Question 1 As a Consultant what you advise Pravin Kulkarni to increase the

Price of their Flagship Product, Parley G? Provide rational for your pricing
decision.
Ans: -
 No, Because FMCG are price Elastic. A slight change in price of Rs. 0.5 resulted in a
fall of sale of 40% within 6 months.
 Since introduction, the biscuit is strongly associated with the offering “value for
money”.
 Middle class (Seeker & Aspirers) is the backbone of variety of product consumption in
India and they are price sensitive
Question 2 Increase price or decrease package grammage – which one would
be a suitable measure for maintaining long term leadership position?
Ans: -
Alternative 1 (increasing the price Rs 0.5)
Previously
100gm – Rs 4
For 1Kg – Rs 40
After increasing the price
100gm – Rs 4.5
For 1Kg – Rs 45
Alternative 2 (decreasing grammage package)
Previously
100gm – Rs 4
For 1Kg – Rs 40
After decreasing grammage
82.5gm – Rs 4
Equivalent 100gm – Rs 4.8
For 1Kg – Rs 48
Therefore, profit is more in alternative 2 i.e. decreasing grammage package. Also, with
increase in price customer are decreasing while with decrease in grammage customer are not
much concerned with it.
Question 3. What could be sustainable marketing plan for retaining price
and product leadership?
Ans: -
 In holding the price line, Parle has brought discipling factors for the Indian market. A
hike in the price had the potential to increase the margin of Parle-G by 50% and to
perhaps restore its value back earlier 15%. But, by the experience of the 2004, the
consumer would be extremely sensitive towards the price hike as a indication of
danger. Marketing plan to overcome the problem was ultimately to “reducing the gram
mage as only way out.” Owning to its VFM image and the brand value through which
Parle-G has grown for middle class from lower middle class, it was like playing with
the fire but without getting burnt.
 Middle and lower middle class contribute as major purchasers for Indian biscuit
industry. Apart from them Nestle’s Maggi, Hajmola and even P&G ‘s Colgate have
adopted weight reduction policy. Since the input is a uncontrollable variable, so it was
best to go for weight reduction of current SKUs. Measures for cost control have to
keep a strict par margin. Parle-G for Premium category: since being a market leader in
Glucose biscuits category with highest share up to 74% and going at 48% penetration,
it ultimately constitutes for 42% of the Indian biscuit industry.
 With the increase in the income level of the country the choices indicate towards shift
to the premium category as a profitable venture. Moving into the premium category
would successful in restoring the glory back to Parle-G as market leader but this time
it should be established for the premium glucose biscuits. Newer varieties should be
launched which are as follows:
 Parle-G Chocolate for Kids from 6-12
 Parle-G Diet for teenagers
 Parle-G Proteins for lactating mother and pregnant women
 Parle-G Sugar for health-conscious people
These would not only fetch the new horizons for the Parle-G in the market and also maintain
its sustainability without cannibalizing the current product lines and varieties.