1.

INTRODUCTION OF FOOD INDUSTRIES

The food industry is a complex, global collective of diverse businesses that together supply much of the food energy consumed by the world population. Only subsistence farmers, those who survive on what they grow, can be considered outside of the scope of the modern food industry. The food industry includes:

Regulation: local, regional, national and international rules and regulations for food production and sale, including food quality and food safety, and

industry lobbying activities

Education: academic, vocational, consultancy Research and development: food technology Financial services insurance, credit Manufacturing: agrichemicals, seed, farm machinery and construction, etc. Agriculture: raising of crops and livestock, seafood Food processing: preparation of fresh products for market, manufacture of prepared food products

Marketing: promotion of generic products (e.g. milk board), new products, public opinion, through advertising, packaging, public relations, etc.

Wholesale and distribution: warehousing, transportation, logistics

Definitions It is challenging to find an inclusive way to cover all aspects of food production and sale. The Food Standards Agency, a government body in the UK, describes it thus:

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"...the whole food industry from farming and food production, packaging and distribution, to retail and catering."[1] The Economic Research Service of the USDA uses the term food system to describe the same thing: "The U.S. food system is a complex network of farmers and the industries that link to them. Those links include makers of farm equipment and chemicals as well as firms that provide services to agribusinesses, such as providers of transportation and financial services. The system also includes the food marketing industries that link farms to consumers, and which include food and fiber processors, wholesalers, retailers, and foodservice establishments."

1.1 FOOD INDUSTRY IN INDIA India is the world's second largest producer of food next to China, and has the potential of being the biggest with the food and agricultural sector. The total food production in India is likely to double in the next ten years and there is an opportunity for large investments in food and food processing technologies, skills and equipment, especially in areas of Canning, Dairy and Food Processing, Specialty Processing, Packaging, Frozen Food/Refrigeration and Thermo Processing. Fruits & Vegetables, Fisheries, Milk & Milk Products, Meat & Poultry, Packaged/Convenience Foods, Alcoholic Beverages & Soft Drinks and Grains are important sub-sectors of the food processing industry. Health food and health food supplements is another rapidly rising segment of this industry which is gaining vast popularity amongst the health conscious.

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2. COMPANY PROFILE
2.1 INTRODUCTION Parle Products has been India's largest manufacturer of biscuits and confectionery for almost 80 years. Makers of the world's largest selling biscuit, Parle-G, and a host of other very popular brands, the Parle name symbolizes quality, nutrition and great taste. With a reach spanning even to the remotest villages of India, the company has definitely come a very long way since its inception.

Many of the Parle products - biscuits or confectioneries, are market leaders in their category and have won acclaim at the Monde Selection, since 1971. With a 40% share of the total biscuit market and a 15% share of the total confectionary market in India, Parle has grown to become a multi-million dollar company. While to the consumers it's a beacon of faith and trust, competitors look upon Parle as an example of marketing brilliance.

Available Anywhere Today, the great strength of Parle Products is the extremely widespread distribution network

2.2 ABOUT THE COMPANY History Parle Products fame and familiarity is undeniable. Considering its extensive reach, the brand Parle is known and recognized by everyone. Over the years, Parles sweets

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and biscuits have become a household name. From kids to adults, everyone loves and cherishes these treats. It gives us great pleasure to see our consumers enjoy and embrace Parle products on daily basis. Our confectioners and chefs have the utmost authority at Parle. Had it not been so, the beginning of Parle would have been quite different.

In 1929 a small company by the name of Parle products emerged in British dominated India. The goal was to spread joy and cheer to children and adults alike, all over the country with its sweets and candies. Although, the company knew that it wouldnt be an easy task, they decided to take the brave step. A small factory was set up in the suburbs of Mumbai to manufacture confectionery products. A decade later this factory was upgraded to manufacture biscuits as well. Since then, the Parle name has spread in all directions and has won international fame. Parle has been sweetening the lives of people all over India and abroad. Apart from the factories in Mumbai and Bangalore, Parle also has factories in Bahadurgarh, Haryana and Neemrana, Rajasthan. These are the largest biscuit and confectionery plants in the country. Additionally, Parle Products also has 10 manufacturing units and 75 manufacturing units on contract.

