The following case study is from the Richard Ivey School of Business. It is about the development of a leading Indian biscuit manufacturer, called Parle Products Pvt. Ltd. Company overview
The company was found in 1929 as a candy manufacturer and started producing biscuits in 1939. At this time only few processed and ready-to-eat food items were available. Parle G are glucose biscuits and the company’s flag brand. It became the largest selling biscuit brand by volume in 2002. The company was using a mass market strategy which is why the price of the Parle G biscuits has maintained 1$ per Kilo since 1990. In 2009 the company had 74% of the market shares of the Indian glucose biscuit category. The biscuits were sold in 2.5 million outlets. Other brands of Parle Products Pvt. Ltd. are Marie in the tea time category and Hide n Seek and five other brands in the premium category. In 2008/2009 the company recorded sales revenues of INR35 billion. 68 percent came from Parle G. The company is known all over India for offering high value for a low price (value for money). The products are available in India, Bangladesh and South Africa because the company had adopted a “follow the costumer” strategy in order to maintain low marketing costs. The two main target groups are 5-14 year old children and their mothers next to institutions. Until 1992 there was only little competition in the sector when Surya Food & Agro Limited entered the market. From 1999 on several companies such as Britannia Industries Ltd. and Hindustan Unilever Ltd. also entered the market because of the high potential in the premium category due to the change of income in Indian households. Problem statement
Since 2004 the company had to deal with rising costs of the two main raw materials - sugar and wheat. In 2004 the company tried to raise the prices of its most popular product the 100g packet by 12.5%. Within 6 month the sales dropped by more than 40%. In 2008 the raw material...
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