Pricing Strategy

By Sujata Ramteke

Established in 1929 1st brands - Parle Glucose and Parle

Monaco Market leader in many products 35% share of the total biscuit market. 15% share of the total confectionery

market. 14 manufacturing units for biscuits & 5

manufacturing units for confectioneries Parle has largest such manufacturing

units in India Annual turnover 2000 crores. It has provided its products to the mass

with the affordable range.

HIDUSTAN KI TAKAT - PARLE G

Largest manufacturer of biscuits since 80 years

Quality, nutrition and great taste. Faith and trust More than 1500 Wholesalers an 1.3 Million

retail outlets Example of marketing brilliance for

Competitors 65 % of Glucose Biscuit market.

PRICING STRATEGY

Appeal to all income groups

Low and mid range price segments

Value for moneyStrict cost control at

every point in supply chain

PARLE – G PRICING STRATEGY

Market Penetration strategy Value pricing The value for money positioning helps

generate large sales volumes for products. Profit margin for distributors is 4% and for

retailers is 10-12%  Parle G is available in Re 1,Rs 2, Rs 4 to Rs 25

packet Rs.4.00 for the last 25 yrs Increase in price by mere 50p

HOW PARLE-G MAINTAINED ITS PRICE OF RS.4.00FOR THE LAST 25 YRS????

Low profit margin. Decrease in weight per biscuit. Bulk purchase of raw material. Reduced wastage- 1% of the 115

tones. Increased productivity. Availability in remote places. Avoid sophisticated packing. 100g pack costing Rs 4 has net

weight of 93.5g from Jan’2008. Parle-G has seen the variation in

sales due to increase in price. By mere 50 paise in 1995.

SWOT ANALYSIS OF PARLEStrengths

•Diversified product range,•Parle Brand•Extensive distribution network.•Low and mid price range•Catering to mass,•Better understanding ofconsumer psyche

Weakness

•Dependence on retailers & grocery•Stores for displaying diversified Parle•Products on shelf, induce impulsive buy•Dependence on Parle G(flagship brand)

Opportunities

•Estimated annual growth of 20%•Changing consumer preference,• Increasing demand for sugar free, Diet biscuit,

Threats

•Hike in cost of production due to hike in Raw material cost•Increasing distribution cost•Local bakery products•Entry of various new entrant, ITC etc

COMPETITORS

PARLE VS BRITANNIA

Description Britannia Parle

Established 1896 1929

Nature of business Public ltd Family run business

No of manufacturing units

5 own ,40CMU 8 own units ,60 CMU

Market share ( value) 32.80% 32.94%

Ads Major methods Cricket events and player

Celebrities endorsement

New areas of promotion

Environment Health and wellness

INTRODUCTION OF BRITANNIA

Britannia was started in Calcutta in 1892 In 1979, Britannia Biscuit Company was re-

christened Britannia Industries Limited. Forbes Global rated Britannia “One amongst

the Top 200 Small Companies of the World”. The Economic Times pegged Britannia India’s

2nd most Trusted Brand. In Indian biscuits market, Britannia is highest selling in terms of value, followed by Parle

and ITC

BRITANNIA PRICING STRATEGY

The pricing strategies of Britannia are:- Market-Penetration Pricing for the products

like tiger. Product-Quality Leadership for products like

Good Day and Treat. Special-Event Pricing in festive seasons.

COMPARATIVE ANALYSIS OF PARLE – G AND BRITANNIA TIGER

Vs

COMPARATIVE ANALYSIS OF PARLE – G AND BRITANNIA TIGER Nearest competitors in Glucose Category. “Tiger” gained 28 % Market Share in 100 gram

Glucose biscuit segment in a short span of 7 years (1997 – 2004)

VURSUS

“Parle G” established since 60 years – 57 % Market Share in this segment.

In 2006 – 07 Parle G raised price for its 100 gram pack by 50 paise (i.e. Rs. 4.50), while Tiger maintained its price at Rs. 4/-.

RESULT

Sales of Parle G dipped to Tiger. Customers of Parle G tended to switch- over to Tiger. PARLE G is highly price sensitive since it caters to the bottom of the pyramid.

COMPARATIVE ANALYSIS OF PARLE – G AND BRITANNIA TIGER PARLE G’s QUALITY = BRAND LOYALTY

Research Says Parle G Customers Prefer Parle G Owing To Its Milky Taste

What should Parle G do to sustain the market leader position? Parle G is price sensitive product Keep the price of Parle G same High end product can absorb the increased production cost

CONCUSION This shows that products even at low prices can earn substantially

considerable profits. Importance of Parle G in comparison with its competitors, local and

imitation brands. The views of the consumers on the Parle G biscuits also put light on its vitality.

To sum up in general, the Indian rural market has grown in recent years in size, range and sophistication.

The company wants to continue having that strong emotional connect with consumers and doing social deeds such as offering scholarships is part of its corporate social responsibility initiatives, which should keep the biscuit major on its pedestal.

Successful rural marketing calls for a review of the nature and profile of rural consumers, designing the rural products to appeal to them, and adopting suitable media as well as appropriate strategies for communication and distribution.

Thank you…!!!