A cream colored yellow stripped wrapper with a cute baby photo containing 10 12 biscuits with the companys name printed in Red and you know these are Parle G biscuits. Times changed, variety of biscuits did come and go but nothing has changed with these biscuits. Yes, the size of their packing has definitely changed but for the consumers good as these are money savers pack. The Parle name conjures up fond memories across the length and breadth of the

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country. After all, since 1929, the people of India have been growing up on Parle biscuits & sweets. Initially a small factory was set up in the suburbs of Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market was dominated by famous international brands that were imported freely. Despite the odds and unequal competition, this company called Parle Products, survived and succeeded, by adhering to high quality and improvising from time to time. A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweets and toffees. Having already established a reputation for quality, the Parle brand name grew in strength with this diversification. Parle Glucose and Parle Monaco were the first brands of biscuits to be introduced, which later went on to become leading names for great taste and quality. For around 75 years, Parle have been manufacturing quality biscuits and confectionery products. Over the years Parle has grown to become a multi milliondollar company with many of the products as market leaders in their category. The recent introduction of Hide & Seek chocolate chip biscuits is a product of innovation and caters to a new taste, being Indias first ever chocolate-chip biscuits. All Parle products are manufactured under most hygienic conditions. Great care is exercised in the selection and quality control of raw material and standards ensured at every stage of the manufacturing process. Parle Products has 4 manufacturing units for biscuits and confectionaries at Mumbai, Haryana, Rajasthan and Karnataka. It also has 14 manufacturing units for biscuits & 5 manufacturing units for confectioneries, on contract. All these factories

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are located at strategic locations, so as to ensure a distribution.

constant output & easy

Today, Parle enjoys a 40% share of the total biscuit market and a 15% share of the total confectionary market, in India.

Milestones - The Decades of Progress

1929:The first year of operation. Our only assets were hard work and hope. 1939:Ten years of determined effort brought results. Things began to take shape. And we tried even harder.

1949:The formative years were over. We had come of age. 1974:Here was the first evidence of Parle as it is today.

2.3 QUALITY

Hygiene is the precursor to every process at Parle. From husking the wheat and melting the sugar to delivering the final products to supermarkets and store shelves nationwide, care is taken at every step to ensure the best product of long-lasting freshness. Every batch of biscuits, confectioneries & snacks are thoroughly checked by expert staff, using the most modern equipment. This ensures consistent and perfect quality across the nation and abroad.

Concentrating on consumer tastes and preferences, the Parle brand has grown from strength to strength ever since its inception. The factories at Bahadurgarh, Haryana and Neemrana, Rajasthan are the largest biscuit and confectionery plants in the country. The factory in Mumbai was the first to be set up, followed soon by the one

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in Bangalore, Karnataka. Parle also has 10 manufacturing units for biscuits and 75 manufacturing units for confectioneries on contract.

2.4 CORE VALUES

An in-depth understanding of the Indian consumer psyche has helped Parle develop a marketing philosophy that reflects the needs of the Indian masses. With products created bearing in mind both health and taste, Parle products equally appeal to fun loving kids & youth. Even today, the great tradition of taste and nutrition is consistent in every pack on the store shelves. The value-for-money positioning allows people from all classes and age groups to enjoy Parle products to the fullest.

2.5 MARKETING MIX OF PARLE PRODUCTS LIMITED

The marketing mix of Parle for this project has been studied from the point of view of Parle biscuits; mainly Parle-G and Parle hide & seek. Product Levels 1) Core benefit- the core benefit of biscuits is to satisfy hunger of the consumer 2) Basic product- in the second level, the basic product is biscuits. 3) Expected product- the consumers expect the product to have a good taste and also give nutrition. 4) Augmented product- parle biscuits increase a persons energy levels. This is not always expected by the consumers and hence exceeds customers expectations. 5) Potential product- in the future parle could come up with different products such as a snack which could be a combo of chocolate and biscuit.

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Classification of products

1) Based on tangibility- Parle biscuits are tangible, i.e. one can see and touch them. 2) Based on functional life- Parle biscuits are consumables since biscuits form a part of food and have a short life. 3) Based on price and quality- most of Parle biscuits such as Parle-G, Monaco, Krackjack are mass products but a few Parle biscuits such as Parle hide and seek and Milano are premium or prestige products. 4) Based on utility- Parle biscuits are convenience goods. They are staples since they are bought by consumers regularly. Also they are partly impulse products.

