BUSINESS HISTORY

PROJECT REPORT

PROJECT REPORT

ON

The Journey Of Parle

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 PROJECT REPORT

ON

UNDER THE GUIDANCE OF

DR. Anitha Acharya,

ASSISTANT PROFESSOR,

ICFAI BUSINESS SCHOOL - HYDERABAD

By

Riya Dutta (19BSPHH01C0943)

Rubble Bagri (19BSPHH01C0960)

Suchita Chukkala (19BSPHH01C1246)

Subham Ghosh (19BSPHH01C1243)

Tejas Patil (19BSPHH01C1313)

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ACKNOWLEDGEMENT:

We would like to express our deepest appreciation to all those who provided us the guidance to complete
this report. A special gratitude we give to our faculty member of Business History and our project
guide, Dr. Anitha Acharya, whose contribution in stimulating suggestions and encouragement helped us
to coordinate our project especially in writing this report.

We are using this opportunity to express our gratitude to everyone who supported us throughout the
course of this Business History project. We are thankful for their aspiring guidance, invaluably
constructive criticism and friendly advice during the project work. We are sincerely grateful to them for
sharing their truthful and illuminating views on a number of issues related to the project.

We would also like to express our warm thanks to Dr. Anitha Acharya for the opportunity given to us
here at IBS Hyderabad,

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ABSTRACT:
Parle Products Private Limited is an Indian food products company. Looking at 50% in market share in
the following year, the company is one of the leading biscuit brands not only in India but also globally.

Parle Products is a Non-government company. It was incorporated on 9th December 1950. It is a private
unlisted company and is classified as 'company limited by shares'. The Company's authorized capital
stands at Rs 372.9 lakhs and has 52.05149% paid-up capital which is Rs 194.1 lakhs. Parle Products
Private Limited has major market share in Manufacturing (Food sector) business for the last 69 years.

Founded in 1929, the company has grown to become one of India’s biggest manufacturer of biscuits and
[Link]-G, the world’s largest selling biscuit brand is the lead seller of the product company.
Also a host of other very popular brands, the Parle name symbolizes quality, nutrition and superior taste.
Delivering to both health and taste, with a value-for-money positioning, it allows people from all kinds
of economic backgrounds and age groups to enjoy Parle products. With a reach spanning even the
remotest villages of India, the brand Parle has become synonymous to a household product.

Considered as a staple snack brand, Parle Products Private Limited has come a long way. Today it boasts
of housing over 40 brands across 5 categories – Biscuits, Confectionery, Chocolates, Snacks and Rusk. It
is fairly important to note here that the brand has recently diversified into Pulses Category with Fresh
Harvest.

This report looks at the 88 year old homegrown manufacturer of biscuits and confectionery and attempts
to elucidate on the brand’s current day market relevance and activities pertaining to the Indian economy
and how it is giving some of the international players a run for their money,

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 CONTENTS

INTRODUCTION 5

MARKET OVERVIEW 6

BUSINESS HISTORY 7

PARLE DRIVER PRODUCT 9

MARKETING MIX OF PARLE 11

MARKET SHARE AND GROWTH 12

CORPORATE SOCIAL RESPONSIBILITY 13

LEARNINGS 14

ISSUES & RECOMMENDATIONS 15

DIFFERENT PRODUCTS OF PARLE 15

REFERENCES 16

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INTRODUCTION:
In 1929 a small company by the name of Parle products emerged in British dominated [Link] intent
was to spread joy and cheer to children and adult all over the country with its sweets and
[Link] withcivilizationandtheneedfornutritious,convenienttocarry andlong-
lastingfoodsonlongjourneys,inparticularatseagaverisetotheconcept
[Link],anear Bombay suburbs to create and meet the demands
for biscuits. Parle: A renownedbrandinthefoodindustrycompanybyParle’sChauhanfamilyfromits parent
production house at Vile Parle of Mumbai suburbs has been emerged asone
ofIndia’smosttrustedfoodindustrywithitsaffordable&popular productportfolio.

