Pravin Kulkarnii, General Manager-Marketing, Parle Products, talks about the brand hopping on to the premiumization bandwagon, and how West and North are strongholds for it in terms of reach and distribution
By Saloni Dutta
Parle Products has been India’s largest manufacturer of biscuits and confectionery for over 80 years. Being the makers of the world’s largest selling biscuit, Parle-G, and a host of other popular brands, the Parle name stands as a symbol of quality, nutrition and great taste. With a reach spanning even the remotest villages of India, the company has definitely come a long way since its inception in 1971.
With a 40% share of the total biscuit market and a 15% share of the total confectionery market in India, Parle recently launched a nationwide TV campaign called ‘Litter Free’. Parle products have disposable biscuit, candy and chips wrappers and in many instances, consumers toss them on the streets and other public areas without a second thought. The commercials are set in a series of everyday scenarios that viewers can identify with and which encourage them to ‘Show Garbage Its Place’. “We want to be seen as an environment-friendly company and hence we came up with this do-good initiative which will basically add to the image of the company and improve it,” says Pravin Kulkarnii, GM-Marketing, Parle Products. He feels that nowadays consumers are looking for brands which are socially responsible and hence they came up with this campaign. Coincidentally, it also goes well with Prime Minister Narendra Modi’s ‘Swachh Bharat Abhiyan’.
Stronghold in the North
In the North region, Parle has been traditionally quite strong. Kulkarnii says that West and North are their strongest zones. “Our distribution in those areas is really good, and we are also focussing on South and East where we are historically not as strong as Britannia and ITC,” he says.
Kulkarnii feels that the market landscape has changed a lot in the last three to four years and now all of a sudden they see stagnation in the mass category. Premium categories are growing at a much faster rate than mass. “From the last 4-5 years, we have been cashing in on this trend and have introduced many varieties and brands like Milano, Mini Milano and Bourbon. This category is growing and will grow in the future and we want to reduce our dependence on the mass brand and get a diverse portfolio of mass and premium. That is the big transition happening for us in the last three years,” adds Kulkarnii. Snacks is another category growing at a rate of more than 20-25%. Kulkarnii says that they are also going to launch a lot of new formats and varieties with snacks as there are so many possibilities.
Talking about the media mix, Kulkarnii states, “Generally, for a mass brand like ours, we use Television quite a lot, followed by Print. We also use OOH sometimes. Use of Radio has reduced over the last two-three years, because it is getting expensive. We do a lot of other activities and BTL promotions. We have also started using Digital, in a smaller way.”
Catering to the Hindi heartland
According to Kulkarnii, markets like Bihar, Uttar Pradesh, etc, are very price-conscious, and hence they need to have a good mix and value-driven products. “Profitability-wise, it is not a great thing as you are giving much higher value as compared to others. But we have to do it, since we have competition from a lot of regional players such as Anmol and PriyaGold, who have a stronghold in the North,” he says.
Parle also has a thrust on rural marketing, “Almost 60-65% of sales come from the rural market in North India, and that is why we have to go really deep into the rural markets with our distribution,” says Kulkarnii. Media penetration is low in these areas and hence ambience advertising, Radio and mobile are vehicles that they look to use.
“We do use local Print for Bihar and UP markets particularly. Whenever we have a new initiative, like change in pricing, introducing a new product or pack, we always use Print to inform the consumers locally. We give details of the offerings, using local papers which are very strong there like Hindustan, Amar Ujala, Dainik Jagran... their readership is very high. Naturally, we don’t use national papers because the readership of national papers in these areas is not much; instead we focus on local Print,” adds Kulkarnii.
Looking beyond Tier 1
Talking about the growth potential of Tier II and Tier III markets, Kulkarnii says, “Right now the metro and the Tier 1 cities have shown a good growth rate as compared to rural markets. Earlier, the rural markets used to grow at something like 16-18% and now the growth rate has come down to 9-10%. In urban markets, metros have grown the best at around 8%, earlier it used to grow by 3-4%. So they have almost doubled the growth rate, metros and Tier I cities. I am pretty sure that Tier II and Tier III markets will show good growth in 2015-2016, they are the next lot of markets which are going to pick up.”
Looking ahead, the brand plans to have many new launches and rebranding in the biscuits and snacks portfolio in 2015-16, along with new campaigns to support these. Talking about the market potential, Kulkarnii says that premium brands are going to grow as consumers want to indulge and are looking at new information and formats. “For example, we had introduced Hide and Seek in 1986 earlier, it failed and did not do well. But we reintroduced it in 1998 and it was a hit. It is a question of time; sometimes the category is not ready. Premium brands are now showing good potential as compared to a decade ago,” he adds. “The health trend is another one catching up as consumers are getting health conscious. But when they want a healthy product, they also don’t want to compromise on taste, they want both taste and health, and that is the challenge for the marketer.”