Introduction

Journey of Parle-G started in 1939, when Parle Product Pvt. Ltd launched its first biscuit brand in
India. A cream-coloured, yellow-stripped, wax-paper wrapper with a photo of a cute young girl,
containing 10-12 biscuit with the company's logo on it and you would know these are Parle-G
biscuits. Over the years, many varieties of biscuit came and went but nothing much has changed
with this biscuit, except for packs. Even after 70 years of its birth, it is still known for its superior
quality and taste across the length and depth of the country.
Parle-G, being the worlds largest selling biscuit brand, accounts for more than half of the total
revenue of the company (Business Standard, 2009). Although past few years, there has been a
consistent decline in its sales growth, it still maintains the superior position in the biscuit market.
This essay tries to analyze its current situation and position in the biscuit market, particularly in
glucose-biscuit market segment. Entire essay is structured into five sections. The next section
puts some light on Indian biscuit industry along with glucose-biscuit market segment; whereas
third section analyzes the behavior of Parle-Gs consumers. Situation and positioning of Parle-G
together is studied in the fourth section; finally essay is concluded with summary of issues in fifth
section.


Biscuit industry overview
Indian biscuit industry:-
Indian biscuit industry, worth Rs.82bn, has been growing steadily in past ten years. In 2008-09,
industry grew by 15% in current-value terms and is expected to grow by 9% constant value
CAGR in 2009-10 (GMID, 2009a). Despite of being moderately attractive industry (Appendix-1),
there has been a significant growth in numbers of domestic and international biscuit companies
in the industry. Current top biscuit manufacturers in the industry are Britania, Parle and ITC, with
Britania is leading with 35% of total biscuit market.All these companies have range of biscuit
varieties in their biscuit-portfolio.
Glucose-biscuit market segment:-
Broadly, biscuits can be categorized into Glucose, Cream, Crackers, Cookie and Marie (fig.2).
Glucose-biscuit segment accounts for more than half the size of total biscuit market. Parle-G
overwhelmingly leading the front with 61% share of total glucose-biscuit market segment and its
rivals Tiger Glucose and Sunfeast Glucose have been steadily growing in last few years, through
aggressive marketing and product innovations. Fig.2 shows the position of top biscuit brands in
glucose-biscuit segment.



Analysis of Parle-G and its consumers
SWOT analysis:-
Parle-G, widely recognized as Common Mans Biscuit, is the flagship biscuit-brand of Parles
biscuit-portfolio (Appendix.2). Current situation of Parle-G with respect to its external and inetrnal
environment can be analyzed using SWOT analysis (fig.3).
Consumer analysis:-
Consumers of Parle-G belong to all classes of society and income, rural and city areas, and age-
groups. Some of them consume it as part of breakfast; while others have it as a part of their
meal. Being a consumable product, purchase of Parle-G is not much influenced by cultural
factors. Its consumers bahviour tend to get affected by social, indvidual and pshycological
factors (fig.4).
Because of its milky and sweetish taste, people, perticularly young children, easily get influenced
by friends, family-members or relatives etc. (i.e. primary-reference group-members), when they
see others eating Parle-G. Families, in India, usually prefer to take Parle-G along with tea, coffee
or milk, and also offer it to guests as a part of snacks. Secondary-refernce group-members, such
as health and medical-practitoner, advice people to consume Parle-G as it is halthy, nutritious
and source of quick energy. For this reason, there is a practice in India to distribute Parle-G in
the activities related to sports or blood donation, to the participants. Age-group wise, its
consumption is high mainly in old-age group (50-60 years) and kids group (3-12 years). Kids,
who have habit of eating Parle-G at their young age, continue to eat it during their growing age.
Due to its low-price, consumers with lower and medium income-level mostly prefer Parle-G. Poor
buyers (i.e. laborers) buy it because of its affordabilty and high glucose-content, to satisfy their
hunger; where as medium income-level buyers get motivated because of their perception about
Parle-G, as value-for-money product. Consumers, with higer income-level and status (i.e.
mangers, executives, business men etc.), are less inclined towards Parle-G as they can affoard
to buy more expensive biscuits or snacks. Therefore, in comparision to rival biscuits,
consumption of Parle-G is more in rural areas and by lower and medium-class societies.


