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    Case Study: Parle G: Name Roll Number

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    Mustafa Rokerya
    Parle-G is a leading glucose biscuit brand in India with 40% market share. It accounts for 68% of Parle's revenues, with the Rs. 4 SKU making up 50% of Parle-G sales. Due to rising costs, Parle-G margins have dipped below 10%. A 2004 price hike resulted in a 40% sales drop within 6 months. To maintain margins and prices, Parle has brought production closer to distributors and consolidated raw material purchases. The document recommends reducing SKU weights by 12.7% to allow for better margins without changing prices. It also recommends positioning Parle-G as a quality brand for all ages to enable future price increases as incomes rise in India

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    Case Study: Parle G: Name Roll Number

    Uploaded by

    Mustafa Rokerya
    104 views10 pages
    Parle-G is a leading glucose biscuit brand in India with 40% market share. It accounts for 68% of Parle's revenues, with the Rs. 4 SKU making up 50% of Parle-G sales. Due to rising costs, Parle-G margins have dipped below 10%. A 2004 price hike resulted in a 40% sales drop within 6 months. To maintain margins and prices, Parle has brought production closer to distributors and consolidated raw material purchases. The document recommends reducing SKU weights by 12.7% to allow for better margins without changing prices. It also recommends positioning Parle-G as a quality brand for all ages to enable future price increases as incomes rise in India

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    Parle-G is a leading glucose biscuit brand in India with 40% market share. It accounts for 68% of Parle's revenues, with the Rs. 4 SKU making up 50% of Parle-G sales. Due to rising costs, Parle-G margins have dipped below 10%. A 2004 price hike resulted in a 40% sales drop within 6 months. To maintain margins and prices, Parle has brought production closer to distributors and consolidated raw material purchases. The document recommends reducing SKU weights by 12.7% to allow for better margins without changing prices. It also recommends positioning Parle-G as a quality brand for all ages to enable future price increases as incomes rise in India

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    104 views10 pages

    Case Study: Parle G: Name Roll Number

    Uploaded by

    Mustafa Rokerya
    Parle-G is a leading glucose biscuit brand in India with 40% market share. It accounts for 68% of Parle's revenues, with the Rs. 4 SKU making up 50% of Parle-G sales. Due to rising costs, Parle-G margins have dipped below 10%. A 2004 price hike resulted in a 40% sales drop within 6 months. To maintain margins and prices, Parle has brought production closer to distributors and consolidated raw material purchases. The document recommends reducing SKU weights by 12.7% to allow for better margins without changing prices. It also recommends positioning Parle-G as a quality brand for all ages to enable future price increases as incomes rise in India

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    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

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