MARATHA MANDIRS BABASAHEB GAWDE INSTITUTE OF MANAGEMENT STUDIES MUMBAI CENTRAL

STRATEGIC MANAGEMENT

VINAYAK S. JAGDALE

MMS (MARKETING)

TOPIC :- BISCUIT

ROLL NO. 35

Submitted To Prof. Anju

CONTENT

Overview Of Biscuit Organization List Of Biscuit Manufacturers In India Biscuit Companies Information Market Share Of Overall Biscuit Industry Porters Five Force Model BCG Matrix GE Matrix Marketing Strategies Of Parle-G Parle-G and Challenges Bibliography

OVERVIEW OF BISCUIT ORGANIZATION

India Biscuits Industry is the largest among all the food industries and has a turn over of around Rs.3000 crores. India is known to be the second largest manufacturer of biscuits, the first being USA. It is classified under two sectors: organized and unorganized. Bread and biscuits are the major part of the bakery industry and covers around 80 percent of the total bakery products in India. Biscuits stands at a higher value and production level than bread. This belongs to the unorganized sector of the bakery Industry and covers over 70% of the total production. India Biscuits Industry came into limelight and started gaining a sound status in the bakery industry in the later part of 20th century when the urbanized society called for ready made food products at a tenable cost. Biscuits were assumed as sick-man's diet in earlier days. Now, it has become one of the most loved fast food product for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and reasonable at cost. States that have the larger intake of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and West Bengal, the most industrially developed states, hold the maximum amount of consumption of biscuits. Even, the rural sector consumes around 55 percent of the biscuits in the bakery products. The total production of bakery products have risen from 5.19 lakh tonnes in 1975 to 18.95 lakh tonnes in 1990. Biscuits contributes to over 33 percent of the total production of bakery and above 79 percent of the biscuits are manufactured by the small scale sector of bakery industry comprising both factory and non-factory units. The production capacity of wafer biscuits is 60 MT and the cost is Rs.56,78,400 with a motive power of 25 K.W. Indian biscuit industry has occupied around 55-60 percent of the entire bakery production. Few years back, large scale bakery manufacturers like cadbury, nestle, and brooke bond tried to trade in the biscuit industry but couldn't hit the market because of the local companies that produced only biscuits. The Federation of Biscuit Manufacturers of India (FBMI) has confirmed a bright future of India Biscuits Industry. According to FBMI, a steady growth of 15 percent per annum in the next 10 years will be achieved by the biscuit industry of India. Besides, the export of biscuits will also surpass the target and hit the global market successfully. India is the third largest biscuit manufacturing country after USA and CHINA .Estimated annual turnover of Indian biscuit industry is around INR 65.0 billion .Biscuit Industry in India is entering into competitive phase from period of two major players dominating the industry to number of player making mark on national scene and getting share of the market which is good for the industry.

Apart from Big 3( Britannia , Parle , ITC ) there are around 150 medium to small biscuit factory in India . These Industry are now facing problem from increase of raw material price. With Govt VAT upto 12.5% has added to their woes . Biscuit consumption per capita in India has grown to 2.1kg per capita in comparison to 10kg per capita consumption in USA ,UK and Europe . GCC has consumption upto 6 kg per capita. According to IBMA, the biscuit industry in India witnessed annual growth as 15% in 200304, 14% in 2004-05 and 2005-06, 13% in 2006-07, 15% in 2007-08 and 17% in 2008-09. While the growth rate has been stagnating during last 4 years, it has picked up momentum during the 2007-08 and the first quarter of 2008-09 mainly on account of exemption from Central Excise Duty on biscuits with MRP up to INR 100 per kg, as per Union Budget for 2007-08. The organized biscuit manufacturing industrys annual production were around 1.1 million tons in 2003-04, 1.25 million tons in 2004-05, 1.4 million tons in 2005-06, 1.6 million tons in 2006-07 and 1.7 tons in 2007-08. Rural -Urban market penetration for biscuits has been 75%/85% for urban market and 55% /65% for rural market . Branded /Organised to Unbranded/Un organised market share of biscuit has been 60% for Organised sector and 40% for Unorganised sector . Biscuit consumption pattern in the country are Northern India 25%, Western India 23%, Southern India 24% and Eastern India 28%. Export share is around 15% of total production .Major types of biscuit popular in Indian market are Glucose , Marie , Cream, Crackers ,Digestive ,Cookies and Milk . Major manufacturers are Britannia, Parle, ITC , Priyagold, Anmol, Sunfeast.

