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DEMAND AND SUPPLY ANALYSIS OF PARLE G ABOUT THE INDIAN BISCUIT INDUSTRY Biscuits are a household name these days. The markets are flooded with biscuits of every taste and for every age group. Sometimes it would be just difficult for us to decide on what to go for. These are good combinations with a hot cup of Tea or a coffee. They make a quick and a tasty snack any time and in any situation. In India per capita consumption of biscuits is estimated at a low 1.5 kg, reflecting the huge potential for growth of the industry. Over 900 million Indians buy and eat biscuits with varying frequency in any year. The penetration of branded product in this segment is quite significant, and is valued at Rs 2,500-3,000 Crore. None of the other wheat-based segments is as developed as the biscuits industry. The biscuit segment has developed with large markets of mass consumption covering over 90% of the overall potential market. The Indian biscuits' market is estimated to be 1.1 million tonnes per annum and valued at over Rs 50 billion. The unorganized sector accounts for over 50% of the market. The market has been growing at a CAGR of 6-7% pa. The present biscuits-bakery sector in India looks like a battlefront. The battle being led by stalwarts like Britannia and Parle with close competition from other companies like ITC, Nutrine, HUL 1

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DEMAND AND SUPPLY ANALYSIS OF PARLE G

ABOUT THE INDIAN BISCUIT INDUSTRY

Biscuits are a household name these days. The markets are flooded with biscuits of every

taste and for every age group. Sometimes it would be just difficult for us to decide on what to

go for. These are good combinations with a hot cup of Tea or a coffee. They make a quick

and a tasty snack any time and in any situation.

In India per capita consumption of biscuits is estimated at a low 1.5 kg, reflecting the huge

potential for growth of the industry. Over 900 million Indians buy and eat biscuits with

varying frequency in any year.

The penetration of branded product in this segment is quite significant, and is valued at

Rs 2,500-3,000 Crore. None of the other wheat-based segments is as developed as the

biscuits industry. The biscuit segment has developed with large markets of mass consumption

covering over 90% of the overall potential market.

The Indian biscuits' market is estimated to be 1.1 million tonnes per annum and valued at

over Rs 50 billion. The unorganized sector accounts for over 50% of the market. The market

has been growing at a CAGR of 6-7% pa. The present biscuits-bakery sector in India looks

like a battlefront. The battle being led by stalwarts like Britannia and Parle with close

competition from other companies like ITC, Nutrine, HUL Kissan, Kwality and even

international brands like Kellogs, Nestle, Sara Lee and United Biscuits.

There are two entrenched players in the biscuits market - Parle and Britannia have 85% of

the market share. Britannia is undoubtedly the leader with brands like Tiger, Little Hearts and

Milk Bikis. Britannia's Tiger brand is selling largely in the rural areas which actually

constitute 56% of the biscuit market. But in the Glucose segment Parle G is the market

leader. Also players like HLL and ITC have huge presence in the market.

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In India, there is a huge unorganized sector. Biscuits market on an average grew at 8% per

annum in the last five years. The rural penetration of the branded biscuits segment is also

significant. Towns with populations of less than a lakh contribute significantly to the

industry's turnover, with some estimates placing it at 40%. However, rural markets largely

consume lower-priced varieties, and it is here that branded biscuits meet with stiff

competition from the unorganized sector.

The unorganized sector in the biscuits segment does exert pressure on the Pricing policies of

the organized players. But only up to a point since the penetration of brands in this business

even in the rural areas is fairly significant.

Therefore, the value for only the branded business segment is more indicative of the

industry's competitive pressures.

The duty structure still favors the unorganized sector. Except for select low-priced varieties,

the excise duty on biscuits is a hefty 16%. However, bowing to pressure from the Federation

of Biscuit Manufacturers of India, 50% of the excise was exempted for biscuits with a

maximum retail price of Rs. 5 for a weight not exceeding 100 grams.

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ABOUT THE COMPANY

Parle Products Pvt. Ltd.

