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IntroductionJourney of Parle-G started in 1939, when Parle Product Pvt. Ltd launched its first biscuit brand in

India. A cream-coloured, yellow-stripped, wax-paper wrapper with a photo of a cute young girl,containing 10-12 biscuit with the company's logo on it and you would know these are Parle-Gbiscuits. Over the years, many varieties of biscuit came and went but nothing much has changedwith this biscuit, except for packs. Even after 70 years of its birth, it is still known for its superiorquality and taste across the length and depth of the country.

Parle-G, being the world‟s largest selling biscuit brand, accounts for more than half of the totalrevenue of the company (Business Standard, 2009). Although past few years, there has been aconsistent decline in its sales growth, it still maintains the superior position in the biscuit market.This essay tries to analyze its current situation and position in the biscuit market, particularly inglucose-biscuit market segment. Entire essay is structured into five sections. The next sectionputs some light on Indian biscuit industry along with glucose-biscuit market segment; whereasthird section analyzes the behavior of Parle- G‟s consumers. Situation and positioning of Parle -Gtogether is studied in the fourth section; finally essay is concluded with summary of issues in fifthsection.

Biscuit industry overviewIndian biscuit industry:-

Indian biscuit industry, worth Rs.82bn, has been growing steadily in past ten years. In 2008-09,industry grew by 15% in current-value terms and is expected to grow by 9% constant valueCAGR in 2009-10 (GMID, 2009a). Despite of being moderately attractive industry (Appendix-1),there has been a significant growth in numbers of domestic and international biscuit companiesin the industry. Current top biscuit manufacturers in the industry are Britania, Parle and ITC, withBritania is leading with 35% of total biscuit market.All these companies have range of biscuitvarieties in their biscuit-portfolio.

Glucose-biscuit market segment:-

Broadly, biscuits can be categorized into Glucose, Cream, Crackers, Cookie and Marie (fig.2).Glucose-biscuit segment accounts for more than half the size of total biscuit market. Parle-Goverwhelmingly leading the front with 61% share of total glucose-biscuit market segment and itsrivals Tiger Glucose and Sunfeast Glucose have been steadily growing in last few years, throughaggressive marketing and product innovations. Fig.2 shows the position of top biscuit brands inglucose-biscuit segment.



Analysis of Parle-G and its consumersSWOT analysis:-

Parle- G, widely recognized as „Common Man‟s Biscuit‟, is the flagship biscuit -brand of Parle‟sbiscuit-portfolio (Appendix.2). Current situation of Parle-G with respect to its external and inetrnalenvironment can be analyzed using SWOT analysis (fig.3).

Consumer analysis:-

Consumers of Parle-G belong to all classes of society and income, rural and city areas, and age-groups. Some of them consume it as part of breakfast; while others have it as a part of theirmeal. Being a consumable product, purchase of Parle-G is not much influenced by culturalfactors. Its consumers‟ bahviour tend to get affected by social, indvidual and pshycologicalfactors (fig.4).

Because of its milky and sweetish taste, people, perticularly young children, easily get influencedby friends, family-members or relatives etc. (i.e. primary-reference group-members), when theysee others eating Parle-G. Families, in India, usually prefer to take Parle-G along with tea, coffeeor milk, and also offer it to guests as a part of snacks. Secondary-refernce group-members, suchas health and medical-practitoner, advice people to consume Parle-G as it is halthy, nutritiousand source of quick energy. For this reason, there is a practice in India to distribute Parle-G inthe activities related to sports or blood donation, to the participants. Age-group wise, itsconsumption is high mainly in old-age group (50-60 years) and kids group (3-12 years). Kids,who have habit of eating Parle-G at their young age, continue to eat it during their growing age.

Due to its low-price, consumers with lower and medium income-level mostly prefer Parle-G. Poorbuyers (i.e. laborers) buy it because of its affordabilty and high glucose-content, to satisfy theirhunger; where as medium income-level buyers get motivated because of their perception aboutParle-G, as value-for-money product. Consumers, with higer income-level and status (i.e.mangers, executives, business men etc.), are less inclined towards Parle-G as they can affoardto buy more expensive biscuits or snacks. Therefore, in comparision to rival biscuits,consumption of Parle-G is more in rural areas and by lower and medium-class societies.

Marketing Mix (4P‟s) ProductParle-G is one of the most popular, oldest and largest selling brands in India. Over the years, thisbrand has been a symbol of health, quality and taste. On the similar lines of Britania‟s Tiger,which already has its five different variants; Parle-G followed line-extension branding strategy tointroduce recently two of its variants, Parle-G Milk Shakti and Parle-G Magix, distinguishedbasically on flavours (Appendix-3).

