Saturday, July 24, 2010

Orange Cream Biscuits

I had fallen into this habit of eating orange cream biscuits when I was at Chennai during the summer season. Being new to the place and not knowing Tamil, I preferred to go to shopping places (MTO's) like Heritage, Spencers, Lifestyle, etc for buying the biscuits.
Now at the stores the following biscuits were available:


So, going w.r.t cost per 100 gram of the biscuit, we see that Parle is the clear winner and it offers the maximum weight for a rupee.
However, before concluding anything w.r.t value for money, we also need to consider other things like taste, hardness, etc.
In my opinion the taste of all the above biscuits except, the Complan biscuits, is similar and not much differences can be attributed to taste. (Complan biscuits taste a bit like medicine).
In terms of the hardness of the biscuits, I found that the Sunfeast Special orange cream biscuits were a bit tough and needed quite an effort to break inside mouth. The other biscuits were comparatively soft and could be easily handled by my teeth. (Meaning the moisture content in the Sunfeast Special orange biscuit is less as compared to other biscuits).
Thus, in terms of properties which I look for in an orange biscuit - Taste, Value for money (here weight), hardness, Parle Kreams is the best.  All this was w.r.t consumer’s point of view.
However, thinking from the point of view of the company, I feel that Parle is losing out w.r.t ITC and Britannia. Britannia is the market leader in cream biscuits market even though it charges the highest per 100 grams (Complan can be left out of discussion due to its taste and positioning as a complete food) Parle is charging less for what the consumers are willing to pay more. Why not cash in? Why is Parle not getting aggressive? ITC on the other hand is currently applying the best strategy. It has orange cream biscuits at both the Rs 5 and the Rs.10 price levels. In addition, I found that ITC biscuits were replenished every 5 days or so thereby keeping the shelf always filled with biscuits. On the other hand, Parle biscuit shelves were always half filled or so suggesting that the focus on the distribution of Parle isn't as good as that of ITC. Britannia's replenishment was moderate i.e not as frequent as that of ITC but not as low as that of Parle Kreams. Currently, Britannia is the market leader in the orange cream biscuit segment. However, because it is charging the most and new player like ITC is introducing new pack sizes at both higher and lower prices, I believe that ITC will surpass Britannia in this segment.
Thus, if we think with respect to company, I feel ITC is doing the right thing while thinking from consumers point of view, Parle is better.
 
Conclusion: It is not always necessary that the consumer is always right. If we think only from the point of view of consumer, we might lose out on creating shareholder value. Thus, marketing personnel should be aware that doing too much for consumer can be detrimental to the sole purpose of the company.

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