PARLE-G

Case Study for Pricing Strategy

Overview
 World’s largest producer of selling biscuits brand by tonnage
 40% share of total biscuit market in India
 Produced 650,000 tons of biscuits/pa. Parle-G comprised of 500,000
tons
 Sales INR 35 billion (68% contributed by Parle G )
 Parle products are perceived as “Good value for money”
Flagship Product : Whether to Increase
Price Or Not
 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.
 Increase Price or decrease package
Grammage
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.
 Sustainable Marketing Plan
 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
 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
 New variants of Parle G should be launched with better ad campaigns(for
market expansion).