Marketing Mix (4Ps)
Product
Parle-G is one of the most popular, oldest and largest selling brands in India. Over the years, this
brand has been a symbol of health, quality and taste. On the similar lines of Britanias Tiger,
which already has its five different variants; Parle-G followed line-extension branding strategy to
introduce recently two of its variants, Parle-G Milk Shakti and Parle-G Magix, distinguished
basically on flavours (Appendix-3).
Product Life Cycle:-
Launched in 1939, Parle-G enjoyed huge success for next sixty years by capturing almost all
parts of Indian markets. It has now reached to its maturity stage and highly competitive
environment has been causing consistent slowdown in its sales growth for past few years. It has
been facing tough competition not only from all biscuit categories but also bakery products. Its
major competitors, Tiger and Sunfeast have been able to grab buyers attention and gain
significant sales growth past five years. Introduced in 1998, Parles own Hide&Seek (cream)
biscuit, Parle-Gs biggest internal competitor, has been seeing substantial sales improvement
and rapid market acceptance.
Product classification and levels:-
Parle-G can be classified as low-end, non-durable, and consumable mass product on the basis
of price, durability and quantity respectively. Based on utility, it can be classified at convenience,
impulse good. Fig.6 shows five levels of customer-perceived-value (cpv) benefits of Parle-G.
Being a basic product as biscuit, its core-benefit is to satisfy the consumers hunger (i.e. personal
need). It gives expected milky and sweetish taste with rich nutrition, along with quick energy from
augmented glucose-content. It is now available in two flavours (i.e. choco and cashew) and
expected to come in more flavours in near future.

Packaging:-
For decades, consumers recognize Parle-G instantly by its packs, which used to consist of
yellow wax-paper wrapper with a baby face on the front, along with its brand name and
companys red-coloured logo Parle. Many regional biscuit-makers duplicated the pack style and
colour and sold their low quality biscuits. In order to avoid such duplication and keep the cost
down, Parle-G now comes in low-cost plastic covering. Using the automatic packaging and
printing facilities, its manufacturing unit now produces 160 packets/minute (Doctor, 2009).
Parle-G is the only biscuit brand, available in the market in nine different sizes. Its size ranges
from 16.5gm to 825gm with prices range of Rs.1/- to Rs.50/- (fig.7). Ctchy and distinctive
packaging with informative labelling gives it an added advantage over its rival brands.
Price
Pricing strategy:-
Parle, in order to create large potential market, employs mass marketing for Parle-G. Mass-
production, mass-distribution and mass-promotion allows Parle to maintain low-price for Parle-G,
while targeting all segments of the market (i.e. masses) (fig.8). Due to Parle-Gs rich-nutrition and
value-for-money positioning, it is able to generate large volume-sales. Other biscuits, such as
Tiger and Sunfeast, also employ the mass marketing; where as Hide&Seek and Horlics employ
niche marketing for their premium biscuits.
Parle employs penetrative (market penetration) strategy for matured glucose-biscuit market. It
provides low-price and high-quality Parle-G to its price-sensitive customers, using value pricing
method. Hide&Seek, being a premium chocolate-cream biscuit, follows market premium strategy
and charges high price for its high innovative and quality biscuits.
As shown in fig-9, Parle, through its range of different biscuits, has been serving many market
segments. Its flagship glucose-biscuit, Parle-G is meant for all markets whereas other premium
sweet-savoury biscuits, such as Monaco and Hide & Seek, are targeted at specific markets and
market segments (i.e. price-insensitive high-income class etc.).
Cost:-
Price of 100gm Parle-G has been maintained at 4Rs/- for last 25 years, which was raised from
3.75Rs/- in 1994. In 2003 Parle-G tried to change its price from 4Rs/- to 4.50Rs/- for a small brief
period; but since customers of glucose-biscuits are very price-sensitive, it caused a big dip in its
sales (TaxGuru, 2009). Therefore, Parle-G had to change its pricing strategy back, although by
then it allowed Tiger to gain significant glucose-market share. Since then, there has been
reductions in the pack size (e.g. from 100gm to 82.5gm) without any price change. For Parle-G
biscuits, raw-material costs 60% and packaging costs 20-25% of the total cost. It charges prices
from 1, 2, 4 to 50Rs/- depending upon the pack size (fig.7).
Place
Parle-G has a very wide market reach due to its widespread distribution network strength. It is
available to customers from big metropolitan cities to remotest and smallest of villages. However
compared to its competitors, it has more focus and penetration in rural and sub-urban areas than
city areas. Major reason is the strategic location of its manufacturing units, which are closer to
rural and sub-urban areas. Through five-level of distribution channel, it has been able to meet its
high nationwide demands. Its distribution channel consists of 14 manufacturing units, 31 depots
and C&F agents, close to 1,500 wholesalers, 425,000 retailers and 2.5 million outlets (Doctor,
2009). Now days, it also has been able to reach the end customers through three-level
distribution channel (fig.10).
Parle-G along with Hide&Seek employs two-channel marketing system to reach customers as
they use two distribution channels (i.e. five-level and three-level); whereas Tiger and Sunfeast
uses multi-channel marketing system as they are distributed through three-level, four-level and
five-level distribution channels.
Motivation:-
Parle-G understands the importance of relationship and therefore, it motivates distributors and
retailers by offering good margins, 8.5% and 12.5% respectively. Although, Tiger and Sunfeast
offer more margins to distributors (10-12%) and retailers, but because of high demand and
volume-sales of Parle-G, it is preferred more (Doctor, 2009). Time to time Parle-G employs trade
schemes to boost sales temporarily, by increasing 2% of retailers margin.
Perceptual Mapping:-
Parle-G along with its major rival brands can be mapped on the positioning map based on quality
and brand equity (Quality-Brand), and price and distribution (Price-Distribution) parameters, as
shown in below perceptual mapping (fig.11).