Legal status: Corporation

Net worth: US $ 450 Million

Year established: 1929

Year started export: 1982

Market share

Biscuit segment: 40%

Confectionary: 15%

Wholesalers: 1500

Retail outlets: 4, 25,000

Annual sales: 179.9 million kg (in volumes)

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HISTORY

A long time ago, when the British ruled India, a small factory was set up in the suburbs of

Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market was

dominated by famous international brands that were imported freely. Despite the odds and

unequal competition, this company called Parle Products, survived and succeeded, by

adhering to high quality and improvising from time to time.

A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweets

and toffees. Having already established a reputation for quality, the Parle brand name grew in

strength with this diversification. Parle Glucose and Parle Monaco were the first brands of

biscuits to be introduced, which later went on to become leading names for great taste and

quality.

PARLE COMPANY PROFILE

The Parle Products Pvt. Ltd. is a US $ 450 million conglomerate started in India in 1929.The

first glucose biscuit to be introduced from the House of Parle is Parle g which is 78 year old

brand. They are in the business of manufacturing and marketing biscuits and confectionaries.

They have State-of-the-art machinery with automatic printing and packaging facilities. Their

biscuit baking oven is the largest of its type in Asia.

Over the decades the efforts of their Research & Development wing have made the repertoire

of their products grow manifold. In biscuits they have Glucose, Milk, sweet and salted,

cream, Digestive, cumin seed and cheese categories. In confectionery, they have a range of

toffees and hard-boiled candies available in chocolate, mint, cola, and tropical fruit flavors.

Some of these are double layered toffees and center filled candies packed in rolls or pillow

packs, or have single or double twist wrapping.

Almost all of their products are market leaders in their category and as recognition of their

quality, have won Gold, Silver and Bronze Monde Selection medals since 1971. Parle enjoys

a 40% share of the total biscuit market and a 15% share of the total confectionary market, in

India. Parle has more than 50 manufacturing units and equal number of distribution points

spread all over India and abroad.

Maximizing value to consumers and forging enduring customer

relationships are the core endeavors at Parle

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PARLE G - THE EVOLUTION!!!

Makers of the world's largest selling biscuit, Parle-G, and a host of other very popular brands,

the Parle name symbolizes quality, nutrition and great taste. With a reach spanning even the

remotest villages of India, the company has definitely come a very long way since its

inception.

Parle-G has been a strong household name across India. The great taste, high nutrition, and

the international quality, makes Parle-G a winner. No wonder, it's the undisputed leader in the

biscuit category for decades. Parle-G is consumed by people of all ages, from the rich to the

poor, living in cities & in villages. While some have it for breakfast, for others it is a

complete wholesome meal. For some it's the best accompaniment for chai, while for some it's

a way of getting charged whenever they are low on energy. Because of this, Parle-G is the

world's largest selling brand of biscuits.

Launched in the year 1939, it was one of the first brands of Parle Products. It was called Parle

Gluco Biscuits mainly to cue that it was a glucose biscuit. It was manufactured at the

Mumbai factory, Vile Parle and sold in units of half and quarter pound packs.

The incredible demand led Parle to introduce the brand in special branded packs and in larger

festive tin packs. By the year 1949, Parle Gluco biscuits were available not just in Mumbai

but also across the state. It was also sold in parts of North India. By the early 50s, over 150

tones of biscuits were produced in the Mumbai factory. Looking at the success of Parle-G, a

lot of other me-too brands were introduced in the market. And these brands had names that

were similar to Parle Gluco Biscuits so that if not by anything else, the consumer would err in

picking the brand.

This forced Parle to change the name from Parle Gluco Biscuits to Parle-G.

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HOW PARLE FOUGHT TO MAKE BISCUIT AFFORDABLE

TO ALL

Biscuits were very much a luxury food in India, when Parle began production in 1939. Apart

from Glucose and Monaco biscuits, Parle did offer a wide variety of brands.

However, during the Second World War, all domestic biscuit production was diverted to

assist the Indian soldiers in India and the Far East. Apart from this, the shortage of wheat in

those days, made Parle decide to concentrate on the more popular brands, so that people

could enjoy the price benefits.

Thankfully today, there's no dearth of ingredients and the demand for more premium brands

is on the rise. That's why; they now have a wide range of biscuits and mouthwatering

confectionaries to offer. Be it a big city or a remote village of India, the Parle name

symbolizes quality, health and great taste! And yet, we know that this reputation has been

built, by constantly innovating and catering to new tastes.

