PARLE

INTRODUCTION

ABOUT THE PROJECT

The project is done with an intention to learn about the biscuit and confectionery industry
through its market leader Parle products.

The project gives a detailed insight to various aspects that drive the organisation and impact
it in various ways. Through this project a detailed insight is gained into the distribution
strategy implemented by Parle.

ABOUT THE ORGANIZATION

In 1929 a small company by the name of Parle products emerged in British dominated India.
The intent was to spread joy and cheer to children and adults alike, all over the country with
its sweets and candies. The company knew that it wouldn’t be an easy task, but they
decided to take the brave step. A small factory was set up in the suburbs of Mumbai, to
manufacture sweets and toffees. A decade later it was upgraded to manufacture biscuits as
well. Since then, the Parle name has grown in all directions, won international fame and has
been sweetening people's lives all over India and abroad.

Apart from the factories in Mumbai and Bangalore Parle also has factories in Bahadurgarh in
Haryana and Neemrana in Rajasthan, which are the largest biscuit and confectionery plants
in the country. Additionally, Parle Products also has 7 manufacturing units and 51
manufacturing units on contract.

Parle Products has been 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, the Parle name symbolizes quality, nutrition and great taste. With a
reach spanning even the remotest villages of India , the company has definitely come a very
long way since its inception.

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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.

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UNDERSTAND YOUR GOALS

 To understand the working of the Parle and the factors affecting the functioning of
the organisation- both internal and external factors.
 To trace the progress of the company since its inception.
 To understand the distribution scenario of Parle.
 To identify the different belts of products that Parle offers.
 To understand the competition that parle is faced with.

GATHERING MARKETING MATERIAL

 Marketing material was collected through direct contact with a senior Parle
executive.
 Further information was collected from the website.
 Newspaper Reports.

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INTERVIEWS USING AUDIT CHECKLIST

Q1. What kind of organisation is it?

The organisation is a profit making private ltd. Company.

Q2. Is it a part of a larger organisation?

The company is a part of an entire FMCG organisation manufacturing biscuits.

Q3. Are conditions surrounding the organisation constantly changing?

The surrounding conditions have been constant for years all together. The company has
been the market leader in the biscuit section for more than past 3 decades.

Q4. How does it affect the organisation?

The organisation external environment has been constant for a lot of years. A bit of
competition from the new players in the market hasn’t a reason to worry except for age old
competitors like Britannia.

Q5. Is your organisation strongly impacted by technology, by shifts in the economy, by

leadership changes?

Technology changes are a strong impact over our printing dept. Since there are constant
changes in the wrappers to be made more attractive and even more preserving than ever
before. Economy shifts affect the company in a minute level as the price of manufacturing
the products is well under control due to mass production achievement now. Leadership has
been pretty much constant due to loyal employees in the company that usually are
promoted to higher posts. Leadership has never changed hands since inception except
would be descendent shuffle in management due to the issue of retirement age.

Q6. How politically sensitive is it? Does it have partners or other organisations with whom
it is closely aligned?

Except for the alignment with Parle Agro and Filtrate packers, the organisation does not
have any connections.

Q7. Describe the users of the products offered by your organisation?

The users would fall under all possible categories as the segmentation isn’t done on any
basis but each product is made with aim of making mass sales. Thus it would be all the
possible categories that can be thought of for defining our customers.

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PARLE

Q8. If you think there is a mix of several different kinds of clients, describe each subgroup
and estimate roughly the proportion of each subgroup of the total population?

The subgroups would lie in “all age groups from a child that just has got his first set of teeth
to an old aged person who lost all his teeth”; this is how we describe our customers.

Q9. Can you identify which group is primary?

The metropolitan customers would be primary in terms of biscuits like Milano but rural
would be important for the major sales of the most successful brand Parle-G.

Q.10 What products does the organisation offer?

It offers products like Parle-G, Monaco, Krackjack, Hide N’ Seek, Milano, Fun centre and
partial production of mango-bite.

Q.11 Which are the primary products of the organisation and which are of lesser
importance? How does the company make it known? What its offerings are?

The primary products would be Parle-G, Monaco and hide n seek. Lesser importance would
the others of the mentioned above. This is decided on the basis of the product
acknowledgement calculated every year and the production is adjusted accordingly. Else
promotional strategies for the same are changed.

Q.12 To what degree are these products standardized or tailored to meet the specific
needs of individuals or groups?

The degree of tailoring is at a very moderate rate according to the taste and preferences as
the company’s aim is mass catering.