Promotion
Parle-G understands human psyche well and hence it focuses more on children. Children, not
only are major biscuit consumers but also have major influence on their parents decisions.
Therefore, Parle-G strategically has placed brand closer to the children. In comparison, rival
biscuit brands such as Tiger, Sunfeast, Hide&Seek spend a lot of effort and money over
promotion activities. Unlike Parle-G, most of them have high-profile celebrities as their brand-
ambassador. Basically, Parle-G employs integrated mass communication and uses non-personal
communication channels, such as media, public relation, events and sales promotions.

Advertising:-
Parle-G currently uses many innovative advertisements, which mainly involve young children. All
these advertisements use a new punch-line G for Genius, which is pretty popular and led
parents believe that Parle-G would do wonders to their kids (Kashyup, 2009). While rivals are
signing on celebrities for the advertisements; Parle-G manages to be in leading position even
without using high-profile celebrities.
Historically, it has always used advertisements, through print media, billboard, and television-
radio channels, to create brand awareness among people by connecting it with their emotions.
Table.1 shows some of the examples of television-advertisements, it has used so far.
Public Relations and Publicity:-
In the past Parle-G has sponsored a tele-serial Shaktiman (similar to Superman), which became
very popular among children. Using the personality of Shaktiman, it succeeded in
communicating its benefits effectively, this gave huge boost to its sale. It also earned significantly
by merchandising Shaktiman. It also used successful Mera sapna sach hoga promo for brief
period, which was basically to fulfil the dreams of children. Parle-G fulfilled the wishes, ranging
from foreign tours, scholarships to meeting with high-profile celebrities C&F. In the form of CSR,
Parle-G has always extended its help to Government and NGOs during natural calamities or
disasters, by providing free biscuits to victims.
Sales Promotions:-
In order to give momentary sales boost-up during festival seasons, it often tends to offer
seasonal discounts. For example, increase the size of the packs but sell it at the same price (i.e.
10% extra free on 82.5gm at 4Rs/-).
Events:-
It sponsors big events very rarely compare to its rivals. However, it does organize fun and game
contests such as, Parle Saraswati Vandana, in many schools, where the winners are given free
packs of Parle-G biscuit (Parle, 2009g). In order to save Navaratri celebration event from fading
away, Parle-G also organizes novel promotion every year, known as Parle Golu Galata contest
(Parle, 2009b).


