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CONTENTS

# Certificate # Acknowledgement # Declaration # Preface Chapter1. Introduction 1.1 Product History 1.2 Product Profile 1.3 Why Horlicks...Key Nutritional Facts 1.4 Objectives of the Project 1.5 Research Design And Methodology Chapter 2 Company Profile 2.1 Glaxosmithkline Consumer Healthcare Ltd. (Gskch) Chapter 3. Marketing Environment 3.1 Competitors 3.2 Market Share 3.3 Marketing Landmarks 17 – 22 18 – 22 23 – 27 25 26 27 28 – 34 30 – 31 Chapter 4. Marketing Strategies 4.1 Market Segmentation 32 33 34 9 – 16 11 12 13 14 15 – 16

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4.2 Brand Extensions 4.3 Problems Leading To Its Re-Launch 4.4 Relaunch of Horlicks Brand Chapter 5. 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 47 5.4.1 Running Seminars About Health Concerns And 48 Health Supplements 49 5.4.2 Claims 5.4.3 Advertising 5.4.4 Promotions To Consumers 5.4.5 Promotions To Retailers 5.5 Distribution 49 – 50 51 – 53 54 – 66 55 – 66 67 – 70 71 – 73 74 – 74 Chapter 6. Data Analysis 6.1 Result & Findings 6.2 Conclusion 75 – 82 83 35 – 53 36 – 38 39 – 42 41 – 42 43 – 45 44 – 45 46 – 50 46 – 47

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6.3 Suggestion 6.4 Limitations Annexure Bibliography

Preface
The research was carried out on the topic A Study of consumer brand preference of Horlicks (With special reference to product variants) in the theoretical concept I had taken the basic concept which are mandatory to carry out the research project The core concept are marketing strategies, Marketing Environment & Marketing Mix after that in the objective of study I had taken the objectives to carry out the research where the main objective is to study the consumer brand preference of Horlicks. In the prior chapter I have given the company profile of Horlicks after that I have presented and analysed the data collected from the sample I had done the analysis of the questions of questionnaire with the help of responses from the respondent found during the field of survey

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CHAPTER-1 INTRODUCTION 4 .

into whites where brands like 'Horlicks' (GSKCH). Brown MFDs are basically milk additives. it is now estimated to be growing at more than 10% p.a. on the basis of their colour of appearance. where 'Bournvita' (Cadbury India Limited). 'Complan' (Heinz India Private Limited) and 'Viva' (GSKCH) are prominent. 'Boost' is the second largest player in the browns segment and has a market share of more than 30% in the segment. The total market for MFDs was estimated to be around 70000 MT. 'Horlicks' dominates the whites segment and accounts for more than three-fourths of the total sales in the segment. After witnessing sluggish growth in the early 1990s. 5 . 'Horlicks' and 'Boost' together command a 65% share of the total MFD market. White MFDs can be had with water or milk and account for approximately two-thirds of the MFD market (by quantity).The MFD market in India has traditionally been divided. 'Boost' (GSKCH) and 'Maltova' (GSKCH) are the main brands. in the last five years. and browns.

In 1994. The focus this time is clearly on providing the added benefit of “mentally sharp and physically active. Manufacture in India began in the year 1960.1.K. Now Horlicks has again been relaunched with smart nutrients.” 6 . Horlicks was relaunched with the addition of vitamins and minerals. which made the product even more wholesome.1 PRODUCT HISTORY The brand Horlicks came into existence way back in 1873. Calcium was added to the product in 1988 as a nutritional enhancement. Horlicks was imported into the country from the U. In its earlier days.

A strong brand heritage. It is the number one brand for Glaxo SmithKline (GSK).its commitment to quality and its understanding of consumer needs. For over 50 ye a r s . Horlicks is widely known as an easy to prepare malted food drink. Malaysians are the third largest consumers of the brand. Horlicks is still the world's most widely consumed malted milk product. Horlicks remains the number one health food drink in India. milk and malted barley. 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%.generations after generations of children wakeup to a mug of Horlicks pre p a red by mothers in their own special way.2 PRODUCT PROFILE Horlicks is made from wheat.Its success is due to a mixture of factors. after India and the United Kingdom.1. The enormous success of the horlicks brand has been reflected in the ever rising sales graph for the product. 7 . It is fortified with iron and eight essential vitamins with twice as much calcium as fresh milk. Horlicks can be enjoyed in over 15 countries worldwide. yet providing the same nourishing goodness unrivaled by any competitive pro d u c t s.

Horlicks drinks provides a modicum of vitamins A.1. D. and dietary fiber .3 WHY HORLICKS. B12. Refer to appendix 1 for the details of nutrients provided by horlicks. iron.. wheat and dairy ingredients. thiamin. 8 . niacin. plus calcium. folate. riboflavin. making Horlicks easily digestible. C. as fresh milk.KEY NUTRITIONAL FACTS Horlicks is a nourishing malted food drink which combines the wholesome goodness of malted barley.. These enzymes break down complex carbohydrates to simple sugars that are easily assimilated by the body. The malting of barley through the natural process of germination releases enzymes.

