BISCUIT INDUSTRY

By- Abhishek Gupta

Aditya Kulshrestha Section-B
Amit Jain ISB&M
Anurag Tiwari Kolkata
Hemant Mishra 2009-11
 INDIAN BISCUIT INDUSTRY
India is known to be the second largest manufacturer of biscuits, the first
being USA.
Exports of Biscuit is estimated to around 10% of the annual production.
Per capita consumption of Biscuits in the country is only 1.8 kg, as compared
to 2.5 kg to 5.5 kg in South eastern countries and European countries & USA
respectively.
AS PER CMIE (Industry Analysis) DATA IN LAKH TONNES
Biscuits Total Supply of Biscuits
Year Production Biscuits Consumption
Mar-05 10.57 10.54 9.93
Mar-06 6.64 6.67 5.84
Mar-07 8.16 8.19 8.74
Mar-08 1.32 1.33 0.5
Mar-09 13.11 13.08 9.36
Mar-10 7.49 7.5 10.66
With Avg. Price of biscuits between Rs9.3 - 9.8/100gm.
 TWO SECTORS OF INDUSTRY

INDIAN MARKET SENARIO

(according to IBMA report)

ORGANISED
SECTOR
45%
UNORGANISED
55% SECTOR
 ANNUAL GROWTH OF BUSCUIT MARKET
18.00%
17.00%
16.00%
15.00%
14.00%
13.00%
12.00%
11.00%
10.00%
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
 INDUSTRY STATISTICS

INDUSTRY TOTAL MARKET MARKET GROWTH

PER ANNUM

BISCUITS Rs 11000 Cr 16%

SNACKS Rs 6500 Cr 20%

CONFECTIONARY Rs 1500 Cr 10-12%

 PORTER’S FIVE FORCES
ANALYSIS

RIVALRY WITHIN THE INDUSTRY:

Major players dominate.
High competition among the players in the industry to capture
maximum market share.
Unorganized sector cannot compete with major players in the case of
Advertising.

ENTRY BARRIERS : Low entry barriers because of,

Capital intensive manufacturing, advertising and distribution
Heavy competition from major players.

BARGAINING POWER OF SUPPLIERS:

In the case of major players bargaining power of suppliers is very low
as they dictate the prices.
The ingredients are basic commodities such as wheat , sugar etc.
PORTER’S FIVE FORCES
ANALYSIS

POWER OF BUYERS: High because of,

Availability of many biscuits from low, moderate
prices
Availability of biscuits from non organized sector
Loyalty of the buyers to biscuits that have brand
identity makes them more powerful in the case of new
entries.

THREAT OF SUBSTITUTES: It is high because ,

Substitute threat is more in the case of biscuits
Growing packaged industry and bread industry
Traditional Indian homemade snacks.
PLAYERS IN THE INDUSTRY

Britannia
Parle
ITC foods
Surya Foods
Others (Dukes, Anupam, Horlicks)
Regional players
 Market Share of Biscuit Companies

Company By Value By Volume

Britannia 37% 30.5%
Parle 31.3% 38.4%
ITC 6.3% 6.7%
Surya Food and Agro - 5%
Others 25.4% 19.4%

40%
35%
30%
25%
20% By Value
15% By Volume
10%
5%
0%
Britannia Parle ITC Surya Food Others
and Agro
 PARLE VS BRITANNIA

Description Britannia Parle

Established 1896 1929

Nature of business Public ltd Family run business

No of manufacturing 5 own ,40CMU 8 own units ,60 CMU

units
Market share ( value) 32.80% 32.94%

Ads Major methods Cricket events and Celebrities

players endorsement
New areas of promotion Environment Health and wellness
IMPORTANT BRANDS PITCHED AGAINST EACH
OTHER
Category Britannia Parle Leader
Glucose Tiger Parle -G Parle-G
Marie Marie Gold Parle Marie Marie Gold
Salty snacks 50-50 Krack Jack Krack Jack
Choco chips Good day Hide n seek Good day
Milk Milk bikis Milk sakhti Milk bikis
Bourbon Bourbon Hide n Seek Bourbon
Nice Nice ------ Britannia Nice
Multi grain Nutri choice ----- Nutri choice
Cream Cream Treat Kreams Cream treats
Cookie Good day 20-20 Good day
BRITANNIA
 SALES TRENDS