INDUSTRY PARLE
FOUNDED 1929
FOUNDER CHAUHAN FAMILY
HEADQUARTER MUMBAI

Apart from the factories in Mumbai and Bangalore .Parle also has factories in Bahadurgarh, Haryana and
Neemrana , Rajasthan .These are the largest biscuit and confectionary plans in the country .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 grew in strength with its 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 .

FOUNDER OF PARLE:

It was started by Mohan Lal Dayal who was the man who whole heartedly followed the spirit of the 1927
swadeshi Movement .Giving up a good business in whole sale silk import to lay the foundation of first of a
confectionary factory then a biscuit factory and later a soft drink plant. He is the founder of the house of
parle .The man who believed in giving back to society the benefits he reaped from it. Later it was continued
by his family and till now it is owned and operated by his family.

The original Parle Product was split into three separate companies owned by the different factions of the
original Chauhan family.

-Parle Products led by Vijay, Sharad and Anup Chauhan (owner of the brands Parle-G ,Melody,Mango, Bite,
Poppins, Monaco and KrackJack .)

-Parle Agro, led by Prakash Chauhan and his daughters Schauna, Alisha and Nadia (owner of the brand
Frooti and Appy).

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All these three companies continue to use the family trademark name “Parle”. The original Parle group was
amicably segregated into three non-competing businesses but dispute over the use of “Parle” brand arose,
when Parle Agro diversified into the confectionary business, thus becoming a competitor to Parle products
.In 2008, Parle Product sued Parle Agro for using the brand Parle for competing in confectionary products
.Later in 2009, Parle Agro launched its confectionary products under a new design which did not include the
parle brand name.

HOW DID PARLE GET ITS NAME?

Parle Products was established as a bakery in the Vile Parle suburb of Mumbai, in 1929. The manufacturing
of biscuits started from [Link] India became independent in 1947, the company launched an advertising
campaign, putting forward its Gluco brand of biscuits as an Indian alternative to British-branded biscuits.

Until 1980, Parle-G biscuits were called 'Parle Gluco' Biscuits. The "G" in the name Parle-G originally stood
for "Glucose", though a later brand slogan also stated "G for Genius".

MARKET OVERVIEW:

The biscuit industry is the largest and fastest growing of all the sectors in the fast moving consumer
goods (FMCG) category in India. The Indian food and grocery market is the world’s 6th largest, with
more than 70 per cent market contribution. The Indian food processing industry accounts for 32 per cent
of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of
production, consumption, export and expected growth. It contributes around 8.80 and 8.39 per cent of
Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13 per cent of India’s exports
and six per cent of total industrial investment. The Indian gourmet food market is currently valued at
US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 per cent. India's
organic food market is expected to increase by three times by 2020.

Source: Ministry of Food Processing Industries

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BUSINESS HISTORY:

The journey from an Indian family business to one of the leading manufacturer of biscuits and
confectionery shows the roller coaster ride of the brand and provides some unique learning insights to
understand the consumer psychology.

Mr. Mohanlal Dayal was the man behind the company which gave the reason for joy. The idea for Parle
was initiated in the year [Link] it was started as a pure confectionery centered company. Its first
factory started functioning in 1929 in the suburbs of Bombay (now Mumbai, in Maharashtra) with the
workforce of mere twelve people. It was started as a family centric business with sweets and
peppermints manufacturing, and their toffee orange candy became the most popular in the unorganized
market of that time. Parle started its promotional activities with the tagline that was “Sweets from the
sweet…PARLE’s- Naturally” and they highlighted that their toffee and sweets are made from rich
ingredients: glucose, pure sugar and milk and available in many delectable flavors.

In the late 1930s’ the most iconic product of Parle was launched which was Parle-Gluco biscuit. Parle
started promoting it with different pictures and prints in two types of packaging with lines – Grow great,
grow strong with Parle’s gluco (Parle-G), this biscuit hit the market and was available at every small and
big shops because of its extensive supply chain system. It became people’s favorite biscuit as its price
was reasonable and also appeared as the perfect companion to the morning tea.