Q.13 Are the products “branded” in any way?

The products are branded using the companies tune, definitely the logo and also the mascot
for our winning product.

Q.14 Do clients come to the organisation for buying the products?

The products are distributed to various stores and even the companies very own outlets.

Q.15 Is there an internet presence?

Yes, but products aren’t channelized through the same.

Q. 16 Can they be delivered through a direct channel?

They are already through company’s very own outlets.

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Q. 17 Are the products offered at a monetary price?

Yes.

Q. 18 Are there discounts available?

Discounts are available for bulk purchases by the distributors.

Q. 19 Do all customers pay the same amount?

All the customers pay equal amount.

Q. 21 What kind of promotion does the organisation do?

The organisation does promotion through their own outlets. Also TV Advertising is the major
part of promotion using Amir Khan and Hritik Roshan as brand ambassadors. Sales
promotion is done on a lesser basis.

Q.23. Are some products and services promoted more than others?

The flagship products like Parle-G and Hide N’ Seek are promoted more than the others.

Q.24 Are some clients targeted more for promotional activities?

No.

Q. 28 How involved is the customer in the delivery of the service?

The customer is less involved in the delivery process as the final hand is received at a store
only.

Q. 29 How much background knowledge is required?

None.

Q.30 How much training is required?

No training required.

Q. 31 Who might be considered as your competitor?

Britannia and Sunfeast would be the closest competitors.

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ANALYSIS
PORTERS FIVE FORCES

THREAT OF SUBSTITUTES

The threat of substitute products is high.

Substitutes are:

 Traditional Indian snacks

 Package snacks
 Bakery Products

THREAT OF NEW ENTRANTS

The market is already filled with many players and the threat from a new player does not
look on the cards. That player will have to incur excess costs in order to advertise and also to
set up its distribution network. Parle already has a brand name and a foothold in the market
and this would be its major advantage over any new entrant.

BARGAINING POWER OF SUPPLIERS

Since the ingredients are Basic commodities like wheat, sugar etc and also the increasing
prices of these commodities reduce the bargaining power of suppliers

BARGAINING POWER OF CUSTOMERS

 The bargaining power of buyers is high.

 This is due to availability of many biscuits from low to moderate prices. Also many
players in the market coming up with the similar or new products.
 Availability of biscuits from non- organized sector

COMPETITIVE RIVALRY WITHIN THE INDUSTRY

Competitive Rivalry is high within the industry as the existing players have a foothold in the
market and are trying to increase their market share.

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PARLE

PEST ANALYSIS
POLITICAL

The company has to pay taxes to the government. This is the normal corporate tax which all
companies have to pay.

It is a fixed percentage of tax and the percentage changes very rarely in extreme cases. If
percentage changes the company bares the changes due to highly competitive Market.

The company has to incur production and distribution expenses

ECONOMICAL

Increase in Per capita income is an advantage for Parle as they can introduce more products
and consumers will purchase more due to increase in disposable incomes.

India’s GDP growth is also increasing which would lead to benefits to the company.

SOCIAL

Increase in per capita consumption of consumers

India is the 3rd largest biscuit producer

People have a very varied lifestyle and are more willing to try out new and different
products.

Consumers have a favourable perception of the brand parle with parle G as their main
brand.

Parle has many CSR activities:

 Parle center of excellence as an institution conducts cultural programs across all

regions for development of children.
 Parle Saraswati Vandana- development activities for children concentrating on
eastern India

TECHNOLOGICAL

Innovation and differentiation is the main thing which companies focus on in order to gain
an advantage in the market. So the company can focus on Innovation.

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PARLE

R&D department of Parle is not very good

SWOT ANALYSIS

STRENGHTS:

1. Strong Brand name of Parle

2. Diversified Product range- biscuits, confectioneries and snacks
3. Extensive Distribution Network
4. Low & Mid price range catering to mass market
5. Better understanding of the consumer psyche

OPPORTUNITY

1. Estimated annual growth of 20%

2. Food industry is growing in leaps and bounds
3. Low per capita consumption of biscuits
4. Increase demand for sugar free biscuits
5. Penetration levels in rural markets are not as high as those in urban markets.
6. More markets can be explored in the southern and eastern India which can lead to
growth in southern and Eastern market

WEAKNESS

1. Dependence on retailers & grocery Stores for displaying diversified Parle products on
shelf, induce impulsive buy
2. Dependence on Parle G (Glucose biscuit) under Parle umbrella

THREATS

1. Increase in production cost due to increase in cost of raw materials and

transportation.
2. Entry of ITC, a well established player into biscuit industry.

