By-KOMAL Roll no. 40 PTMBA-FIN DIV A NMIMS PARLE BISCUITS LTD By-KOMAL Roll no. 40 PTMBA-FIN DIV A NMIMS

Introduction-Parle India's largest manufacturer of biscuits and confectionery, for almost 80 years. Makers of the world's largest selling biscuit, Parle-G, and a host of other very popular brands Parle name symbolizes quality, nutrition and great taste. With a reach spanning even the remotest villages of India

Introduction (conti) Many of the Parle products - biscuits or confectioneries, are market leaders in their category and have won acclaim at the Monde Selection, since 1971. With a 40% share of the total biscuit market and a 15% share of the total confectionary market in India , Parle has grown to become a multi-million dollar company. While to consumers it's a beacon of faith and trust, competitors look upon Parle as an example of marketing brilliance.

History 1929 a small factory in the suburbs of Mumbai city. Products manufactured sweets and toffees called Parle Products 1939, Parle Products began manufacturing biscuits Parle Glucose & Parle Monaco first brands of biscuits became leading names for great taste and quality.

Parle Products Parle Sweets: Parle Snacks: Parle Biscuit: Melody Kismi Gold Mango Bite Orange Candy Kaccha Mango Bite Xhale Poppins 2 in 1 Eclair Kismi Toffee Golgappa Kisme Toffee Bar Melody Softee Mazelo Parle Lites Parle Biscuit: Parle - G Hide and Seek Krackjack Hide & Seek Milano Magix Digestive Marie Monaco Parle Marie Kreams Milk Shakti Parle 20-20 Cookies Goldenarcs Nimkin Kreams Gold Chox Monaco Jeera Parle Snacks: Musst Bites Jeffs Cheeslings Musst Stix & Musst Chips Sixer Sixer Zeera

Parle Biscuits Ltd Parle Biscuits Limited is a subsidiary of the Parle Products Limited, Mumbai, Closely held company run by the Chauhans. Parle enjoys a 40% share of the total biscuit market and 15% share of the total confectionery market in India.

Parle Production Factories

Parle core Values “The great tradition of taste and nutrition is consistent in every pack on the store shelves, even today. The value-for-money positioning allows people from all classes and age groups to enjoy Parle products to the fullest.”

Strategic Competencies An in-depth understanding of the Indian consumer psyche Nutritious Products Newer & Innovative products Strong sales / distribution N/W Value for money products

External Analysis Industry trend The biscuit industry is been experiencing steady growth of 14-15% annually. In 2008, the growth exceeded 16% mark on account of exemption from Central Excise Duty on biscuits.

External Analysis Two Sectors of Biscuit Industry

External Analysis Annual Production: The organized biscuit manufacturing industry‘s annual production figures show YOY growth indicating rising consumption pattern in India.

Industry Players Other Players HLL • Bisk Farm • Anmol • Elite • Cremica • Dukes • Anupam • Craze • Nezone

External Analysis Major Market Share Holders – Organized Sector

PEST Political Economical Social Technological • Innovation • R&D • Taxes • Production and Distribution licenses Economical • ↑ in per capita income • India’s GDP growing at an average 8% Social • ↑ in per capita consumption • India is 3rd largest producer of biscuit • Age • Lifestyle • Perception Technological • Innovation • R&D

Porter's Five Forces Analysis Threat from New Entrants -Capital intensive manufacturing, advertising and distribution system. Industry Outlook: ATTRACTIVE! Low The ingredients are basic commodities such as wheat, sugar etc. - High competition among existing players to capture maximum market share. Internal Rivalry Powers of Buyers Powers of Suppliers High Low High Availability of many biscuits from low to moderate prices - Availability of biscuits from nonorganized sector -Traditional Indian home made snacks - Bread -Growing packaged snacks industry High Threats of Substitutes

Opportunities & Threats - Indian Biscuit Manufacturers’ Association (IBMA) estimates annual growth of around 20% in next couple Of years. - The $220 Billion food industry is expected to grow to $300 Billion by 2015. - Per capita consumption of Biscuits in the country is only 1.8 kg as compared to 2.5 kg to 5.5 kg in South East Asian countries and European countries, and 7.5 kg in USA. - Growing demand of Sugar free cream crackers & diet biscuits - Opportunity to further grown in Urban & Rural market; Current penetration levels are Urban Market : 75% to 85% Rural Market : 50% to 65% - Grow in southern and east India Threats - Fluctuations in the prices of transportation costs & distribution cost due to high wedges and oil prices - Entry of ITC (having very good distribution channels) in to biscuit industry

