PARLE – G

General Manager- Hello Everyone, we have a problem at our hand. Our profits are getting reduced
due to increase in major chunk of our raw material cost. So now I want your views on whether we
should increase the price or opt for any other strategy.
Finance Manager- The cost of sugar and wheat flour, 55% of our raw material is increasing since past
18 months leading to a reduction in profit margins from 15% to less than 10%. Besides that, we have
also invested 500 million for increasing our manufacturing capacity. Therefore, there is an urgent need
to increase the price.
Sales Head- I don’t think reducing the price is a good idea. We have already tried this in 2004 and the
consequences were reduction in sales upto 40% within a short span of 6 months. We need to look for
better alternative.
Product portfolio Manager- I agree with the Sales head. Instead of increasing the prices, we can
focus on product portfolio development. The overall growth rate in the premium segment is expected
to be more than 20% as compared to the industrial growth of 15%. We should explore ways of
increasing our shares in the premium segment (sweet, cream and milk) as it also provides profit
margins of as high as 30%.
Marketing Head- Adding to what Product Portfolio Manager said, the image that we have built for
Parle since the very beginning is ‘Value for Money’ but now is the time to shift the focus to building
Brand Image from a holistic perspective. As per the study by McKinsey Global Institute, demand for
discretionary items will grow dramatically in the future whereas the demand of the basic necessities
will grow on a slow pace. Therefore, we need to adopt aggressive marketing strategies for product
range like Hide and Seek, Cheeslings, Jeffs, Krack Jack etc.
Retailer- Gradually, the running costs of the retailers are rising and without any increase in the price
by the company, we are su
Inventory gets stocked up if the product doesn't get sold. 1 rupee product is easy to handle as they
come in form of sachets which can be hanged outside the shops. The bigger packets don't get sold in
rural India as they are mostly hand to mouth according to their need