1.

INTRODUCTION OF FOOD INDUSTRIES

The food industry is a complex, global collective of diverse businesses that together
supply much of the food energy consumed by the world population. Only subsistence
farmers, those who survive on what they grow, can be considered outside of the scope
of the modern food industry.

The food industry includes:

 Regulation: local, regional, national and international rules and regulations for food
production and sale, including food quality and food safety, and
industry lobbying activities

 Education: academic, vocational, consultancy

 Research and development: food technology

 Financial services insurance, credit

 Manufacturing: agrichemicals, seed, farm machinery and construction, etc.

 Agriculture: raising of crops and livestock, seafood

 Food processing: preparation of fresh products for market, manufacture of prepared

food products

 Marketing: promotion of generic products (e.g. milk board), new products, public
opinion, through advertising, packaging, public relations, etc.

 Wholesale and distribution: warehousing, transportation, logistics

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Definitions

It is challenging to find an inclusive way to cover all aspects of food production and
sale. The Food Standards Agency, a government body in the UK, describes it thus:

"...the whole food industry – from farming and food production, packaging and
distribution, to retail and catering."[1]

The Economic Research Service of the USDA uses the term food system to describe
the same thing:

"The U.S. food system is a complex network of farmers and the industries that link to
them. Those links include makers of farm equipment and chemicals as well as firms
that provide services to agribusinesses, such as providers of transportation and
financial services. The system also includes the food marketing industries that link
farms to consumers, and which include food and fiber processors, wholesalers,
retailers, and foodservice establishments."

1.1 FOOD INDUSTRY IN INDIA

India is the world's second largest producer of food next to China, and has the
potential of being the biggest with the food and agricultural sector. The total food
production in India is likely to double in the next ten years and there is an opportunity
for large investments in food and food processing technologies, skills and equipment,
especially in areas of Canning, Dairy and Food Processing, Specialty Processing,
Packaging, Frozen Food/Refrigeration and Thermo Processing. Fruits & Vegetables,
Fisheries, Milk & Milk Products, Meat & Poultry, Packaged/Convenience Foods,
Alcoholic Beverages & Soft Drinks and Grains are important sub-sectors of the food
processing industry.

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Health food and health food supplements is another rapidly rising segment of this
industry which is gaining vast popularity amongst the health conscious.

2. COMPANY PROFILE
2.1 INTRODUCTION
Parle Products has been India's largest manufacturer of biscuits and confectionery for
almost 80 years. Makers of the world's largest selling biscuit, Parle-G, and a host of
other very popular brands, the Parle name symbolizes quality, nutrition and great taste.
With a reach spanning even to the remotest villages of India, the company has
definitely come a very long way since its inception.

Many of the Parle products - biscuits or confectioneries, are market leaders in their
category and have won acclaim at the Monde Selection, since 1971. With a 40% share
of the total biscuit market and a 15% share of the total confectionary market in India,
Parle has grown to become a multi-million dollar company. While to the consumers
it's a beacon of faith and trust, competitors look upon Parle as an example of
marketing brilliance.

Available Anywhere

Today, the great strength of Parle Products is the extremely widespread distribution
network

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2.2 ABOUT THE COMPANY

History
Parle Product’s fame and familiarity is undeniable. Considering its extensive reach,
the brand Parle is known and recognized by everyone. Over the years, Parle’s sweets
and biscuits have become a household name. From kids to adults, everyone loves and
cherishes these treats. It gives us great pleasure to see our consumers enjoy and
embrace Parle products on daily basis. Our confectioners and chefs have the utmost
authority at Parle. Had it not been so, the beginning of Parle would have been quite
different.

In 1929 a small company by the name of Parle products emerged in British

dominated India. The goal was to spread joy and cheer to children and adults alike,
all over the country with its sweets and candies. Although, the company knew that it
wouldn’t be an easy task, they decided to take the brave step. A small factory was set
up in the suburbs of Mumbai to manufacture confectionery products. A decade later
this factory was upgraded to manufacture biscuits as well. Since then, the Parle name
has spread in all directions and has won international fame. Parle has been
sweetening the lives of people all over India and abroad.
Apart from the factories in Mumbai and Bangalore, Parle also has factories in
Bahadurgarh, Haryana and Neemrana, Rajasthan. These are the largest biscuit and
confectionery plants in the country. Additionally, Parle Products also has 10
manufacturing units and 75 manufacturing units on contract.

