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Will Parle-G’s brand extension strategy work?

14-August-2004
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Will Parle-G’s brand extension strategy work?

It’s time now for the 8 lakh tonne branded readymade wheat flour segment to gain momentum with competition hotting up in the segment, and, wellknown new players joining the marketplace with brand extension strategies.

For example, with its recent entrant into the branded wheat flour segment, Parle Products is now aggressively planning to launch “Parle-G” branded wheat flour atta in various cities, in the year 2004. At the moment, the product is being marketed through almost all the retail outlets in Mumbai.

As part of its marketing initiative, Parle Products has recently adopted a major pricing strategy whereby a 5 kg ‘Parle-G’ atta will be available to consumers and, alongwith ‘Parle-G’ biscuit pack for free at Rs 90. However, competitors, ‘Pillsb-ury’ atta is priced at Rs 104, and, ‘Kissan Annapurna’ at Rs 102, in similar capacity.

When contacted, officials from Parle Products confirmed rolling out “Parle-G” atta is various cities, but however, the company refused to divulge further details. However, to feel the mood of the market, when FE communicated with certain select retail outlets in Mumbai where ‘Parle-G’ atta has just started being available, the retailer said: “‘Pillsbury’ atta is the fastest-selling brand in the readymade atta segment, but ‘Parle-G’ atta being available at just Rs 90 alongwith Parle-G biscuit pack for free, the dema-nd for atta has started increasing tremendously. There is a feel that the branded ready-made atta market should grow looking at the fast changing lives of Indian citizens.”

Further, an official from Apna Bazaar added that Parle Products should increase the frequency of supplying ‘Parle-G’ atta so that the demand meets the supply because the moment Apna Bazaar receives ‘Parle-G’ atta packs in bulk, the shelf space base for the product becomes empty very soon.

In the 8 lakh tonne branded atta market, which constitutes two per cent of the overall wheat flour market, General Mills India Private Ltd — makers of ‘Pillsbury’ atta — had recently announced its plans of a major relaunch of its atta with 13 new concepts based on the health-platform, and, good for the heart. Besides, it had also revealed plans of beefing up its distribution network by an additional 20 per cent, in the year 2004. More than that, General Mills has also launched a new scheme whereby 10 kg Pillsburry Atta is available for Rs 150 only. According to AC Neilson, ‘Pillsbury’ atta is the market leader in the southern region with a market share of 23.7 per cent, for June 2004.

Says Sundar Rajan, CEO of consulting firm, Market Search India Private Ltd: “The branded readymade wheat flour market is going at the retail level. In sync with the trend, Parle-G will soon emerge as the most powe-rful brand in the segment since it is the most trusted brand and almost every household uses Parle-G biscuits. In fact, the brand has a very strong brand equity too. Looking at the scen-ario, Parle Products has moved into a synergistic diversification whereby the company will generate more demand due to its price point.”

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