In 1941, the company diversified the taste of product to salty biscuits. Parle came up with its new
product that was salty cracker with the name “Monaco” which was India’s first salted cracker. They
advertise it as a party snack which can also be served with different toppings and they used the picture of
woman in their packaging and advertising because they were targeting woman as their customers and
their tagline for this product was- “What’s special about Shushila’s tea parties”. After independence in
1947 when there was shortage in supply of wheat due to riots and all, Parle-g and Monaco was out of
production and company requested consumers to please ask for barley biscuits from shops until situation
improve. Company came back when the situation and supply both improved, with Parle-G and Monaco
biscuits, this time with new packaging as company had adopted new innovative packaging techniques
and they also created India’s longest oven which was 250 feet long and they started production of
biscuits on much larger scale with huge number of work [Link] independence of India, company
started focusing on the technical aspects of the production. It introduced India's longest oven -250 feet
long which helped to boost the production capacity. Also the rising sense of patriotism positively
affected the growth & acceptance.

With an overwhelming product response from Parle Gluco& Monaco, the company entered into cheese
snacks segment in 1956. Though there was a huge contrast with Indian food habit, the product gained
acceptance in the urban & metro areas.

Moving ahead from the Orange candy, Parle added Kismi& Poppins to its confectionery range. Kismi
was launched in 1963 with a target audience of young adults and teenagers. Few years later, in 1966 they

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launched Poppins which gained huge popularity among children. During mid 1960s’Parle launched
“ParleJeffs” for the fans of savory snacks. The exotic flavor and packaging style was mainly targeted
towards the affluent class f customers.

In 1971, Parle awarded with Monde Selection Award for its excellence in taste, hygienic production and
packaging. It became the first Indian food company to win Monde Selection Award for four successive
years. After introducing a wide range of chocolates, Parle introduced the original sweet and salty biscuit
as “Krackjack” in 1974. The main intension was to bring a taste which is equally acceptable in various
regions of India.

The promotional elements mainly projected the product as a tastier energy food with vitamin enriched
ingredients. During early 80s’ Parle renamed its flagship product Parle Gluco to Parle G where the letter
“G” symbolized theGlucose essence. Subsequently the packaging, biscuit design and their promotional
strategies modified which helped the organization in reinforcing the market share in biscuit segment.
Television popularity was rising with the popular shows broadcasted in DD National. Taking the
advantage of rising momentum of television, Parle introduced its first television advertisement in 1982.
Along with the ongoing print advertisements, television commercials were targeted towards family
members with an emotional & informational approach. Parle G brand emerged as a revolutionary
product in biscuit segment. Looking at growing popularity for Parle products, the company decided to
diversify the confectionary range in 1983 with the introduction of “Chocolately Melody”. Three years
later, in 1986 it launched Mango Bite which is known as the first mango candy of [Link] 1996, Parle
launched “Hide & Seek” which emerged as India's most loved moulded chocolate chip biscuits. From
the year 2000 onwards, the company started focusing on existing portfolio with an eye on traditional
taste and a true sense of patriotism. Technological innovation, spreading of retail market and ecommerce
chains helped to accelerate the growth rate.

From elite to affordable product:

Biscuit was a product meant for elite class in 1929 it was not affordable to average consumer .The
brand got into business of philosophy that biscuits should be there for every Indian .Parle –G is a
brand that has made Indians habituated of consuming biscuits .Alone Parle G is 5000 crore brand
with as 75-80% market penetration .The brand has never changed its logo and its packaging the key
reason behind this is that the brand is sold in the smallest towns -it is the only brand you can buy at
location like a village of a 100 people near the indo-pak border on the LOC. Many of the consumer
may not be able to read. This helps them recognize and Pin point Parle-G amongst the clutter of
brands.
A brand which changed the societal norms and turned out to be biggest player in biscuits. Today if we
see 4551 Parle-G biscuits are consumed every second sold in 5million retail stores

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PARLE DRIVER PRODUCT
PARLE – G: The Face of Parle

The iconic product- Parle G provided a long lasting brand image for Parle. It started as a biscuit with
glucose in 1939 and brought a few variance in taste, packaging over last 80 years. It is a biscuit filled
with the goodness of milk and wheat and considered as a source of all round nourishment for the nation.
According to the brand survey by Nielsen in 2003, Parle G emerged as the world’s largest selling biscuit
brand with a record of 400millions units of daily production and holding 79.4% of Indian market in
terms of Glucose Biscuits.

