Horlicks-The Winds Of Change

HORLICKS

THE WINDS OF CHANGE

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 Horlicks-The
Winds Of Change

CONTENTS
Executive summary
Strategic brand management
Marketing
Advertising & Public Relations

. INTRODUCTION
1.1 Product History
1.2 Product Profile
1.3 Why Horlicks...Key Nutritional Facts
1.4 Research Design and Methodology

COMPANY PROFILE
2.1 Glaxo SmithKline Consumer Healthcare Ltd. (Gskch)

MARKETING ENVIRONMENT
3.1 Competitors
3.2 Market Share
3.3 Marketing Landmarks

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 MARKETING STRATERGIES

4.1 Market Segmentation

4.2 Brand Extensions
4.3 Problems Leading To Its Re-Launch

MARKETING MIX
5.1 Product
5.2 Packaging
5.2.1 Repositioning of Horlicks
5.3 Price
5.3.1 Price of Horlicks
5.4 Promotion
5.4.1 Seminars About Health Concerns & Health Supplements
5.4.2 Claims
5.4.3 Advertising
5.4.4 Promotions To Consumers
5.4.5 Promotions To Retailers
5.5 Distribution

CONSUMER ANALYSIS

CONCLUSION

SUGGESTION

APPENDIX

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 Introduction
Strategic Brand Management
"Strategic brand management involves the design and
implementation of marketing programs and activities to build,
measure, and manage brand equity. These concepts and
techniques are to improve the long-term profitability of brand
strategies.”

Brand management is the application of marketing techniques to a

specific product, product line, or brand. It seeks to increase the
product's perceived value to the customer and thereby increase
brand franchise and brand equity. Marketers see a brand as an
implied promise that the level of quality people have come to
expect from a brand will continue with future purchases of the
same product. This may increase sales by making a comparison
with competing products more favorable. It may also enable the
manufacturer to charge more for the product. The value of the
brand is determined by the amount of profit it generates for the
manufacturer. This can result from a combination of increased
sales and increased price, and/or reduced COGS (cost of goods
sold), and/or reduced or more efficient marketing investment. All
of these enhancements may improve the profitability of a brand,
and thus, "Brand Managers" often carry line-
management accountability for a brand's P&L profitability, in
contrast to marketing staff manager roles, which are allocated
budgets from above, to manage and execute. In this regard, Brand
Management is often viewed in organizations as a broader and
more strategic role than Marketing alone.

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Coca-cola is the most valuable brand in the world,
with the name alone worth billions of dollars. But
why? What is a brand?
Brand management is a total approach to
managing brands that is sometimes extended, by
those who understand the power of brands, to cover
the whole approach to managing the company.
A brand is a promise

First and foremost, a brand is a promise. It says 'you

know the name, you can trust the promise'. As all
promises, it is trusted only as far as those promises
are met. Trust is a critical first step and brands aim
to accelerate that step by leveraging the implied
promise of the brand.
A brand is an associated image

Most brands have a logo which acts as a short-cut to

remind us of the brand promise. The logo uses color,
shape, letters and images to create a distinctive
image that is designed both to catch our eye and to
guide our thoughts in the right direction. The brand
may also be associated with tunes, celebrities,
catchphrases and so on.
All parts of the brand image works as a
psychological trigger or stimulus that causes
an association to all other thoughts we have about
the brand.
Everything and everyone is a brand

If you get down to the detail, everything is a brand,

because we build our understanding of the world by

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creating associations about everything. A tree has
an implied promise of beauty and shade. Even words
are brands. When I say 'speed', you will conjure up
images of fast cars, etc.
People are brands, too. When people see you, or
even hear your name, they will recall the image they
have of you, (which is something you can actively
manage or 'let happen'). In a company where people
are visible to customers, such as a service business,
the people are very much a part the brand.

MARKETING

“Marketing is the management process responsible for

identifying, anticipating and satisfying customer
requirements profitably” – CIM definition.

It’s a bit of a mouthful, but it highlights that the customer is

at the heart of marketing, and businesses ignore this at their
peril.
In essence, the marketing function is the study of market
forces and factors and the development of a company’s
position to optimize its benefit from them. It is all about
getting the right product or service to the customer at the
right price, in the right place, at the right time. Both
business history and current practice remind us that without
proper marketing, companies cannot get close to customers
and satisfy their needs. And if they don’t, a competitor
surely will.

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Marketing is sometimes wrongly defined within the narrow
context of advertising or selling, but this is not the whole
story. Marketing is a key management discipline that
enables the producers of goods and services to interpret
customer wants, needs and desires — and match, or exceed
them, in delivery to their target consumers.

Every product we buy, every store we visit, every media

message we receive, every choice we make in our
consumer society has been shaped by the forces
of marketing. The marketing process is central to the
business performance of companies, large and small,
because it addresses the most important aspects of the
competitive marketplace.

Today, as competitive pressures increase, marketing skills

have never been more highly valued by organisations in
both the public and private sectors. What was once seen as
a departmental activity within companies is now regarded
as a frontline business attitude of mind for all employees.
Marketing has played a key role in many recent business
success stories — from pharmaceuticals to airlines, sports
brands to food and drink, business-to-business companies
to small, niche players.

The marketing professionals who shape and implement

marketing strategy contribute directly to the economic
wealth of a nation. Their skills attract and retain customers,
build sales and generate profits which can then be
reinvested as part of a cycle of prosperity.

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The 7Ps of marketing
Successful marketing depends upon addressing a number of
key issues. These include: what a company is going to
produce; how much it is going to charge; how it is going to
deliver its products or services to the customer; and how it
is going to tell its customers about its products and
services.

Traditionally, these considerations were known as the 4Ps

— Product, Price, Place and Promotion. As marketing
became a more sophisticated discipline, a fifth ‘P’ was
added — People. And recently, two further ‘P’s were
added, mainly for service industries — Process and
Physical evidence. These considerations are now known as
the 7Ps of marketing, sometimes referred to as the
marketing mix.

1. Product:
There is no point in developing a product or service that no
one wants to buy, yet many businesses decide what to offer
first, and then hope to find a market for it afterwards. In
contrast, the successful company will find out what
customers need or want and then develop the right product

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— with the right level of quality to meet those needs now
and in the future.
• The perfect product must provide value for the customer.
This value is in the eye of the beholder — we must give our
customers what they want, not what we think they want
• A product does not have to be tangible — an insurance
policy can be a product.
• Ask yourself whether you have a system in place to
regularly check what your customers think of your product,
your supporting services, etc, what their needs are now and
whether they see them changing.
• Beware going too far with product quality. Don’t try to
sell a Rolls-Royce when the customer really wants a Nissan
Micra.

2. PRICE:
A product is only worth what customers are prepared to pay
for it. The price also needs to be competitive, but this does
not necessarily mean the cheapest; the small business may
be able to compete with larger rivals by adding extra
services or details that will offer customers better value for
money. Your pricing must also provide a profit. It is the
only element of the marketing mix that generates revenue
— everything else represents a cost.
• Thinking of price as ‘cost’ to the customer helps to
underscore why it is so important.
• Price positions you in the marketplace — the more you
charge, the more value or quality your customers will
expect for their money.

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• Existing customers are generally less sensitive about price
than new customers — a good reason for looking after
them well.
• If you decide in favour of a higher priced added-value
approach, remember that price ‘positions’ you in the
marketplace. This means it gives an indication to potential
and existing customers of where to place you in relation to
your competitors. Expectations will generally be higher;
customers will assume a higher quality product or service.
Everything about your dealings with customers must live
up to the expectations of this positioning. Anything that can
be seen by the customer must be consistent with these
higher quality expectations — packaging, environment,
promotional materials, letterheads, invoices, etc.

