Parle-G is an established company globally, but it currently faces a huge problem.

This is
caused due to the increase in prices of raw materials, resulting in falling profit margins. The
problem that the General Manager, Pravin Kulkarnii faces is the decision involving the
potential price increase of the flagship glucose biscuit brand. Over the past 18 months, the
manufacturing costs have increased resulting in decreased profit margins to 10%. There is
substantial pressure to reinstate the margins back to 15% but it involves analysis of various
constraints through logistics and reasoning. The company has many strengths and
weaknesses. It is a market leader for the established product Parle-G. It also has the largest
distribution network. Nevertheless, Parle-G has no brand loyalty. It is a very price sensitive
market owing to the Value for Money (VFM). These being the weaknesses hold competition
as its main weakness. It could further lead to profit erosion and entry of unbranded players
into the market. Notwithstanding these threats, the company beholds many opportunities
such as exports and affluence. The growing affluence shows the rise in purchasing power of
the consumers. Parle-G has been strongly associated with offering the Value for Money, a
marketplace perception that had remained unfaltering for more than 60 years. Based on the
SWOT analysis, we can deduce the issues and constraints. There are many competitors
who are waiting for Parle-Gs market share; be it branded competitors like Britannia, Nestle,
or unbranded competitors who benefit in the rural areas. The market share is highest with
Parle-G because of the Value for Money it awards to its consumers. The companys niche
product is Parle-G, and its expansion towards the affluent


Parle-G Harvard Case Solution & Analysis
In 2009, Parle Products Pvt. Limited (Parle), a leading Indian manufacturer of
biscuits, had the honor of producing the best-selling brand of glucose biscuits in the
world by volume, Parle-G. Parle-G biscuits sold for about U.S. $ 1 per kilogram, and
as very few processed and ready-to-eat products were available at that price, Parle-G
was closely associated with the offer value for money (VFM). Impending problems
in this brand category for Parle was the fact that the prices of raw materials from the
two main raw materials for the Parle-G biscuits (which account for 55 percent of
their value inputs) rose enough in the past 18 months to reduce the field from 15
percent to less than 10 percent. Pressure to restore fields led Parle to consider price
increases more previous attempt caused a sharp decline in sales. Parle later turned
increase production costs by reducing the weight of the package, franchise
production, reducing supply chain costs and reduce packaging costs. Parle could not
ignore the deep-rooted perception of VFM in the development of short-and long-
term marketing plans to maintain the success of Parle-G in the market. These plans
are required to address segmentation, positioning, and changing demographics
Indian when considering potential rise in Parle-G biscuits. Hide
by Ramasastry Chandrasekhar, Miranda Hood Source: Richard Ivey School of
Business Foundation 16 pages. Publication Date: October 21, 2010. Prod. # 910A22-
PDF-ENG



Parle G case analysis

Last Year Parle Products Pvt. Limited (Parle) a respected
Indian biscuit manufacturer had the difference of making the
greatest selling glucose biscuit brand by volume in the world
the Parle G. Parle G biscuits offered for roughly US$1 per
kilogram to ensure that as very handful of processed and
eager to eat foods were offered by this cost point Parle G
was strongly associated with offering value (VFM). A pending
symptom in this brand category for Parle might be the input
prices of two major recycleables for your Parle G biscuits
(which together taken care of for 55 percent from the input
costs) had risen enough formerly 18 several days to reduce
margins from 15 % to under 10 %. Pressure to bring back
margins introduced Parle to consider an expense increase yet
an early on attempt had triggered dramatic reduction in
sales. Parle subsequently addressed rising input costs by
decrease in the burden in the package franchising production
reducing logistics costs and reducing packaging costs. Parle
could not overlook the deeply established considered VFM
when devising both short and extended term marketing
expects to retain Parle G s success in the marketplace. Diets
needed to deal with segmentation positioning and changing
Indian census when considering a potential cost increase for
Parle G biscuits.



Parle-G
Miranda R. Goode , Ramasastry Chandrasekhar
Product Number:
9B10A022
Publication Date:
11/01/2010
Length:
16 pages
Product Type:
Case (Field)
Source:
Ivey
In 2009, Parle Products Pvt. Limited (Parle), a leading Indian biscuit
manufacturer, had the distinction of producing the largest selling glucose biscuit
brand by volume in the world, the Parle-G. Parle-G biscuits sold for
approximately US$1 per kilogram and as very few processed and ready-to-eat
foods were available at this price point, Parle-G was strongly associated with
offering value for money (VFM). A looming problem in this brand category for
Parle was that the input prices of two major raw materials for the Parle-G biscuits
(which together accounted for 55 per cent of their input costs) had risen enough
in the past 18 months to decrease margins from 15 per cent to less than 10 per
cent. Pressure to restore margins led Parle to consider a price increase yet a
previous attempt had caused dramatic reduction in sales. Parle subsequently
addressed rising input costs by reducing the weight of the package, franchising
production, reducing supply chain costs and reducing packaging costs. Parle
could not ignore the deeply entrenched perception of VFM when devising both
short- and long-term marketing plans to retain Parle-G's success in the
marketplace. These plans needed to address segmentation, positioning and
changing Indian demographics when considering a potential price increase for
Parle-G biscuits.
Learning Objective:
This case exposes students to the strategic complexities underlying a major
pricing decision. The major learning objectives are as follows:
To enable students to appreciate that tactical decisions such as pricing are not
made (or, at least, are not made effectively) in isolation of bigger picture
marketing strategy
To encourage students to explore the challenges surrounding the sustainability
of a value-for-money positioning
To provide students with the opportunity to devise both short- and long-term
marketing plans
Issues:
Marketing Planning; International Business; Positioning; Market Strategy; Pricing
Disciplines:
International, Marketing
Industries:
Manufacturing
Setting:
India, Large, 2009
Intended Audience:
Undergraduate/MBA