A cream colored yellow stripped wrapper with a cute baby photo containing

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10 – 12 biscuits with the company’s name printed in Red and you know these are
Parle G biscuits. Times changed, variety of biscuits did come and go but nothing
has changed with these biscuits. Yes, the size of their packing has definitely
changed but for the consumers good as these are money savers pack.
The Parle name conjures up fond memories across the length and breadth of the
country. After all, since 1929, the people of India have been growing up on Parle
biscuits & sweets.
Initially a small factory was set up in the suburbs of Mumbai city, to
manufacture sweets and toffees. The year was 1929 and the market was dominated
by famous international brands that were imported freely. Despite the odds and
unequal competition, this company called Parle Products, survived and succeeded,
by adhering to high quality and improvising from time to time.
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 name grew in strength with this 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.
For around 75 years, Parle have been manufacturing quality biscuits and
confectionery products. Over the years Parle has grown to become a multi million-
dollar company with many of the products as market leaders in their category. The
recent introduction of Hide & Seek chocolate chip biscuits is a product of
innovation and caters to a new taste, being India’s first ever chocolate-chip
biscuits.

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 All Parle products are manufactured under most hygienic conditions. Great
care is exercised in the selection and quality control of raw material and standards
ensured at every stage of the manufacturing process.
Parle Products has 4 manufacturing units for biscuits and confectionaries at
Mumbai, Haryana, Rajasthan and Karnataka. It also has 14 manufacturing units for
biscuits & 5 manufacturing units for confectioneries, on contract. All these factories
are located at strategic locations, so as to ensure a constant output & easy
distribution.
Today, Parle enjoys a 40% share of the total biscuit market and a 15% share
of the total confectionary market, in India.

Milestones - The Decades of Progress

• 1929:The first year of operation. Our only assets were hard work and hope.
• 1939:Ten years of determined effort brought results. Things began to take shape.
And we tried even harder.
• 1949:The formative years were over. We had come of age.
• 1974:Here was the first evidence of Parle as it is today.

2.3 QUALITY

Hygiene is the precursor to every process at Parle. From husking the wheat and
melting the sugar to delivering the final products to supermarkets and store shelves
nationwide, care is taken at every step to ensure the best product of long-lasting
freshness. Every batch of biscuits, confectioneries & snacks are thoroughly checked

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by expert staff, using the most modern equipment. This ensures consistent and
perfect quality across the nation and abroad.

Concentrating on consumer tastes and preferences, the Parle brand has grown from
strength to strength ever since its inception. The factories at Bahadurgarh, Haryana
and Neemrana, Rajasthan are the largest biscuit and confectionery plants in the
country. The factory in Mumbai was the first to be set up, followed soon by the one
in Bangalore, Karnataka. Parle also has 10 manufacturing units for biscuits and 75
manufacturing units for confectioneries on contract.

2.4 CORE VALUES

An in-depth understanding of the Indian consumer psyche has helped Parle develop a
marketing philosophy that reflects the needs of the Indian masses. With products
created bearing in mind both health and taste, Parle products equally appeal to fun
loving kids & youth. Even today, the great tradition of taste and nutrition is
consistent in every pack on the store shelves. The value-for-money positioning
allows people from all classes and age groups to enjoy Parle products to the fullest.

2.5 MARKETING MIX OF PARLE PRODUCTS LIMITED

The marketing mix of Parle for this project has been studied from the point of
view of Parle biscuits; mainly Parle-G and Parle hide & seek.

Product Levels

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1) Core benefit- the core benefit of biscuits is to satisfy hunger of the consumer
2) Basic product- in the second level, the basic product is biscuits.
3) Expected product- the consumers expect the product to have a good taste and
also give nutrition.
4) Augmented product- parle biscuits increase a person’s energy levels. This is not
always expected by the consumers and hence exceeds customer’s expectations.
5) Potential product- in the future parle could come up with different products such
as a snack which could be a combo of chocolate and biscuit.
Classification of products

1) Based on tangibility- Parle biscuits are tangible, i.e. one can see and touch them.
2) Based on functional life- Parle biscuits are consumables since biscuits form a
part of food and have a short life.
3) Based on price and quality- most of Parle biscuits such as Parle-G, Monaco,
Krackjack are mass products but a few Parle biscuits such as Parle hide and seek
and Milano are premium or prestige products.
4) Based on utility- Parle biscuits are convenience goods. They are staples since
they are bought by consumers regularly. Also they are partly impulse products.

2.6 PRODUCT MIX

• Width- Parle produces biscuits, snacks and sweets. So the width is 3.
• Length- the length of Parle products is as below
PRODUCT BASKET OF PARLE
PARLE BUSCUITS

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Parle - G Hide and Seek
Hide & Seek
Krackjack
Milano
Magix Digestive Marie
Monaco Parle Marie
Kreams Milk Shakti

Parle 20-20 Cookies Golden Arcs

Nimkin Kreams Gold

Chox Monaco Jeera

Hide & Seek Bourbon

PARLE SWEETS

Right from candies to toffees, the sweet 'n' treat category of the Parle product
range is a genuine treat for every snack lover. This category can satisfy one's
taste and at the same time create a desire for more. These confectioneries are a

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 sheer delight to the taste buds and have a universal appeal. Parle Biscuits and
confectioneries, continue to spread happiness & joy among people of all ages.