3. Place:
The place where customers buy a product, and the means of
distributing your product to that place, must be appropriate
and convenient for the customer. The product must be
available in the right place, at the right time and in the right
quantity, while keeping storage, inventory and distribution
costs to an acceptable level.
• Customer surveys have shown that delivery performance
is one of the most important criteria when choosing a
supplier
• Place also means ways of displaying your product to
customer groups. This could be in a shop window, but it
could also be via the internet.

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4.Promotion:
Promotion is the way a company communicates what it
does and what it can offer customers. It includes activities
such as branding, advertising, PR, corporate identity, sales
management, special offers and exhibitions. Promotion
must gain attention, be appealing, tell a consistent message
and above all else give the customer a reason to choose
your product rather than someone else’s.
• Good promotion is not one-way communication — it
paves the way for a dialogue with customers.
• Promotion should communicate the benefits that a
customer obtains from a product, and not just the
features of that product.
• Whether your promotional material is a single sheet or
a complex brochure, folder or catalogue, it must grab
the attention of your customers. It should be easy to
read and enable the customer to identify why they
should buy your product.
• A brochure isn’t necessarily the best way of promoting
your business, the problem being that once a brochure
has been printed, the information is fixed. You can’t
change or remove anything should the need arise. A
more cost effective and flexible option might be a
folder with a professionally designed sheet inside,
over a series of your own information sheets produced
in-house. These sheets can be customized by varying
them to suit the target customers and/or changing them
as required.

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Promotion does not just mean communicating to your
customers. It is just as important to ensure your internal
stakeholders are aware of the value and attributes of your
products. This means communicating effectively to your
staff/ fellow employees so that they can be knowledgeable
and share expertise with their customers.

5. PEOPLE:

Anyone who comes into contact with your customers will

make an impression, and that can have a profound effect –
positive or negative - on customer satisfaction. The
reputation of your brand rests in your people’s hands. They
must, therefore, be appropriately trained, well motivated
and have the right attitude.
• It is essential to ensure that all employees who have
contact with customers are not only properly trained,
but also the right kind of people for the job.
• Many customers cannot separate the product or
service from the staff member who provides it. This
shows the importance of your people.
• The level of after sales support and advice provided by
a business is one way of adding value to what you
offer, and can give you an important edge over your
competitors. This will probably become more
important than price for many customers once they
start to use your product.
• Look regularly at the products that account for the
highest percentage of your sales. Do these products

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 have adequate after-sales support, or are you being
complacent with them? Could you enhance your
support without too much additional cost?

6. PROCESS:

The process of giving a service and the behaviour of those

who deliver are crucial to customer satisfaction.
Issues such as waiting times, the information given to
customers and the helpfulness of staff are all vital to keep
customers happy.
• Customers are not interested in the detail of how your
business runs. What matters to them is that the system
should work efficiently.
• Do customers have to wait? Are they kept informed?
Are your people helpful? Is your service efficiently
carried out? Do your people interact in a manner
appropriate to your service?

7. PHYSICAL EVIDENCE:

A service can’t be experienced before it is delivered.

This means that choosing to use a service can be
perceived as a risky business because you are buying
something intangible. This uncertainty can be reduced by
helping potential customers to ‘see’ what they are
buying. Case studies and testimonials can provide
evidence that an organization keeps its promises.
Facilities such as clean, tidy and well-decorated
reception area can also help to re-assure. If your

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 premises aren’t up to scratch, how would the customer
think your service is?
• The physical evidence demonstrated by an
organization must confirm the assumptions of the
customers – a financial services product will need to
be delivered in a formal setting, while a children’s
birthday entertainment company should adopt a
more relaxed approach.

Each of the ‘ingredients’ of the marketing mix is a key to

success. No one element can be considered in isolation –
you cannot, for example, develop a product without
considering a price, or how it will reach the customer.

This process is called marketing planning.

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 ADVERTISING
"Advertising is the non-personal communication of
information usually paid for and usually persuasive in
nature about products, services or ideas by identified
sponsors through the various media."
The advertising is very important and vital part of a successful
business. Advertising can be of any kind, some of the popular
forms of advertising are:

1) Print Media Advertising: This is the advertising in which we

promote the business through Newspapers, Magazines, Journals
and books. This advertising covers all of people who are related
directly or indirectly with above said media. This is very popular
form of advertising as print media is very important. We can
further categorize the print media (newspapers) into Entertainment,
Careers, Classifieds, technology (Computers, Electronics,
defence), Real Estate, Lifestyles, Comics and much more. It also
includes hoardings and banners.

2) Television: TV is a very popular platform for advertising. It

covers nearly all kind of audience and of all genders.

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3) Internet: The newest and increasingly getting popular form of
media is internet. As it is the widest platform for the advertisers. It
covers everything from a needle to a ship. These days more and
more companies are focusing on advertising through internet.
Internet advertising comprises of websites, portals, gadgets, feeds
and search engines.
With help of advertising the business firms publicize their
businesses to make it more popular and to create brand awareness.
Advertising help them in increasing revenues which directly
increases the profit of the companies. Many companies are having
separate departments for advertising. The function of these
departments is to make plan and make budgets for advertising.
Advertising helps in forecasting sales of a company. If the
company spends more on advertising then definitely the people
will be more aware about the brands of the company.

PUBLIC RELATIONS

What is Public Relations?

Public relations involves the cultivation of favorable

relations for organizations and products with its key
publics through the use of a variety of
communications channels and tools. Traditionally,
this meant public relations professionals would work
with members of the news media to build a favorable
image by publicizing the organization or product
through stories in print and broadcast media. But
today the role of public relations is much broader and
includes:

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 • building awareness and a favorable image for a company or
client within stories and articles found in relevant media
outlets
• closely monitoring numerous media channels for public
comment about a company and its products
• managing crises that threaten company or product image

• building goodwill among an organization’s target market

through community, philanthropic and special programs and
events.

Objectives of Public Relations

Like other aspects of marketing promotion, public

relations is used to address several broad objectives
including:

• Building Product Awareness – When introducing a new

product or re-launching an existing product, marketers can use
a PR element that generates consumer attention and awareness
through media placements and special events.
• Creating Interest – Whether a PR placement is a short
product article or is included with other products in “round
up” article, stories in the media can help entice a targeted
audience to try the product. For example, around the holiday
season, a special holiday food may be promoted with PR
through promotional releases sent to the food media or
through special events that sample the product.
• Providing Information – PR can be used to provide customers
with more in depth information about products and services.
Through articles, collateral materials, newsletters and
websites, PR delivers information to customers that can help
them gain understanding of the product.

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 •Stimulating Demand – A positive article in a newspaper, on a
TV news show or mentioned on the Internet, often results in a
discernable increase in product sales.
• Reinforcing the Brand – In many companies the public
relations function is also involved with brand reinforcement
by maintaining positive relationships with key audiences, and
thereby aiding in building a strong image. Today it is ever
more important for companies and brands to build a good
image. A strong image helps the company build its business
and it can help the company in times of crises as well.

Advantages of PR

Public relations offers several advantages not found with other

promotional options. First, PR is often considered a highly
credible form of promotion. One of PR’s key points of power rests
with helping to establish credibility for a product, company or
person (e.g., CEO) in the minds of targeted customer groups by
capitalizing on the influence of a third-party -- the media.
Audiences view many media outlets as independent-party sources
that are unbiased in their coverage, meaning that the decision to
include the name of the company and the views expressed about
the company is not based on payment (i.e., advertisement) but on
the media outlet’s judgment of what is important. For example, a
positive story about a new product in the business section of a local
newspaper may have greater impact on readers than a full-page
advertisement for the product since readers perceive the news
media as presenting an impartial perspective of the product.

