Parle G Case

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Submitted By shrey1612
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Case Study
PARLE—G
Group 5

A flagship brand should be generating a margin of 15 to 20 per cent of revenue. A margin of less than 10 per cent is unacceptable for Parle-G. I have to bite the bullet at some time on pricing. The concerns are several.
Mr. Kulkarnii wants to balance the rise in raw material prices by changing pricing of product Parle-G. There are 2 ways, either to increase rate per package or reduce costs. The 100-g packet is Parle’s best-selling SKU, contributing to 50 per cent of brand revenues every year. Company tried to balance the raw material price increase by increasing cost of this SKU, however this reduced the sales of this SKU owing to its VFM image. Eventually company rolled back its price increment. It reduced its costs by changing packaging and reducing quantity per SKU. Such changes are not going to serve company in long-run as consumers would eventually shift to competitors, given that ITC and Britannia have deep pockets. * Should I make tactical moves like launching new SKUs and new price points?
Parle should avoid modifying 100 gm SKU. Instead, company should start promoting larger SKUs aggressively. Market for such 1000 gm and 500gm is more organized compared to 100gm market. These are institutional buyers such as canteens and hotels. Parle could promote its larger SKUs as monthly nutritional package, which will compel urban buyers to buy larger SKUs for monthly consumption. Larger SKUs would provide company better savings, as cost of production, packaging and distribution would be lower. One more fact is that income level of globals consumer category is going to increase by 300% by 2025, hence pricing of product can be modified without consumers getting away from product. * Should I continue to tinker with the grammage?
Howerver, the company must always keep in mind the R3 and R4 consumers in rural segment. They…...

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