Volume 3, Issue 10 (October, 2014) Online ISSN-2277-1166

Published by: Abhinav Publication

Abhinav National Monthly Refereed Journal of Research in
Commerce & Management
POSITIONING IN FMCG SECTOR: A CASE STUDY OF
PARLE-G BISCUIT
Natasha Saqib
Assistant Professor
University of Kashmir, India
Email: natashasaqib008@gmail.com

ABSTRACT
Positioning have always been at the heart of marketing FMCG products .In today’s crowded and
fragmented markets, companies require systematic approaches to develop offers to the customer.
Consumers who differ in their needs, attitudes or incentives to act in particular ways should perceive
one company’s offer to be distinct from and more valuable than other competitive offers .For this
companies need to develop effective brand positioning strategies. Positioning helps customers know
the real differences among competing products so that they can choose the one that is most valuable
and useful to them. This is a case study of Parle – G widely recognised as “common man’s biscuit”
and the flagship brand of Parle’s biscuit portfolio with the brand history of over 73 years .The case
focuses on how Parle-G has become the undisputed leader in the biscuit industry through right
positioning strategies and how successful positioning is a cumulative process, requiring years of
consistent effort.
Keywords: FMCG sector, Parle-G Biscuit

INTRODUCTION
The average consumer spends a lot of their total budget on FMCGs (Celen, Erdogan, & Taymaz,
2005). Fast Moving Consumer Goods (FMCG) - alternatively known as consumer packaged goods
(CPG) are type of consumer goods that are purchased for almost immediate consumption .Products
which have a swift turnover and relatively low cost are known as Fast Moving Consumer Goods
(FMCG). FMCG items are those which generally get replaced within a year. Examples of FMCG
commonly include a wide range of repeatedly purchased consumer products such as toiletries, soap,
cosmetics, oral care products, biscuits, drinks, as well as other non-durables such as glassware, bulbs,
batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer
electronics, packaged food products etc. A separate sector called FMCG sector is well established in
India. India has always been a country with a big chunk of world population, be it the 1950’s or the
twenty first century. In that sense, the FMCG market potential has always been very big. FMCG
companies operate a wide portfolio of very distinct brands in different categories
FMCG has been among the best performing sectors relative to other sectors in India .It has delivered
higher returns than most sectors both in the short as well as the long term .The Indian FMCG sector is
the fourth largest sector in the economy . The FMCG sector consists of four product categories, each
with its own hosts of products that have relatively quick turnover and low costs: Household Care;
Personal Care ‘Healthcare and Food & Beverage
Food & Beverage segment comprises of the food processing industry, health beverage industry, bread
and biscuits, chocolates & confectionery, Mineral Water and ice creams. The three largest consumed
categories of packaged foods are biscuits, packed tea, and soft drinks.

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Biscuits are everyday products that are popular in both Indian rural and urban markets. Almost 10 lakh
metric tons of biscuits are produced in India each year and consumption is growing at 10-11 per cent
annually. The per capita consumption of biscuits in the India is about 1.8 kg annually. Contrary to
popular belief that biscuits are consumed by the middle and high income groups, it is actually the only
nutritious and hygienic food product for children, lower income groups and the rural population. The
organized and unorganized sector of the biscuit industry is in the proportion of 70%:30% ratio. The
biscuit industry of India can be categorized into three segments consists of economic segment (Parle-
G, Tiger, PriyaGold etc.), middle segment (KrackJack, 50-50 etc.), premium and super-premium
segment (Burbon, Digestive, Nutri Choice etc.). Economy and middle segment constitutes about 70
per cent of the total biscuit market in India.
Indian biscuit market is worth Rs 15,000 crores with glucose segment accounting for 30% of and is
head of the U.S.A, Mexico, China, Argentina, France, Italy, Germany, Turkey & Spain. According to
The Nielsen study India is the world's leading market for biscuits, ahead of the US, Mexico, China,
Argentina, France, Italy, Germany, Turkey and Spain. The growth of biscuit industry in India over the
years is given in Table 1 below.
