PARLE G

HISTORY OF THE COMPANY –

Parle –G is manufactured by the company named Parle which was established in the year 1929 during the British period. The founder of this company was Shree Mohanlal Dayalji and Narotamdas chauhan. Mr. Chauhan went to Germany and did a complete study on confectioneries which was then implemented in this company.The 1st Parle factory was set up in the suburbs of Mumbai city to manufacture Sweets and Tofees. During that period, the market was dominated by International Brands but despite of various odds and unequal competition, this company survived and succeeded by improvising its quality from time to time. In 1959, Parle began to manufacture biscuits as well and the 1st biscuit brands manufactured was Parle-G and Parle Monaco. Later, Parle-G became the World’s largest selling biscuit. Parle holds about 40% shares in the Total Biscuit market and about 15% shares in Total Confectionery market and their annual turnover is approx.2000 crores.

INTRODUCTION TO THE PRODUCT (PARLE-G) –

Parle-G has a great taste as it contains wheat flour, Sugar, Edible oil etc

The above mentioned ingredients are very rich in nutritients. Hence, it has a great nutritive values which is accepted internationally.

Also, it is associated with the brand values like Honesty, Sharing and Caring.

Parle-G is packed in a cream colored yellow strip wrapper with a cute baby containing 10-12 biscuits and the company’s name is printed in Red. Also, it is available in many different sizes ranging from Rs.2/- to Rs. 25/-

It has been an undisputed leader in the biscuit category for decades. Many fake brands like Parle Jee, Parle M etc tried to copy the original Parle-G but they remained unsuccessful.

This product is available almost everywhere from global market till the remote areas catering a population of even 500 people.

SWOT ANALYSIS OF PARLE-G –

STRENGTHS –

1. GOODWILL – It is approx.82 years old company and has developed a great impact amongst the consumers. The products are trusted most by all, especially Parle-G biscuit. It was a great success which satisfied the customers need and became World’s largest selling biscuit.

2. DIVERSIFIED PRODUCT RANGE – Parle does not deal in any single product or any single category, it deals in various categories like biscuits, toffees, chips etc. Hence, it is very much diversified which adds to the strength of the company.

3. PRODUCTION – Parle company has the Asia’s largest oven. Approx. 140-180 biscuit packets are produced per minute.

4. LOW AND MID PRICE RANGE – Parle focuses to cater all the parts of Society. Hence, they fix low and mid range of prices which caters everyone. This increases the Sales of their products, further increasing the turnover and Profits which is one of the biggest strength of the company.

WEAKNESS –

1. DEPENDENCE ON RETAILERS AND GROCERY STORES – Parle does not have their own company outlets for the products. Hence, they depend on the Retailers and Grocery stores for displaying the diversified product of Parle. So, they have to take a very good care of these Retailers so that they induce customers to buy their product.

2. DEPENDENCE ON PARLE-G – Parle-G is the World’s largest selling biscuit. Maximum revenue of the company is generated by the Brand Parle-G. If anytime, anything will happen to Parle-G, then it would affect the business of the overall company.

OPPORTUNITIES –

1. CHANGING CONSUMER’S PREFERENCE – In today’s world, consumer like varieties of things and their preference towards any commodity is not

constant anymore. It just keeps on changing everytime. This gives an opportunity to the company to manfacture different products parallel to the needs of the consumer.

2. INCREASING DEMAND FOR SUGAR-FREE AND DIET PRODUCTS – The standard of living of everyone has risen which makes them more conscious towards health. They understand the disadvantage of sugar oriented products. Hence, people start seeking for the products which is good for their health. So, this is again an opportunity for the company to manufacture these products and satisfy consumer’s need.

THREATS –

1. HIKE IN PRICE OF RAW MATERIAL AND DISTRIBUTION COST – We all are aware that the value of money has decreased with the increase in price of raw material as compared to 80years back. This is a threat to the company as increased price of raw material directly affects the cost of the product which in return decreases the profit margin or the Sales.

2. NEW ENTRANTS – Parle has been the most trusted brand but there are many new Entrants in market like Britannia, Cadbury etc which has also spreaded their roots in the market very effectively. Hence, it becomes a threat for the company that it can take over Parle at any point of time with some or the other strategy.

MARKETING MIX –

PRICING STRATEGY –

Parle G has adopted the Market Penetration strategy i.e. low price along with capturing of a large marketAlso they focus on providing good quality products at the same time, which means it uses the value pricing method.The value-for-money positioning helps generate large sales volumes for the products.Parle G is available in Re 1,Rs 2, Rs 4 to Rs 25 packet

Profit margin for distributors is 4% and for retailers is 10-12%Parle-G maintained its price of Rs.4.00 for the last 12 yrs & has seen the variation in its sales due to increase in price by mere 50p.

PLACE STRATEGY –

The extensive distribution network, built over the years, is a major strength for Parle Products.

Parle G biscuits are available to consumers, even in the most remote places and in the smallest of villages with a population of just 1500.

Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets directly or indirectly.

Factories at strategic locations & Establishment of manufacturing units in rural areas.

PROMOTION STRATEGY –

ADVERTISING - It was advertised mainly through press ads. The communication spoke about the basic benefits of energy and nutrition.

In 1989 Parle-G released its “Dadaji” commercial which was a huge success and was aired over a period of 6 years. The communication spoke about the basic benefits of energy and nutrition.