4 OBJECTIVES OF THE PROJECT The study is planned to focus on some emerging questions. They are: a) How successful would be the out-of-home consumption model as launched by Horlicks? b) Can Horlicks really break the image barrier and get nourishment fun image? c) After confusing consumer with so many campaigns like.1.“Strength and energy drink” and “Health drink for the family” can GSK settle for a long term promoting strategy? d) How does new Marketing mix helps Horlicks in getting back its position in market? plus 9 .

. Sampling for the research is convenience sampling . Sources of information :  Primary Data  Secondary Data The research is a combination of both primary and secondary data. The sample size was 50 people 10 . The research process tends to be circular over a period of time.1.5 RESEARCH DESIGN AND METHODOLOGY Research design  Exploratory Research Exploratory Research seeks to discover new relationship and establish hypothesis. A survey was done covering various aspects of the customer opinion regarding the product Horlicks. For the primary data purpose we had visited company’s sales office and tried to collect as much information as we could. . Exploratory studies are used when little is known about a given area .

Secondary sources of data includes internet. brochures of the company. magazines e. 11 .t. newspaper. Sampling Plan : Data was collected through questionnaire Sample Size : Sample size is of 50 people including mothers .c.

CHAPTER-2 COMPANY PROFILE 12 .

In 1977 Beecham’s Indian subsidiary Beecham India Pvt. Brylcream hair grooming cream and Silvikrim shampoo. in 1969. the name of the Indian operations was changed to SmithKline Beecham Consumer Brands Limited in 1991. Major brands Brylcream and Silvikrim were globally sold to Sara Lee. UK. Consequent to the merger of Beecham Group plc. hair care etc. and SmithKline. The company exited from toiletries. (GSKCH) Smithkline Consumer was originally incorporated in 1958 and went public in 1961. which was hitherto being imported. The worldwide interests of Horlicks Limited. UK. The parent 13 .1 GLAXOSMITHKLINE CONSUMER HEALTHCARE LTD. The company was then known as Hindustan Milk Manufacturers (HMM). USA in 1989. were purchased by Beecham Group plc. In Mar ’95. Ltd was merged with HMM Beecham India was producing a range of products such as Eno fruit salt. 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". mainly to manufacture and sell malted milk food ..2. UK.'Horlicks'. UK. It was promoted by Horlicks Limited.

Ltd. Horlicks. is the largest single shareholder of SBCH with a 40% stake and management control. Smithkline operated through 3 companies SmithKline Pharmaceuticals. Crocin and Tums. SmithKline Beecham plc. 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.company SmithKline Beecham Plc. Its flagship product. one of the world's largest healthcare companies. SBCH is the largest player in the domestic malted food industry. SmithKline Consumer Healthcare and a 100% subsidiary SmithKline Beecham Asia Pvt. Boost. with around US$13 billion in revenues and operations in 160 countries. The Pharmaceutical business of Glaxo and Smithkline has been merged in India.. In India. 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. has been merged globally with Glaxo Wellcome on 27th Dec'00 to form a new entity. Eno. SmithKline Consumer Healthcare 14 . GlaxoSmithKline Plc. The Consumer business however is continued separately through SmithKline Consumer and the company is being renamed as GlaxoSmithkline Consumer Healthcare Ltd to reflect the new association.

In white food 15 . Its manufacturing units at Nabha and Rajahmundry and its 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. Nestle and GCMMF have 3-4% market share each. further strengthening its position in the category.Maltova & Viva. The company has two manufacturing plants located in Nabha and Rajahmundry and a total workforce of 2300 people. followed by Cadbury (12%) and Heinz (10%).acquired two local brands . But GSK’s brand. GSK’s main competitors are HJ Heinz. Horlicks is the market leader and accounted for over 55% of the market while Cadbury’s Bournvita accounted for 15% and Boost around 9%. Cadbury India and Nestle India. SMBE has a 70% volume share. A new plant for manufacture of Horlicks has been set up at Sonepat in Haryana and has commenced commercial production in early 2002. The company has a wide distribution network covering 3000 towns.000 retail outlets.50. Malted drinks Viva & Maltova and biscuit brands Horlicks & Boost are outsourced by the company. 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 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. by virtue of its strong market position and wellestablished brands. The other major raw materials are malted barley. Vendors have been developed for the supply of these products and raw material availability is not a constraint. Cumulative market share post 16 . wheat flour and sugar. Operating Performance GSK.drinks. SmithKline has Horlicks and Boost range of biscuits while Heinz has Complan brand of biscuits. GSK.'Horlicks' and 'Boost'. GSK's sales primarily come from the MFD market where it has two 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.Both SmithKline Consumer and Heinz have extended their malted drink brands to the biscuit category. 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). ICRA expects the MFD market to maintain a steady growth rate of 8-10% in the medium term. GSK’S chief competitor is Complan from HJ Heinz.

