How ParleG built a billion dollar brand on Rs.5!

Parle-G has never disappointed us and I know this case study won't either. In 1997, a pack of Parle-G cost ₹4 and weighed 100 grams.

Today, it costs ₹5 and weighs 55 grams. A ₹1 price increase, and a 45% reduction in weight. 

But no one stopped buying it because Parle-G understood something most brands miss: Indian consumers are price-point loyal, not weight loyal.

So they never significantly changed how much their packet costs. It has been at ₹4 since 1994 to 2021 and only increased by a rupee since then. 

Research has shown that a simple ₹0.50 increase can cause a 40% drop in sales within six months. But for the daily-wage workers managing small cash denominations, ₹5 is a manageable amount. Need something filling that also gives you energy, give ₹5 coin and get going.

Parle-G sold a transaction so frictionless that it became a reflex.

Even during the COVID-19 lockdown, when most snack brands were unavailable, Parle-G became a national lifeline. Within 7 days, they restocked their distribution network in 6 million outlets.

I think for a brand, clarity is very important as who they want to target and what can help them remain in their minds. Yes, we all obsess over building a luxury brand or at least being able to charge a premium. But most brands underestimate the power of tier 2 and 3 markets. 

Recently, in a conversation with a fellow marketer, we realised how ‘unfancy’ these markets are but if you actually do the math, they have the most potential to help you run a profitable business with good margins. 

Yes, building a brand is important but pricing your product right is a part that most brands fail at. Either they are overpriced or underpriced. When they are overpriced, they miss the relevant audience and when they are underpriced, the relevant audience misses the brand or perceives it as cheap. 

If you are looking to make a pricing decision, I would suggest, do a trial run of various pricing models on your target audience. You’ll be surprised at what you’d find. And if you are still unsure how to do it, well, you know who to DM!