How Parle-G Generates Billions Without Increasing Prices?

How Parle-G Generates Billions Without Increasing Prices

Explore the fascinating case study of Parle-G and uncover the secrets behind their success in generating billions without increasing prices for 27 years.

Introduction:

Have you ever wondered how Parle-G, a popular biscuit brand, managed to generate billions without increasing prices for 27 years? Let's explore the fascinating case study of Parle-G and uncover the secrets behind their success.

The History and Brand Identity of Parle-G

Parle-G, originally known as Parle Gluco Biscuit, was introduced in 1939 and gained popularity as a Swadeshi biscuit. It started as an exclusive product for the British Army but soon became available to the common man. Parle-G got its name from the place where the first factory was established, and the company's identity became synonymous with the name Parle.

Diversification and Product Range Expansion

To drive sales growth and cater to a wider customer base, Parle-G adopted a smart strategy of diversifying its product range. They introduced different flavors and variants of biscuits, expanding beyond just the original glucose biscuit. This move helped them tap into various consumer preferences and further boost their sales.

Entering the FMCG Market and Launching New Products

As a successful brand, Parle-G didn't stop at biscuits. In 2020, they entered the FMCG market and expanded their portfolio by launching new products. This move opened up additional revenue streams for the company and allowed them to reach out to a larger consumer base.

Shrink Inflation: Maintaining Price, Reducing Weight

A unique strategy adopted by Parle-G to keep prices unchanged for 27 years is shrink inflation. They reduced the weight of their biscuits from 100 grams to 55 grams without reducing the price. Shrink inflation involves decreasing the quantity or weight of a product while keeping the price the same. This allows the company to maintain profitability while satisfying customer demand.

Cost Control and Efficient Production

Parle-G keeps its prices low by focusing on cost control and efficient production practices. They buy raw materials in bulk, taking advantage of economies of scale and eliminating intermediaries. By producing a large quantity of biscuits, they can offer them at a low cost without compromising on quality. Furthermore, Parle-G leverages advanced technology and logistics, working with IBM and implementing SAP for detailed data analysis. This helps them ensure operational efficiency and minimize wastage.

Widespread Distribution and Contract Manufacturing

Parle-G benefits from its strategic factory location, enabling close proximity to the market and quick movement of goods. They have also adopted contract manufacturing and established partnerships with reliable companies. These measures have allowed Parle-G to expand its reach across India and ensure widespread distribution of its products.

Conclusion:

Parle-G's case study showcases the remarkable journey of a brand that achieved billions in sales without increasing prices for almost three decades. Their success lies in diversification, smart strategies like shrink inflation, cost control, efficient production, and widespread distribution. Parle-G has become a household name not just because of its affordable biscuits but also due to its adaptability, innovation, and understanding of consumer preferences.