 1 billion packs of Parle-G are produced monthly and marketed over 6 million retail stores.
 4,551 Parle-G biscuits are consumed per second and as per The Brand Trust Report-2014 Parle-G
ranked as the 42nd most trusted brand of India in 2014.
 In 2013, Parle- G became India's first domestic FMCG brand to cross the ₹ 5,000 crore mark in
retail sales.

DIVERSIFICATION BEYOND PARLE G

With the growing demand and favorable market condition, the competition in the market started growing
with a rapid acceleration. To uphold the Customers’ choice company implemented several innovative
marketing strategies which enabled Parle to capture a decent market share of Rs 21,213crore Biscuit
market.

Taking the advantage of Business environment several business firms entered into this segment of
business to meet the colossal demand of Indian market, which resulted in intense competition. A small
variation in the need of customer can make a huge impact in market position. To maintain the growth of
company in the declining stage of Product Life Cycle, Parle added Snacks segment to its Product
portfolio. Taking the scope of huge potentiality of one of the fastest growing categories, Parle entered
with launching of western snacks product along with a traditional touch to Indian Snacks preferences.
Parle added potato wafers and chips, Aloo Bhujjia and Moong Daal to its tasty product portfolio. It was
a great attempt to capture Indian Customer with providing a new variant of traditional tasty snacks but
somehow Parle was able to capture only 6% of the Rs 5,565crore western snacks market, which is
dominated by global giants such as PepsiCo.

The launching of the western snacks under the brand names Must Chips and Must Stick was unable to
gain the customers preference as that of other Parle Products which were giving a stiff competition
because of absence of Parle Brand Name. Parle was able to create an unmatched brand equity which was
symbolized by its quality product, nutrition and superior taste. Later during mid 2009, it re-launched the
products as Parle's Wafers and Parle's Full Toss and the brand name accelerated the sales growth. The
unique approach of Brand engineering enabled Parle to place itself in the share of the pie in Indian
Snacks market. In 2009, Parle launched health snack category with Monaco Smart Chips to further
expand the market share but it was not accepted by majority Indian customers. Realizing the middle
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income level & traditional consumption pattern of major customers, the company had to withdraw it
within six months. The demand was concentrated over a small segment of Indian customer and instead
of targeting this small segment Smart chips product was launched as a mass brand. Smart Chips
appealed to the upper end of the pyramid. Instead of launching that in modern trade, Parle made a
mistake to launch that as a mass brand.

Although Parle Snacks segment was giving stiff competition to smaller player, still PepsiCo was far
ahead in snacks segment with almost 70% market share and good capture over urban market. To further
expand its business, Parle made marketing strategies to tap the rural market for snacks segment.
Understanding the consumption pattern &low income level of rural customers, Parle adopted the High
volume & Low margin as of Biscuit production. This resulted in offering more for the same price and
provided competitive advantage in the rural market. More offering & the trusted brand of Parle created a
significant impact up on rural market.

In early 2010, Parle redesigned separate distribution teams after realizing the need of Individual
Distribution & marketing strategy for Biscuit & Snacks. Looking at the different shelf life & volume of
production, Parle adopted various marketing strategies which resulted in increased sales. An in-depth
understanding of Indian Consumer Psyche has helped Parle to develop a marketing philosophy that
reflects the need of the Indian masses. Another marketing strategy of maintaining the same price with
variation in weight helped in Consumer decision making process in terms of price & demand constraints.
This pricing strategy also helped in maintaining equilibrium in sales even in the situation of increased
production & resource procurement cost. High volume of production & low profit margin is the Ultimate
business secret of Parle’s business success. Britannia products stand in competition of Parle products,
but adjustment in the profit margin is answerable to its share holders. Sole authority on financial
investment decision is another advantage for Parle. Unlike Britannia, it is not answerable to any
shareholders, which gives a freedom to adjust the profit margin according to the market position. For
any products, manufacturing cost & logistics cost are two major factors for relatively higher or lower
price. To reduce these manufacturing & transportation cost, Parle has partnered with more than 100
Franchisees across India. These franchisees accounts for more than 60% of the total production. This
strategy helped Parle to reduce the cost of product and stimulate the distribution to meet the demand at
the right time. Parle expanded its area of operation rather than product diversification and aimed at
capturing the global market. With its presence in more than 70 countries & tie ups with global retail
giants like Wal-Mart stores projects a clear picture of global expansion & high ambition. Looking at the
market position of Parle definitely it can be said that the business forecast made by Edelweiss for Parle
stands the test of time. Parle captured a significant position in snacks segment unlike its undisputed
leader position in Biscuit segment. A tradition to deliver quality products with a combination of taste and
value for money helped Parle in meeting the demand of Biscuits & confectionary products irrespective
age, region & income. With a widespread reach from the rural segment of India to the global presence
across the world and unmatched quality & tasty products, Parle is expanding its business empire.