• Gross sales increased to Rs 2317.11

Cr in 2006-07 registering a growth of
28%.
• Profits declined by 33% due to
increase in input prices and stiff
competition
• Britannia followed the industry
growth rate for the past 3-4 years
while the profit margin followed a
zigzag pattern.
• Costs have increased significantly on
the production as well as on selling
front.
 SALES STRATEGY

• Target customers to capture growth in each category by segmenting the

market both along conventional lines and through segmentation .
• On the basis of price, the biscuit market can be segmented into
i. Low (less than Rs 40 per kg.)
ii. Medium (Rs. 40-70 per kg.)
iii. High (over Rs.70 per kg.)
• Consumers are becoming more health conscious.
• "Swasth Khao Tan Man Jagao" (Eat Healthy, Think Better) campaign
directly addressed this new trend.
• A new logo was created encapsulating the core essence of Britannia -
healthy, nutritious and optimistic.
• Sports and sporting events are a key channel for promotions.
• Britannia khao, World Cup jao" campaign in 1999 and 2003 was the most
recognized sales promotion among all Cricket World Cup-related sales
activity.
 SALES STRATEGY

To establish a brand in this tough market is never easy. Since Biscuits are
convenience goods, new tastes and new products are essential to built
excitement in the market Biscuits are consumed by people of all ages,
from the rich to the poor, living in cities & in villages.

• While some have it for breakfast,

•For others it is a complete wholesome meal.
•For some it's the best accompaniment for tea,
•While for some it's a way of getting charged whenever they are low on
energy.
 
Biscuit industry practices mass marketing, which appeals to masses. It is
a product liked by everyone and does not cater only to a specific group or
part of the whole market. Thus the industry adopted mass production,
mass distribution and mass promotion of products for all buyers.
 SALES STRATEGY
Customer Analysis
Key Information Areas
• Demographic Profile of the consumer
– Age, Sex, Income level, Occupation
• Personal Customer characteristics
– When do customer consume biscuits
– Type of biscuits consumed
– Where do the customer purchase
– Purpose of buying (personal consumption, gifting, serving guests)
• Factors Affecting the buying decision
– What are the various factors that are considered
– Their order of preference
Comparative analysis
– How does Britannia fare on these attributes
– How does the competitors fare on these attributes
– The competitor brands taken for the analysis are
• Parle
• ITC
• Priya Gold (Surya Foods)
PARLE
 SALES STRATEGY
PRICING-

• Appeal to all income groups

• Low and mid range price segments
• Value for money
• Strict cost control at every point in supply chain
• International pricing
• Complete excise exemption for biscuits up to 50/kg.
•Biscuit is a comparatively low margin food product in the PMCG
(Packaged Mass Consumption Goods) sector. The commodity is also
price sensitive with high relativity to input costs.

PLACE STRATEGIES

• Extensive distribution network

• Nearly 1500 wholesalers
• 4,25,000 retail outlets
• Multi-channel marketing system
• Establishment of manufacturing units in rural areas.
 SALES STRATEGY

PROMOTIONAL STRATEGY-
• Budget : 500-600million/annum
• Marketing tools utilized :
: Advertising
: Sales promotion events
: Public relations

ADVERTISING

• Started in 80’s
• First commercial ’DADAJI’
• Several celebrity endorsements like
Kajol, Hrithik, Aamir
• Major ad campaigns :
‘Parle G – G for Genius’
‘ Jeene ki raah yahi hai sahi’
‘Swad bhare, shakti bhare’
‘Life namkeen banaye : Monaco’
 BEST ADVERTISEMENT OF BISCUITS

BRITANNIA GOOD DAY PARLE HIDE & SEEK

 Webliography

IBMA- http://www.ibmabiscuits.in/

Britannia- http://www.britannia.co.in/

Parle G- http://
www.parleproducts.com/brands/biscuits_parleg.asp

CMIE – Industry Analysis Programme

Thank You