Pricing and Revenue management

This case illustrates a classic pricing decision that many companies face, regardless of industry.

In writing your report, I want you to focus on the issues discussed in the section titled “ISSUES IN DECEMBER 2009” on pages 8 and 9 of the case, culminating with the questions asked by forlorn Mr. Kulkarni at the end of the case (on page 9):

“A flagship brand should be generating a margin of 15 to 20 percent of revenue. A margin of 10 percent is unacceptable for Parle-G. I have to bite the bullet at some time on pricing. The concerns are several. Should I make tactical moves like launching new SKUs and new price points? Should I continue to tinker with the grammage? Is there a strategic move?”

Please write your report so as to give clear guidance to Kulkarni. It might be a good idea to first spend some time and effort in understanding and explaining the factors that drive Parle-G’s pricing in the report, and then delve into your recommendations.

Please be sure to consider and explain both the short- and long-term impacts of your recommendations.