ECO515 Case Study: Analyzing Biscuit Market Preferences

This case study, for ECO515, analyzes the Indian biscuit market, focusing on consumer taste and preferences as key determinants of demand. It explores demand analysis, the five determinants of demand (price, income, prices of related goods, tastes, and expectations), and their impact on market dynamics. The study highlights the characteristics of demand, including its expression in quantity, time, price, and market context. The case examines the market share of major players like Britannia and Parle, and the challenges of meeting diverse consumer preferences in urban and rural areas. It also addresses marketing strategies and the importance of product quality and cost-effectiveness. The assignment concludes with suggestions for market research and addressing the challenges in the biscuit industry.

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Course Code: ECO515
Course Title: taste and preference of biscuits
Course Instructor:
Academic Task No.: CA2
Academic Task Title: Assignment –case based
Date of Allotment:18/08/2018
Date of Submission:11/09/2018
Student’s Roll no.: Student’s Reg. no.:
Evaluation Parameters: Introduction, Links to the other readings/ references, Issues,
Suggestions ,market share Question Handling and Conclusion
Learning Outcomes: In this case I have learn that the demand of non durable goods taste
and preferences plays major role. But for the case of durable goods the demand is mainly the
income of the consumer and price of the product.
Declaration:
I declare that this assignment is my individual work. I have not copied it from any other student’s
work or from any other source except where due acknowledgement is made explicitly in the text, nor
has any part been written for me by any other person.
Student’s Signature:
Evaluator’s comments (For Instructor’s use only)
General Observations Suggestions for
Improvement
Best part of assignment
Evaluator’s Signature and Date:
Marks Obtained: Max. Marks:

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INTRODUCTION:
Demand Analysis:
The Demand Analysis is a method whereby the management makes choices with relevance the
assembly, price allocation, advertising, inventory holding, pricing, etc. Although, what quantity a firm
produces depends on its production capability however what quantity it should endeavour to supply
depends on the potential demand for its product.
Thus, the vender is needed to analysis properly the demand for its product within the market and
should hold inventory consequently. like if there's a possible demand within the future, then the firm
ought to hold additional inventories and just in case there's no demand, then the assembly remains
unwarranted, and hence, lesser inventories square measure control. there's a clear stage that
production may exceed the demand, then the vender should use other ways like higher advertisements
to make a replacement demand.
The demand shows the link between 2 economic variables, the worth of the merchandise and
therefore the amount of product that a client is willing to shop for a given amount of your time,
alternative things being equal.
Characteristics of Demand
The following square measure the most options or characteristics of demand that the vender should
detain mind whereas analysing the demand for its product:
The demand is that the specific amount that a client is willing to buy. Thus, it's expresses in numbers.
The demand should mean the demand per unit of your time, per month, per week, per day.
The demand is often at a value, e. any amendment within the value of a trade goods can bring forth a
particular amendment in its amount demanded.
The demand is often during a market, an area wherever a group of consumers and sellers meet. The
market desires to not be a geographic region.
Thus, demand plays a vital role within the success of any commerce. And it should be remembered
that demand is often at a value and a selected fundamental quantity during which it's created. like
demand for woollen garments are going to be additional in winters than in the other season. Hence,
demand analysis is often worn out terms of the worth and therefore the relevant fundamental quantity.
The 5 Determinants of Demand
The 5 determinants of demand are:
The price of the great or service.
Prices of connected merchandise or services. These square measure either complementary, those
purchased together with a selected smart or service, or substitutes, those purchased rather than a
particular smart or service. financial gain of consumers. Tastes or preferences of customers .
Expectations. These square measure sometimes regarding whether or not the worth can go up.