Table 1- The Growth of Biscuit Industry in India
S.No Year Growth in Percentage
1 2003-04 13
2 2004-05 14
3 2005-06 14
4 2006-07 13
5 2007-08 14
6 2008-09 16
7 2009-10 14
8 2010-11 11
9 2011-12 11
10 2012-13 09
Source: www.biscuitfederation.com
The Urban penetration of biscuit is 75 to 85 per cent while of the rural areas is 50 to 65 per cent. The
biscuit consumption in India on zone basis is given in Table 2 below
Table 2: The Biscuit consumption in India
S.No Zone Biscuit Consumption
1 Northern Zone 25%
2 Western Zone 23%
3 Southern Zone 24%
4 East and North East 28%
Source: www.biscuitfederation.com
The biggest consumers of the biscuits in India are Maharashtra, Karnataka, and West Bengal Uttar
Pradesh & Andhra Pradesh. The leading players of the Indian biscuit industry are Britannia, ITC,
Parle, Bakemans, and Priya Gold & Glaxo Smith Kline. The biscuits manufactured in India can be
categorised into Glucose, Marie, Sweet, and Cream Milk. Some of the popular brands of biscuits in
India are Parle, Britannia, Priyagold, Anmol, Sunfeast, Biskfarm, Dukes, Cremica, Priya, Veeramani,
Bonn, Bhagwati, Raja, Madhabi, Nezone, Ankit, Nalanda, etc.
Between 2009 -10 & 2011-12 the rural consumption increased in comparison to the urban
consumption. Additional spending in rural areas touched Rs 3.75 trillion while as urban additional
consumption touched Rs 2.99 trillion .Which reflects huge market available in the rural India. The
rural India represents the bottom of pyramid of India. With increase in the rural consumption
companies are geared up tapping this market.
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 Abhinav National Monthly Refereed Journal of Research In
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OBJECTIVES OF THE CASE STUDY
This case study focused on the following objectives:
i. to understand the concept of positioning
ii. to comprehend the positioning strategy adopted by Parle G in India.
RESEARCH METHODOLOGY
The study aims to determine the strategies adopted by Parle G to grow its market share The secondary
data have been collected from various government publications like Nielson and internet (periodicals,
newspaper, book databases, newsgroup, blogs etc).
PARLE- COMPANY BACKGROUND
Parle Product is an Indian private limited company established in 1929 by Mohanlal Dayal Chauhan in
the Vile Parle suburb of Mumbai. It is one of the oldest and leading biscuit manufacturers in India
under brand name Parle G. In 1929 there were no Indian biscuit companies except Britannia (now
Britannia Industries Ltd), which was owned by a British company. Parle saw an opportunity to make
glucose biscuits. Ever since, a glucose (Parle G) biscuit have been selling in India and is now world’s
largest single brand selling company. The biscuit portfolio of Parle include brands like Parle G
,Nimkin , Krackjack , 20-20 Cookies ,Monaco-Salted Craker ,Golden Arcs , Kreams ,Festo ,Hide &
Seek Choco Chips , Hide & Seek Milano ,Happy Happy ,Hide & Seek Bourbon ,Hide & Seek Fab
,Parle Actifit Digestive Marie ,Milk Shakti etc.
PARLE-G BISCUIT - HISTORY AND ORIGIN
Launched in the year 1939, it was one of the first brands of Parle Products. "Parle-G" derived its name
from the name of the suburban rail station, Vile Parle which in turn is based on village Parle in olden
days. By the year 1949, Parle Glucose biscuits started expanding its horizons and were sold across the
state of Maharashtra as well as in North India. The launch of biscuit became a success and 1950’sThe
early 1950’s production touched over 150 tons of biscuits at the Mumbai factory. Looking at the
success of Parle-G, many firms started manufacturing biscuits with packaging looking like Parle G.