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PARLE

TOWS

SO STRATEGY (MAXI MAX STRATEGY)

 The growth in the food industry can be captured by the diversified products range of
Parle. (S2, O1)

 Since Parle has a strong brand name and a strong distribution network, it would help
them to increase penetration in southern and Eastern India (S1, S3, 05)

 Since they have strong distribution channel they can explore new markets and build
on existing markets especially the rural market where the penetration levels are only
around 50-65%. (S3, O4)

 Since per capita consumption is low and there is an increased demand for sugar free
biscuits which can be catered to by the various products of Parle. (S2, O3, O4)

Strengths/Opportunities O1 O2 O3 O4 O5 O6

S1 0 0 0 0 + 0

S2 + 0 + + 0 0

S3 0 0 0 + + 0

S4 0 0 0 0 0 0

S5 0 0 0 0 0 0

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PARLE

WO STRATEGY (MINI MAX STRATEGY)

 Heavy promotional campaigns in rural areas, Southern and Eastern India to increase
brand awareness to boost brand recall (W1, 04, 05)

 Advertise and promote Parle’s nutritious brands other than Parle G since the per
capita consumption of biscuits is low so there is scope to create awareness about the
other parle brands. (W2, O1, O2)

Opportunities/Weakness W1 W2

O1 0 +

O2 0 +

O3 0 0

O4 + 0

O5 + 0

O6 0 0

ST STRATEGY (STRENGHTS AND THREATS STRATEGY)

 Entry of ITC, a well established player in to biscuit industry can be countered by the
diversified product range and extensive distribution network. (S2, S3, T2)

Strengths/Threats T1 T2

S1 0 0

S2 0 +

S3 0 +

S4 0 0

S5 0 0

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PARLE

WT STRATEGY (WEAKNESS AND THREATS)

 Dependence only on Parle-G biscuit would increase the threat of a prominent brand
like ITC. The company should try and increase the sales of other brands in order to
retain their market share and be protected from new entrants. (W2, T2)

Weakness/Threats T1 T2

W1 0 0

W2 0 +

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PARLE

VALUE CHAIN ANALYSIS

PRIMARY ACTIVITIES

INBOUND LOGISTICS: The company has to Import chocolate chips, glucose chips and other
raw materials for the manufacture of their various brands of snacks, biscuits and
confectioneries.

Major Vendor of raw materials for Parle is Dinen Shah.

OPERATION: The raw material then goes through the stages of Baking, Melting, and various
Assembly lines for Tasting, Packaging etc.

OUTBOUND LOGISTICS: The end products Biscuits, cookies etc are then transported after
packing to distributors. Printing on packaging is done by filtrate packers.

MARKETING AND SALES: The marketing for Parle is carried out by Mudra. They take care of
the communications.

SALES: Rajni Transporters and Distributors are the transporters and distributors of
Parle products in Maharashtra. The transport the products to various retailers.

SERVICES: Commission offered to distributors and retailers.

SUPPORT ACTIVITIES
PROCUREMENT is a supporting activity. This is done mainly with the consent of the finance
department and as per requirements. It could be procurement of machinery.

HRM: Performance appraisal is conducted through 360 degree feedback approach.

TECHNOLOGY MANAGEMENT: Printing Technology is used for printing of collateral and also
on the packaging.

INFRASTRUCTURE: Mould oven is needed as part of the baking process and is required as
infrastructure by the company. Regular maintenance is also required.

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FINDINGS AND RECOMMENDATIONS

FINDINGS:

 Research & Development of Parle is weak

 Mudra handles all the marketing activities of Parle including the communications
and advertising
 Parle does not have region specific Products.
 Distribution is done through Hub and Spoke model. The distribution is carried out by
Rajni Transports and Distributors.
 Parle G is the flagship brand which keep the company as no.1

RECOMMENDATIONS:

 Research & Development must be improved in order to come up with innovative

products to keep abrest of competition.
 Some of the Marketing activities should be done by the company itself.
 Region specific products should be developed.
 The company should reduce its dependence on Parle G and try to develop their
other brands.

CONCLUSION:

Parle is a profit making Company, but it depends majorly on its older Flagship brands
(i.e.Parle). There are many companies entering the biscuit and confectionery markets which
will be major competitors to Parle.

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REFERENCES
www.parle.com

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