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For combination demand, the quantity of consumers within the market is that the sixth determinant.
Demand Equation or perform
This equation expresses the link between demand and its 5 determinants:
qD = f (price, income, costs of connected merchandise, tastes, expectations)
It says that the amount demanded of a product could be a perform of 5 factors: price, financial gain of
the client, the worth of connected merchandise, the tastes of the buyer, and any expectation the buyer
has of future supply, prices, etc.
How every Determinant Affects Demand You will perceive however each determinant affects
demand if you first assume that each one the opposite determinants do not amendment. That principle
is called ceteris paribus or “all alternative things being equal.” So, ceteris paribus, here's however
every part affects demand.
Price. The law of demand states that once costs rise, the amount of demand falls. That additionally
implies that once costs drop, demand can grow. individuals base their buying choices on value if all
alternative things square measure equal. the precise amount bought for every index is represented in
the demand schedule. It's then planned on a graph to show the demand curve.
If the amount demanded responds a great deal to cost, then it's notable as elastic demand. If the degree
does not amendment a lot of, despite value, that's inelastic demand.
The demand curve solely shows the link between the worth and amount. If one among the opposite
determinants changes, the entire demand curve shifts.
Income. once financial gain rises, therefore can the amount demanded. once financial gain falls,
therefore can demand. however if your financial gain doubles, you will not perpetually get doubly the
maximum amount of a selected smart or service. there is solely such a large amount of pints of frozen
dessert you'd need to eat, despite however moneyed you're. that is wherever the conception of
marginal utility comes into the image. the primary pint of frozen dessert tastes delicious. you would
possibly have another. however then, the utility starts to decrease to the purpose wherever you do not
need from now on.
Prices of connected merchandise or services. the worth of complementary merchandise or services
raises the price of exploitation the merchandise you demand, therefore you will need less. for
instance, when gas costs rose to $4 a gallon in 2008, the demand for Hummers fell. Gas could be a
complementary smart to Hummers. the price of driving a Hummer rose on with gas costs.
The opposite reaction happens once the worth of a substitute rises. once that happens, individuals can
need additional of the great or service and fewer of its substitute. that is why Apple regularly
innovates with its iPhones and iPods. As before long as a substitute, like a replacement robot phone,
seems at a lower cost, Apple comes out with an improved product. Then the robot isn't any longer a
substitute.
Tastes. once the public’s wishes, emotions, or preferences amendment in favor of a product, therefore
will the amount demanded. Likewise, once tastes go against it, that depresses the number demanded.
complete advertising tries to extend the will for trade goods. for instance, Buick spent millions to
create you think that its cars don't seem to be just for older individuals.

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Expectations. once individuals expect that the worth of one thing can rise, they demand additional of
it. That explains the housing asset bubble of 2005. Housing costs rose, however individuals bought
additional as a result of they expected the worth to still go up. costs exaggerated even additional till
the bubble burst in 2006. Between 2007 and 2011, housing costs fell thirty %. however the amount
demanded did not grow. Why? individuals expected costs to continue falling. Record levels of
foreclosures entered the market thanks to the subprime mortgage crisis.
Demand did not increase till individuals expected future costs would, too.
Number of consumers within the market. the quantity of customers affects overall, or “aggregate,”
demand. As additional consumers enter the market, demand rises. that is true although costs do not
amendment. That was another reason for the housing bubble. low-priced and sub-prime mortgages
increased the quantity of individuals United Nations agency may afford a house. the whole range of
consumers within the market enlarged. This exaggerated demand for housing. once housing costs
began to fall, several accomplished they could not afford their mortgages. At that time, they
foreclosed.
That reduced the quantity of consumers and drove down demand.
Tastes and preferences:
All markets square measure formed by collective and individual tastes and preferences. These patterns
square measure part formed by culture and part planted by data and information of merchandise and
services (including the influence of advertising). totally different societies use forest merchandise
otherwise owing to these variations in style and preferences. for instance, markets for wood
merchandise in Japan square measure normally recognized as requiring terribly high product quality
standards, the importance of visual attributes of wood, and alternative preferences not normally found
in several alternative markets.
Market share
The biscuit industries in india has been growing in recent years and is current valued at
145billion. India is largest consuming nation in worldwide and its expected to increase
further in the coming years. Its expected to be worth approximately Rs 279 billion
(approximately $4.65 billion) by FY 2019.
Compared to other fast-moving consumer goods (FMCG) products, the penetration of
biscuits and cookies, in both the urban and rural areas, is quite high (94 per cent and 83 per
cent, respectively).
East and North India have the highest consumption of biscuits in the country. 80% of the
market is currently organised.
The top four players in the market for biscuits are Parle Products, Britannia, ITC and Surya
Foods and Agro. But Britannia and Parle are enjoying in market share of 61 per cent.
Britannia enjoys leadership position and strong brand recall in the biscuit category where the
Company enjoys 33% market share. The Company currently has seven strong brands in its
portfolio, including Tiger (glucose biscuits), Treat (cream biscuits), 50-50 (crackers), Good

