BADM 326 Parle-G - Parle-G Case Study PDF

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Parle-G Case Study...

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1 Parle G Parle has been the leader of the biscuit market in India since its conception in 1939. During the past 70 years it began to develop a reliance on its most popular item, Parle-G, for most of its revenue. This is due to its heavy market share in the glucose biscuit market as well as customer loyalty to the Parle brand. Parle-G has marketed itself to mothers and children since 1990 and hopes to continue this trend. Parle now faces a challenge due to decreasing profit margins, and it must decide whether to raise prices to make more revenue or to maintain its current price. With all of this in mind, I believe that Parle-G would be best off if it maintains its prices. After reading through the case study and seeing the statistics that most of Parle-G’s customers are in the “Deprived” social class it would seem in poor taste to increase prices on those who are already financially struggling. With the end customer in mind, this choice is rather easy as nearly 60% of the Parle-G consumption was from the SEC classes R3 and R4, which are the two lowest social classes. With the socio-economic numbers looking to suggest that the middle class will begin to grow as the lower-class stinks in the next 25 years, this would seem to be a great way to increase brand loyalty. Maintaining the lower prices would show the consumer that Parle-G care about them and that they will not go against them and increase the prices. This message would most likely be well received and lower class would continue to purchase Parle-G when they become middle class the future. Parle-G is well positioned in contrast to competition, it is an old company, and it owns many different manufacturing centers near wholesalers. It has been proven in the past that Parle-G is the front runner in the glucose biscuit category. With Parle so well positioned with

2 low distribution cost any competition would begin to see their own profit margins go down and would pull out of the glucose biscuit market or they would raise their prices. Both of which seem to give Parle-G a further advantage and would increase their profitability. Since Parle-G is the market leader it is up to them to keep the glucose biscuit affordable to its main audience, the lower class. My “big idea” for Parle-G to keep the VFM consumer perception is to maintain price for Parle-G for the whole sale markets for its retail consumers. It would focus more on the individual consumer as that is where the initial VFM perception is coming from. I believe that if Parle-G raises its price and not allow for bulk order discounts for its institutional consumers it would raise its profit margins. Raising prices for hospitals, factories, railway stations, government offices, and corporate offices would allow for consumers to think that the price increase would be a premium for convenience of having their favorite Parle-G biscuit wherever they are. Having the Parle product at these public places is a great way to increase brand awareness; However, Parle-G is marketing mainly to mothers and children and these institutional customers are not where their audience will be shopping.

Overall, I believe that Parle-G is a market leader in the glucose biscuit market and their consumers are reliant on their low prices. To keep consumers loyal to the Parle brand, Parle must also stay loyal to them and provide quality biscuits at affordable prices. I believe that as market leaders Parle can be less reliant on the revenue coming in from the instutional consumers and provide institutional consumers Parle-G at the premium. Parle-G is well positioned and should not be worried about their profits in the present and should focus on the

3 consumer, who have shown their faithfulness to the Parle brand, by in turn being reliable to them....