Subject:- Managerial Economics

Course Code:-ECOM531
CA:- 02
Instructor:- Dr Nadeem Ahmad Bhat
Section:- Q2154

Mittal School Of Business

Lovely Professional University
Phagwara, Punjab

Annexure-V- Cover Page for Academic Tasks

Course Code: ECOM531 Course Title: Managerial Economics

Course Instructor: Dr. Nadeem Ahmad Bhat

Academic Task No.: 02 Academic Task Title: Assignment

Date of Allotment: Date of submission: 20.05.2022

Student’s Roll no: A02, A16, A20 Student’s Reg. no: 12100047,
12110909, 12113636
Evaluation Parameters: (Parameters on which student is to be evaluated- To be mentioned by
students as specified at the time of assigning the task by the instructor)

Learning Outcomes: (Student to write briefly about learnings obtained from the academic
tasks)

Declaration: I declare that this Assignment is my individual work. I have not copied it from
any other student‟s work or from any other source except where due acknowledgement is made
explicitly in the text, nor has any part been written for me by any other person.

Student’s Signature: Robiul Islam Akash, Vishnu Jayraj, Jerry Oldpa Lyon

Evaluator’scomments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

Evaluator‟s Signature and Date:

Marks Obtained: Max. Marks: …………………………

 Peer Rating

Name Registration Roll No Rating Signature

No
Robiul Islam Akash 12110909 A16 10

Jerry Oldpa Lyon 12100047 A02 10

Vishnu Jayraj 12113636 A20 07

Introduction:-

Summary of the Case:- While doing the demand analysis it is almost mandatory to study
factors like consumer's income, price of related goods and expectation about the future.
The Indian market till recently was a seller market where the product and the market dictated
the terms of the trade to the customer. But the things are not the same today with open
competition it has become a buyers' market.
For the consumer non-durables like cold drink, snacks marketers realized that the market
demand is governed more by consumer preference than income or price of the product. Biscuit
are a good example of one of the most common and popular snack. The organized Biscuit
industry is controlled by two major players Britannia and Parle – G

Taste and Preference for Biscuits:- Taste and preference means what does a consumer likes
and preferences for goods as measured by utilities of goods it is a psychological factor so cannot
be measured quantitatively but is only qualitative aspect of Demand but in case of non-durable
goods like one discussed in the case i.e. biscuits, the factor of taste & preference plays a big
role. A consumer has own choices for biscuits they eat what they like most and it all depends
on their own taste and preference and utility to spend money. They have own decision to take
this or not it all depends on the choices they have. BRITANNIA, PARLE these are the major
player of biscuits industry. They all know consumer wants quality and reasonable cost.
In India biscuits are an example of one the most common and popular snacks. Everyone likes
to eat biscuit's as snacks because biscuits are providing easily everywhere and price as well as
quality and quantity. For consumer NON DURABLE GOODS like cold drinks snacks
etc...Marketers" consumers that the market demand is governed more by the consumer taste
and preference more than price or income of product and they are not leaving any stone
unturned to climb up the ladder of consumer's choice list.
Biscuits are synonymous with a low cost sweet item that is taken with tea. BRITANNIA and
PARLE both seem to have understood this distinct preference. BRITANNIA re launch
Glucose-d and Circus brands as low cost tiger brand biscuits has taken by the rural market by
storm. Tiger brand (synonymous to the power of the animal which it is named). PARLE-G yet
another well-known low cost glucose biscuit's. Mainly from the rural sector and because of
their easy reorganization as a result of its long presence in the market.
Urban people and rural people has own choices which type of taste and preference they have
and in there budget. The urban people like to eat salty, sweet salty and creamy and another
right there niral people has own choice.
So the taste and preference may have lesser role in case of durable goods but this case shows
that how the Parle and Britannia are working on this factor majorly and hence making out good
returns after providing what the customer wants and they also considered some other factors
that have been working in their favour.
Case Revolves Around
Demand:- Demand is the main component that is being discussed in whole of the case demand
is the willingness and desire of the customer to pay for a specific product or service but the
demand is subject to its various functions that may lead to shift and changes in demand and
these determinants are explained further:
Determinants of (Factors affecting) demand of Biscuits:-
Good's own price:- The basic demand relationship is between probable prices of a good and
the amounts that would be bought at those prices. Usually the bond is negative meaning that
an increase in price will hring a decrease in the quantity demanded. This undesirable
relationship is come to life in the descending slope of the consumer demand curve. The
statement of an adverse relationship is reasonable and natural. If the worth of a new novel is
great, a person force decide to borrow the book from the public library slightly than buy it.
Price of related goods:- The main correlated goods are supplements and substitutes. A
supplement is a good that is used with the main good. Example Britannia and parle-g. (Perfect
supplements act as a single good.) If the price of the supplement goes up the quantity demanded
of the other good goes downcast. Mathematically, the variable representing the price of the
corresponding good would have a negative quantity in the demand function. For example, Qa-
P-P, where Q is the quantity of Britannia and parle-g Demanded, P is the price of Britannia and
parle-g P, is the price of quantity. The other main category of associated goods are substitutes.
Substitutes are goods that can be used in place of the main good. The mathematical bond
between the price of the substitute and the demand for the good in question is optimistic. If the
price of the substitute goes downcast the demand for the good in question goes downcast.
Personal Disposable Income:- In this case, the more disposable income (income after tax and
receipt of benefits) a person has the more likely that person is to buy a product.
Tastes or preferences:- The greater the wish to own a good the more likely one is to buy the
good. There is a basic difference between desire and demand. Desire is a measure of the
willingness to buy a good based on its fundamental qualities. Demand is the willingness and
ability to put one's desires into effect. It is assumed that tastes and preferences are
comparatively continuous.