2.6 PRODUCT MIX Width- Parle produces biscuits, snacks and sweets. So the width is 3. Length- the length of Parle products is as below PRODUCT BASKET OF PARLE PARLE BUSCUITS Parle - G Krackjack Magix Monaco Kreams Parle 20-20 Cookies Nimkin Chox Hide & Seek Bourbon Hide and Seek Hide & Seek Milano Digestive Marie Parle Marie Milk Shakti Golden Arcs Kreams Gold Monaco Jeera

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PARLE SWEETS Right from candies to toffees, the sweet 'n' treat category of the Parle product range is a genuine treat for every snack lover. This category can satisfy one's taste and at the same time create a desire for more. These confectioneries are a sheer delight to the taste buds and have a universal appeal. Parle Biscuits and confectioneries, continue to spread happiness & joy among people of all ages.

Grab Your Sweets: Melody Mango Bite Kaccha Mango Bite Poppins Kismi Toffee Kisme Toffee Bar Mazelo Kismi Gold Orange Candy Xhale 2 in 1 Eclair Golgappa Melody Softee Parle Lites

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PARLE SNACKSSalty, crunchy, chatpata and crispy caters to the bunch of Parle snacks. You can now treat your loved ones with this yummy lot.Parle snacks are a complete delight to the taste buds and can create the desire for more and more. These snacks will not only satisfy your tummy but will also sustain a feel in your mouth to associate you with the bond of Parle. Get Your Snacks: Musst Bites Cheeslings Sixer Monaco Smart Chips Jeffs Musst Stix & Musst Chips Sixer Zeera

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The product consistency generally depends on 3 parameters

2.7 PRODUCTION PROCESSThe production process of every parle biscuit follows some basic ingredients like wheat flour, vegetable oil, inverted syrups, skimmed milk powder, etc. then depending upon the product, extra ingredients are added for e.g. in Monaco there might be an extra amount of salt put in to give it that prominent salt taste, to hide & seek, chocolate chips are added. Etc. THE MARKETING STRENGTH DISTRIBUTION AND SUPPLY CHAIN The extensive distribution network, built over the years, is a major

strength

for Parle Products. Parle biscuits

& sweets

are available to

consumers, even in the most remote places and in the smallest of villages with a population of just 500. Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets

directly or indirectly. A two hundred strong dedicated field force services these wholesalers & retailers. Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution network.

The Parle marketing philosophy emphasizes catering to the masses. They constantly endeavor at designing products that provide nutrition & fun to the common man. Most Parle offerings are in the low & mid-range price segments. This is based on their understanding of the Indian consumer psyche. The value-for-money positioning helps generate large sales

volumes for the products.

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However,

Parle

Products

also

manufactures

variety

of

premium

products for the up-market, urban consumers. And in this way, caters a range of products to a variety of consumers Parle uses the same distribution channels for selling all its products

under the biscuit category i.e. 1st, 2nd & the 3rd level of the distribution channels. CONSUMER END TO USE The basic end use of all parle products remains the same eating it simply to satisfy hunger. Products like parle-g may also be consumed for the intake of high glucose levels for immediate strength & energy.

2.9 PARLE G Every nation dreams of a better tomorrow. And every nation's tomorrow lies in the hands of its children; the young stars who shape the future of the nation. So, it's important to nourish these young stars, after all it's a question of the nation's future. Filled with the goodness of milk and wheat, Parle-G is a source of all round nourishment. Treat yourself to a pack of yummy Parle-G biscuits to experience what has nurtured and strengthened millions of people for over 70 years. A meal substitute for some and a tasty and healthy snack for many others. Consumed by some for the value it offers, and many others for its taste. Whatever the occasion, it has always been around as an instant source of nourishment. Little wonder that it's the largest selling biscuit brand in the world.

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2.10 MARKETING MIX FOR PARLE G Parle-G or Parle Glucose biscuits are one of the most popular confectionary biscuits in India. Parle-G is one of the oldest brand names in India and is the largest selling brand of biscuits in India. For decades, the product was instantly recognized by its iconic white and yellow wax paper wrapper with the depiction of a young girl covering the front. Many counterfeit companies have attempted to recreate and sell lower quality products of similar names and virtually identical package design. Ingredients: Wheat Flour Sugar, Partially Hydrogenated Edible Vegetable Oils, Invert Syrup,

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Leavening Agents [ 503 ( Ii ), 500 ( Ii ) ], Salt, Milk Solids, Emulsifiers [ 322 or 471 & 481 ( i ) ] Dough Conditioners [223]. Contains Permitted Natural Color [Artificial]

Pack Size & Price: For 19grams:Rs.1/For 44grams:Rs.2/For 93.5grams:Rs.5/For 231.5grams:Rs.12/-

Place: It is available in mostly every retail shop.

