Section 37
How Parle-G protected its low price point
When costs rise, should a low-price brand raise its price or change the pack?
- case
- Success
- years
- 2020-2023
- 35%
- Rise in production cost since March 2020 · 2022
- ₹5 (unchanged)
- Price of the small Parle-G pack · 2023
- 01
The situation
Parle-G sells to very price-sensitive buyers, and its small packs at a fixed low price like Rs 5 are bought with loose change. Business Today reported in August 2022 that Parle Products' production costs had risen by 35 per cent since March 2020 because of higher commodity prices.
- 02
The decision
Instead of breaking the familiar low price point, Parle held the price of its Rs 5 pack and adjusted how much biscuit the pack contained, YourStory reported. When commodity prices began to cool in 2022, the company's senior category head Mayank Shah told Business Today it would rather pass on the benefit through price cuts, more grammage or offers such as '10-20 per cent extra' than through further price hikes.
- 03
The outcome
The Rs 5 Parle-G pack kept its price, so buyers could continue to pay with the same coin. Shah told Business Today in 2022, 'you will not see further price hikes.'