PUBLIC RELATIONS - Parle has done the following for enhancing public relations:

In the year 1997, Parle-G sponsored the tele-serial of the Indian superhero, Shaktimaan that went on to become a huge success.

In the year 2002, a national level promo - `Parle-G Mera Sapna Sach Hoga' was run for a period of 6 months. The promo was all about fulfilling the dreams of children.

PRODUCT STRATEGY –

NO COMPROMISE IN THE QUALITY OF THE PRODUCT – Over the period of 80years, the quality of the Parle-G biscuit has never shown an decline. It is always constant and the same which attracts more and more consumers and builds brand loyalty.

RESEARCH AND DEVELOPMENT – Parle has their own laboratory where continuous research is done to improvise the existing product and to launch some better product in the market to compete with the competitors well.

PLC – PRODUCT LIFE CYCLE –

There are various stages in the life of the product:

1. INTRODUCTION STAGE – Here, products are introduced in the market. So, the company has to do heavy promotions to create product awareness and in this stage, low sales volume is seen.

2. GROWTH STAGE – Here, brand awareness is created. So, the product is known in the market and Sales starts growing gradually. Company starts focusing on dealing with competitors and the load on advertisement is reduced to some extent because the product has been already introduced in the market.

3. MATURITY STAGE – Products enter this stage when the Sales of the company attains it’s highest position. Here, product is very much known and demanded in the market. It becomes essential for the company to maintain it’s position during this phase as it is said – To reach the peak is simpler than to remain there for the longer period. Hence, consistency becomes essential feature in this stage.

4. DECLINE STAGE – Product reaches decline stage, when the demand for the same starts declining or some better quality of product is introduced in the market.

Taking these various points into consideration, we can conclude that Parle-G lies in the Maturity Stage at this moment because –

It is well-known product with goodwill in the market World’s largest selling biscuit, so achieves high Sales Consistency in the quality

MICHAEL PORTERS 5 FORCES MODEL

CompetitiveRivalryWithin

industry

Bargaining power Of suppliers

Bargaining power Of Customer

Threat of New Entrants

Threat of Substitute

5 forces analysis assumes that there are 5 important forces that determine the competitive power of the product in different situation.

These 5 important factors are –

1. COMPETITIVE RIVALRY WITHIN INDUSTRY – This force is located at the centre of the diagram and is most likely to be high in those industries where there is a threat of a Substitute product. If suppliers and buyers don’t get a good deal from you, then they will go elsewhere but on contrary, if they get the best deal from you then they will become loyal to you and you will gain tremendous

SubstituteTraditional Indian homemade snacks, Bread, Package SnacksBakery product.

Customer Many biscuit from low to moderate Range, Like of bakery product

New EntrantsCapital Sensitive:Manufacturing,Advertising,Distribution network,

Suppliers`Basic commodities : Wheat, Sugar.Increasing price

High competition Among existing players

strength. Parle-G has tremendous substitutes to it’s product but it offers the best quality of product at a very economical price which adds to it’s strength on competitors.

2. BARGAINING POWER OF SUPPLIERS - Suppliers are the important factor for Production as they provide Raw material required. If there are less suppliers, then suppliers gains power and they can fix the price of Raw materials as they want. At this stage, the Bargaining power of the supplier is very high. Like in 2006-07, Parle-G had suffered on their Sales because of increase in price of Raw materials.

3. BARGAINING POWER OF BUYERS – Buyers can influence the prices of the product in the market when very close substitutes of the products are available and the product is very price sensitive. Like Parle-G is a very price sensitive product. Also, it has many competitors in the market.

4. THREATS OF SUBSTITUTION – Here, the demand for a product is affected by the introduction of its substitute products. Like in Parle-G, the demand may fall if its competitor-Britannia Tiger reduces its price. Hence, becoming a threat for Parle-G.

5. THREAT OF NEW ENTRY:- In a market, it becomes essential for the company to maintain it’s position consistently because any kind of downfall can be an opportunity for its competitors to create a threat for them. If Parle-G does not maintain its position now, then there are chances that Britannia Tiger can take over.

CHALLENGES –

In 2006-2007, the prices of Raw material like milk, sugar, wheat etc increased which lead to the increase in manufacturing cost of the biscuilts. Parle-G is the market leader but on the other hand, it is very price sensitive as well. During this phase, the price of Parle-G was hiked by mere 50paisa but even this much hike resulted in decline of the sales.

During this time, Tiger biscuit gained the market share as they did not increase any price so those who were loyal customers for Parle-G happily changed their brand to Britannia Tiger biscuit just because of the mere increase of 50paisa.

It was a threat to Parle-G, but slowly and steadily Parle-G gained the market share again just because of the quality and the nutrients of the product.

Also, many fake brands were introduced during this phase to attack Parle-G but the only serious competition given was by Britannia Tiger.

COMPETITORS –

Following are the competitors for Parle-G –

Britannia Sunfeast PriyaGold etc.

QUESTIONAIRE –

1. What is the market share of Parle-G comparative to Britannia Tiger Biscuit?2. How did the rise in price of Raw material affect Parle-G?3. Parle focuses on which part of the Society and Why?4. How is the response of Parle-G globally?5. What does Parle do for Social welfare?6. What facilities does Parle give for the day to day working of an employees in

an industry?7. What is the process of making Parle-G biscuit?8. What does Parle do for the Research and development of the product?9. How did Parle increased it’s brand awareness?10. What is the worldwide ranking of Parle-G biscuit?