LIST OF BISCUIT MANUFACTURERS IN INDIA

Parle Biscuits Ltd Britannia Industries Ltd Surya Food & Agro Pvt. Ltd. Anmol Biscuits Ltd ITC Ltd.

BISCUIT COMPANIES INFORMATION

Major brands The Indian biscuit industry is dominated by major brands like Parle, Britannia, and Sunfeast. Also the category has strong regional brands such as Priya Gold-North, Cremica-North & West, Dukes-South and Anmol-East & North. Other popular brands Horlicks, Biskfarm-East, Rose-Andhra Pradesh & South, Sobisco-East and North East also launched in Andhra Pradesh and Madhya Pradesh., Nezone- North East, Bakewell. Market Share Breakdown The Indian biscuit industry is dominated by brands like Parle, Britannia and Sunfeast. Parle Products Pvt. Ltd :- Established In 1929, company has factories in Mumbai, Bangalore, Bahadurgarh in Haryana and Neemrana in Rajasthan, Additionally, Parle Products also has 7 manufacturing units and 51 manufacturing units on contract. Company has about approximate market share of 30-35% of the total biscuit market. Parle-G accounts for the major volume turnover it accounts for approximately 80% of the total biscuit tonnage for the company. Key Products : Parle - G , Hide and Seek ,Krackjack ,Hide & Seek Milano ,Magix ,Digestive Marie ,Monaco ,Parle Marie ,Kreams ,Milk Shakti ,Parle 20-20 Cookies ,Golden arcs ,Nimkin ,Kreams Gold ,Chox ,Monaco Jeera. ITC Ltd :- In July 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose, Marie and Cream Biscuits. Sunfeast with a current market share of ~10% is now clearly established as a credible third brand. Key Products : Sunfeast Milky Magic ,Sunfeast Marie Light ,Sunfeast Golden Bakery ,Sunfeast Dark Fantasy ,Sunfeast Dream Cream ,Sunfeast Snacky ,Sunfeast sweet 'n salt ,Sunfeast Nice ,Sunfeast Benne Vita Flaxseed Biscuits ,Sunfeast Special. Britannia Industries Ltd. :- It is one of the premier food product company in India started its business in Calcutta (now Kolkata) with an initial investment of Rs. 295 as a small biscuit company in 1892 and has grown to a household name. Key Products :Tiger, Good Day, Bourbon, 50-50, Treat, Milk Bikis, Marie Gold, NutriChoice, Timepass, Little Hearts. Anmol Biscuits Ltd :- Anmol is a popular brand of eastern & northern region, having manufacturing facilities in W.B & U.P. Key Products : Lemon Mazaa , Funfill Choco Vanilla , Yummy - Milk Cream , Tip Top Kajoo Kurkure Masala, Coconutty , Thin Arrowroot , Marie,2 in 1, Butter Bake , Cream Cracker , Dil Khush , Dream Lite , E-Time , Funfill Orange , Funfill Rich Chocolate ,Golmol ,Jadoo ,Marie Time , Snackles ,Milk Made.

Surya Food & Agro Ltd :- Manufacturing & selling of biscuits under brand Priyagold. Company has three plants located in Greater Noida, Lucknow & Surat. They also outsource some of our requirements to another plant located in Hyderabad. Capacities have reached 1, 50,000 MT p.a. Key Products : Classic Cream , Butter Bite ,Kids Cream ,Bourbon ,Big Boss ,Marie Lite ,Magic Gold ,CNC ,Cheese Cracker ,Snacks Zig Zag ,Don ,Coconut Crunch ,Cheez Bit Classic Salt ,Chatpata.

The organized biscuit manufacturing industries annual production :-

Year 08 2008-09

2003-04

2004-05

2005-06

2006-07

2007-

Annual Production (Lakh MT) 11.00 17.14 19.5

12.54

14.29

16.14

Market share of overall biscuit industry

Parle-G is the largest selling biscuit in the world. It has 70% market share in India in the glucose biscuit category followed by Britannia, Tiger (17-18%) and ITC's Sunfeast (8-9%). The brand is estimated to be worth over Rs 2,000 crore (Rs 20 billion), and contributes more than 50 per cent of the company's turnover (Parle Products is an unlisted company and its executives are not comfortable disclosing exact numbers). Last fiscal, Parle had sales of Rs 3,500 crore (Rs 35 billion).

