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ABOUT PARLE
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 cores . It has provided its products to the mass with the affordable range.
SWOT ANALYSIS
Strength Parle Brand, Diversified product range, Extensive distribution network. Low and mid price range Catering to mass, Better understanding of consumer psyche Market leader in glucose biscuit Opportunities Estimated annual growth of 20% Low per capita consumption, Changing consumer preference, Increasing demand for sugar free, Using advertising aggressively Weakness Dependence on retailers & grocery stores for displaying diversified Parle Products on shelf, induce impulsive buy. Britannia capturing market slowly (eg- tiger biscuit ) Dependence on Parle G (flagship brand) Threat 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. Britannia capturing market slowly (eg- tiger biscuit )
IMPACT
Short term: Increase in profits due to higher market share. Decrease in market share if competitors have deeper pockets. Long term: Increase in the market share due to brand building activities. Rs.5SKU will give a greater headroom for tinkering grammage during future increase in input costs. Decrease in the overall growth rate due to customer shift for higher end biscuits.
RECOMMENDATION
INCREASE THE PRICE-BUT AFTER DOING GROUND WORK Step1: Dont change the price Rs.4 immediately (VFM-BOP) No. of biscuits and weight per biscuit which might be a value proposition for the customers Step2: Focus on Rs.5 SKU and Focus on Rs.4 SKU Cannibalize Rs.4 SKU(~80g) with Rs.5 SKU(~90g) Step3: Monitor the competitors & consumers reactions