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Tasting growth in biscuits

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Tasting growth in biscuits

Being the largest selling glucose biscuit brand has not made Parle complacent. The Mumbai-based low-profile biscuits major believes there is still scope in the category, and that it's time it built more `social' equity for its largest selling brand, Parle G.

Through yet another image-building exercise, it is giving scholarships to the children of West Bengal and Tamil Nadu. "Our corporate equity has been weak in these States compared to Britannia. With academics being a priority in these States, we have decided to strengthen the equity of our corporate brand in these parts," says Pravin Kulkarni, Marketing Manager, Parle Products.

"Parle G is all about all-round development and we owe children a lot for having built equity for the brand all these years. It is our way of paying them back," states Mayank Shah, Product Manager, Parle Products Pvt Ltd.

At the same time, Parle also recognises the growing threat of more glucose brands entering its arena, especially domestic brands from ITC (Sunfeast) and Hindustan Lever (Modern). There was a time when the biscuit maker was threatened, when Britannia's Tiger made an entry into the glucose segment a couple of years ago. Today, in spite of bigger FMCG majors such as ITC and HLL muscling their way into the category, Parle is not exactly on shaky ground. Besides, the category is fast expanding and its growth in the sluggish FMCG industry has helped the company hold on to its dominant position.

For instance, the recent aggression on the part of ITC's Sunfeast brand does not immediately bother Parle's marketers. "ITC may have a good distribution network for cigarettes but it lacks experience in servicing the general and kirana stores. But it is learning quickly, and with its deep pockets, it is a threat old players like us should watch out for," says Shah.

Adds Kulkarni: "We are recognising the presence of these players and are already trying to plug in the gaps needed. For instance, there are distribution gaps in the eastern and southern markets (compared to the North and the West), and we are enhancing our distribution in these parts.''

Observes A. Sundara Rajan, Chief Executive, Market Search, a research firm: "Parle's equity extends into the heartland of India. At the same time, the company realises that if it does not do anything, its equity will get eroded. Over the years Parle has been enhancing its packaging and communication and luckily the market has also been expanding." Thus, new players have not really poached on Parle's territory and lack of penetration has helped all the players grow.

Protecting the turf of its largest-selling glucose brand, Parle has also decided to restrict its line extensions to avoid diluting its equity. While it has extended Parle G to a more premium variant (Magix) in three flavours, it has deleted the Parle G tag for its Milk Shakti brand and brought it under the generic Parle name.

It has also reacted to competition when the need has so dictated. Early this year, it took on Britannia's brand of Good Day cookies. Parle Products introduced two new cookie variants under its chocolate chip cookie brand — Hide & Seek. Sporting flavours such as Butter and Cashew Badam, Hide & Seek is pitted against Britannia's existing Good Day cookies that come in similar flavours. Hide & Seek till then existed as a single chocolate chip cookie brand at the premium end of the market.

However, this is not the first time that Parle has introduced variants under its Hide & Seek brand. Pioneering the chocolate chip cookie category with its Hide & Seek brand in 1998, Parle stretched it to three variants — orange, coffee and mint. However, poor offtake led the company to discontinue the products. Claims Sundara Rajan, "For the first time, Good Day will have a challenger brand at the national level. All this time Good Day had competition in the cookie market mainly from the regional players." In fact, cookies, which generally have high butter content, are manufactured by a host of regional players (mainly the local bakeries) and the big national players will have to fight for their share in this segment from the unorganised local players.

Explaining the reasons for the earlier failure of the Hide & Seek variants, Lakshmi Goyal, Business Director, O&M, the advertising agency handing the account, says, "The chocolate variant had a broader appeal and this led to the other variants falling by the wayside." The `exotic' nature of the variants did not help acceptance in the market, and so, this time around, Parle has decided to include variants which Indian consumers are more familiar with.

The variants are pegged at a slightly lower price compared to the chocolate chip cookie (Rs 12 for 75 gm). Hide & Seek Cashew Badam is priced Rs 12 for 100 gm while its Butter variant is priced at Rs 10 for 100 gm. Adds Sundara Rajan, "Chocolate is an expensive ingredient and is expected to be costlier the other variants."

With the intention of launching a new campaign for Hide & Seek variants, Goyal says, "Essentially we intend keeping intact Hide & Seek's brand values based on indulgence."

Meanwhile, within the biscuit category, the cookie segment is growing rapidly. Observes Sundara Rajan: "Today there is a gradual shift upwards in terms of taste. Cookies having higher butter content are expected to be tastier."

Considering the biscuits category has been growing rapidly at near 8 per cent, Parle has decided not to focus on its confectionery brands. "There is no big thrust on confectionery since the kind of volumes we do are not enough to support the advertising spends," says Kulkarni. In spite of having certain strong confectionery brands such as Poppins, Mango Bite, Melody and Kismi, Parle realises that it cannot get the margins in this category compared to its biscuits.

The company wants to continue having that strong emotional connect with consumers and doing social deeds such as offering scholarships is part of its corporate social responsibility initiatives, which should keep the biscuit major on its pedestal.


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