Second, a well-structured PR campaign can result in the target

market being exposed to more detailed information than they
receive with other forms of promotion. That is, media sources
often provide more space and time for explanation of a product.

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Third, depending on the media outlet, a story mentioning a
company may be picked up by a large number of additional media,
thus, spreading a single story to many locations.

Finally, in many cases public relations objectives can be achieved

at very low cost when compared to other promotional efforts. This
is not to suggest public relations is not costly, it may be, especially
when a marketer hires PR professionals to handle the work. But
when compared to the direct cost of other promotions, in particular
advertising, the return on promotional expense can be quite high.

Horlicks-The Winds Of Change

CHAPTER-1

INTRODUCTION

The MFD market in India has traditionally been divided, on the basis of their

colour of appearance, into whites where brands like 'Horlicks' (GSKCH),

'Complan' (Heinz India Private Limited) and 'Viva' (GSKCH) are prominent,

and browns, where 'Bournvita' (Cadbury India Limited), 'Boost'

(GSKCH)and 'Maltova' (GSKCH) are the main brands. White MFDs can be

had with water or milk and account for approximately two-thirds of the

MFD market (by quantity). Brown MFDs are basically milk additives.

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The total market for MFDs was estimated to be around 70000 MT. After

witnessing sluggish growth in the early 1990s, it is now estimated to be growing

at more than 10% p.a. in the last five years. 'Horlicks' dominates the whites

segment and accounts for more than three-fourths of the total sales in the

segment. 'Boost' is the second largest player in the browns segment and has a

market share of more than 30% in the segment. 'Horlicks' and 'Boost' together

command a 65% share of the total MFD market.

Horlicks-The Winds Of Change

1.1 PRODUCT HISTORY

The brand Horlicks came into existence way back in 1873. In its earlier days,

Horlicks was imported into the country from the U.K. Manufacture in India

began in the year 1960. Calcium was added to the product in 1988 as a nutritional

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enhancement. In 1994, Horlicks was relaunched with the addition of vitamins and

minerals, which made the product even more wholesome. Now Horlicks has

again been relaunched with smart nutrients. The focus this time is clearly on

providing the added benefit of “mentally sharp and physically active.”

1.2 PRODUCT PROFILE

Horlicks is made from wheat, milk and malted barley. Horlicks is widely

known as an easy to prepare malted food drink. It is fortified with iron and

eight essential vitamins with twice as much calcium as fresh milk.

Horlicks is still the world's most widely consumed malted milk product. For

over 50 years, generations after generations of children wakeup to a mug

of Horlicks prepared by mothers in their own special way, yet providing

the same nourishing goodness unrivaled by any competitive products.

Horlicks can be enjoyed in over 15 countries worldwide. Malaysians are the third

largest consumers of the brand, after India and the United Kingdom. It is the

number one brand for Glaxo SmithKline (GSK). The enormous success of the

horlicks brand has been reflected in the ever rising sales graph for the product.

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With a brand share of over 50% in the health food drink market, turnover of over

Rs. 400 crores in 1997 and a CAGR of over 20%, Horlicks remains the number

one health food drink in India. Its success is due to a mixture of factors. A strong

brand heritage, its commitment to quality and its understanding of consumer

needs.

1.3 WHY HORLICKS...KEY NUTRITIONAL FACTS

Horlicks is a nourishing malted food drink which combines the wholesome

goodness of malted barley, wheat and dairy ingredients.

The malting of barley through the natural process of germination releases

enzymes. These enzymes break down complex carbohydrates to simple

sugars that are easily assimilated by the body, making Horlicks easily

digestible.

Horlicks drinks provide a modicum of vitamins A, C, D, B12, plus calcium,

iron, thiamin, riboflavin, niacin, folate, and dietary fiber. As fresh milk.

Refer to appendix 1 for the details of nutrients provided by horlicks

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 Horlicks-The Winds Of Change

1.4 RESEARCH DESIGN AND METHODOLOGY

The research is a combination of both primary and secondary data. A survey

was done covering various aspects of the customer opinion regarding the

product Horlicks. Sampling for the research is convenience sampling

targeting the 18-30 age group consumers of health food drinks. The sample

size was 25-28 people.

Secondary sources of data includes internet, newspaper, brochures of the

company, magazines etc.

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 Horlicks-
The Winds Of Change

CHAPTER-2

2. COMPANY PROFILE

2.1. GLAXOSMITHKLINE CONSUMER HEALTHCARE LTD.

(GSKCH)

SmithKline Consumer was originally incorporated in 1958 and went public

in 1961. The company was then known as Hindustan Milk Manufacturers

(HMM). It was promoted by Horlicks Limited, UK, mainly to manufacture

and sell malted milk food - 'Horlicks', which was hitherto being imported.

The worldwide interests of Horlicks Limited, UK, were purchased by

Beecham Group plc, UK, in 1969. In 1977 Beecham’s Indian subsidiary

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Beecham India Pvt. Ltd was merged with HMM Beecham India was

producing a range of products such as Eno fruit salt, Brylcream hair

grooming cream and Silvikrim shampoo. Consequent to the merger of

Beecham Group plc, UK, and SmithKline, USA in 1989, the name of the

Indian operations was changed to SmithKline Beecham Consumer Brands

Limited in 1991. In Mar ’95, SmithKline Beecham Consumers Brand

Company worldwide was renamed as SmithKline Beecham Consumer

Health Care with a change in business focus to "Science based health care

products". The company exited from toiletries, hair care etc. Major brands

Brylcream and Silvikrim were globally sold to Sara Lee. The parent

company SmithKline Beecham Plc. has been merged globally with Glaxo

Welcome on 27th Dec'00 to form a new entity, GlaxoSmithKline Plc. In

India, Smithkline operated through 3 companies - SmithKline

Pharmaceuticals, SmithKline Consumer Healthcare and a 100% subsidiary

SmithKline Beecham Asia Pvt. Ltd. The Pharmaceutical business of Glaxo

and Smithkline has been merged in India. The Consumer business however

is continued separately through SmithKline Consumer and the company is

being renamed as Glaxo SmithKline Consumer Healthcare Ltd to reflect the

new association.

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SmithKline Beecham plc, one of the world's largest healthcare companies,

with around US$13 billion in revenues and operations in 160 countries, is

the largest single shareholder of SBCH with a 40% stake and management

control.

SBCH is an Indian associate of SmithKline Beecham of the UK and has

continually benefited from the technical and marketing inputs that have been

available as a consequence of this association. SBCH is the largest player in

the domestic malted food industry. Its flagship product, Horlicks, is a widely

regarded and highly respected 110 year old brand. The company today

markets over 12 products which include prominent household names such as

Horlicks, Boost, Eno, Crocin and Tums. SmithKline Consumer Healthcare

acquired two local brands - Maltova & Viva, further strengthening its

position in the category.

The company has two manufacturing plants located in Nabha and

Rajahmundry and a total workforce of 2300 people. A new plant for

manufacture of Horlicks has been set up at Sonepat in Haryana and has

commenced commercial production in early 2002. Malted drinks Viva &

Maltova and biscuit brands Horlicks & Boost are outsourced by the

company. Its manufacturing units at Nabha and Rajahmundry and its

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packing facilities at Hyderabad were recently awarded the prestigious ISO

9002 certification

GSK has a strong marketing and distribution network in India comprising

over 1000 wholesalers and direct coverage of over 2,50,000 retail outlets.