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Day (premium cookies), Marie, Milk Bikis and NutriChoice (premium high-fiber biscuits).
The Company derives ~90% of its revenue from the biscuits segment while, 10% of its total
sales coming from non-biscuits category and International market.
In the urban Area, Britannia is focusing of their products. Britannia is also making efforts to
add new sub brand and introduce new variants/innovations under existing brands. Britannia
launched ‘Heavens’ under the Nutri Choice and ‘Chunkies’ under Good Day brand as
premium category of biscuits.
The biggest competitor of Britannia is also making some efforts to increase their market
share. Parle Products is aiming to grab half of the super premium biscuit market in one year
with its Platina range, said a top company official.
"We have around 40 per cent plus market in this segment. We are looking at 50 per cent in
next one year," Parle Category Head Mayank Shah told .
ISSUES IN THE CASE
 The taste and preferences have been changing from time to time people are changing
their views from time to time with competitors facing the challenges.
 There are two competitors as given in the case but being Britannia and who compete
with range of products in same price range and with almost same sort of tastes and
biscuits.
 Urban people who have different taste and Preference in this market Britannia has a
edge over parle with bourbon, 50-50 over Parle's Monaco, krackjack.
 The Britannia has tiger biscuits which is huge hit and with glucon-d biscuits back in
market it has taken by storm in sales of Britannia in rural areas with share market of
20-25 percent but parle's parle-g has great edge with 55 percent market share.
 It has been challenging for the biscuits companies to meet the taste difference
between rural and urban areas with different segmented products and advertisement
strategies.
 It’s has been great marketing strategies with Britannia ‘ Britannia khao world cup jao'
and many than parle-g advertisement are comparatively low.

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 There are stiff challenge in delivering the product is low cost and with taste because
people are now well aware of what they want and quality of the good and taste.
SUGGESTIONS
 More research is needed to know exactly why people of urban area and people rural
area have distinct taste and preferences.
 Both the companies have to increase their advertisement especially parle in order to
attract more customers.
 The companies should interact with theirs customers in order to meet the requirement
of the customers.

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Answers To Questions From The Case Study
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?
It is important to understand what is durable goods, consumer goods and non-durable goods.
 Durable goods- these are goods that a user can use for a long period of time. for
example Vehicles and electronics we can use them for a long time may be two years
or more than that.
 Capital goods –these are goods that are being used in business to produce other goods.
for example machinery
 Non-durable goods – these are goods that are being used for short period of time.
As we have read in the case study, we will consider the taste and preference mostly, when we
are buying Non-durable goods like eatable things such as biscuits.But we will not consider
that much about taste and preference for the case of durable goods.
The key factors that affect demand in case of non-durable goods are:
 Price
 Income
 Taste and preference
Taste and preference
Taste and preference of the consumer plays major role in the case of non-durable goods. For
example if we want to buy:
Eatables-when we want to buy for instance biscuit then we have some taste and preference.
some will like to have salty biscuit with tea or sweet in taste therefore we buy according to
our taste and preference.
IN THE CASE OF DURABLE GOODS AND CAPITAL GOODS
Here some affect the demand of these goods:

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 Price of product
 Technology
 Consumers income
 Price of related goods
These demand of these goods is mainly driven the consumers income and the price of the
related product. Taste and preference plays minor role here.
Durable-goods – in case we want to buy vehicle then the consumer income is important. A
consumer with less income will not demand supercar buggatti or Lamborghini etc .Here taste
and preference is also important but only if the consumer is able and willing to buy.
Capital goods – goods that are being used in business to produce.here the driven force is
technology, if the manufacturer if buying a machine then he/she will look the efficiency of
the machine after that the price of the machine.
CONCLUSSION
The taste and preference plays a major role in the case of non-durable goods.
In case of durable goods the taste and preference plays minor role but the incomes income is
important here.
And for the case of capital goods also taste and preference isnot a matter but main concern
will be technology and price.
Q2. What are the other attributes that other than taste and preferences the two market leaders
in the biscuit industry are considering?
Ans- 1)PRICE-
Low price is important factor in Parle and Britannia’s popularity. Parle-G is priced at RS.5
and is considered to be one of the most affordable biscuits with its low price strategy. It is
available to the population present even in villages and smallest of locations. Further with
constant innovations. It ensures that its prices are not raised beyond curtain level. For such a
low price, the perceivers value for customer is high resulting in more sales.

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2)STRONG DISTRIBUSTION NETWORK-
Britannia has focused on building a robust distribution system which could increase its
products reach in urban and rural market. Britannia also trying to expanding the distribution
network and improve product pipeline. In FY2015 the company products were available in 10
lakh outlets as against 7.5 lakh in FY2014.In the same period Britannia increased its rural
reach by over 8000 outlets. In FY2015 and is planning to increase the same to 2 times to over
2018.
3) MARKETING-
One of the most results of popularity of parle and Britannia biscuit is marketing strength.
Parle biscuits are available to consumer even in the most remote places and in the small
villages with a population of just 500. Parle has nearly 1500 wholesale, catering to 4,25,000
retailer outlets directly or indirectly. A 200 dedicated field force. services these wholesale
and retailer additionally there are 31 depos and CF agent supplying good to the wide
distributed network. The Parle marketing philosophy emphasizes catering to people. They
consistently design products that provide nutrition and fun to common man. The value for the
money positioning helps them to generate large sales volumes for the products.
3.Is there market segmentation as far as taste and preference is concerned in the biscuit
industry?
Market research shows that people in rural and urban India have distinct snacking habits.
People in rural area likes to have traditional salty Indian snacks like samosas, pakoras etc
while people in urban area who too like snacking show different taste pattern. Their tea-time
biscuits are salty, sweet-salty and creamy.
The biscuit industries like Britannia and Parle, seems to have understood the distinct
preference. Britannia’s relaunch of glucose-D and circus brand as the low cost tiger brand
biscuits has taken rural market. Parle-G is well know low cost glucose biscuit enjoys the
market share by 55 percent, mainly rural areas again.
Lets look the market segmentation of Britannia and Parle-G.
Market segmentation in Britannia:-

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Since the company cannot go to all sectors and all customers with different needs and
demands, therefore its important the company identify various market segment.
We analyse the market segmentation of Britannia as follow:
 Demographic segmentation
 Behavioural segmentation
 Niche segmentation
Demographic segmentation: - Considering the age, income, family size and occupation of
various people, Britannia has segmented their market like this:
 Depending on age:- Britannia fruit rolls for children, little hearts for youth and good
day for mature people.
 Income:-different products with different package .for instance good day are for
people with little higher income and Britannia Marie is designed for people with little
income.
Behavioural segmentation:-Britannia keeps consideration of people behavioural changes. it
also segmented their market as :
 Benefits:-At tea time people likes to have some snacks therefore Britannia designed
for cream cracker.
 User status:-the little heart biscuits are dedicates for people in love as these biscuits in
little in size, red in colour and have shape of the heart.
Niche segmentation:- Britannia slice cakes and Britannia good day are designed for people
who wants some food characteristics in a biscuits
Market segmentation of Parle-G:-
If we divide the market on basis of their preference for sweetness and saltiness in the biscuit
then the result would be the preference are clustered near some tastes, that is, the consumer
would not want to have something really vague like 50% salty, 25% sweet and 25% creamy.
That is why the preference are clustered and not diffused wherein the preferences have to be
very extreme and vague.