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ADDITION OF PARLE PLATINA

Parle launched “Parle Platina” division for premium products in May 2017 to target the affluent class of
customer. It began with a television commercial that was aired during the ongoing Indian Premier
League (IPL) cricket tournament featuring Hide & Seek. While Parle’s last campaign, with the tag line
“Naam tohsunahoga” (You would have heard of the name), highlighted brands under its so-called
popular division, the new campaign will focus on its premium range. The packaging &promotional
strategies were mainly focused on upper middle class of consumers.

Marketing Mix of PARLE:

Product- Parle has variety of products which are available like salted biscuits Monaco, krack-jack, in
confectionery it has mango bite, éclairs in snacks they have nachos, cakes and in sweet biscuit they have
hide and seek, and the most famous Parle –G.

Price- Since its old days, Parle has maintained its low pricing formula to target the large population of
Indian market where customers are very price conscious. With low pricing Parle never compromised
with the quality, they balanced the price by keeping production on large scale to keep the price low.
With this strategy Parle has maintained its position in market despite huge competition.

Place- Parle products are available at all big and small stores and shops in India because of its huge
distribution network. They have global presence also in many sub-continental and middle-eastern
countries. It is having 23 manufacturing plant which supply to number of wholesalers and they also
have depot agents, due to this huge distribution network Parle has always been ahead of its competitor
and ensures people’s first choice.

Promotion- Parle has adopted all type of platforms available for marketing like TVC, online, print as its
marketing strategy. Parle get connected with small aged children and kids by sponsoring T.V serial
[Link] also started coming up with new and improved packaging. With all these four P’s of
marketing-mix Parle maintained its position

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MARKET SHARE & GROWTH:

Source:[Link]

Parle company which has turnover of more than 10,000crore rupees is expected to get double to 20,000
crore by 2023-24 as said by its top officials.

Parle Biscuits competitors in India

 Britannia
 Sun feast
 Priya Gold
 Horlicks
 Cadbury
Parle snacks Competitors in India

 Pepsi Lays
 Bingo
 Haldirams
 Kurkure
 Diamond Wafers

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CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES:
When we hear the word “Parle-G” first things that come to our mind is hygiene and nutrition. Parle takes
these factors into consideration in its CSR activities. Parle has done various activities under its CSR to
make India litters free country and nutritious. Followings are some major projects done by Parle.

1. Every year Parle conducts a program named as “SARASWATI VANDANA” in the state of
West Bengal during Saraswati Puja, inviting school students from all across the state to
participate.
2. It organizes “GOLU GALATA” every year in Tamilnadu during Navaratri where all members
of a family come together to show their creativity.
3. Parle partners with “Design for Change” (DFC) i.e. world’s largest movement that empowers
children. DFC started when students in a school of Tamilnadu started falling ill due to dirty
toilets.
4. Parle started “THE JUNKYARD PROJECT” in association with MTV in 300 colleges of 15
cities.
5. Parle launched “LITTER FREE” campaign in 2015 to make India litter free.
6. It promotes healthcare & sanitation including contribution to Swach Bharat Project of Indian
government.
7. It promotes education and gender equality.
8. Parle donates to the Prime Minister’s National relief fund.
9. It contributes to many rural and slum area development projects.
10. It conducts interaction and distribution of Gifts to Children from MotherTeressa Foundation.
11. Contributions or funds provided to technology incubators located within academic institutions
which are approved by the Central Government;
12. Promoting environmental sustainability;
13. Protection of national heritage, art and culture;
14. Training to promote rural sports, nationally recognized sports, Paralympic sports and Olympic
sports.