This forced Parle to change the name from Parle Glucose Biscuits to Parle-G. Parle-G biscuits were
earlier called 'Parle Gluco' biscuits until 1980s. The "G" in the name Parle-G originally stood for
"Glucose", though a later brand slogan stated "G means Genius". For decades, the product was
instantly recognized by its iconic white and yellow wax paper wrapper with the depiction of a young
girl named “Gunjan Gundaniya “.
Despite the low growth of biscuit industry in 2012, Parle Products sold.5, 010 crore worth of its
flagship glucose biscuit brand at retail price. This meant sales of more than 100 crore packets across
sizes every month, or 14,600 crore biscuits in the entire year, that is, 121 biscuits each for the 1.2
billion Indians. Thus Parle G, glucose biscuit, is the top-selling biscuit brand by volume sales and
holds 79.4% market share in India in the glucose biscuit category followed by Britannia (8.7% ) and
ITC's (8.3%). Parle G has been around for over 73 years, it has a loyal consumer base. Of the overall
40 brands across biscuits, chips and confectionery that Parle Products makes, Parle-G contributes 50%
to the firm's top line.
This journey and success that Parle –G is enjoying is because of its focus on the lower-medium
segment of the Indian population which is characterised by price sensitivity and constrained income.
The lower-medium segment reflects the Bottom of Pyramid of the Indian population and is highly
heterogeneous & huge market. Parle-G in order to capture this huge market formulated an effective
positioning strategy
POSITIONING
Nowadays, positioning concept is applied extensively by the companies specifically FMCG in India.
After taking the decision to segment the market, i.e. To select one or various segments as target
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customer groups, the next step is to decide how the product should be perceived in the customers’
minds and this process is called as positioning. The origin of the term “Positioning” goes back to
Trout and Ries (1969), who define it as a strategy for ´staking out turf’ or ´filling a slot´ in the mind of
target customers.”. The Positioning has, therefore, nothing to do with what you make of the product.
Positioning is what you do with the target customer". Kotler (1997) defines positioning as: “the
process of designing the company’s product/services and image based on consumers’ perceptions
relative to that of competitors”. Aaker and Shanby (1982) defines Positioning as a art and science of
fitting the product or service to one or more segments of the broad market in such a way as to set it
meaningfully apart from competition. To Kapferer (1992), positioning is a two-step process, in which
the first step is to clarify which product category the brand should be compared to and associated with.
In the second step, the brand’s differentiating characteristics are identified and communicate. Further
Arnott (1992) states that Positioning is the deliberate, proactive, iterative process of defining,
modifying and monitoring consumer perceptions of a marketable object. In other words, the process
of positioning can be described as iterative, it necessitates deliberate and proactive actions; it involves
decisions at conceptual, strategic and operational levels and should reflect the triumvirate deliberations
of the company, its competitors and its target market/customers Kalafatis et.al (2000).
Most of the FMCG companies in India position their brands more or less by developing a particular set
of product attributes, by price/quality, by competitor, by application, by product user, by product class
or by the cultural symbol approach aimed at a customer segment. Generally, there are 3 major aspects
of brand positioning - Functional, Symbolic and Emotional; an effective positioning process should
place enough importance on all of them, though mostly one of the aspects becomes more important
compared to others depending on the product type and competitive dynamics. It can be argued that in
the Indian FMCG Sector most of the products competing in biscuit segment have more or less similar
features with marginal differences depending on the target segment. Hence, functional and emotional
aspects become very important in terms of positioning.
PARLE G -POSITIONING STRATEGY
Parle launched Parle-G in 1939 during the British rule with aim to sell affordable biscuits to Indians.
And even after 73 years the company hasn’t changed this philosophy. Manufacturing biscuits within
the affordability range is a key driver in the rural India and recognising this fact has helped Parle G
become to be the first Indian FMCG brand to cross the.5,000-crore mark in retail sales in a year
despite rivals such as ITC and Britannia entering the space.