The company has a wide distribution network covering 3000 towns. A

chunk of GSK’s sales come from south and west India though it plans to

increase coverage in the northern and eastern parts of the country. GSK’s

main competitors are HJ Heinz, Cadbury India and Nestle India. But GSK’s

brand, Horlicks is the market leader and accounted for over 55% of the

market while Cadbury’s Bournvita accounted for 15% and Boost around 9%.

SMBE has a 70% volume share, followed by Cadbury (12%) and Heinz

(10%). Nestle and GCMMF have 3-4% market share each. In white food

drinks, GSK’S chief competitor is Complan from HJ Heinz. Both

SmithKline Consumer and Heinz have extended their malted drink brands to

the biscuit category. SmithKline has Horlicks and Boost range of biscuits

while Heinz has Complan brand of biscuits.

GSK has an intensive dairy development programme in the milk sheds

allotted to it in Punjab and Andhra Pradesh for ensuring regular supply of

milk, which is the major raw material for manufacturing MFD. The other

major raw materials are malted barley, wheat flour and sugar. Vendors have

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been developed for the supply of these products and raw material availability

is not a constraint.

ICRA expects the MFD market to maintain a steady growth rate of 8-10% in

the medium term. GSK, by virtue of its strong market position and well-

established brands, is expected to capitalize on this growth. ICRA does not

perceive any threat to the leadership position of GSK in the near future.

Horlicks-The Winds Of Change

Operating Performance

GSK, India's largest player in the malted food drinks with a dominant 60%

market share is represented through Horlicks (52% market share) and Boost

(8% market share).

GSK's sales primarily come from the MFD market where it has two

established brands - 'Horlicks' and 'Boost'. Cumulative market share post

acquisition stands at 70%.Biscuits are sold primarily to take advantage of an

established distribution channel and the brand equity enjoyed by 'Horlicks'

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and 'Boost' and contribute about 6% to GSK’s operating income. GSK set its

long-term revenue growth target at 25% year on year.

Horlicks-The
Winds Of Change

Key issues

GSK continues to maintain its leadership position in the MFD market, with

'Horlicks' maintaining its dominant market share in the white MFD segment

and 'Boost' being positioned strongly in the browns segment. The financial

flexibility of the company remains strong due to its low gearing, sizeable

liquid investments and low bank limit utilization. ICRA expects GSKCH to

further consolidate its strong financial position with healthy cash accruals in

the short to medium term.

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 Horlicks-The Winds Of Change

CHAPTER-3

3.MARKETING ENVIRONMENT
The white malted category comprises 60 per cent of the overall Rs 1,200-

crore HFD market, and Horlicks, along with Junior Horlicks, is the market

leader with a 59 per cent market share. While 45 per cent of the brand's sales

comes from the South, especially Tamil Nadu, 49 per cent of its sales is

from the East, while the rest is from the North and West put together.

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Amongst GSK's quality nutritional products, Horlicks stands out as the No.1

malt drink in Malaysia. As the leading nourishing malt drink in the region,

Horlicks established its household stature as the trusted source of

nourishment by combining wholesome goodness of milk, wheat, and malted

barley.

3.1 COMPETITORS
The nutritional drink or the health drink industry has been marked by

competition from various companies in the past few years. The health drink

manufacturers in India have tried to retain their brand image by improving

their product quality & by meeting consumer’s expectation.

Horlicks-The Winds Of Change

Glaxo SmithKline Beecham’s Horlicks is the leader in the HFD market

with the market share of over 50%.

There are two kinds of competitors GSK face in the industry, the direct

competitors and the indirect ones including the substitutes. Here the primary

competitors or direct ones are very easily identifiable and very visible.

Whereas the indirect ones may not be competing directly but still pose a

threat to the company. The key to success being strong product innovation,

31
marketing and the promotion efforts and distribution capabilities of the

manufacturer in the HFD market.

GSK’s main competitors are HJ Heinz (Complan), Cadbury India

(bounvita) and Nestle India (Milo).

Given here under is a percentage wise beak-up of the market shares enjoyed

by the various brands in the MFD industry:

Horlicks-The Winds Of Change

3.2 MARKET SHARE

The market size of health food drink is: Rs. 1,300 Crores.

Percentage Share of Major Brands in The Health Food Drink Market

32
 MARKET SHARE OF HFDs
MARKET SIZE : Rs.1300 crore

2.2 3.3 HORLICKS

1.2
1.4 BORNVITA
11.6 COMPLAN
8.3 MALTOVA
MILO
59
VIVA
13 BOOST
OTHERS

Amul has launched its new health beverage Amul Shakti in northeast India

at a higher price than GlaxoSmithKline Beecham Consumer's Horlicks this

year and Rasna has launched Rasna Shake UP, a pre-sweetened milkshake

mix powder increasing the competition in the HFD market.

The market growth will depend on the ability of the major players to drive

category penetration amongst the milk consuming masses in the North and

Horlicks-The Winds Of Change

the West as well as their ability to drive penetration amongst the lower

SECs, which is currently low.

3.3 MARKETING LANDMARKS

33
• 1931: "Night Starvation" story developed to promote Horlicks as a

bedtime drink.1

• 1952: Horlicks is linked to the successful treatment of gastric ulcers

and some forms of diabetes.

• 1982: Instant Horlicks launched as the first instant malted drink.

• 1985: Flavours (Chocolate and Chocolate Malt) added to original

Horlicks.

• 1988: Instant Horlicks changed from jars to Ceka packaging format.

• 1999: “Twice the calcium of fresh milk” claim.

• 2000: “Guess who didn't have their Horlicks last night?” Advertising

Campaign is launched.2

• The testimonial advertising campaign, “one for now, one for the

future” with tactical advertising such as “Iced Horlicks”.3

Horlicks-The Winds Of Change

CHAPTER-4

MARKETING STRATEGIES

34
Marketing strategy is an integral part of business strategy, no matter what

source of competitive advantage a firm chooses to pursue. It involves

focusing explicitly on the quest for long run competitive and Consumer

advantage .Changing definitions of market segments, changing definitions of

industries/new sources of competition responding to all of which, is clearly

the role of marketing strategy.

The Consumer Healthcare business relies on the development of high-

quality branded products with good consumer acceptance, supported by

advertising and brand promotion, line extensions, new formulations and

packaging innovations. Glaxo SmithKline’s ability to compete effectively is

dependent on its skills in developing new scientifically supported products

and line extensions with performance superior to those of its competitors,

backed up by compelling advertising. The marketing strategy of GSKCH

formulation enhancement, relaunches, product repositioning, upgradation in

packaging and consumer education through advertising following .

Horlicks-The Winds Of Change

4.1MARKET SEGMENTATION

35
The Indian market for malted milk powders is very large, since the product

is widely used as a nutrition and energy supplement by a large number of

adults and children. Three major players exist in this product-market:

Cadbury’s India with its brand Bournvita, Glaxo Smithkline Beecham with

its brand Horlicks and Heinz, with its brand Complan. Historically, market

segmentation was done on the basis of milk availability, milk-surplus

markets and milk-short markets. Brown powders (containing cocoa) and

needing to be mixed with liquid milk were targeted at milk-surplus markets

while white powders, containing a much higher proportion of milk powder,

which could be mixed with just water were targeted a milk-short markets.