User hopes about future prices, income and accessibility:- If a consumer trusts that the
price of the good will be higher in the future, he/she is more likely to purchase the good
nowadays. If the consumer thinks that his/her income will be higher in the future, the consumer
may buy the good nowadays. Accessibility (supply side) as well as predicted or expected
accessibility also affects both price and demand.
Population:- If the population develops this means that demand will also increase. As the
Indian population living in rural and urban areas both are being targeted by the Parle and
Britannia with two different strategies.
Demand always have a downward slope

Britania In The Market:- Confections have vital important among the public unrelatedly of
the age, sex and preferences of the individual in all parts of the world. So, from childhood to
retirement age every one of us used to take biscuits as a pleasant food during morning and
evening tea breaks. Hence the confections are moving fast in the market as all the people
consume multiplicities of sweets, cakes and biscuits frequently and regularly. Further the
children up to a particular age limit they consume more amount of confection items. There are
number of manufacturers for all types of biscuits. Among various brands Britannia products
contribute more shares in the entire market. Due to globalization in all business there are many
competitors. Similarly for all the confections heavy competitions carry the day in the market
which eventually affect the sales of the products of the particular company. Though the
manufacturers take creativities to improve the sales by way of advertisement for certain
products like good day, fifty-fifty there are heavy demands particularly for cream biscuits all
the retailers get more demand from the public unrelatedly of the age and sex. Due to the taste
and more advertisement by the Parle-G nowadays the Britannia Company face tough
competition in the market to move its various products. In olden days Britannia was considered
as almost the monopolistic company in confection items but at present there are number of
competitors in the market. The Britannia Company has established its own market in major
parts of the country.
But in Coimbatore its involvement is little bid low when compared with the other areas. The
dealers even felt and conveyed the information to the company. They do not know the real
cause for the issue for the decrease in sales.
Hence it is necessary to know the cause for the decrease in sales volume of Britannia products.
The Britannia. Company has many dealers for Coimbatore region. But Cheran Traders,
R.S.Puram, Coimbatore is the main approved distributor who supplies Britannia products to
more than 500 retailers in the districts. The retailers are the main mediators who frequently
meet the ultimate consumers of the Britannia products. They know the consumers preferences
and attitudes towards particular product having different brands. To know the consumers
attitudes towards the Britannia products in its place of meeting the consumers i.e. public who
are numerous and uncountable, the investigator due to the time constrictions decided to get
training in Cheran Traders, Coimbatore and collect the consumers attitudes and preferences
towards the Britannia products through the retailers.