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Parle-G as company makes use of these clustered preferences and manufactures biscuits for
each and every cluster. For example Monaco is for entirely salty biscuit and krack-jack cream
is for sweet and salty taste.
Q4. 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?
Ans- TASTE AND PREFERENCES OF MODERN INDIA-
1.The Indian market till recently, was a seller’s market, but things are not same today with
time change. It has become buyer’s market beside the price of the product the Indian’s are
giving importance to taste of product also. The people in rural area were preferred the product
with low cost not with quality or taste. But with changed time they are preferring quality of
product. Consumer of biscuit are very sensitive about their availability, followed by brands
and quality. Consumers behavior is not affected by factors like price and packaging. People
are preferring the product with different pattern and taste. Children are preferring free gifts
with all types of flavors of biscuits like small playing things, stickers, tattoos which are useful
for children . people are preferring quality rather than cost.
2.Brittania introducing new products to complete customer’s preferences. Britannia
relaunched of Glucose-D as low cost tiger brand with low price biscuit. Urban people prefer
salty, sweet-salty, cream biscuit at tea time. Hence Britannia launched SNAX(Salty), 50-
50(Sweet-salty), Bourbon (Chocolate) with different flavors.
3.In urban area’s Parle also launching their product as per people’s preferences to fulfill their
requirement. In urban area’s people prefer the product with quality rather than cost to fulfill
these requirement Parle launched Black-Bourbon to bump Britannia’s Bourbon.
CONCLUSSION
Different people have different taste and preferences. As in the case study we have seen how
consumer is divided based on the Area they live. It’s been divided in two:-
 Rural area
 Urban area

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Consumers in these Areas have different taste and preferences as it mention like rural people
prefer taste and preference of biscuits to have traditional salty snack like samosas and pakoras
whereas urban people have different taste and preferences compared to rural people.Their
taste and preference is to have salty, sweet and cream biscuits like 50-50(sweet-salty),
bourbon(chocolate) and Britannia snax(salty).these companies have produced different taste
and preference according to the requirement of the consumers.
There are various factors that affect the demand and leads it to shift but the case non-durable
goods taste and preference plays a major role since all the companies have taken into
consideration and produced according to their taste and preferences.
LITERATURE REVIEW
Dr. M. Arutselvi, (2012), “A Study on consumers preference towards various types of
Britannia Biscuits”. The Case says all about the consumers behaviour towards Britannia’s
Biscuits. theirs behaviour varies from brand to brand on the basis of Taste, Quality, Quantity,
Price, Advertisement etc. The result of the study shows that Britannia Biscuits having good
market share.
Brosekhan Abdul et. AI, the topic deals with the important factors including lifestyle and its
effect on the consumer buying behaviour. It explains the dominant, positivistic consumer
perspectives.
Dr. Yashmin Sofat, “A Study on consumer buying behaviour towards biscuits”. The study
conclude that consumer behaviour is affected by various factors like biscuits of various
brands which are proved with the help of chi square test. The study says that the consumers
behaviour depend on the different factors like availability, price, quality of the product,
packaging, brand of the product.
Dr. V. Kannan, “Customers Preferences and Attitude towards Britannia Products”. The
study says that the business and modern marketing are fully consumer and customer oriented.
Knowing about Those things very important for manufacturers. Otherwise, they have to lose
existing customers.
All companies try to satisfy the need, taste, desires of the customers in all possible ways. The
Britannia industry should be very careful with regard to customer satisfaction.
Jean, A. And Dr. Sudalaiyandi, (2013), A Study on consumers behaviour towards various
types of ITC biscuits is conducted to know the customer’s preferable taste, about the choice,
their frequency of preference, satisfaction, need of the customer, awareness about various
brands. The result of the study shows that ITC’s Biscuits having good market share.