In this way, by concentrating on consumer tastes and preferences and emphasizing Research

& Development, the Parle brand grows from strength to strength

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FEATURES OF PARLE G

Tests on samples of the world’s largest-selling biscuit brand and India’s first glucose

biscuit, introduced way back in 1939 i. e. Parle-G

The familiar face of Parle-G biscuits. The child's face and the yellow and white strips

haven't changed much.

According to ORG-MARG reports, Parle G commands a good 65 per cent market share in the

domestic biscuit market.

Ingredients:

The ingredients used to prepare the Parle G biscuits are Wheat Flour, Sugar, Edible

Vegetable Oils, Invert Syrup, Skimmed Milk Powder, Salt, Leavening Agents, Permitted

Emulsifier, Flavors and Dough Conditioners.

Nutritional value:

The pack is also point out that it contains Glucose, Milk, Iron and Calcium and is intended to

picture itself as some kind of 'energy' food.

Very rightly described as “SWAD SE BHARA, SWASTHYA SE BHARA” means full

with taste, full with health.

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MANUFACTURING UNIT:

There are five mother units and thirty one contract manufacturing units in India. The

main difference between mother units and contract units is that mother units produce

more than one product that is PARLE G, MONACO, KRACK JACK, SIXER, HIDE

AND SEEK etc. while contract unit manufacture only PARLE G.

Mother units are as follows.

Mumbai (Maharashtra),

Bhadurdgarh (Haryana),

Neemrana (Rajasthan),

Bangalore and Kolkata.

All the biscuits were manufactured in this factory i.e. In Mumbai one as the load of work

exceeded many factories were set up in other states of India. So the cost of transportation

decreases and more profit is earned.

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PRICING:

The biscuit market in India is extremely price sensitive. With Parle providing most of its

biscuits in the range of Rs. 1to 40, other players in the market can’t think of increasing the

prices.

PLACE:

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

Products. Parle biscuits & sweets are available to consumers, even in the most remote places

and in the smallest of villages with a population of just 500.

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

A two hundred strong dedicated field force services these wholesalers & retailers.

Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution

network.

PROMOTION:

Parle-G started being advertised in the 80's. 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 went on to become one of the most popular

commercials for Parle-G. The commercial was run for a period of 6 years.

Parle-G grew bigger by the minute. Be it the packs sold, the areas covered or the number of

consumers. It became a part of the daily lives of many Indians. It wasn't a biscuit any more. It

had become an icon. The next level of communication associated the brand with the positive

values of life like honesty, sharing and caring.

In the year 1997, Parle-G sponsored the tele-serial of the Indian superhero, Shaktimaan that

went on to become a huge success. The personality of the superhero matched the overall

superb benefits of the brand. Parle extended this association with Shaktimaan and gave away

a lot of merchandise of Shaktimaan, which was supported by POS and press communication.

The children just could not get enough of Parle-G and Shaktimaan.

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In the year 2002, it was decided to bring the brand closer to the child who is a major

consumer. 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.

The year 2002 will go down as a special year in Parle-G's advertising history. A year that

saw the birth of G-Man - a new ambassador for Parle-G. Not just a hero but also a super-hero

that saves the entire world, especially children from all the evil forces. A campaign that is not

just new to the audiences but one that involves a completely new way of execution that is

loved by children all over the world – Animation.

To make the brand much more interesting and exciting with children, it was decided to

launch a premium version of Parle-G called Parle-G Magix in the year 2002. Parle-G Magix

is available in two exciting tastes - ‘Cocoh’ and ‘Cashew’. The year 2002 also witnessed the

launch of Parle-G Milk Shakti, which has the nourishing combination of milk and honey,

especially launched for the southern market.

The Parle marketing philosophy emphasizes catering to the masses.

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PACKAGING:

Originally packed in the wax paper pack, today it is available in a contemporary, premium

BOPP pack with attractive side fins. The new airtight pack helps to keep the biscuits fresh

and tastier for a longer period.