Promotion: It is relish a delectable experience as they melt in your mouth. PARLE-Gs tag line is: Hindustan Ki Taakat

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Product Life Cycle For Parle

Parle as a company has reached the maturity stage in its products life cycle; since products such as parle-G, parle Monaco, parle Krackjack which form a major part of parle products sales have captured most of Indias market. But for its premium biscuits parle hide and seek and parle hide and seek Milano the products are in the growth and introduction stages respectively.

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3. VALUE CHAIN ANALYSIS

3.1 INTRODUCTION This concept was propagated by Michael Porter as a tool of analyzing the firms internal environment and resource base. It is an analytical tool that describes all activities that make up the economic performance and capabilities of the firm, used to analyze and examine activities that create value for a given firm. A firm can be conceived of an aggregation of discrete activities and the competitive edge arises based on how a firm performs these activities better than its competitors. The cluster of these activities is called the value chain. The value chain classifies each firms activities into two broad categories: Primary activities and Secondary activities or support activities. The following figure represents the value chain of a firm:

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Primary activities: The sequence of activities through which raw materials are transformed into benefits enjoyed by the customer is called primary activities.These activities relate directly to the actual creation, development, manufacture, distribution, sales and servicing of the product or the service to a customer. Five major activities are involved in this sequence: inbound logistics, operations, outbound logistics, marketing and sales and service. Working together, these activities determine the key operational tasks surrounding the product or services.

Inbound logistics: As the word implies, inbound logistics deal with the handling of raw materials and inventory received from the firms suppliers. Detail activities include Receiving, storing, materials handling, warehousing, inventory control, vehicles scheduling and returns to suppliers.

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Operations: Operations are the activities and procedures that transform raw materials, components and other inputs into finished end products. Detail activities include machining, packaging, assembly, equipment maintenance, testing, printing, facility operations.

Outbound logistics: Outbound logistics refers to the transfer of finished product to the distribution channel members. The focus of outbound logistics is on managing the flow and distribution of products to the firms immediate customers such as wholesalers and retailers. Activities and procedures associated with outbound logistics include inventory control, warehousing, order processing, delivery schedule maintenance etc.

Marketing and sales: Marketing and sales include advertising, promotion, product mix pricing, specifying distribution channel members, maintaining channel relations etc in order to induce and facilitate buyers to purchase the product.

Service: Customer service is a central value adding activity that a firm can seek to improve over time. It includes installation, repair, training, parts supply and product adjustment in order to maintain or enhance the value of the product after sales. Secondary or support activities: The remaining activities of the value chain are undertaken to support primary activities. They are therefore referred to as the secondary or support activities. Support activities help the firm improve co-ordinations across and achieve efficiency within the firms primary value adding activities. Support activities are located across the first four rows of the diagram. This includes, procurement, technology development, human resource management and firm level infrastructure.

Procurement: Securing inputs (such as raw materials, supplies, and other consumable items and assets) for primary activities.

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Technology development: Methods of performing primary activities are improved (Such as know-how, procedures, technological inputs needed)

Human resource management: Employees who will carry out the primary activities are recruited, trained, motivated and supervised.

Firm infrastructure: Activities such as accounting, finance, legal affairs, and regulatory compliance are carried out to provide ancillary support for primary activities. How value chain analysis matters in strategic planning: As already stated, the competitive edge arises based on how better the firm performs the activities involved in the value chain compared to its competitor. For this purpose, each activity is broken up in sun activities for comparison with the competitors, and three basic questions are tried to be answered? i) How can the firm keep the benefits provided to the customers intact keeping the cost constant? ii) How can the firm increase the benefits provided to the customers keeping the cost constant? iii) How can the firm increase the benefits provided to the customer while lowering the cost? For creating competitive advantage through the value chain analysis while answering these questions, Porter has suggested the following measures;

Reconfigure the value chain differently from those of the competitors. Perform the activities more efficiently than the competitors. Outsource the non-core activities: While outsourcing the following points are needed to be judged judiciously;

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i) There might be a risk of non-performance by the supplier, To avoid this, ways of keeping alternative suppliers, Tapered integration and part outsourcing can be adopted. ii) There might be a risk of disproportionate value appropriation iii) There can be a high risk of elimination by suppliers. Internal integration of value chain activities: Internal integration of value chain activity gives the following benefits; i) Improvement of quality ii) Shorten new product development cycle. iii) By integrating the firm with its external suppliers and buyers it can reduce inventory holding costs, enhance the ability to customize the product and become more responsive to customers demand. The point to be noted that throughout the whole analysis every measures are to be taken on the basis of comparison with suppliers.

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