Parle wanted to develop the effective positioning strategy for Parle G in India. Because one of the
most important aspects of successfully marketing a product is “Positioning. In fact, brands can succeed
– or fail – depending on how they are positioned.
Management at Parle tried to focus on the price factor and developed “Value for Money Positioning
Strategy” for Parle –G. Recognising the price-sensitiveness of rural consumers in India Parle-G is
available in small size packs with low price units in the rural market. Parle-G is available at Rs 1, Rs 2,
Rs 3, Rs 4, Rs 5, Rs 10, Rs 20 and Rs 50. The Rs1 to Rs4 packs are available only in Tier 2 & 3 cities
and the rural markets. But the top selling packs are priced at Rs 4 and Rs 5. Although During 1994 to
2008 the prices of raw materials such as wheat, sugar and milk increased up by 150 per cent. Parle-G
kept its price fixed at Rs 4 a pack because of price sensitive of Bottom of the pyramid. To cope up
with increasing raw material costs Parle G adopted smart strategy whereby the company reduced the
weight of the packs but kept price same. The number of biscuits in a pack came down from 16 to 15 &
each biscuit became lighter. Parle G with its low-price policy is able to cater to the consumers with
lower and medium income-level. Low income group like labourers buy it because of its affordability
and high glucose-content, to satisfy their hunger; whereas medium income-level buyers get motivated
because of their perception about Parle-G, as value-for-money product. This has helped the Parle-G to
report over 15 per cent compounded annual growth rate in the past five years.

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However Management also positioned Parle –G on the emotional factor .The management developed
well planned communication strategies from time to time to popularise biscuit brand. In 1947, when
India became independent, Parle G ad campaign highlighted brand as an Indian alternative to the
British biscuits. This way making people emotional towards its purchase. During 1980’s through press
ads Parle G advocated the benefits of energy and nutrition. Parle G was perceived as an energy
supplement & substitute for milk. While most of the companies in the Indian biscuits market endorse
celebrities for the advertisements Parle-G in order to remain low priced connected with its rural targets
through well planned ad campaigns like In the year 2002, a national level promo – `Parle-G Mera
Sapna Sach Hoga’ was run for a period of 6 months which received over 5 lakh responses and of that,
over 300 dreams were fulfilled. In 2010 the company started an ad campaign stating “G-maine
Genius” to repaint the image as health supplement that would sharpen mind. Hence Parle –G’s long-
term competitive advantage stems, in part, from its value for money and emotional positioning.
CONCLUSION
This 73 year old biscuit has been an iconic brand in the biscuit industry and widely recognized for its
superior quality and taste. Parle G from the very beginning focussed on the low-medium income
segment with high volumes sales and competitive pricing backed by strong distribution.. In a country
like India where a lot of new biscuit brands are launched every year with very less differentiation,
surviving for such a long period seems like an unimaginable task. However, Parle-G has shown that if
you are able to successfully position your product in target consumers mind, then you don’t really need
to worry about the competition. Parle –G has positioned itself as common man’s biscuit. It has proved
to be an iconic brand that focuses on adding value to the end customer rather than minting money from
the pockets of Indian masses and this value for money positioning strategy is what has differentiated
the brand from its competitors and has led to its magnificent success. Parle –G has also adopted
emotional positioning with its ad campaigns highlighting brand as an Indian alternative to the British
biscuits, `Parle-G Mera Sapna Sach Hoga promos and recent ad campaign stating “G-maine Genius” to
repaint the image as health supplement that would sharpen mind.
LEARNING’S AND IMPLICATION FOR THE FMCG COMPANIES IN INDIA
Learning-1: A sound understanding of consumer perceptions is essential to the long run success of the
brand. Parle understood the functional need of their customers of low price biscuit and tried to satisfy
that need with low-cost biscuit
Learning-2: Developing an effective positioning strategy is inevitable nowadays for any organization.
Learning-3: Developing successful positioning is a cumulative process, requiring years of consistent
effort.
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