Grab Your Sweets:

Melody Kismi Gold

Mango Bite Orange Candy

Kaccha Mango Bite Xhale

Poppins 2 in 1 Eclair
Kismi Toffee Golgappa
Kisme Toffee Bar Melody Softee

Mazelo Parle Lites

PARLE SNACKS-

Salty, crunchy, chatpata and crispy caters to the bunch of Parle snacks. You can now
treat your loved ones with this yummy lot.Parle snacks are a complete delight to the
taste buds and can create the desire for more and more. These snacks will not only
satisfy your tummy but will also sustain a feel in your mouth to associate you with
the bond of Parle.

Get Your Snacks:

Musst Bites Jeffs

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Cheeslings Musst Stix & Musst Chips
Sixer Sixer Zeera

Monaco Smart Chips

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S.B.J.I.T.M.R.
The product consistency generally depends on 3 parameters

2.7 PRODUCTION PROCESS-

The production process of every parle biscuit follows some basic
ingredients like wheat flour, vegetable oil, inverted syrups, skimmed milk
powder, etc. then depending upon the product, extra ingredients are
added for e.g. in Monaco there might be an extra amount of salt put in to
give it that prominent salt taste, to hide & seek, chocolate chips are
added. Etc.

THE MARKETING STRENGTH – DISTRIBUTION AND SUPPLY CHAIN

The extensive distribution network, built over the years, is a major
strength for Parle Products. Parle biscuits & sweets are available to

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consumers, even in the most remote places and in the smallest of villages
with a population of just 500.
Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets
directly or indirectly. A two hundred strong dedicated field force services
these wholesalers & retailers. Additionally, there are 31 depots and C&F
agents supplying goods to the wide distribution network.
The Parle marketing philosophy emphasizes catering to the masses. They
constantly endeavor at designing products that provide nutrition & fun to
the common man. Most Parle offerings are in the low & mid-range price
segments. This is based on their understanding of the Indian consumer
psyche. The value-for-money positioning helps generate large sales
volumes for the products.
However, Parle Products also manufactures a variety of premium
products for the up-market, urban consumers. And in this way, caters a
range of products to a variety of consumers

Parle uses the same distribution channels for selling all its products
under the biscuit category i.e. 1st, 2nd & the 3rd level of the distribution
channels.

CONSUMER END TO USE –

The basic end use of all parle products remains the same – eating it
simply to satisfy hunger. Products like parle-g may also be consumed for
the intake of high glucose levels for immediate strength & energy.

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 2.9 PARLE G
Every nation dreams of a better tomorrow. And every nation's tomorrow lies in the
hands of its children; the young stars who shape the future of the nation. So, it's
important to nourish these young stars, after all it's a question of the nation's future.

Filled with the goodness of milk and wheat, Parle-G is a source of all round
nourishment. Treat yourself to a pack of yummy Parle-G biscuits to experience what
has nurtured and strengthened millions of people for over 70 years. A meal substitute
for some and a tasty and healthy snack for many others. Consumed by some for the
value it offers, and many others for its taste. Whatever the occasion, it has always been
around as an instant source of nourishment. Little wonder that it's the largest selling
biscuit brand in the world.

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2.10 MARKETING MIX FOR PARLE G

Parle-G or Parle Glucose biscuits are one of the most popular confectionary biscuits
in India. Parle-G is one of the oldest brand names in India and is the largest selling
brand of biscuits in India. For decades, the product was instantly recognized by its
iconic white and yellow wax paper wrapper with the depiction of a young girl
covering the front. Many counterfeit companies have attempted to recreate and sell
lower quality products of similar names and virtually identical package design.

Ingredients:
• Wheat Flour
• Sugar,
• Partially Hydrogenated Edible Vegetable Oils,
• Invert Syrup,
• Leavening Agents [ 503 ( Ii ), 500 ( Ii ) ],
• Salt, Milk Solids, Emulsifiers [ 322 or 471 & 481 ( i ) ]
• Dough Conditioners [223].
• Contains Permitted Natural Color [Artificial]

Pack Size & Price:

For 19grams:Rs.1/-

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For 44grams:Rs.2/-
For 93.5grams:Rs.5/-
For 231.5grams:Rs.12/-

Place:
It is available in mostly every retail shop.

