and
Taste.
 VFM is the only value dimension consumers seem to be plugged into with Parle-G.
 Dependence on a single brand and a single SKU
 Parle-G’s share in company’s sales revenue was expected to fall from 68% to 50%.

6. 1. Third largest producer of biscuits in the world
2. 2.Biscuit manufacturing was divided into two sectors – i. Organised
ii. Unorganised

7. Organised sector consisted of 60% of the national market.
Five main categories of biscuits – Glucose, marie, sweet, cream
and milk.
Glucose represented 42% of the market and Parle-G was part of
this category.
This sector produced 107 billion tons of biscuits valued INR 110
million in 2008.
Growth at an average annual 15% rate.
Premium price category had historically grown at a 8 to 10% rate
per each year and it had 20%
More growth than low price category.

8. This sector consisted 40% of the national
market.
It’s mostly consist of the rural market and low-
priced varieties ruled the rural market.
Some local stores are the competitors in the
this market.

9. 1929 – started its business as a manufacturer
of confectionery(western India).
1939- Began manufacturing of biscuits.
Parle had 70 manufacturing sites in India.(10
own & 60 contract mfg.).
Parle-G was gaining success as the biscuit
market was much larger then confectionery
market .
Share in the market: 40% of total biscuit
market and 15% of confectionary market

10. PARLE
G, 500
OTHERS
, 150
PRODUCTION(‘000)
TONS.
REVENUE
:
PARLE
G, 68
OTHERS
, 32
REVENUE(35 BILLION)

11. CATEGORY – GLUCOSE .
• NAME – PARLE G.
CATEGORY – TEA TIME .
• NAME - MARIE
CATGORY – PREMIUM .
• NAME – HIDE & SEEK , CHEESLINGS , JEFFS ,ETC.

12. SERVING DOMESTIC WANTS IS PRIORITY
.
AS PARLE ALREADY HAS 40% OF THE
DOMESTIC MARKET .
AND IT ALSO HAS 74 % OF THE TOTAL
GLUCOSE BISCUITS MARKET.

13. Factors that influenced buying behaviour of
consumer are:
Parle G segmented its customer in two types:
1. Retail customers 2. Institutional
consumers
Social
Factors
•Reference
Group
•Family
Personal
Factor
•Age
•Occupation
•Income
Psychological
Factor
•Motivation
•Perception

14. No competitor till 1996.
Major competitors of Parle- G
Competitors From India
1. Britannia
2. ITC Ltd.
3. HUL
Competitors From Abroad
1. Nabisco (U.S.A.)
2. United Biscuit (U.K.)
3. Campbell Arnott’s
(Australia)

15. • Market penetration strategy with low price.
• Value for money positioning.
• Appeals to all income group.
• Profit margin for distributors is 4% and for retailers is 10-12%.
• High Involvement

16. • Changed the name from Parle-Gluco to Parle-G
• Celebrity endorsements and using the tag-line “G for
Genius” for kids
• Perceived to be “Value for money”
• Meal substitution
Positioning

17. • Small packages trend in India
• Smallest single serve packages Rs.1 for 16.5
g package
• Highest selling SKU was the 82.5g package
priced at Rs.5
• Harmonized with the Indian habit of top-up
shopping as opposed to large buying
• No change in packaging – simple and rustic

18. • Advertisement cost has been Rs.600 mn to Rs.700 mn
• Approximately two percent of annual revenues
• “G mane Genius” campaign
• Incorporating celebrity endorsement
ADVERISEMENT AND
PROMOTION

19. • Considered one of the strongest distrinution
channels in india
• 15 Million Indian retail market in which Parle G is
present in 2.5 Million stores.
• Available even in remote village
• Distribution through 8000 wholesalers
• Have depots all over India
• Distributed to people even at times of emergencies

21. • Reduction in the grammage
• Decrease in advertising expenses
• Focus on premium products
• Increase in franchise production
• Decrease in Distribution Cost