Rural Urban Marketing comparison

(Parle Products Pvt. Ltd.)

Faculty Guide - Dr. Bhaskar Jyoti Neog By – Saurabh Singh

Contact Number - 9807603773

 INDUSTRY OVERVIEW

Target Market Segment

• Demographic - Based on Age, income, and occupation
demographic segmentation is used for a standard range of
biscuits that have to be distributed far.
• Psychographic – Psychographic segmentation is used for a
premium range of biscuits such as Milano targeted towards
tier 1 and tier 2 cities.
 PESTEL ANALYSIS

Political Technological
• Taxes • Lack of technological innovation.
• Production licenses • Improved research &
Economical development.
• Lack of technology upgradation. Environmental
• Increase in per capita income in • Agriculture based industry
India. • Population in country.
Social Legal
• India is 3rd largest producer. • Taxation
• Changing lifestyle
• Positive perception among
people.
 PORTER’S FIVE FORCES MODEL

• Competitive Rivalry - It is getting high as competitors are

coming up with new and innovative products. Example -
McVitie’s digestive biscuits & Britannia Nutri Choice
Biscuits.
•  Bargaining Power of Suppliers - Due to a high number of
suppliers in the market the bargaining power is weak. The raw
materials (wheat, sugar, etc.) that suppliers provide are less
differentiated and have low switching costs.
•  Bargaining Power of Consumers - It is weak because the
number of consumers is high due to the high population and
firms are less for a segment.
 PORTER’S FIVE FORCES MODEL (cont.)

• The threat of Substitute - There are few substitutes available.

For example, there are fewer products available in competition
with Parle-G of Rs 2/- & Rs 5/-. For Example, Sunfeast &
Tiger.
• The threat of New Entrants - The access to distribution
networks is making easy for new players to set up their
distribution channels. Example- Cadbury with Oreo &
Bournvita biscuits.
 REVENUE MODEL

• General Trade
• Modern trade
• Institutional sales
• Commercial sales
 INDUSTRY GROWTH

• India biscuit market stood at $3.9 billion in 2016 and is

projected to grow at a compound annual growth rate (CAGR)
of 11.27 per cent, in value terms, between 2017 and 2022, to
reach $7.25 billion by 2022.
• FMCG (Fast Moving Consumer Goods) Industry is called so
because of the consumption of goods produced is at higher
rate than others. The goods are non-durable, and sells quickly,
or you purchase them on a regular basis because they are
consumable, or its life is short.
 INDUSTRY GROWTH (cont.)

• Nowadays, consumers are becoming more health conscious

and moving towards healthy eating and this is the greatest
influencer of the biscuit industry.
• Demand of cookies is increasing as increase in purchasing
power of consumers.
 GROWTH IN CATEGORY

• By Category - Non-premium dominates the Premium segment

of biscuits because of the huge population which majorly
comprises rural areas and creates a huge demand for
affordable biscuits.
• Cookie biscuits category is estimated to be the fastest growing
category among the biscuit market in India because of increase
in purchasing power consumers are paying for taste and
quality products. For example, UNIBIC, ITC’s Sunfeast Dark
Fantasy.
 IMPACT OF COVID-19 CRISIS

• Demand Side Impact - Extended lockdown will lead to shift in

consumption habit. . Consumption is getting impacted due to
job losses and decline in income levels of people particularly
the daily wage earners due to slowing activity in several
sectors
• Supply Side Impact - On the supply side, shutdown of
factories and the resulting delay in supply of goods. Reduced
manufacturing activity will have implications on employment.
 GOVERNMENT STIMULUS PACKAGES

• Control consumer inflation.

• Personal tax cut: Lower personal income tax rates to leave
more disposable income in the hands of the common man
• Industry demands Rs 6 lakh crores stimulus package to
mitigate impact of lockdown.
 IMPACT OF REGULATORY BODIES

• FMCG sector faces regulatory risk from TRAI that could

impact their advertising spends.
• Biscuits are taxed at 12-18% in the goods and service taxes
regime. These biscuits were taxed at 12-14% on previous
excise & VAT regime.
• Industrial licence is not required for almost all food and agro-
processing industries.
 SUSTAINABILITY

Sustainability can make a positive contribution to company’s

long-term business success.
• In this pandemic, Parle distributes 3 crore packets of Parle-G
to people in need.
• Promoting health care including preventive health care and
sanitation including contribution to Swach Bharat Kosh set-up
by the Central Government for the promotion of sanitation.
 CONTINGENCY PLANNING

• Stock up inventory of raw material to fulfil the post lockdown

demand.
• In any pandemic, it is a reality that some associates will
become ill. Maintain social distance. Policies should be
implemented that encourage employees to avoid working
when sick.
• Measures to manage sales and revenue by offering discounts
on products or increase the quantity of their most selling
product.
 CONTINGENCY PLANNING (cont.)

• Relationship management with vendors and clients,

Companies should plan and undertake effective
communication with customers and suppliers.
• In this pandemic, company can manage cost and finance by
reducing their labour/ manpower cost by sending people on
unpaid long leaves, reducing workforce and through salary
reduction.
THANK YOU