Promotion:
It is relish a delectable experience as they melt in
your mouth. PARLE-G’s tag line is:
“Hindustan Ki Taakat”

Product Life Cycle For Parle

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Parle as a company has reached the maturity stage in its products life cycle; since
products such as parle-G, parle Monaco, parle Krackjack which form a major part of
parle products’ sales have captured most of India’s market.
But for its premium biscuits parle hide and seek and parle hide and seek Milano
the products are in the growth and introduction stages respectively.

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 3. VALUE CHAIN ANALYSIS

3.1 INTRODUCTION

This concept was propagated by Michael Porter as a tool of analyzing the firm’s
internal environment and resource base. It is an analytical tool that describes all
activities that make up the economic performance and capabilities of the firm, used
to analyze and examine activities that create value for a given firm. A firm can be
conceived of an aggregation of discrete activities and the competitive edge arises
based on how a firm performs these activities better than its competitors. The cluster
of these activities is called the value chain.
The value chain classifies each firm’s activities into two broad categories: Primary
activities and Secondary activities or support activities. The following figure
represents the value chain of a firm:

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 Primary activities: The sequence of activities through which raw materials are
transformed into benefits enjoyed by the customer is called primary activities.These
activities relate directly to the actual creation, development, manufacture,
distribution, sales and servicing of the product or the service to a customer. Five
major activities are involved in this sequence: inbound logistics, operations,
outbound logistics, marketing and sales and service. Working together, these
activities determine the key operational tasks surrounding the product or services.
• Inbound logistics: As the word implies, inbound logistics deal with the handling of
raw materials and inventory received from the firm’s suppliers. Detail activities

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 include Receiving, storing, materials handling, warehousing, inventory control,
vehicles scheduling and returns to suppliers.
• Operations: Operations are the activities and procedures that transform raw
materials, components and other inputs into finished end products. Detail activities
include machining, packaging, assembly, equipment maintenance, testing, printing,
facility operations.
• Outbound logistics: Outbound logistics refers to the transfer of finished product to
the distribution channel members. The focus of outbound logistics is on managing
the flow and distribution of products to the firm’s immediate customers such as
wholesalers and retailers. Activities and procedures associated with outbound
logistics include inventory control, warehousing, order processing, delivery
schedule maintenance etc.
• Marketing and sales: Marketing and sales include advertising, promotion, product
mix pricing, specifying distribution channel members, maintaining channel
relations etc in order to induce and facilitate buyers to purchase the product.
• Service: Customer service is a central value adding activity that a firm can seek to
improve over time. It includes installation, repair, training, parts supply and product
adjustment in order to maintain or enhance the value of the product after sales.
Secondary or support activities:
The remaining activities of the value chain are undertaken to support primary
activities. They are therefore referred to as the secondary or support activities.
Support activities help the firm improve co-ordinations across and achieve efficiency
within the firm’s primary value adding activities. Support activities are located
across the first four rows of the diagram. This includes, procurement, technology
development, human resource management and firm level infrastructure.

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• Procurement: Securing inputs (such as raw materials, supplies, and other
consumable items and assets) for primary activities.
• Technology development: Methods of performing primary activities are improved
(Such as know-how, procedures, technological inputs needed)
• Human resource management: Employees who will carry out the primary
activities are recruited, trained, motivated and supervised.
• Firm infrastructure: Activities such as accounting, finance, legal affairs, and
regulatory compliance are carried out to provide ancillary support for primary
activities.
How value chain analysis matters in strategic planning:
As already stated, the competitive edge arises based on how better the firm performs
the activities involved in the value chain compared to its competitor. For this
purpose, each activity is broken up in sun activities for comparison with the
competitors, and three basic questions are tried to be answered?
i) How can the firm keep the benefits provided to the customers intact keeping the
cost constant?
ii) How can the firm increase the benefits provided to the customers keeping the cost
constant?
iii) How can the firm increase the benefits provided to the customer while lowering
the cost?
For creating competitive advantage through the value chain analysis while
answering these questions, Porter has suggested the following measures;
• Reconfigure the value chain differently from those of the competitors.
• Perform the activities more efficiently than the competitors.
• Outsource the non-core activities:

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While outsourcing the following points are needed to be judged judiciously;
i) There might be a risk of non-performance by the supplier, To avoid this, ways of
keeping alternative suppliers, Tapered integration and part outsourcing can be
adopted.
ii) There might be a risk of disproportionate value appropriation
iii) There can be a high risk of elimination by suppliers.
Internal integration of value chain activities:
Internal integration of value chain activity gives the following benefits;
i) Improvement of quality
ii) Shorten new product development cycle.
iii) By integrating the firm with its external suppliers and buyers it can reduce
inventory holding costs, enhance the ability to customize the product and become
more responsive to customers’ demand.
The point to be noted that throughout the whole analysis every measures are to be
taken on the basis of comparison with suppliers.

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