Over the years, the divide between milk-short and milk-surplus markets was

beginning to blur due to operation flood solving of the problem of milk

shortage in the milk deficit regions and the product-market segments ended

up being brown powder for those who were drinkers of liquid milk, and

white powders for those who were not. Bournvita was the leader in brown

powders and Horlicks in white powders. Glaxo Smithkline Beecham, the

makers of Horlicks, complicated matters by

Horlicks-The Winds Of Change

36
launching a brown variant of their white powder – Chocolate Horlicks –

which could be consumed unlike Bournvita, with water alone. They

extended the Horlicks brand name along many dimensions into several sub

brands (Junior Horlicks, Mother Horlicks, Horlicks with Smart Nutruents).

Such markets can best be termed ‘markets in transition’ where products,

consumers, competitors are all in a state of flux and the traditional ‘rules of

the game’ seem to be changing – some driven by the consumer environment

and some by the players in the business. Though not very explicitly horlicks

tries to address the younger population i.e. kids under the age of 15 as it has

been found that maximum consumption of HFD is by this generation. The

market is still segmented based on product capabilities and usage method

(brown and white powders) through there are signs that this is beginning to

change, Thus the segmentation is largely on the basis of age, the

advertisement and sales promotion also focuses on kids by way of cartoons

featuring in the advertisements and also cartoons serial sponsorships.

Horlicks-The Winds Of Change

37
4.2 Brand Extensions

GSK has introduced various brand extensions in the last few years and

notable among these are 'Mother Horlicks' and 'Junior Horlicks'. The former

caters to the nutritional needs of pregnant and lactating mothers while the

latter is targeted at the growing child in the age group of 1-3 years. Both the

brand extensions have been very well accepted in the market and have

shown good growth rates since 2001.

During 2001, GSK launched another health drink under the brand name

'Ribena Amla'. 'Ribena' is one of the most successful brands of SmithKline

Beecham Plc. In India, the product has been launched as an Amla based

Vitamin C drink. The brand launch has been successful and initial trial rates

are healthy.

GSK has already re-launched 'Horlicks' and 'Boost' to maintain the top of

mind recall for its products. Further the new products to be launched by the

company will strengthen the presence of the company in the MFD markets.

Horlicks-The Winds Of Change

38
 4.3 PROBLEMS LEADING TO ITS RE-LAUNCH ARE:

Various problems faced by the brand ultimately leading to its re-launch are:

1) Although the brand was proving out to be a cash cow for GSK, it was

having a boring nutrient image which made its market stagnant. After

extensive research it was realised that Horlicks was considered as a boring

nourishment drink.

2) Positioning of the brand has been a big point of confusion in the

consumers mind. The brand was earlier targeted towards Mothers whereas

the actual consumer was mainly children.

3) In launching other products like Aquafresh, Boost etc. GSK ignored its

flagship brand.

4) The brand is not available into the ready to drink category.

5) The market for milk food beverages has stagnated for the last three years.

This has led to a great deal of intra-category cannibalization. Frequent re-

launches and the attempt to differentiate the brands by ingredients by

competitors has stop putting impression on customer perception.

Horlicks-The Winds Of Change

39
 4.4 RELAUNCH OF HORLICKS BRAND

Glaxo SmithKline (GSK) has re launched its Rs 800-crore Horlicks brand in

three new variants — vanilla, honey and chocolate in addition to its regular

malt. The relaunch is done for the very specific purpose of changing focus

from nutrient value to the flavors of the product. This is done to change

Horlicks from a boring nourishment drink to attractive health drink. The

relaunch includes a change in appearance with the change in packaging

style. The positioning has also been changed from mothers to children in the

new marketing strategy. In a relaunch campaign New TV advertisement has

been created. While the first phase of the campaign would talk about the re-

launch of Horlicks, the second phase will talk about the new features of the

product.

40
Horlicks-The Winds Of Change

CHAPTER-5

MARKETING MIX

The marketing manager needs to choose a mix of marketing efforts to make

a set of tangible decisions. The mix is commonly referred to as the 4 P's of

marketing. They include product, price, place and promotion.

5.1 PRODUCT

Product variety, quality, design, texture, brand name, packaging, sizes,

services, warranties, are all components of product itself. In all it is the

characteristics of product or service that meet the needs of customers.

Decisions regarding a product are dependent on how a product fits in with

the existing line, what is the differentiating factor in the product and in what

stage of the product life cycle is it currently in.

Starting from the concept stage to the delivery stage, marketing is

instrumental, as it strives always to "satisfy" the customer.

41
Product attributes are the characteristics that describe a good or a service.

Marketers use these features to attract consumers. But they must be careful

Horlicks-The Winds Of Change

when planning the campaign to create a fit between the product's attributes

and the needs or desires of the target market.

Horlicks-a Glaxo SmithKline product occupies major share in Health food

Drink segment. Horlicks is made from milk, wheat and malted barley.

Pharma and healthcare company, GSK has relaunched Junior horlicks. It

was realized that Horlicks was considered as a boring nourishment drink and

was beginning to lose its significance. The company research showed that

preference for flavours reigned higher than nutrients, and hence, the decision

to make the drink tastier and enjoyable was taken.

New Horlicks with Smart Nutrients is being manufactured at the company’s

modern plants in Nabha and Rajahmundry.

Relaunch of its 'New Horlicks with Smart Nutrients-The relaunched

product contains a 'combination of nutrients that act as resistance builders'

and helps 'build up the immune system of the child'.

42
 The new formulation brings about a significant improvement in

this much liked health drink by incorporating vital micronutrients that are

Horlicks-The Winds Of Change

known to have a proven direct co-relation with mental sharpness and

physical activeness. These are Iron, Vitamin B2, Vitamin B6, Vitamin B12,

Folate and Vitamin C. It also plays a significant role in enhancing internal

resistance against infections. The SBCH research team has termed these

micronutrients as 'Smart Nutrients' because of their positive effect on mental

sharpness and physical activeness. New Horlicks with Smart Nutrients has

been scientifically formulated to provide optimal levels of these nutrients, on

consumption. Two cups of New Horlicks with Smart Nutrients fully meet an

individual’s daily requirement of these vital nutrients.

While the product has been substantially enhanced to provide greater

benefits, it continues to retain all the positive features and advantages of the

earlier formulation. This includes the unique delicious taste that has

characterised Horlicks for generations.

Customer is the profit, everything else is the overhead’

43
Keeping this in mind the Horlicks has shown good understanding of both the

consumer and the buyer / influencer by addressing two issues with one

product, that of nutrition and taste.

Horlicks-The
Winds Of Change

The focus this time is not only on enhancing the nutrient values of the

product but major emphasis has been given to different flavours. The

company has re-launched Horlicks in three new variants — vanilla, honey

and chocolate — apart from the regular malt.

44
Horlicks-The Winds Of Change

5.2 PACKAGING

The role of packaging has increased significantly in recent times, partly due

to improvement in packaging technology. Traditionally, packaging was

expected to serve the purpose of protection and economy. Then, packaging

was expected to fulfill the objective of convenience. Today, packaging is

used as an effective tool for promotion. Besides, new packaging technology

has enabled most FMCG companies to significantly reduce their packaging

costs.

The packaging of the Great Family Nourisher has been made Modern &

contemporary. While the product packaging has been designed by Tata

Elxsi, the pack designing has been done by J. Walter Thomson. The new

avatar of Horlicks has the highest shelf appeal and maximum visibility. The

new Horlicks formulation is accompanied by contemporary packaging in

45
hues of bright blue and orange. It has also gone in for a packaging change

with more convenient-to-handle jars.

The new jars are more convenient to handle and dispense from.

Horlicks-The
Winds Of Change

Horlicks has substantially increased the value for money proposition for its

consumers. While the product has been enhanced to provide an additional

new and important benefit, it continues to retain all the positive features of

its earlier formulation.