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SWOT ANALYSIS

STRENGTHS:

1. Great taste:

Any one can eat the Parle G biscuits with water also, that is the best thing about it.

2. Availability:

Parle G has strong distribution network.

3. Brand Name:

Parle is the existing brand since last 78 years, so Parle G gets an edge over the others and it

is also the world’s largest selling biscuit.

4. The quality commitment:

All Parle products are manufactured under the most hygienic conditions. Great care is

exercised in the selection & quality control of raw materials, packaging materials & rigid

quality standards are ensured at every stage of the manufacturing process. Every batch of

biscuits & confectioneries are thoroughly checked by expert staff, using the most modern

equipment.

5. Value for money:

They constantly endeavor at designing products that provide nutrition & fun to the common

man. Most Parle offerings are in the low & mid-range price segments. This is based on their

understanding of the Indian consumer psyche. The value-for-money positioning helps

generate large sales volumes for the products.

However, Parle Products also manufactures a variety of premium products for the up-market,

urban consumers. And in this way, caters a range of products to a variety of consumers.

Affordability:

Parle G offers 1Rs. pack which contains 4 biscuits which is affordable to anyone

aims to satisfy hunger.

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6. The customer confidence:

The Parle name conjures up fond memories across the length and breadth of the country.

After all, since 1929, the people of India have been growing up on Parle biscuits & sweets.

Today, the Parle brands have found their way into the hearts and homes of people all over

India & abroad.

The consumer is the focus of all activities at Parle. Maximizing value to consumers and

forging enduring customer relationships are the core endeavors at Parle. Their efforts are

driven towards maximizing customer satisfaction and this is in synergy with their quality

pledge. “Parle Products Limited will strive to provide consistently nutritious & quality food

products to meet consumers' satisfaction by using quality materials and by adopting

appropriate processes. To facilitate the above we will strive to continuously train our

employees and to provide them an open and participative environment."

WEAKNESS:

1. The biggest concern for Parle -G is that the brand shouldn’t become outdated as it is a

historic brand. The brand has managed to retain its leadership position because it has evolved

its campaign with every consumption trend.

OPPORTUNITIES:

1. Market expansion:

Parle is weak in Eastern India and Tamil Nadu. To cover up this loop hole, they are giving

scholarships to children in these states to cover up the corporate equity which is less than

Britannia in these states.

THREATS:

1. Promotional Strategy of Competitors:

ITC is promoting their Sun Feast brand by using strong promotional campaign with Brand

ambassador Shah Rukh khan. ITC Foods Ltd has expanded network and is promoting its Sun

feast biscuits across 1000 schools in the country. Britannia Tiger has brand ambassador Rahul

Dravid and Virender Sehwag who are doing heavy duty endorsement on their personal equity

line for the brand.

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SURVEY

REPORT

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SURVEY REPORT:

SAMPLE SIZE: (30 CONSUMERS, 15 REATIL OUTLETS, 1 DISTRIBUTOR)

We have done survey at various retail outlets, customers and also visited some of the

distributors; to understand which is the largest selling glucose biscuit?, why people buy

it?, what attracts them more in the brand?.

RETAILER’S SURVEY

LARGEST SELLING GLUCOSE BISCUIT

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CUSTOMER’S SURVEY

WHAT ATTRACTS THEM MORE?

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CUSTOMER’S RATING

FLAVOR SATISFACTION 1/2

PRODUCT QUALITY

PACKAGING

DISTRIBUTOR’S SURVEY

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We have visited the Swanand distributor in kalwa, who supplies the Parle G to the Big

Bazaar, D-mart, Supermarkets, and railway canteens.

DEMAND AND SUPPLY ANALYSIS

What is demand?

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“By demand we mean various quantities of commodities and services which consumer would

buy in one market in a given period of time at various prices” Bobber.

In simple word, demand means the quantity of goods and services which consumer would

buy in a market at a given time and price.

PRICES QUANTITY DEMANDED PER

WEEKS

Rs. 2 5134

Rs. 4 3990

Rs. 10 1250

Rs. 15 545

Rs. 20 392

Rs. 25 202

Rs. 40 100

Explanation:

The above schedule shows the no. of people, at various prices which Parle g comes and

quantity demanded per week.