Parle In The Market:- In 2009. Parle Products Pvt. Limited (Parle), a primary Indian biscuit
manufacturer, had the difference of producing the largest selling glucose biscuit brand by
volume in the world, the Parle-G. Parle-G biscuits sold for approximately USSI per kilogram
and as very few sort out and ready-to-eat foods were available at this price point. Parle-G was
strongly associated with contribution value for money (VFM). A pending problem in this brand
category for Parle was that the input prices of two major raw materials for the Parle-G biscuits
(which together accounted for 55 per cent of their input costs) had risen enough in the past 18
months to decrease limitations from 15 per cent to less than 10 per cent. Burden to restore
margins led Parle to reflect a price increase yet a previous effort had caused histrionic lessening
in sales. Parle consequently addressed rising input costs by dipping the weight of the package,
permitting production, dipping supply chain costs and dipping packaging costs. Parle could not
overlook the intensely entrenched perception of VFM when planning both short- and long-term
marketing strategies to retain Parle-G's success in the marketplace.

Highlights of the Case:-

Taste and Preferences "Psychology Yet a Game Changer”:- Taste and preferences is a
function of demand that is not taken care of too much mainly because it cannot be measured
but in this case where we are discussing about a non-durable good i.e. biscuits the taste and
preference is playing a major roll as the name of the case also depicts the population living in
the urban region of India and the rural part of India are both having different tastes and
preferences so the product has been introduced differently for both the targeted people by both
Britannia and Parle.
Product Pricing Taken Care Of:- Both by Parle and Britannia Price were kept very low that
got them to sale a Heavy amount and accumulate the Market Share as the price was not so
much the consumers can now easily buy the product without worrying what the results for the
pocket will be.
Packaging by Britannia:- Britannia when introduced their biscuit tiger this biscuit was having
an attractive packing as the packing of this product shows the strength of the rigorous animal
made on it to promote an idea that this glucose biscuit will give the consumer energy and power
that a tiger have.
Edge Over Unorganized Sector:- Their low prices and the good quality that the two
companies Britannia and Parle were and are providing have actually given them an edge over
the unorganised Indian market as there is no much difference in the cost and still the quality
that the consumer is having from brands is a-one so unorganised sector is tackled with the
strategy.
The Idea of "LEISURE":- Having snacks with tea the time is leisure time so Britannia found
that as people love to have some leisure time so the company introduced some campaigns and
schemes to provide some winnings to the consumer regarding leisure time only for example,
campaign that was "Britannia Khao Worldcup Jao" so this was another step taken by Britannia
to attract more consumers towards the brand and increase the sales of their biscuit as result.

Questions from the Case study

1. Do you think taste and preference is an equally important demand determinant for
consumer durable goods and capital goods as it is for non-durable consumer goods?
Answer:- Firstly, let us understand what are Durable goods, capital goods and non-durable
goods.
• Durable goods-Durable goods are the type of goods that are to be used by a user for
long time span i.e. three years or more than this so these cannot be consumed in short
period of time. For example. Automobiles, electronics
• Non-Durable goods- These goods are those which can be consumed in shorter period
of time by the consumer as these are not such goods which are used for long span but
under the in time span of maximum three years these are consumed. For example.
Eatables. clothing
• Capital goods These goods are those goods which are used in a business for eg
Machinery, etc.
As we read in the case, when we are buying most of non-durable consumer goods we will
consider taste and preference majorly, but I think that in case of Durable goods it does not
matter that much as it is in case of non-durables. I understand the demand for durable goods, it
is majorly driven by price of good, income and technology.

In case of No-Durable:-
The key factors that effect demand are:
• Price of product
• Income
• Fashion
Taste and Preference:- Taste and preference do play a major role in the case of the non-
durable goods because if we are buying some non-durable goods for an instance if we are
buying:
Clothes:- So when we are buying clothes we will always want to look good and most
importantly according to our taste and preference and adding into it according to the fashion
prevailing in the current times so taste of a person largely effect the decision to buy kind of
clothes.
Eatables:- Again as we read in case even when we are going to buy biscuit if we like to have
salty biscuits with tea or sweet in taste we will buy according our taste that is the case with all
the eatables so taste and preference plays a major role in choosing non-durables.