46
 Horlicks-The Winds Of Change

5.2.1 REPOSITIONING OF HORLICKS

The re-launch also includes a new look for the brand not only in terms of

packaging but also new positioning which addresses children instead of

mothers. Junior Horlicks, is now positioned for children in the one to three

age-group. The brand variants targeted different consumer segments such as

Junior Horlicks for infants, Mother’s Horlicks for expecting mothers,

Horlicks. Three-in-one and Horlicks Smart Nutrients positioned on health

platform and targeted at children.

47
 Horlicks-The Winds Of Change

It is been realized that it is not only the mother who plays main role in

purchasing but the children which are indeed the main users of the product.

The company's communication strategy, therefore, focuses on children who

have an attitude - an attitude, which is positive, livewire and spirited.

Although the relaunch has targeted the children segment this time, the

concept of mother has not been fully given up.

5.3 Price

48
The Marketing Department of any company does a lot of research work in

order to determine the price points that are most suitable to the company and

at the same time would generate maximum satisfaction for the target

customer. Depending on the product the marketing department adopts

various pricing strategies. Premium pricing, penetration pricing, economy

pricing, and price skimming are the four main pricing policies or strategies,

which form the bases for the pricing exercise.

 PremiumPricing

It is decided to use a high price when the product or service is

Horlicks-The Winds Of Change

 unique. This approach is used where a substantial competitive

advantage exists. Such high prices are charged for luxury products.

For e.g.: a Mercedes car

 Penetration Pricing

The price charged for products and services is set lower than actual when

it is introduced in the market in order to gain market share. Once this is

49
 achieved, the price is increased. This approach is adopted in order to

attract a new customer base.

EconomyPricing

This is a basic price of the product. The cost of marketing and manufacture

are kept at a bare minimum. Supermarkets often have economy brands for

atta, dal etc.

 Price Skimming

If a product is unique and has a considerable competitive advantage, then the

product may be introduced at a high price so that before competitors

Horlicks-The Winds Of

Change

come in you can make maximum profits. When Dove was launched in

the market it was the only soap with ¼ moisturizer and was priced at a

premium price of Rs. 45/- per soap, today the soap is available at a lower

price.

5.3.1 PRICE OF HORLICKS

50
 Similarly the GSk has chosen the price for horlicks keeping in mind the

value addition done to the product by the company along with the

consumer comfortability. Junior Horlicks is available in three SKUs —

 500 gm jar (Rs 114),

 500 gm GP (Rs 105)

 200 gm jar (Rs 58)

The company has not gone for reducing price as they believe that Price

alienation could translate into alienation with the product proposition itself.

Diehard Horlicks consumers who may have moved out of the brand and

learnt to live without it may not find a credible reason to go back if such a

step is being taken.

Horlicks-The Winds Of Change

5.4 PROMOTION

Promotions are very important because health food drinks are generally not

considered necessities by the majority of users. Promotions of Horlicks are

done by GSK through both direct and indirect means. These involve:

51
5.4.1. Running seminars about health concerns and health

supplements.

GSK organized a seminar for doctors in Chennai stressing on the

importance of nutrition during illness and convalescence.

GSK is also planning to take up major initiative to increase awareness of its

brands among school kids. About 1.5 million students from 3000 schools in

eight cities was involved in the mega programme called Activity 2003. The

Activity, an organization working with schools, has announced the launch of

Horlicks Activity 2003— The Kool Skool Fest, an inter-school literary and

cultural event. The event aims at encouraging the learning of `Life skills'—

that are recommended by the World Health Organization for the

development of individuals. Sponsored by Horlicks, the flagship brand of

GlaxoSmithKline, the fest is being held in the cities such as Bangalore,

Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Cochin, Pune and

Horlicks-The Winds Of Change

Jamshedpur. The fest will feature more than 40 different competitions in

fields such as literary art, creative speaking, singing, dancing and informal

events for students from 1st to 12th std. The Activity along with Horlicks

will hand out scholarships to two deserving students in each city. The

52
scholarships for the year 2003 are worth more than Rs 1,00,000. Over and

above the scholarships, Horlicks will also sponsor the complete one year

education for two students who emerge as the "Mr & Ms Live Wire

Activity" in the personality contest during the finals.

5.4.2. CLAIMS

GSK remains committed in inventing new reasons and ways for consumers

to enjoy the nourishing goodness of Horlicks. They make a strong claim on

Horlicks which changes from time to time. Horlicks has constantly

improved its formulation to keep up with the ever changing needs of the

consumers. Like in 1998, calcium and protein the building blocks to

children’s growth were added into Horlicks. After a few years, Horlicks

contained a new formula fortified with Vitamin C, B-12 and Iron. Now, its

latest relaunch

Horlicks-The Winds of

Change

contained a new a new claim “twice the calcium of fresh milk”, which

boosted it‘s sales.

53
5.4.3. ADVERTISING

The advertising account is being handled by creative agency HTA. The

company has also launched a television ad campaign created by JWT

featuring kids, which would be aired across channels. The TV campaign

would also be accompanied by print ads and hoardings. Mothers always

hope to see their children grow up strong and healthy. This age-old fact is

the backbone of Horlicks communication strategy. It lays the foundation for

a child’s future, hence it’s tagline: “Horlicks, nourishment for life”. In late

90s its ads reverberated through the television sets of every Indian household

and they just couldn’t get it out of their heads. Its campaign was well

received by Indian mothers. Also there campaigns are still lodged in

consumers’ memory.

Horlicks-The Winds Of Change

5.4.4. PROMOTIONS TO CONSUMERS

Besides relying on conventional bottles, the Horlicks brand is also being

aggressively pushed in the market through a mix of refill-packs and bundled

54
gifts (like katoris). Promotions include special discounted bundled packs and

Periodic price discounts of between 5% and 10% off the recommended retail

price are also being provided by the company from time to time.

5.4.5. PROMOTIONS TO RETAILERS

 DISPLAY CONTESTS

A strong brand presence at retail outlets is made with impressive

floor displays and value added promotions from time to time. Recently they

have asked retailers to display three bottles of Horlicks arranged in a

triangular form for 45 days with a poster advertising Horlicks in the

background. The rationale behind this is that bottles arranged in this fashion

attract consumers’ attention. Moreover after 45 days the GSK people will

conduct a lucky draw of the retailers who participated in this scheme and

offer them attractive prices.

Horlicks-The Winds Of Change

 OTHER PROMOTIONS

55
There are also various sampling programmes in schools, shopping malls and

at sponsored events. All this is done in an effort to vie for the top spot in

consumers’ minds.

The brand had begun to look dated and was losing its significance. The

company is looking at innovative ways to increase consumer base in the

health food drinks segment. For instance, it is exploring the possibility of

introducing ready-to-drink version of its popular drinks. It is also looking at

opportunities in joint marketing with companies that have strong rural

networks.

5.5. DISTRIBUTION

In this sector, one of the most critical success factors is the ability to build,

develop, and maintain a robust distribution network. To derive success in the

FMCG segment it is important to have a good distribution channel. In

fact a good distribution channels guarantees a good reach to the consumer

which is so vital to derive profits Availability near the consumer is vital for

wider penetration. Distribution network refers to the consumer buying points

Horlicks-The Winds Of Change

56
where products are available (almost always). It takes enormous time and

effort to build a chain of stockists, retailers, dealers etc and establish their

loyalties. There are entry barriers for a new entrant as a new product is

typically slow moving and has lesser consumer demand. Therefore dealers/

retailers are reluctant to allocate resources and time.