Product Life Cycle:-



Launched in 1939, Parle-G enjoyed huge success for next sixty years by capturing almost allparts of Indian markets. It has now reached to its maturity stage and highly competitiveenvironment has been causing consistent slowdown in its sales growth for past few years. It hasbeen facing tough competition not only from all biscuit categories but also bakery products. Itsmajor competitors, Tiger and Sunfeast have been able to grab buyers‟ attention and gainsignificant sales growth past five years. Introduced in 1998, Parle‟s own Hide&Seek (cream)biscuit, Parle- G‟s biggest internal competitor, has been seeing substantial sales improvementand rapid market acceptance.

Product classification and levels:-

Parle-G can be classified as low-end, non-durable, and consumable mass product on the basisof price, durability and quantity respectively. Based on utility, it can be classified at convenience,impulse good. Fig.6 shows five levels of customer-perceived-value (cpv) benefits of Parle-G.Being a basic product as biscuit, its core-ben efit is to satisfy the consumer‟s hunger (i.e. personalneed). It gives expected milky and sweetish taste with rich nutrition, along with quick energy fromaugmented glucose-content. It is now available in two flavours (i.e. choco and cashew) andexpected to come in more flavours in near future.

Packaging:-

For decades, consumers recognize Parle-G instantly by its packs, which used to consist ofyellow wax-paper wrapper with a baby face on the front, along with its brand name andcompany‟s red -coloured logo „Parle‟. Many regional biscuit -makers duplicated the pack style andcolour and sold their low quality biscuits. In order to avoid such duplication and keep the cost

down, Parle-G now comes in low-cost plastic covering. Using the automatic packaging andprinting facilities, its manufacturing unit now produces 160 packets/minute (Doctor, 2009).

Parle-G is the only biscuit brand, available in the market in nine different sizes. Its size rangesfrom 16.5gm to 825gm with prices range of Rs.1/- to Rs.50/- (fig.7). Ctchy and distinctivepackaging with informative labelling gives it an added advantage over its rival brands.

PricePricing strategy:-

Parle, in order to create large potential market, employs mass marketing for Parle-G. Mass-production, mass-distribution and mass-promotion allows Parle to maintain low-price for Parle-G,while targeting all segments of the market (i.e. masses) (fig.8). Due to Parle- G‟s rich -nutrition andvalue-for-money positioning, it is able to generate large volume-sales. Other biscuits, such asTiger and Sunfeast, also employ the mass marketing; where as Hide&Seek and Horlics employniche marketing for their premium biscuits.

Parle employs penetrative (market penetration) strategy for matured glucose-biscuit market. Itprovides low-price and high-quality Parle-G to its price-sensitive customers, using value pricingmethod. Hide&Seek, being a premium chocolate-cream biscuit, follows market premium strategyand charges high price for its high innovative and quality biscuits.



As shown in fig-9, Parle, through its range of different biscuits, has been serving many marketsegments. Its flagship glucose-biscuit, Parle-G is meant for all markets whereas other premiumsweet-savoury biscuits, such as Monaco and Hide & Seek, are targeted at specific markets andmarket segments (i.e. price-insensitive high-income class etc.).

Cost:-

Price of 100gm Parle-G has been maintained at 4Rs/- for last 25 years, which was raised from3.75Rs/- in 1994. In 2003 Parle-G tried to change its price from 4Rs/- to 4.50Rs/- for a small briefperiod; but since customers of glucose-biscuits are very price-sensitive, it caused a big dip in itssales (TaxGuru, 2009). Therefore, Parle-G had to change its pricing strategy back, although bythen it allowed Tiger to gain significant glucose-market share. Since then, there has beenreductions in the pack size (e.g. from 100gm to 82.5gm) without any price change. For Parle-Gbiscuits, raw-material costs 60% and packaging costs 20-25% of the total cost. It charges pricesfrom 1, 2, 4 to 50Rs/- depending upon the pack size (fig.7).

PlaceParle-G has a very wide market reach due to its widespread distribution network strength. It isavailable to customers from big metropolitan cities to remotest and smallest of villages. Howevercompared to its competitors, it has more focus and penetration in rural and sub-urban areas thancity areas. Major reason is the strategic location of its manufacturing units, which are closer torural and sub-urban areas. Through five-level of distribution channel, it has been able to meet itshigh nationwide demands. Its distribution channel consists of 14 manufacturing units, 31 depotsand C&F agents, close to 1,500 wholesalers, 425,000 retailers and 2.5 million outlets (Doctor,

2009). Now days, it also has been able to reach the end customers through three-leveldistribution channel (fig.10).

Parle-G along with Hide&Seek employs two-channel marketing system to reach customers asthey use two distribution channels (i.e. five-level and three-level); whereas Tiger and Sunfeastuses multi-channel marketing system as they are distributed through three-level, four-level andfive-level distribution channels.

Motivation:-

Parle-G understands the importance of relationship and therefore, it motivates distributors andretailers by offering good margins, 8.5% and 12.5% respectively. Although, Tiger and Sunfeastoffer more margins to distributors (10-12%) and retailers, but because of high demand andvolume-sales of Parle-G, it is preferred more (Doctor, 2009). Time to time Parle-G employs tradeschemes to boost sales temporarily, by increasing 2% of retailer‟s margin.