In case of Durable Goods and Capital Goods:-

Here the prime drivers of demand are:
• Price of good
• Income of the buyer
• Change in technology

So, in place of taste and preference having a minor role in demand here, Technology plays a
major role.
Durable goods:- If i am buying some electronic good than I will always want that the product
I am buying should be competent in terms of technology to the other variables that are present
in the market my device should provide me as much features as possible and it must be future
ready for changes in the technology and then I will move towards the price of this good
Capital goods:- Capital goods are all the goods that are being bought bt producers/business
men to use in their businesses for example, the machines that are being used to manufacture
products so again if a manufacturer i buying a machine he/she will always want to have the
cutting edge technology the best optimum manufacturing he/she can do and then choosing
machine according to the price.

Conclusion:-
• In case of Non-Durable goods Taste and preference do play a major role to decide what
brand to buy what not to be bought.
• In case of durable goods the taste and preference does not matter as much as in the case
of the non-durable goods and technology is a major factor specially when talking about
capital goods.
2. What are the other attributes other than taste and preferences these two market leaders
in the biscuit industry are considering?
Answer:- There are various attributes that are to be kept in mind while getting into market to
introduce and sell a product same Is the case with the market especially when its about a non-
durable goods the psychological factors of consumer also comes into play and it gets more of
a complex work because these factors just like taste and preferences of consumer cannot be
measured by any device but effects the demand on large extent.
These two big players in the biscuit industry "britannia" and "parle" they are targeting the taste
and preferences but other then that there are various attributes they have kept in mind let us
discuss those attributes:

Price:- When Parle introduced their glucose

biscuit Parle-g to be sold in the Indian market the
price was only Rs. five for a 99gm pack and later
on became the largest selling biscuit brand in
India.

The other brand Tiger by Britannia which is the

other big player in the same segment reduced the
pack weight to 90gm but again keeping the
market competence in their mind kept their price
constant at Rs. 4.

Keeping in mind the pocket of the buyer as by taste and preferences Rural market was the
major consumer for this product so this was a very vital aspect of the demand creation and this
played a major role in preventing competition from the unorganised sector.

Income of Consumers:- As one segment these companies are targeting is the rural area where
incomes are not so high both these companies are taking care of the people's pocket that they
don't face any problem regarding the ability to buy their product so income of consumer is the
other important attribute that they have been taking care of and marketing their product
accordingly.
Population Composition:- Population is a major factor that these two companies have
considered as well they have introduced their products according to the population that is living
in the rural area and the population living in the urban area because as we read in the case they
have mentioned that a major part of the Indian population is living in the rural areas other than
the urban area having different taste and preferences then people living in urban region.

Packaging:- This is another psychological aspect through which these companies have tried
to create demand through their effective packaging as the red packed of Britannia's tiger biscuit
shows the strength of this animal to depict the energy that people will get after consuming their
packet of biscuit whereas parle g also having their packaging depicts a baby on its packet yet
quite attractive packing is done by parle g to attract people to buy their biscuit

3. Is there market segmentation as far as taste and preference is concerned in the biscuit
industry?
Answer: Market research shows that rural India, which is becoming an important buying
segment has a distinct snacking habit. People in rural areas like to have traditional salty Indian
snacks like samosas, pakoras etc., while biscuits are synonymous with a low cost sweet item
that is taken with tea. Britannia and Parle, both seem to have understood this distinct preference.
Britannia's relaunch of glucose-D and circus brands as the low cost tiger brand biscuits has
taken the rural market by storms.
Parle-G yet another well know low cost glucose biscuit which currently enjoys 55 percent
market share, again, mainly from the rural sector. Urban people who too like snacking show a
different taste pattern. their tea time biscuits are Salty, sweet-salty and creamy.
Market segmentation in Britannia:- In view of the fact that Britannia Industries Limited is a
food based organization which produces a large variety of Biscuits, Dairy products, Rusk,
Bread and Cakes, it is evident that they have now excelled in their business. Britannia Industries
Limited is a public food industry, with its headquarters located in Bangalore, well-known for
its Britannia and Tiger biscuits. It now has around 300 stores spread, owned by DANONE and
KALABAKAN Investments in India. As we know, they deal in Biscuits, Rusk, Dairy products,
Bread and Cakes.
Within this document the evidence of company's current position and success is at hand with a
concentration on the marketing mix and the STP analysis of Britannia. In brief, we see that
Britannia Industries Limited continues to improve the quality of their products to meet the
consumer's demands and prevail over the competitive edge They have a variety of biscuits even
considering the health and economy to the life-style oriented types. BIL has decided to focus
on seven core brands in the biscuits category. The brands include Good Day, Tiger, 50-50,
Snacks, and the Cream Treat, bourbon, marigold.
Britannia has got very good image among its customer base in terms of reliability and quality
of products. The quality perception of the brand among customers is positive and very strong;
it appears in saying "Britannia can't compromise with its quality of products". Almost every
customer able to recall its brand logo and more than one product name which shows consumer
is highly aware of brand Britannia. The customer those have been consuming this brand from
very long time they rarely make any shift or even try any different brand.
Age group: Different products for different age groups for example tiger and treat for kids,
little hearts for youths and good-day for elders.
Occasions: Britannia's shubh kaamnaa ye is for special occasions like Diwali.
Benefits: Products like milk Bikis, Nutrichoice, Britannia tiger are healthy and Nutricious.