Following is the distribution channel followed by GSK for Horlicks:

FACTORY ► DISTRIBUTION CENTERS ► WHOLESALERS ►

RETAILERS

The first link in the channel is the factory situated at Sonepat, which has

been designed to produce Horlicks formulations. The Sonepat plant is of

26,000 tonnes per annum capacity. GSK has total workforce of over 3,000

people at its manufacturing plants located in Nabha and Rajahmundry. Its

packing facilities are located at Hyderabad and Ballabgarh. GSK has four

regional Sales Offices in the four metros which co-ordinate the sales,

distribution and collection activities in their respective regions. The

company now has 34 sales depots (one in each State), as against 28 in 1998.

The product is supplied to wholesalers from over there. It has a strong

marketing network in India comprising over 1,800 wholesalers and

direct coverage of over 4,25,000 retail outlets. Its wholesaler network has

57
 Horlicks-The
Winds Of Change

grown from 1,317 in 1998 to 1,800 at present. These wholesalers further

supply to 425,000 retail outlets across the country.. SBCH has increased its

reach over the years, which has helped it gain incremental market share.

58
Horlicks-The Winds Of Change

CHAPTER-6

6. CONSUMER ANALYSIS

Changing consumer profiles, shifts in value systems, changing cultural

labels of product categories, attitudes to technology, changing behaviour in

the area of diffusion of innovation, are some examples of macro trends of

consumer environment for knowing the consumer attitude.Consumer

analysis is dome on the basis of a questionnaire covering different aspects of

the consumer opinion in the Northern Region. The main objectives being

met by the questionnaire are:

a) To find out which brands consumers are actually preferring

b) To find out what they actually look for from a health food drink

c) To find out their taste preferences

d) To find out which medium of promotion actually attracts them

e) To find out their satisfaction level from their current brand

f) To find out the influencer of buying decision

59
 g) To find out the image of horlicks

Horlicks-The Winds Of Change

Q1).What Brand(s) comes to your mind first in the Milk based health food

drink?

Horlicks Boost Maltova Milo Complan Bournvit Others

a
8 2 1 1 5 11 0

Choice of Brands

0% Horlicks
29% Boost
38%
Maltova
Milo
Complan
7%
Bournvita
18% 4% Others
4%

60
Horlicks-The Winds Of Change

The survey indicates that Bournvita enjoys the most recognized brand

among the milk based health food drink category, followed by Horlicks.

Even complan have a good recognition. Thus Horlicks should work upon

building such promotional programs which increase its visibility among the

health food drink segment

Q2).What do you prefer in Health food Drink?

Nutritional Value Taste Colour Other

13 11 1 0

Preferences

Nutritional
4% 0% Value
Taste

44% 52% Colour

Other

61
It is evident from the survey that people consume health food drink mainly

for its nutritional value rather than taste or to change color of milk. Thus

there is no flaw on horlicks having an image of nutritional health food drink.

Horlicks-The Winds Of Change

Q3).Which flavor do you prefer to take?

Chocolate Malt Vanilla Honey

16 4 2 1

Taste

9% 4%
Chocolate
17%
Malt
Vanilla
70% Honey

62
It is clear that chocolate remains ever preferred choice of health food drink

consumers irrespective of gender. Thus horlicks should concentrate on

chocolate flavor rather than malt to build its market.

Q4).Time period of usage

Less than 1 year 1-3 years 3-5 years More than 5

years
6 8 10 4

Loyalty

Less than 1
year
14% 21%
1-3 years

3-5 years
36% 29%
More than 5
years

63
It is seen that in case of health food drinks the consumers are more or less

loyal towards their brand. Hence horlicks should concentrate on tapping new

customers while giving value to their existing customers.

Q5).Satisfaction level

Highly Satisfied Satisfied Dissatisfied Indifferent

3 16 3 4

Satisfaction Level

15% 12% Highly Satisfied

12% Satisfied
Dissatisfied
61% Indifferent

64
Q6).What do you think is the most effective in creating an impact on

decision making process regarding Health food Drink.

T.V. Magazines Newspaper Word of Mouth

16 4 1 4

Medium of information

16%
T.V.
4% Magazines
16% Newspaper
64%
Word of Mouth

Horlicks-The Winds Of Change

65
It is evident from the survey that T.V. plays an important role in forming the

opinion of the consumer regarding choice of health food drink. Hence GSK

should concentrate over visual media to promote its brand.

Q7).Given a chance would you like to shift to another brand?

Yes No
8 15

Shift

Most of the respondents in the survey

35% were not willing to shift from their
Yes
brand. But the good news for horlicks is that most of the respondents in this
No
65%
segment are users of horlicks itself.
Influencers

Q7) Who influences choice of health food drink in your family?

Parents 5% Children Knowns

Parents
Children
41% 54% Knowns

66
Contrary to the popular opinion, survey indicates that parents are still the

deciding force in the health food drink segment. Though pester power also

plays its part. So GSK should concentrate over both segments to build

equity.

Q8).What image does horlicks carry in your mind?

Fun Drink Nutritional Drink Other

67
1 21 2

Image of Horlicks

8% 4% Fun Drink

Nutritional
Drink
Other
88%

No matter how hard GSK is trying, it is not been able to break its image of

Nutritional Drink. Most of the respondents in the survey are carrying image

of horlicks as nutritional drink.

Q9) Have you tried new variants of Horlicks?

Yes No

68
4 19

New Variants

17%

Yes
No

83%

Most of the respondents of the study have not tried the new variants of

horlicks. GSK should take efforts in this field. It should plan proper channels

to get its product to the customer.

Horlicks-The Winds Of Change

Q10).Would you like to have horlicks in ready to use out of vending

machine form?

69
Yes No
15 9

Out of Home Consumption

38%
Yes
No
62%

Most of the respondents from the study are willing to consume Horlicks

ouof-home ready to drink form. GSK should go ahead with its plan to setup

Vending machines to sell Horlicks.

70
CHAPTER-7

71
 CONCLUSION
The health food drinks industry has been facing testing times with stagnant
markets. Market leader GlaxoSmithKline is looking to put the spring back in
its brands and the market through repositioning and relaunches of the
product.
Milk food drinks, the category in which GSKCH operates, offers scope for

steady growth through development of high-quality branded products with

good consumer acceptance, supported by advertising and brand promotion,

line extensions, new formulations and packaging innovations. So, the market

growth in the health food drinks will depend on the ability of the major

players to drive category penetration amongst the milk consuming masses in

the North and the West as well as their ability to drive penetration amongst

the lower SECs, which is currently low.

Speed and reach will become critical and differentiation in supply-chain

capabilities would determine the success of competing companies.We have

done Consumer analysis through questionnaire which covered different

aspects of the consumer opinion in the Northern Region.

The results of which are as follows:-

1. Horlicks should work upon building such promotional programs which

increase its visibility among the health food drink segment as the Bournvita

72
enjoys the most recognized brand among the milk based health food drink

category in the northern region.

2. Horlicks should not change its positioning of Nutritional Health Drink but

it should also focus on its image building as Nourishment with fun.

3. Chocolate remains ever preferred choice of health food drink consumers

irrespective of gender.

4. In case of health food drinks the consumers are more or less loyal towards

their brand. Horlicks should concentrate on tapping new customers along

with more innovative marketing strategies while giving value to their

existing customers.

5. Customers are more or less satisfied with their current brand but Horlicks

should try to tap new customers as promotion and marketing strategies play

a significant role in attracting new customers.

6. People rarely shift their brands but they do so when they are being enticed

by the freebies or other promotion.

7. Parents are still the deciding force in the health food drink segment. GSK

should concentrate over both segments parents and children to build equity.

Horlicks-The
Winds Of Change

73
8. Horlicks has not been able to break its image of Nutritional Drink in the

northern region.

