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Tuesday, February 27, 2024

Why Parle-G is not increasing its price despite inflation

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Instead of increasing prices, Parle-G gradually and progressively reduced the amount of the portion while keeping the illusion of a little packet over time.

To some, Parle-G is a brand of easily accessible and inexpensive packets of biscuits; to others, it is a feeling. Saptarshi Prakash, Swiggy’s Director of Design, recently gave some thoughts on how Parle-G is still accessible for Rs 5 after surviving for 25 years without changing its pricing.

Prakash posted about it on LinkedIn, “The price of a small packet of Parle-G was Rs 4 in 1994, and it remained that way until 2021, when it was raised by a rupee. A small package now costs Rs 5. Have you ever pondered how it is even possible?. In addition to various operational optimizations, Parle used an extraordinary psychological hack to accomplish this honour.”

He elaborated on the hack, saying, “What comes to mind when I say “tiny packet”? A package that fits in your hand and contains a handful of biscuits? The majority of us would see it that way, and Parle was well aware of it.”

As a result, rather than raising costs, they gradually and steadily reduced the amount of the piece over time, while keeping the illusion of a little packet.

Prakash explained, “It started with a chunk of 100 gm, then 92.5 gm, then 88 gm, and now the tiny package that costs Rs 5 weighs 55 grammes, which is a solid 45 percent reduction from what they started with in 1994.”

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