Price:-
Lower Segment: To target the price sensitive customers, the company has introduced biscuits
that provide them value for money and have nutritional value Tiger (100gms) - Rs. 5 MilkBikis
(100gms) - Rs. 7
Middle Segment: The Company has a range of biscuits that lie in the mid-segment that are
light and include both sweet and salty variety.
1. 50-50 (135gms) - Rs.10
2. Marie Gold (100gms) - Rs.13
3. Time Pass (75gms) - Rs.15
4. Little Hearts (67gms) - Rs. 10
5. Nice time (100 gms)-Rs.10

Premium Segment:- The premium segment offers biscuits that have more to them in addition
to the taste and value for money. They offer a wide assortment of biscuits with dry fruits and
different cream flavours.
1. Good Day (100gms) - Rs. 12
2. Treat (100gms) - Rs. 9 to Rs.
3. Bourbon (100gms)- Rs.10
Britannia Industries Ltd, is one of India's leading producers of biscuits and other bakery
products. The company is partially owned by the French company Group DANONE, one of
the world's largest food products company. BIL has a widespread retail distribution network
that services 400,000 retail outlets in 2,200 towns with the help of 2,500 distributors.
The company's plants are located in India's four major metropolitan cities- Kolkata in eastern
India, Chennai in southem India and Delhi and Uttaranchal in northern India. Combined, these
facilities employ more than 4,300 people and yet only make 30% of the company's products.
Sixty-one other contracted factories produce the remaining 70% of Britannia's product line,
Eat Healthy, Think Better! This tag line is something that has changed the face of Britannia
completely. This logo encapsulates the core essence of Britannia-healthy, nutritious, optimistic
and combines it with a delightful product range to offer variety and choice to customers.
"Swasth Khao Tan Man Jagao" promises the new generation a healthy and nutritious alternative
that is also delightful and tasty. "BRITTANIA KHAO, WORLD CUP JAO" was the theme
adopted in 1999. People bought the biscuit packs and searched for the lucky scratch for flying
to England to see world Cup Cricket match. The sales bounced 37% high on account of this
strategy. The scheme came alive again during the world Cup Match in 2002-2003 in South
Africa. Market segmentation in parle
If we divide the whole market on basis of their preferences for sweetness and saltiness in the
biscuits then the possible outcome would be that the preferences are clustered near some tastes
i.e. the consumers would not like to have something really vague like 50% salty. 25% sweet
and25%-creamy. That is why the preferences are clustered and wherein the preferences have
to be very extreme and vague. Parle as a company makes use of this clustered preferences and
manufactures biscuits for each and every cluster. For e.g. Monaco for entirely salty biscuits
and its latest product Krackjack-cream is for sweet and salty taste.

4. Discuss the taste and preference' of modern Indians. How is Britannia catering to it?
Is parle at par with its rival while catering to the tastes and preference of urban
consumers?
Answer: Things are changing. Although attitudes remain complex, they have shifted
substantially toward consumerism, particularly over the past decade. The country's recent
economic performance is a factor, of course. For three years, GDP growth has been strong and
sustained, at an average annual rate of around 8%. The population's demographic profile also
plays a role: Indians constitute fifth of the world's citizens below age 20. So a youthful,
exuberant generation, weaned on success, is joining the ranks of Indian consumers.