Perceptual Mapping:-

Parle-G along with its major rival brands can be mapped on the positioning map based on qualityand brand equity (Quality-Brand), and price and distribution (Price-Distribution) parameters, asshown in below perceptual mapping (fig.11).





ConclusionThis 70 year old biscuit has been an iconic brand in the biscuit industry and widely recognized forits superior quality and taste. Parle has been able to maintain low price for Parle-G because of toits strength in raw material procurement, transport and distribution channels. However, it hasbeen losing the grip over its customer‟s brand loyalty, especially in city areas, which it managedto maintain for so many years. Its slight price hiking strategy few years back caused many price-sensitive customers to move away to its competitors (i.e. Tiger) and opened the opportunity doorfor them. Since then, there has been a consistent decline in its sales growth. Increasingurbanization and changing lifestyles due to rising nation‟s per capita income has also bee ninflencing consumer‟s attitude towards it.

Parle believes that Parle-G does not need much promotion to increase its sales, as there is

always an ongoing demand for it. Increasing input and distribution cost has been lowering profit-margin, resulting into reduction in promotion expenditure. Unlike Parle-G, competitors areaggressively marketing their brands; whereas Parle does not pay much attention to its flagshipbrand and spend good money on marketing its other premium biscuits (i.e. Hide&Seek and Parle20-20 cookie), using revenues generated by cash-cow Parle-G. However, year 2008 saw someincrement in promotional activities for Parle-G.

In order to maintain its hold over biscuit market, Parle-G needs more innovations without losingits successful old taste and product quality. This along with more marketing efforts will not onlyhelp it in penetrating the fading customer-base in city areas but also taping more rural marketopportunities.

Appendices Appendix-1 - Industry biscuit industry analysis (Five Forces):-

Threat of New Entry:

There is a consistent government support & incentives for biscuit companies. Government hasalso given exemption from central excise duty on biscuits with MRP up to Rs.100/per kg (IBMA,2009b). Requirement of investment capital is also not huge to set up biscuit manufacturing unit,

though penetrating the market, in presence of competitive incumbents, is tough. There is hugescope for biscuit in India as per capita consumption is only 1.8kg in comparison to 2.5-5.5Kg inwestern countries (GMID, 2009a). Therefore, threat of new entry is low.

Substitutes Products:

Overall demand for biscuit is huge. However, there are many substitutes available to customersin the form of bakery products, homemade and packed snacks, bread and junk foods etc. Hencethreat of substitutes is high.

Buyer‟s power:



Availability of many options, within biscuits and their substitutes, makes buyer‟s power high,despite of the high biscuit consumption.

Supplier‟s power:

Ingredients of biscuits, such as milk, sugar, wheat etc., are basic commodities and easilyavailable. Supplier firms are basically small in size and many in numbers. Hence supplier poweris low.

Competition:

Competition among incumbent biscuit companies is fierce and hence competition rivalry is high.

Five forces analysis of biscuits industry suggests that the attractiveness of this industry ismoderate.

Appendix-2 - Biscuit portfolio of Parle:-

Appendix-3 - Major glucose-biscuit manufacturers:-

Appendix-3 – Rising input cost for glucose-biscuits:-



ParleG has adopted the Market Penetrating Strategy i.e low price along withcapturing the market. Parle, in order to create large potential market, employs massmarketing for Parle-G.

Mass-production, mass-distribution and mass-promotion allows Parle to maintain low-

price for Parle-G while targeting all segments of the market.It is available to customers from big metropolitan cities to the remotest and smallest of villages with population of 1500.

However, when compared to its competitors, it has more focus and penetration in ruraland sub-urban areas than city areas . The major reason being the strategic location of itsmanufacturing units, which are closer to rural and sub-urban areas.

Through five-level of distribution channel, it has been able to meet its high nationwidedemands. Its distribution channel consists of 14 manufacturing units, 31 depots and C&Fagents, close to 1,500 wholesalers, 425,000 retailers and 2.5 million outlets

Below are the strategic mapping of ParleG and its competitors:





ref:Parle-g marketing strategy Journey Of Parle G Started In 1939 Marketing Essay

Updated 6 Mar, 2013. Upvote 351

http://articles.economictimes.indiatimes.com/2013-02-13/news/37079254_1_parle-g-parle-products-glucose-biscuit-brand

http://www.slideshare.net/d3lt4/parleg-marketing-strategy


http://www.ukessays.com/essays/marketing/journey-of-parle-g-started-in-1939-marketing-essay.php


http://www.quora.com/Biscuits/Parle-G-pricing-strategy/answer/Sneha-Prasad

http://www.quora.com/Biscuits/Parle-G-pricing-strategy




http://www.quora.com/Biscuits/Parle-G-pricing-strategy/answer/Sneha-Prasad