We can see that, as the prices increases, from RS. 2 to RS. 40, the quantity demanded

decreases from 5134 to 60.

This shows that low price result in high demand for that product. This schedule is plotted on

the below diagram

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PRICE

64

32

16

8

4

2

0 50 150 450 1350 4050 12150

QUANTITY DEMANDED PER WEEK

Explanation:

1. In the above diagram we have taken quantity demanded per week on X axes and prices of

Parle g on Y axes.

2. It is general law that demand curve slopes downward to the right, it shows the inverse

relationship between price and demand i.e. when price raises demand falls and vice –versa.

This is why; it is also known as negative slope of demand curve.

PRICE ELASTICITY OF DEMAND

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In economics and business studies, the price elasticity of demand (PED) is a measure of the

sensitivity of quantity demanded to changes in price. It is measured as elasticity, which is it

measures the relationship as the ratio of percentage changes between quantity demanded of a

good and changes in its price. Water is a good example of a good that has inelastic

characteristics in that people will pay anything for it (high or low prices with relatively

equivalent quantity demanded), so it is not elastic. On the other hand, sugar is very elastic

because as the price of sugar increases, there are many substitutions which consumers may

switch to.

MEASURING THE ELASTICITY WITH THE MID POINT

FORMULA

Mid point formula:

Ep = dQ P1 + P2

dP Q1 + Q2

P1= 2, P2 = 4, Q1 = 5134, Q2 = 3990,

dQ= (5134 – 3990) = 1144,

dP= (4 – 2) = 2

Ep = 1144 6 = 0.6190

2 924

Elasticity is less than 1,

Therefore we can conclude that for Parle G the demand is

relatively inelastic

RELATIVELY INELASTIC DEMAND

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(ELASTICITY IS LESS THAN 1)

PRICE

4

50 % INCREASE

2

22 %

DECREASE

0 3990 5134

QUANTITY

Explanation:

1. In the above diagram we have taken quantity demanded on X axis and prices of Parle

G on the Y axis.

2. It clearly shows that when prices increase from RS. 2 to Rs. 4 that is 50 % increase in

price, than the quantity demanded comes down from 5134 to 3990 that is 22%

decreases in quantity demanded. There fore we can conclude that, for Parle g the

demand is relatively.

ANALYSIS OF SURVEY

FACTORS AFFECTING DEMAND:

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1. Price:

As per the survey done by us, we came to know that price of the product affect

purchasing behavior of customer. It was found that the Rs. 4 packet of Parle G has

maximum sales of 33% because it sells more in rural areas.

Coming to the bigger outlets and malls the RS. 40 packet has 25 % sales

2. Brand name:

According to survey done it was found that only 11% of people opt for Parle G

biscuits because of its brand name.

3. Taste and preferences:

According to the survey done on 15 retailers and 30 consumers, we found that

majority of the people i. e. 66 % opt for Parle G for its taste.

GLOBAL SCENARIO

The immense popularity of Parle products in India was always a challenge to their production

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capacity. Now, using more modern techniques for capacity expansion, they have begun

spreading their wings and are going global.

Parle biscuits and confectionaries are fast gaining acceptance in international markets, such

as, Abu Dhabi, Africa, Dubai, South America and Sri Lanka. Even the more sophisticated

markets like USA & Australia, now relish Parle products.

As part of the efforts towards a larger share of the global market, Parle has initiated the

process of getting ISO 9000 certification.

That’s why Parle-G is the World's Largest Selling Biscuit.

COMPETITORS

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Parle-G’s image as an affordable wholesome meal that could be used as a charger when low

on energy as well as a tasty accompaniment with Chai helped it to consolidate and retain its

position as the number one biscuit brand for decades.

Parle g has the tough competitors like Britannia tiger, ITC Sunfeast and smaller players like

Priya gold (north), Surya Foods, Anmol, and Champion.

According to ORG figures, Parle G has captured around 69%, Britannia tiger 24%, ITC

Sunfeast 5%, others 2%.