Conclusion
This 70 year old biscuit has been an iconic brand in the biscuit industry and widely recognized for
its superior quality and taste. Parle has been able to maintain low price for Parle-G because of to
its strength in raw material procurement, transport and distribution channels. However, it has
been losing the grip over its customers brand loyalty, especially in city areas, which it managed
to maintain for so many years. Its slight price hiking strategy few years back caused many price-
sensitive customers to move away to its competitors (i.e. Tiger) and opened the opportunity door
for them. Since then, there has been a consistent decline in its sales growth. Increasing
urbanization and changing lifestyles due to rising nations per capita income has also been
inflencing consumers attitude towards it.
Parle believes that Parle-G does not need much promotion to increase its sales, as there is
always an ongoing demand for it. Increasing input and distribution cost has been lowering profit-
margin, resulting into reduction in promotion expenditure. Unlike Parle-G, competitors are
aggressively marketing their brands; whereas Parle does not pay much attention to its flagship
brand and spend good money on marketing its other premium biscuits (i.e. Hide&Seek and Parle
20-20 cookie), using revenues generated by cash-cow Parle-G. However, year 2008 saw some
increment in promotional activities for Parle-G.
In order to maintain its hold over biscuit market, Parle-G needs more innovations without losing
its successful old taste and product quality. This along with more marketing efforts will not only
help it in penetrating the fading customer-base in city areas but also taping more rural market
opportunities.
Appendices
Appendix-1 - Industry biscuit industry analysis (Five Forces):-
Threat of New Entry:
There is a consistent government support & incentives for biscuit companies. Government has
also given exemption from central excise duty on biscuits with MRP up to Rs.100/per kg (IBMA,
2009b). Requirement of investment capital is also not huge to set up biscuit manufacturing unit,
though penetrating the market, in presence of competitive incumbents, is tough. There is huge
scope for biscuit in India as per capita consumption is only 1.8kg in comparison to 2.5-5.5Kg in
western countries (GMID, 2009a). Therefore, threat of new entry is low.
Substitutes Products:
Overall demand for biscuit is huge. However, there are many substitutes available to customers
in the form of bakery products, homemade and packed snacks, bread and junk foods etc. Hence
threat of substitutes is high.


Buyers power:
Availability of many options, within biscuits and their substitutes, makes buyers power high,
despite of the high biscuit consumption.
Suppliers power:
Ingredients of biscuits, such as milk, sugar, wheat etc., are basic commodities and easily
available. Supplier firms are basically small in size and many in numbers. Hence supplier power
is low.
Competition:
Competition among incumbent biscuit companies is fierce and hence competition rivalry is high.
Five forces analysis of biscuits industry suggests that the attractiveness of this industry is
moderate.
Appendix-2 - Biscuit portfolio of Parle:-
Appendix-3 - Major glucose-biscuit manufacturers:-
Appendix-3 Rising input cost for glucose-biscuits:-




















ParleG has adopted the Market Penetrating Strategy i.e low price along with
capturing the market. Parle, in order to create large potential market, employs mass
marketing for Parle-G.

Mass-production, mass-distribution and mass-promotion allows Parle to maintain low-
price for Parle-G while targeting all segments of the market.
It is available to customers from big metropolitan cities to the remotest and smallest of
villages with population of 1500.

However, when compared to its competitors, it has more focus and penetration in rural
and sub-urban areas than city areas. The major reason being the strategic location of its
manufacturing units, which are closer to rural and sub-urban areas.

Through five-level of distribution channel, it has been able to meet its high nationwide
demands. Its distribution channel consists of 14 manufacturing units, 31 depots and C&F
agents, close to 1,500 wholesalers, 425,000 retailers and 2.5 million outlets

Below are the strategic mapping of ParleG and its competitors:






ref:
Parle-g marketing strategy
Journey Of Parle G Started In 1939 Marketing Essay

Updated 6 Mar, 2013.
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