Change in Consumer Behaviour:- Interestingly, this trend does not apply only to the young-
it holds true for people aged 15 to 55. And it is not merely a large-city phenomenon; people in
smaller towns espouse these values as well. Among durable goods, high-tech luxury items are
increasingly in demand. The number of Indians who own or use mobile phones, for example,
has grown 1,600% not surprising in a country that is adding more than 3 million subscribers a
month. The number of people who own or use computers or laptops is up 100%, albeit from a
very small base. Ownership of music systems and televisions is also on the rise. Across
products, a majority of the potential customers are entering the market for the first time. This
is great news for marketers, since it signifies an expanding market, which will get even bigger
as current owners replace or upgrade what they have.
How Britannia catering to it:- As we know, they deal in Biscuits, Rusk, Dairy products, Bread
and Cakes. Within this document the evidence of company's current position and success is at
hand with a concentration on the marketing mix and the STP analysis of Britannia. In brief, we
see that Britannia Industries Limited continues. improve the quality of their products to meet
the consumer's demands and prevail over the competitive edge. They have a variety of biscuits
even considering the health and economy to the life-style oriented types.

BIL has decided to focus on seven core brands in the biscuits category. The brands include
Good Day, Tiger, 50-50, Snacks, and the Cream Treat, bourbon, marigold. Britannia has got
very good image among its customer base in terms of reliability and quality of products. The
quality perception of the brand among customers is positive and very strong: it appears in
saying "Britannia can't compromise with its quality of products". Almost every customer able
to recall its brand logo and more than one product name which shows consumer is highly aware
of brand Britannia. The customer those have been consuming this brand from very long time
they rarely make any shift or even try any different brand
• Different products for different age groups for example tiger and treat for kids, little
hearts for youths and good-day for elders.
• Urban people who too like snacking show a different taste pattern their tea time biscuits
are salty. sweet-salty and creamy.

Parle's taste and preference to urban consumers:- The immense popularity of Parle
Products in India was always a challenge to our production capacity. Now, using more modern
techniques for capacity expansion, we have begun spreading our wings and we are going
global. Parle biscuits and confectionaries are fast gaining acceptance in international markets,
such as the Middle East. Africa and South East Asia. The more sophisticated economies like
U.S.A., UK, Canada, Australia and New Zealand are also relishing 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. The Parle name symbolizes quality, health and great taste.
And yet, we know that constantly innovating and catering to new tastes has built this reputation.
This can be seen from the success of its new brands such as Hide and Seek etc. Today, the Parle
brands have found their way into the hearts and homes of people all over India and abroad. The
Parle biscuit brands, such as, Parle-G, Monaco, Krackjack, Marie Choice, Hide and Seek enjoy
a strong imagery and appeal amongst consumers across the world. This has resulted into Parle-
G being the World's Largest Selling Biscuits.
Conclusion Of The Case:-
In the case of taste and preference of biscuits as I have discussed every person have different
choices and own likes and dislikes what they like and what they don't. In this case as the
consumer is divided on the basis of the areas they are living in that is customer living in:
• Urban Area
• Rural Area

The consumers in these areas have different taste & preferences as mentioned like Urban
people they have choices or taste and preference for biscuits they like salty, sweet-salty and
creamy for example of Britannia's SNAX (salty), 50-50 (sweet-salty) and BOURBON
(chocolate) they are the preferences of urban people On the other side RURAL people they has
own choices and taste and preference for biscuit's they mostly like traditional salty snacks like
SAMOSA, PAKORAS, etc. and these companies have produced according to these different
taste & preferences moreover, urban people who have lots of money to spend and on other
hand people who don't have much money to spend called rural, so even pockets of these people
are being taken care of.
So the tastes and preferences are to be taken care of these are qualitative yet very important
factors that may effect the demand in a big extent and not only for this but every business have
to look after the prevailing economic conditions.

So Yes, there are various factors of demand that effects the demand and leads to shifts in
Demand but in case of non-durables specially Taste and Preferences do play a very important
role as we read and came to know about parle and Britannia are both taking it in the
consideration and introducing the products accordingly.

Reference:-
➢ www.investopedia.com
➢ www.bakerybazar.com
➢ www.censusindia.gov.in