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Revision Case Study

Parle Products plc is an Indian biscuit company that enjoys 40% of the Indian biscuit market share. Seeking new growth opportunities, Parle is considering expanding into the African market. Parle has a strong distribution network in India of over 1,500 wholesalers and 425,000 retailers. However, in European markets Parle faces fierce competition from United Biscuits' McVitie's brand. With competition intensifying in India, Parle wants to target the emerging biscuit and confectionery markets in former British colonies in Africa with cultural similarities to India.

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17 views

Revision Case Study

Parle Products plc is an Indian biscuit company that enjoys 40% of the Indian biscuit market share. Seeking new growth opportunities, Parle is considering expanding into the African market. Parle has a strong distribution network in India of over 1,500 wholesalers and 425,000 retailers. However, in European markets Parle faces fierce competition from United Biscuits' McVitie's brand. With competition intensifying in India, Parle wants to target the emerging biscuit and confectionery markets in former British colonies in Africa with cultural similarities to India.

Uploaded by

polsdeku09
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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REVISION CASE STUDY

PARLEY PRODUCTS plc

An Indian Biscuits Company is seeking new markets in Africa

Background

In the colonial days when the British ruled India, a small factory was set up in the suburbs of
Mumbai City to manufacture sweets and toffees. The year was 1929 and at that time, the
market was dominated by some famous foreign brands that were freely imported. Despite the
odds and unfair competition, the company called Parle Products survived and succeeded by
focusing on a policy of high quality products and improvising from time to time.

Today (2010), Parley Products plc enjoys 40 percent shares of the Indian Biscuits market and 15
percent shares of the Indian Confectionery market. Parley Biscuit brands such as Melody,
Poppins, Mangobite and Kismi enjoy a strong image and appeal, particularly among Indian
consumers all over the world.

If you thought a typical family-run Indian company could not top the worldwide charts, think
again. The homegrown biscuit brand Parle G, has proved such belief wrong by becoming the
largest selling biscuit brand in the world. However, in most European markets, Parle Products
has to compete fiercely with United Biscuit’s brand McVitie’s. Indeed, Parle Biscuit has a very
low share of the European market. Nevertheless, it is the leader in the glucose and salty biscuits
category, but do not have a strong presence in the premium segment of which Hide-n-Seek is
the only brand.

Parle’s Marketing Philosophy

The company’s marketing philosophy emphasizes on marketing to the masses. By this


philosophy the company focuses on designing products that provide nutrition, fun and
excitement for everyone. Most Parle product offerings are targeted at the low and mid-range
price segment of the market. This decision is based on the company’s understanding of the
Indian consumer psyche. This value-for-money positioning has been effective in generating high
sales volumes for the company’s products.

Sales and Distribution Network

Parle’s intensive distribution network, built over the years, is a major strength. Its biscuits and
sweets are available to consumers, even in the remotest parts of India, and in the smallest of
villages, some with a population of just 500. Furthermore, Parle has nearly 1,500 wholesalers
breaking bulk and supplying 425,000 retailers, directly or indirectly. This physical distribution

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network is supported by a 200 strongly dedicated field salesforce that services the needs of
these wholesalers and retailers all over the world. Additionally, the company has a
collaborative network of 31 depots and Cost & Freight (C&F) agencies engaged in logistics and
physical distribution support services

The Competition

The few competing global brands in the Indian market include Nabisco’s Oreo and the UK-based
United Biscuit’s McVitie’s. According to market reports Parle Products commands a 40 percent
share of the R3, 500 Indian biscuits market, with Parle G brand being the market leader. In the
confectionery segment, the company enjoys a paltry 15 percent share of the market, but its G
brand faces competition from Britannia’s The company’s flagship brand, Parle G, contributes
more than 50 percent to the company’s sales turnover. The other biscuit brands in Parle’s
product portfolio include Marie, Cheeslings, Jeff’s, Sizer and Fun Centre.

A major competitor of Parle Products though is the UK-based United Biscuits (UB) plc. United
Biscuits was founded in 1948 following the merger of two Scottish family businesses – McVitie
& Price and McFarlane Lang. In 1960 UB added to its product portfolio by the acquisition of
Crawford’s Biscuits and MacDonald’s Biscuits.

In 2000 Finalrealm (a Consortium of investors) bought the company and reverted it to private
limited company (plc) status, maintaining the name United Biscuits.

UB’s brands rank No.1 or 2 in seven countries in the world, and among the top 10 Biscuit
brands in the United Kingdom, France and Spain. UB ranks 4 out of the 10 top brands in the UK.
In 2001, more than 89% of UK households bought UB’s McVitie’s. The fact that McVitie’s has a
‘brand muscle’ is indisputable.

United Biscuit’s unique brand position in the minds of consumers as the largest UK snack food
producer with a balanced portfolio of sweet and savory brands, gives it the pride of a company
capable of responding appropriately to changing consumer needs and preferences within the
global market.

Future Direction

Having regard for the fierce competition in the Indian market, Parle Products plc decides to
intensify its marketing activities in the African continent where the company observes the
emergence of a high growth Biscuits and Confectionery consumption life-style market. The
company specifically wants to target former British colonies in Africa with similar culture as in
India.

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