MARKET SHARE

BRITANNIA TIGER

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BRITANNIA TIGER, launched in 1997, became the largest brand in Britannia's portfolio in

the very first year of its launch and continues to be so till today. Tiger has grown from

strength to strength and the re-invigoration in June 2005 and more recently, in Apr 2008 has

further helped bolster its growth in the highly competitive glucose biscuit category.

Over the years, Tiger has become the mass-market face of Britannia symbolizing fun and

energy in both urban and rural India, and transcending glucose biscuits.

Tiger Coconut: launched in 2001

Tiger Creams: Was Introduced in 2002 at just Rs 5 per pack. Comes in 5 flavours - Orange,

Elaichi, Chocolate, Rose Milk and Kesar (Rose Milk and Kesar only available in North

markets).

Chota Tiger: Is an extension of brand Tiger launched nationally in May, 2007. It comes in

two variants: Milk Sparkies and Choco Sparkies

Tiger Banana: They have launched a new variant under our power brand TIGER - TIGER

BANANA - power packed with IRON ZOR & and with the delightful taste of banana.

IRON ZOR helps make mind sharper and body stronger being available in convenient packs

priced at Rs.2, Rs.4 and Rs.10.A Rs.4 pack has as much IRON ZOR as that in 1 kg of

Banana.

ITC SUNFEAST

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ITC launched delicious biscuits of international quality under the Sunfeast range on 28th

July 2003. The biscuits were launched after a great deal of market research. "Sunfeast" - to

be launched nationally in phases in over One million retail outlets across the country.

Sunfeast Glucose,

Sunfeast Marie and

Dream Cream biscuits; were the first to make an appearance in the market.

In a short span of 3 years Sunfeast has launched many new varieties and has its presence in

almost all types of biscuit categories.

In April 2005, Sunfeast launched its major campaign. It signed on Hindi film actor, Shah

Rukh Khan as its brand ambassador.

ITC Sunfeast glucose biscuit comes in RS.4 and RS.10 Packets.

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CONCLUSION

We did a survey on 15 retail outlets and 30 consumers and few distributors, and

we came to know that due to the varying income of the consumers the Rs. 4

packet sells more in smaller retail outlets and the bigger packet of Rs. 40 is

maximum sold in malls.

The Rs. 1 packet we would mostly found in rural areas and

Rs. 3 packet they usually export it to the other countries

The majority of the people opt for Parle G biscuits for its taste.

60 % of the consumers are satisfied with the Parle G.

Parle G as a product has the strong penetration into the marketing metro cities and

the remotest village, but they have not completely succeeded in spreading their

wings in the eastern India and Tamil Nadu.

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METHODOLOGY

REATILERS SURVEY OF PARLE G

NAME OF SHOP __________________________________________________

NAME OF OWNER __________________________________________________

1. Which glucose biscuits brands are available in your shop?

__________________________________________________________________________

2. Which brand having largest sell?

PARLE G BRITANNIA TIGER ITC SUNFEAST PRIYA GOLD

3. How many varieties of PARLE G you have?

___________________________________________________________________________

4. What is the weekly sell of PARLE G, BRITANNIA TIGER and ITC SUNFEAST?

PARLE G RS. 1

RS. 2

RS. 3

RS. 4

RS. 10

RS. 15

RS. 20

RS. 25

RS. 40

BRITANNIA TIGER RS. 2

RS. 4

RS. 10

ITC SUNFEAST RS. 4

RS. 10

5. Who is the supplier of PARLE G?

___________________________________________________________________________

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CUSTOMERS SURVEY OF PARL G

NAME: _______________________________________________

LOCATION: _______________________________________________

1. Which is your favorite glucose biscuit?

Parle G

Britannia tiger

ITC sun feast

Priyagold

2. Which biscuit packets do you purchase? (i. e. in Rs.)

3. How many times do you purchase it?

Daily Weekly Monthly

4. Why do you like this biscuit?

Taste Crispiness Freshness Brand name

5. How will you rate the biscuit on the following category? (Scale: 0-5)

Flavor satisfaction

Product quality

Packaging

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BIBLIOGRAPHY

www.parleproducts.com

www.wikipedia.com

www.britannia.com

www.sunfeastharabanao.com

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