Porters Five Force model

Competitive Rivalry Within industry:In biscuit industry itself has high competition among existing players. The main rival of the parle has Britannia and ITC. Also these companies are exist in the market from long decades with their brand names. Bargaining power Of suppliers:Suppliers bargaining power also affect to determine the product cost. Because biscuit manufacturing require basic commodities like Wheat, Sugar etc. If these commodities cost will get high then product cost also will get high. This increasing in input commodities cost cause to increasing in final product price. Bargaining power Of Customers (Buyers):Customers buying power also the factor which affect to company because customers has many biscuit options from low to moderate price range like of bakery product. Customers are not bothering or thinking about quality or brand while purchasing of small product like biscuit. They prefer to the low cost product. Threat of New Entrants:Threat from new entrants is always with this industry because this industry is capital sensitive. For this reason Parle G always concentrates on their manufacturing. They are producing their products in huge quantity. Out of sight means out of mind for that reason they always try to come up with the new advertisements to make customers aware about their product. To reach customers parle g also has good and efficient distribution network. Threat of Substitute Products:Company has threat from substitute products like Traditional Indian products. In this customer prefers to purchase homemade snacks which are they made in their home, Bread which is easily get available in various variety like brown bread etc, package snacks like cookies and bakery products like butter, toast, khari etc.

BCG Matrix

Biscuit industry is fully saturated with their products like various varieties and with competitors. But Parle has above than other companies. If we have to put companies in BCG matrix then analysis will come like below, - Parle will come under Star because they dont have growth in market of glucose biscuit but their market share is high as compare to other companies. - Britannia will come under Question Mark because they they dont have that much market as compare to parle but they have growth. - ITC and Priyagold will come under Dogs because they dont have that much market share as well as market growth. GE Matrix

As per statistics shown, Parle has good business position in all over the world with their Glucose Biscuit. So they are comes in GE matrix on High market attractiveness and

High business position where as Britannia will fall under Medium market attractiveness and Medium business position. Other companies like ITC and Priyagold has Medium market attractiveness and Low business position.

MARKETING STRATEGIES PARLE-G

With competition hitting between BIG 3, The Britannia, Parle and ITC in Indian bakery market, each one has to develop its own marketing strategy . Few have gone for product enhancement calling it a health and wellness plat form other s have gone on pack size modification from Rs 2/- pack sachet to Rs 30/- family pack .Parle-gs marketing strategies are follows. Parle G has adopted the Market Penetration strategy. Because their target market is mass audience. In this strategy they using low pricing along with capturing of a large market.eg. They have glucose biscuit price from Rs.2 to Rs.30. Also they focus on providing good quality products at the same time, which means it uses the value pricing method. They have made their positioning in the mind of customers is that The value-formoney positioning which helps them to generate large sales volumes for the products. Pricing strategy is also USP of Parle g. Affordable pricing is also helps to increase Parle Gs market share. Biscuit available in the packet of Rs.1, Rs. 2, and Rs 4 to Rs 30. Parle-G maintained its price of Rs.4.00 for the last 12 yrs & has seen the variation in its sales due to increase in price by mere 50p. Distributors profit margin is also more than other competitors. parle G giving Profit margin for distributors is 4% and for retailers is 10-12% which is helps to parle g to keep their product in the shelves. The extensive distribution network, built over the years, is a major strength for Parle Products. Parle G biscuits are available to consumers, even in the most remote places and in the smallest of villages with a population of just 1500 and even in the abroad as well. Factories at strategic locations & Establishment of manufacturing units in rural areas.

Parle - G and Challenges

Increasing prices of basic Raw material like , Sugar, Wheat, Milk, Milk powder. This leading to increase in manufacturing cost of the biscuits.Parle G very price sensitive product.

Small increase in price (by 50 paise) in past had seen high decline in sales. Even though the Parle is market leader in the segment, others are also trying to capture the chunk of market share. Fake brands like Parel G, Parle Jee tried to extract market share. How ever only serious competition faced by Parle G is from Britannia Tiger biscuit.

BIBLIOGRAPHY

http://www.redgage.com/blogs/dobus/indian-biscuit-industry-review.html http://business.mapsofindia.com/india-industry/biscuits.html http://www.marketresearchdata.org/index.php?option=com_content&view=article&id =63:biscuit-industry-india-&catid=40:food-and-beverage&Itemid=54 http://en.wikipedia.org/w/index.php?title=Special%3ASearch&redirs=0&search=parl e+g+in+india&fulltext=Search&ns0=1