9. GSK should go ahead with its plan to setup Vending machines to sell

Horlicks as people are willing to consume Horlicks out-of-home ready to

drink form.

Horlicks-The Winds Of Change

74
 CHAPTER-8

SUGGESTIONS

 PRE-EMPTIVE MOVE

A sustainable competitive advantage can sometimes be built by a pre-

emptive move. In the HFD it pays to go for a pre-emptive move. In case of

GSK, it can go for a pre-emptive move by going in for innovative ideas as

designing the product in interesting shapes or to come up with freebies as

games, or a collection of a popular comic character or of pictures of a chain

of events so that the completion of the series will bring a prize.

 THE FOCUS STRATEGY

The market growth will depend on the ability of the major players to drive

category penetration amongst the milk consuming masses in the North and

the West as well as their ability to drive penetration amongst the lower

SECs, which is currently low. Apart from this GSK has to focus it’s energy

towards rural markets which have huge potentials and are highly

unexploited.

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 PROMOTING CHOCOLATE FLAVOUR

The white powder has become a boring flavour so GSK should promote it’s

chocolate flavour as it is much more popular in the northern and western

parts of the country.

 PROMOTING OUTSIDE HOME CONSUMPTION

GSK should focus to build upon out of home consumption business.

The company should focus upon vending machines and introduce the brand

in a ready to drink aspectic pack.

 IMPROVING DISTRIBUTION CHANNELS

To derive success in the FMCG segment it is important to have a good

distribution channel .Infact a good distribution channels guarantees a good

reach to the consumer which is so vital to derive profits. .So GSK will do

well to improve its distribution channels in time to build sustainable

competitive advantage.

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 DIFFERENTIATION STRATEGIES

The concept is to make the product different from those of its competitor.

GSK should constantly differentiate itself from the competitors on the basis

of newer products. This differentiation could be on the basis of product

quality, product features, or distribution channels.

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APPENDIX

ANNEXURE-I
QUESTIONNAIRE

We, hereby declare that the information collected by means of this

Questionnaire will be used purely for academic purposes. Your co-operation
would be highly appreciated.

1) Which is the Brand that comes to your mind first in the Health Food
Drinks?
Horlicks Boost Maltova
Milo Complan Bournvita Others

2) What do you prefer in Health Food Drink?

Nutritional Value Taste Colors Other________

3) Which flavor do you prefer to take?

Chocolate Malt Vanilla Honey

4) Which Brand(s) are you currently using?

_________________________________
_________________________________
_________________________________

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Winds Of Change

5) For how long are you using this brand?

Less than 6 Months Less than a Year More than a year

6) Are you satisfied with your current brand?

Yes No
If No, What else do you want?
__________________________________________

7) What do you think is the most effective in creating an impact on

decision-making process regarding Health Food Drink?
T.V Magazines Newspaper Word of Mouth

8) Given a chance would you like to shift to another brand?

Yes No

If Yes, to which
Brand_________________________________________________
And Why
___________________________________________________________

9) What image does Horlicks Carry on your mind?

Fun Drink Nutritional Drink
Other__________________

10) Have you tried new Variants of Horlicks?

Yes_________ No___________

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ANNEXURE II-
Key Nutrients
Horlicks is a nourishing malted food drink which combines the wholesome

goodness of malted barley, wheat and dairy ingredients.

Horlicks drinks provide the following essential nutrients:

Nutrient Function
Energy Essential for the basic metabolic processes of the body

(for the heart to beat, for breathing, to maintain body

temperature etc.); for growth and repair of tissues; for all

movement.
Protein Essential for healthy growth and development in children

and for cell maintenance and repair throughout life.

Protein can also be used as a source of dietary energy.

Carbohydrate The main source of dietary energy. Horlicks provides a

mixture of carbohydrates including maltose (the sugar

obtained by the breakdown of cereals in the Horlicks

process), lactose (the sugar found naturally in milk),

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 sucrose (ordinary table sugar) and more complex

carbohydrates.
Fat The most concentrated form of dietary energy.
Vitamin A Required for healthy eyes and skin.

Niacin A vitamin which aids the conversion of food into energy.

Vitamin B1 A vitamin which aids the conversion of food into energy.

Also needed for proper functioning of the heart and

nervous system.
Vitamin B2 Helps to keep skin and eyes healthy. Involved in energy

release from foods.

Vitamin C Helps in growth and repair of tissues. Aids iron absorption

for healthy blood. Helps protect against infection.

Folic Acid Needed for the production of red blood cells.
Vitamin D Needed for proper calcium absorption and therefore

healthy teeth and bones.

Vitamin B12 Necessary for the proper formation of red blood cells and

nerve fibres.
Vitamin E An important dietary antioxidant.
Vitamin B6 Important for a healthy nervous system, for healthy blood

and for the metabolism of protein.

Iron Essential for the production and functioning of red blood

cells.
Calcium Essential for healthy bones and teeth; required for the

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 proper functioning of nerves and muscles. An adequate

intake of calcium is vital in childhood and adolescence to

ensure that strong bones are formed.

Horlicks-The Winds Of Change

Annexure III -

Some facts about Horlicks

• Horlicks was first invented to substitute milk as baby food.

• In India, two billion cups of Horlicks are drunk every year.

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 • Horlicks is consumed by over 120million people daily and enjoy an

annual growth rate of over 22% in global sales.

• In Britain, South Africa and Australia, Horlicks is positioned as a

sleep enhancing night time drink.

• Where there’s a problem taking solid food, Horlicks can provide the

nutrition that would otherwise be missing from the diet.

• People on special diets, including liquid diets or any diet devised for

gastric disorders, can benefit from the nutritional convenience of Horlicks.

Horlicks-The Winds Of Change

Annexure IV -

Horlicks : Cheaper than Coffee and Its Good

For You

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Horlicks, in one form or another, has been around for yonks and yonks, and

even as a small boy my Maternal Grandmother insisted on her grandson

devouring a cup of it before turning over and going off to enjoy a sound

nights sleep. Today it comes in various flavours and you can buy pack etc.

sachets as well as the jars which are the version I am most familiar with.

Horlicks is made by the giant multinational, Smith Kline and Beacham,

having originally been produced by the British based Beacham company.

What is Horlicks? Well it is a very nutritional malted food and health drink.

It is said to aid sleep and is a veritable breeze to prepare. Out two or three

spoonfuls in a cup, add some boiling water and a bit of milk, and by jingo

you have a thoroughly nice drink at a cost which is a lot cheaper than coffee,

drinking chocoalate or exotic teas.

Horlicks-The
Winds Of Change

The ingredients of Horlicks include some of the following:

Wheat Flour

Malted Barley

Dried Skimmed Milk

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Dried Whey

Sugar

Milk Protein

Malt Extract

Vegetable Fats

Lactose

Salt

Horlicks Original is a thoroughly refreshing health drink and I personally

like its creamy malt flavour. At times I find drinking chocolate a tad boring

and I don’t like to drink coffee late at night but I enjoy a cup of Horlicks just

before turning in for a good night's sleep. Needless to say it comes with a

strong recommendation from this veteran reviewer.

Horlicks-The
Winds Of Change

BIBLIOGRAPHY
1. Pande, Bhanu, “Cup Half Empty”. “The Economic Times- Brand
Equity “, New Delhi.

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2. “ Glaxo SmithKline consumer not in pink of health”
http://www.sharekhan.com

3. “ SmithKline to add muscle to boost Horlicks, Viva”

http://www.sharekhan.com

4. “GSK relaunches Horlicks”

http://www.sharekhan.com

5. Kailash, Sanjay.Distributor of GSKCH, Chandigarh.

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