Case Study

Taste and Preference for Biscuits

While doing a demand analysis, it is almost mandatory to study factor like the consumer income, price of the product, price of related goods etc., while the taste and preference factor is usually not taken much into account (mainly because it is difficult to measure). Unless one is able to quantify a factor, one cannot use it in quantitative analysis. The Indian market till recently, was a seller's market where the producer and the marketer dictated the terms of trade to the consumers. Under such circumstances accurate information on prices, income and other quantifiable variables could give an accurate estimation of the demand as the supply side of the market has always had a more structured database.

Things are not the same today. With open competition, it has become a buyer's market, where the sellers are trying to outdo each other in getting their market share to win over the consumer. Under such circumstances, besides the price of the product and that of related products, the income of the consumer and the demographic profile, what is gaining importance is the psychographic profile of the consumer, which is about understanding the tastes and preferences of consumers, especially when the product is food, clothing or cosmetics.

For consumer non-durables like cold drinks, snacks, etc., marketers have realized that the market demand is governed more by the consumer's preference more than the price or income of the product and they are not leaving any stone unturned to climb up the ladder of the consumer 's choice list.

Biscuits are an example of one of the most common and popular snacks. The organized biscuit industry is controlled by two major players, Britannia (which holds 40 per cent market share) and Parle (which holds 30 per cent marker share). How do these players maintain their market share? Is it the pricing strategy, do they target a particular income or age group, or is it the simple fact that they know the taste and preferences of modern Indians?

Market research shows that rural India, which is becoming a buying segment has a distinct snacking habit. People in rural areas like lo have traditional salty Indian snacks like samosas, pakoras, etc., while biscuits are synonymous with a low-cost sweet item that is taken with tea. Britannia and Parle, both seem to have understood this distinct preference. Britannia's relaunch of Glucose-D and Circus brands as the low cost Tiger brand biscuits has taken the rural market by storm. Tiger brand (synonymous to the power and strength of the animal after it is named) bases its advertisement on the power-generating quality of the biscuits and has an estimated sales of Rs 1.5 billion (mainly from rural and small town areas) garnering 20 to 25 per cent of the market share in the glucose biscuit segment. Britannia hopes to make Tiger brand the number one brand by 2002 AD, surpassing Parle's (the current market leader) Parle-G yet another well-known low-cost glucose biscuit which currently enjoys 55 per cent market share, again, mainly from the rural sector. Parle seems to enjoy a significantly higher market share in the glucose segment (the glucose segment accounts for 35 per cent of the total biscuit market) mainly because of easy recognition as a result of its long presence in the market. Britannia seems determined to steal a march over Parle by advertising heavily and packaging its product attractively (the red colour packaging represents vigour and strength).

Urban people who too like snacking show a different taste pattern. Their tea-time biscuits are salty, sweet-salty and creamy. Here Britannia's Snack (salty), 50-50 (sweet-salty) and Bourbon (chocolate) seem to have an edge over Parle's Monaco, Krackjack and the recently launched, Hide and Seek. Some research analysts feel that with the launch of Parle's latest Hide and Seek, the company may gain a higher market share than Britannia, a point well-noted by the rival itself and is reflected in what the MD Mr. Sunil Alagh said recently, . . .'we are looking for acquisitions - which does not mean that we plug any gaps ns such in the product portfolio, but is meant to give us a bigger presence in the sector'.

The current market leader's aim is to convert every third Indian into

a Britannia consumer by the year 2003 AD by making products suit

every taste and pocket. The management nevertheless feels that the

company also has to develop a favorable brand image and adopt an acceptable pricing policy to be a permanent market leader, while modifying its products to suit tastes. The company has, therefore, already gone in for Low Unit Packs (LUPs), reducing the cost of packaging considerably. However, the company is fully aware that the modern consumer (in the buyer's market) is loyal to his brand only if he is 'excited' enough to buy the product, In other words, the consumer today shows a distinct taste and preference for innovative products. The novelty of a product, excites the consumer enough to spend on it. Britannia believes that snacking is a leisure activity, hence consumers can relate to it easily if the company associates itself with popular leisure activities. This has given rise to three major Britannia promos in recent timer 'Britannia Khao World Cup Jao'; 'Britannia Khao Cricketer Ban Jan' and linking itself with Surplus's 'Kaun Banega Crorepati' (Britannia 50-50); the first two being associated with the nation's favourite game, cricket and the last being one of the all-time favourite game shows, in the electronic media. All these activities are pursued at leisure.

The strategy seems to work well as the company is the distinct market leader, way ahead of other players. With this innovative promos, the company seem to fit the 'taste' of the young, sporty, urban crowd.

Questions for Discussion

1.Do you think taste and preference is an equally important demand determinant for consumer durable goods and capital goods as it is for non-durable consumer goods?

2.What are the other attributes that other than taste and preference the two market leaders in the biscuit industry are considering?

3.Is there market segmentation as far as taste and preference is concerned in the biscuit Industry?

4.Discuss the 'taste and preference' of modern Indians. How is Britannia catering to it? Is Parle at par with its rival while catering to the tastes and preferences of urban consumers?

I want this case study solve, I want answer of these above four question. Please help me