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LEARNINGS:

 Brandname&itsimpact.

All the diversified portfolio of Parle includes the brand name which helped in easy
Recognition and carried the brand impression and good will of the associated product.
Because of a huge brand name Parle enjoys good economies of scale because various
products of Parle can be distributed by a single distributor. So variable cost increases
whereas fixed cost remains the same which results hugeprofittotheorganization.

 Quantity and weight game

The company know that the consumer are price sensitive when it comes to its driver product
so instead of playing with price ,the company reduced the quantity of item so as to maintain
economies of scale .Parle has not increased the price of Parle-G from a very long time as
consumer are price sensitive when it comes to Parle-G

 Operational efficiency
The product line of parle is very efficient. It has very less number of defects in terms of units
produced. For every 115 tonnes of production parle has only 1% wastage .Also in terms of
workers also their effectiveness is very high .No Man hour is wasted as every hour wasted
will lead to loss of sale as Parle play the game of production and high turnover which in turn
will lead to more profit.

 Strategic Location of Factories

When we see the location of Parle the area where their factories are set up are in a location,
where major population exist –Mumbai ,Rajasthan etc. Setting up of plant in such location
gives advantage of low cost, warehousing cost and low logistics cost ultimately reducing per
unit cost of product and cost efficiency .

 Multiple Price Variant

When you know the market then it is easy to know the need of it. Parle know the
demographic, Cultural pattern in India .In India there is Joint Family, Nuclear family and
people living alone .Parle caters to all the needs it has product range from Rs 2 to Rs 50
packets and also different segment for youths with different taste and need.

 Buying Intelligence
Parle is very meticulous in purchase of raw material .It buys product with best quality and
also at low cost.

 Pricing Strategy
Parle is a true example of how pricing strategies play big games in market .Parle knew that it
cannot chance the price of its driver product –Parle G so it played with low profit Margin
with its driver product while earning more profits from its other products .The company saw
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 the impact earlier once when it increased the price of the product which led to lower down of
its sales. By playing with its pricing strategy the company has increased its turnover from
5000 crore in 2013 to 8000 crore in 2018.

KEY ISSUES FACED BY THE COMPANY:

 Increase in cost of production due to rising prices of raw materials

Rise in the prices of raw materials and acquiring them is in turn increasing the cost of
production. This further narrows down Parle’s profit margin while it continues to be a brand
accessible to all demographics instead of marketing itself as a premium brand.

 Rise in Distribution costs

With overall increase in prices of every commodity and services, this has led to the further
increase in distribution costs which affects the company’s strategy of low pricing.

 Local Bakery product

Parle being a domestic player with no premium branding, it faces competition from International
brands in the Indian market.

 Entry of new players

With new companies and brands entering the FMCG market, Parle’s competition continues to
increase.

RECOMMENDATIONS:

 Upgrading their manufacturing equipment will help increase efficiency and tackle rising costs
of production.

 Further enhancing their brand image through advertisements and media outlets will help
increase mindshare of the Company.

 Explore innovative ways to keep the brand market relevant by identifying currents needs and
trends.

 Extensive Research and Development will also enable the Company to handle newer market
demands at a cost effective value while increasing revenue at the same time.

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DIFFERENT PRODUCTS OF PARLE:
Reference Links:

 [Link]
 [Link]
 [Link]
snacks/story/[Link]
 [Link]
pioneer-parle-g-becomes-indias-first-homegrown-rs-5k-crore-fmcg-
brand/articleshow/[Link]
 [Link]
 Journal of Advanced Research in Dynamical & Control Systems, 07-Special Issue, July 2017
 Brand Trust Report,2014
 [Link]
biscuits-Too-large-to-miss
 [Link]
division-premium-products/ [ Assessed on 12th July 2019]
 [Link]
selling-biscuit-nielsen/articleshow/[Link] [Assessed on 12th July 2019]
 [Link] [Assessed on 13th
July 2019]

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