BISCUIT INDUSTRY

PRESENTED BY SHIVPRAKASH VARMA & GROUP

Sweet or salty. Soft or crunchy. Simple or exotic. Everybody loves munching on biscuits, but do they know how biscuits began?

history of biscuits can be traced back to a recipe created by the Roman chef Apicius,in which is "a thick paste of fine wheat flour was boiled and spread out on a plate. When it had dried and hardened it was cut up and then fried until crisp, then served with honey and pepper."

The

Biscuits

market in India : Approx. Rs 9,000-crore (Rs 90-billion) The biscuit industry is been experiencing steady growth of 14-15% annually. If we see last years growth.

Rural-urban penetration of Biscuit : Urban Market : 75% to 85% Rural Market : 50% to 65%

Per capita consumption of Biscuits : INDIA 1.8 kg, South East Asian Countries 2.5 kg to 5.5 kg USA 7.5 kg

In 2008, the growth exceeded 16% mark on account of exemption from Central Excise Duty on biscuits.

Annual production Biscuit Industry

Biscuit Industry profile

Porters Five Force model

Threat of Substitute

Threat of New Entrants

Bargaining power Of suppliers

Bargaining power Of Customer

Porters Five Force model

Substitute

New Entrants

Traditional Indian homemade snacks, Bread, Package Snacks Bakery product.

Capital Sensitive: Manufacturing, Advertising, Distribution network,

Suppliers`

Customer

Basic commodities : Wheat, Sugar. Increasing price

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

HIGH

LOW

Biscuit Industry major players

Parle Production Factories

Competition to Parle is from following players : B R I T A N N I A S U N F E A S T P R I Y A G O L D M A R I C O

Lets do strategic mapping on following ground : Price Distribution , Nutrition content Brand , Innovation Technology , Packaging .

Parle - G and Competitors Price Distribution

HIGH

PRICE

Mar ico

Sunf east

Priy agol d

Brit ania Parl e

LOW LOW

DISTRIBUTION

HIGH

Parle - G and Competitors Nutrition content Brand

HIGH

Brit ania

Parl e

NUTRITION CONTENET

Mar ico

Priy agol d

Sunf east

LOW LOW

BRAND

HIGH

Parle - G and Competitors Innovation Technology

HIGH

Parl e Brit ania Priy agol d Sunf east Mar ico

INNOVATIONLOW POOR

TECHNOLOGY

ADVANCED

Parle and Competitors Packaging

Parl Priy Brit e agol ania Mar Sunf d ico east

POOR

PACKAGING

ADVANCED

Parle Products Confectionaries.

Parle G has been a strong household name across India. It is popularly known as biscuit ka puda . A cream colored yellow stripped wrapper with a cute baby photo containing 10 12 biscuits with the companys name printed in Red and you know these are Parle G biscuits. The great taste, high nutrition, and the international quality, makes Parle-G a winner. Times changed, variety of biscuits did come and go but nothing has changed with these biscuits. It has been the undisputed leader in the biscuit category for decades.

STP ANALYSIS

PARLE Company as a whole inculcates P1 SELECTIVE MARKET SPECIALIZATION strategy. In the diagram we P can say blue colour 2 represents the extent of Parle-G i.e. Product(P) 1 for all the 3 markets and Hide & SeekP2P3 where it is a product only for 1 market and the orange is for Krackjack biscuits where the product

M1

M2

M3

Parle-G is positioned in the minds of people as a value for price product and also as a low-priced product. Whereas hide & seek has tapped a new market. For Parle-G the company has used channel and image differentiation tools. Parle-G by far has the most intensive distribution coverage as compared to any other biscuit company in India. Also the name PARLE has an image that generates respect and a belief of good quality in the minds of the buyers.

SWOT Analysis of Parle

S

W

O

T

SWOT Analysis of Parle

Strengths

Parle Brand , Diversified product range , Extensive distribution network . Low and mid price range Catering to mass , Better understanding of consumer 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 % Low per capita consumption , 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 .

4 Ps

WIDTH: PARLE PRODUCT produces biscuits, confectionares & snacks so width 3.

BISCUITS PARLE-G MONACO KRAKJACK

PRODUCT LENGTH of PARLE:

CONFECTIONARIES MELODY KISMI BAR POPPINS

HIDE N SEEK,HIDE N MANGOBITE SEEK MILANO, MARIE CHOICE KISMI KOFFEE GOLDEN ARCS DIGESTIVE MARIE GOL GAPPA PARLE 20-20, MAGIX KACCHA MANGO BITE MILK SHAKTI CHOX KREAMS MAZELO

SNACKS JETTS SIXER MUSTT BITES TANGY BITES MUSTT TOMATO GARDEN SPICE MUSTT STIX MUSTT CHIPS

CONTD..

DEPTH for PARLE-G: 8 Different packs 16.5G, 38.5G, 60.5G, 82.5G, 99G, 209G, 313.5G, 418G, 825G hence depth of parle G is 9. Two variants: Parle-G Magix having two flavours choco & cashew & comes in only 1 size 75gms hence depth 2. Parle Milk Shakti has no flavour & comes in one size of 150gms. So depth of Parle G is 8+2+1=11

Parle G has adopted the Market Penetration strategy i.e. low price along with capturing of a large market Also 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.

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. A two hundred strong dedicated field force services its huge wholesalers & retailers network. Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution network. Factories at strategic locations & manufacturing units in rural areas.

Establishment of

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.

The next level of communication associated the brand with the positive values of life like honesty, sharing and caring. Just a few months back a reminder TV commercial was launched for Parle-G where the product is being called hindustan ki takat . Recently Parle G has started the use of celebrity in their advertisements.

Sales promotion - Every year it holds day fairs at branded venues

where games and fun events are organized for the employees of Parle and their families; where Parle products are giveaway prizes.

Parle - G and promotion mix (contd..)

Parle My Green Planet, a Corporate social responsibility initiative, will work across levels from school students to environmentalists to media professionals and through them educate and empower everyone about the cause of environment conservation.

Even though the Parle is market leader in the segment, others are also trying to capture the chunk of market share. Fake brands like Parel G, Parle Jee tried to extract market share. How ever only serious competition faced by Parle G is from Britania Tiger biscuit.

FOR PARLE-G:

FOR HIDE N SEEK:

M A R K E T G R O W T H R A T E CASH COW DOG QUESTION MARK

STARS

B C G M A T R I X

RELATIVE MARKET SHARE

CRUNCHY BATTLE

V s

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) VERSUS 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 TigerPARLE Gs QUALITY = BRAND LOYALTYPercentage of Respondents

C m a iso o T erA dP r o p r n f ig n a le-GM yT ste ilk aT e ig r M yT ste ilk a7 .5 5

P rle a -G

4 .5 0 2 .5 6 3 .5 0 0 2 .5 AL ittle H igh 0 J stR h u ig t 6 .5 AL ittleL w o 0 V Lw ery o

2 .5 9

1 .5 5 Cn S y a 't a

V Hh ery ig

N . o R o d ts: o f esp n en

T er 0 ig -2 0

Pr G 0 a le -2 0

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