Internal Analysis-SWOT Weakness 1. Dependence on retailers & grocery stores for displaying diversified Parle products on shelf to induce impulsive buying 2. Dependence on Parle-G (glucose biscuit) under Parle umbrella Strengths 1. Parle Brand 2. Diversified Product Range 3. Extensive Distribution Network (Availability in most remote villages) 4. Low & mid range price segment catering to mass 5. Better understanding of consumer Psyche Opportunity 1. Estimated annual growth of 20% 2. The 220 B$ food industry is expected to grow to 300 B$ by 2015. 3. Low Per capital consumption of Biscuits (1.8 KG) as against 5.5 KG in South East Asian countries. 4. Increasing demand for Sugar free cream crackers & diet biscuits 5. Current penetration levels Urban Market : 75% to 85% Rural Market : 50% to 65% 6. Growth in southern and east India Threats Hike in cost of production due to Hike in prices of raw materials and increase in transportation plus distribution cost due to high wedges and oil prices 2. Entry of ITC (having very good distribution channels) into biscuit industry

SWOT Recommendations W – O S – O W – T S – T 1. Increase penetration in southern India and eastern India 2. Expand in rural market 3. Cater to new diet conscious segment 4. Advertising of Parle products using celebrities such as sport person (Cricketer – very popular game in India) W – O 1. Heavy promotional campaigns in rural areas , southern & eastern India to increase brand awareness to boost ‘top of the mind recall’ sales. 2. Advertise and promote Parle’s nutritious brands other than Parle- G in educated urban market looking for healthy product S – T Shift towards products (SKUs) That are highly appreciated in urban market (heath conscious mothers) and price sensitive rural market rather than just increasing no of SKUs W – T Capture more market share of Other biscuit segments using Distribution channels by associating Individual products with a promotion. Example – the stylish cream biscuit is promoted by bollywood star, Marie products are branded as family snacks product etc.

Pricing Strategy of Parle Golden question……. How Parle-G is priced at Rs.6 for past 12 years?????????

Pricing Strategy of Parle Golden question……. How Parle-G is priced at Rs.6 for past 12 years?????????

Pricing Strategy of Parle QUALITY LOW HIGH Economy Penetration L O w P R I C E Skimming Premium H I G Pricing Strategies Matrix

Parle Pricing Parle brand symbolizes -quality, health and great taste. Factories at strategic locations Automatic Printing and packaging facilities Extensive distribution network build over the years is a major strength

Parle Pricing 140 – 180 packets /minute 12000 biscuits /minute Bulk purchase of Wheat Reduces no. of shifts Wastage- 1% of the 115 tones

Parle Pricing Establishment of manufacturing units in rural areas Investment in R & D Increase in number of biscuits and reduction in weight per biscuit 100g pack costing Rs. 4 has net weight 93.5g

Parle-G Pricing Strategies Sell brand not price Wider reach/presence through different medium-education, hospital, army, railways & bus donation, sports, NGOs Brand value compels suppliers to sell Parle-G at low commissions Nearly 1500 wholesalers, catering to 425000 retail outlets directly or indirectly Availability in remote places even in the villages having population of 1500

Parle-G Pricing Strategies Now available in Re 1,Rs 2,Rs 4, to Rs 25 packet Profit Margin for distributors is 4% and for retailers is 10 -12 % Pricing advantage of Parle brand in other product lines

Parle-G Pricing Strategies Penetration Strategy– Keeping high quality and maintaining low price Previously sets its price as per the geography, freight cost for reaching remote places is quite high As per G’dsouza, coordinator of Parle products, variation of the price of Parle –G from Rs 4-5 in different states But due to factories at strategic locations Parle-G is moving towards uniform pricing all over India

Parle-G Pricing Strategies Alternative Increasing Price Reducing Product Size, using less expensive raw materials, unbundling the product. Buyer reactions to price changes must be considered

Parle-G Pricing Strategies Competitors are more likely to react to price changes under certain conditions Number of firms is small (Britannia, ITC, Priya Gold and other small players) Product is uniform Buyers are well informed Parle has seen the variations in sales due to increase in price by mere 50p Respond to price changes only if Market share/profit will be negatively affected if nothing is changed.

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