Key issues GSK continues to maintain its leadership position in the MFD market. The financial flexibility of the company remains strong due to its low gearing. GSK set its long-term revenue growth target at 25% year on year.acquisition stands at 70%.Biscuits are sold primarily to take advantage of an established distribution channel and the brand equity enjoyed by 'Horlicks' and 'Boost' and contribute about 6% to GSK’s operating income. ICRA expects GSKCH to further consolidate its strong financial position with healthy cash accruals in the short to medium term. sizeable liquid investments and low bank limit utilization. with 'Horlicks' maintaining its dominant market share in the white MFD segment and 'Boost' being positioned strongly in the browns segment. 17 .

CHAPTER-3 MARKETING ENVIRONMENT 18 .

is the market leader with a 59 per cent market share. Horlicks stands out as the No. and malted barley. While 45 per cent of the brand's sales comes from the South. Horlicks established its household stature as the trusted source of nourishment by combining wholesome goodness of milk. especially Tamil Nadu. while the rest is from the North and West put together. along with Junior Horlicks. and Horlicks.The white malted category comprises 60 per cent of the overall Rs 1. wheat.1 malt drink in Malaysia.200crore HFD market. Amongst GSK's quality nutritional products. 49 per cent of its sales is from the East. 19 . As the leading nourishing malt drink in the region.

There are two kinds of competitors GSK face in the industry. The health drink manufacturers in India have tried to retain their brand image by improving their product quality & by meeting consumer’s expectation. Whereas the indirect ones may not be competing directly but still pose a threat to the company. marketing and the promotion efforts and distribution capabilities of the manufacturer in the HFD market.2 MARKET SHARE 20 . 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: 3. GSK’s main competitors are HJ Heinz (Complan). the direct competitors and the indirect ones including the substitutes. The key to success being strong product innovation.3. Glaxo SmithKline Beecham’s Horlicks is the leader in the HFD market with the market share of over 50%. Here the primary competitors or direct ones are very easily identifiable and very visible.1 COMPETITORS The nutritional drink or the health drink industry has been marked by competition from various companies in the past few years.

Percentage Share of Major Brands In The Health Food Drink Market MARKET SHARE OF HFDs MARKET SIZE : Rs.3 MARKETING LANDMARKS 21 .1300 crore 2.3 1. which is currently low. 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 the West as well as their ability to drive penetration amongst the lower SECs.3 59 13 3.6 8. 1. 3.2 HORLICKS BORNVITA COMPLAN MALTOVA MILO VIVA 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.2 1.300 Crores.The market size of health food drink is : Rs.4 11.

• 1952: Horlicks is linked to the successful treatment of gastric ulcers and some forms of diabetes. • The testimonial advertising campaign. • 2000: “Guess who didn't have their Horlicks last night?” Advertising Campaign is launched. • 1982: Instant Horlicks launched as the first instant malted drink. 22 . “one for now. • 1988: Instant Horlicks changed from jars to Ceka packaging format. • 1985: Flavours (Chocolate and Chocolate Malt) added to original Horlicks. one for the future” with tactical advertising such as “Iced Horlicks”. • 1999: “Twice the calcium of fresh milk” claim.• 1931: "Night Starvation" story developed to promote Horlicks as a bedtime drink.

no matter what source of competitive advantage a firm chooses to pursue.CHAPTER-4 MARKETING STRATEGIES Marketing strategy is an integral part of business strategy. It involves focusing explicitly on the quest for long run competitive and 23 .

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. Changing definitions of market segments. The Consumer Healthcare business relies on the development of highquality branded products with good consumer acceptance.consumer advantage. The marketing strategy of GSKCH formulation enhancement. changing definitions of industries/new sources of competition responding to all of which. line extensions. since the product is widely used as a nutrition and energy supplement by a large number of 24 . relaunches. product repositioning. 4. new formulations and packaging innovations. upgradation in packaging and consumer education through advertising.1MARKET SEGMENTATION The Indian market for malted milk powders is very large. is clearly the role of marketing strategy. supported by advertising and brand promotion. backed up by compelling advertising.

containing a much higher proportion of milk powder. with water alone. 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. milk-surplus markets and milk-short markets.the makers of Horlicks. with its brand Complan. Historically. Horlicks Lite). Mother Horlicks. which could be mixed with just water were targeted a milk-short markets. 25 . Over the years. market segmentation was done on the basis of milk availability.adults and children. Three major players exist in this product-market: Cadbury’s India with its brand Bournvita. Horlicks with Smart Nutrients. complicated matters by launching a brown variant of their white powder – Chocolate Horlicks – which could be consumed unlike Bournvita. Bournvita was the leader in brown powders and Horlicks in white powders. and white powders for those who were not. Brown powders (containing cocoa) and needing to be mixed with liquid or milk were targeted at milk-surplus markets while white powders. Glaxo Smithkline Beecham. Glaxo Smithkline Beecham with its brand Horlicks and Heinz. They extended the Horlicks brand name along many dimensions into several sub brands (Junior Horlicks.

Though not very explicitly horlicks tries to address the younger population i. 4. the advertisement and sales promotion also focuses on kids by way of cartoons featuring in the advertisements and also cartoons serial sponsorships.e.2 Brand Extensions 26 . Thus the segmentation is largely on the basis of age.Such markets can best be termed ‘markets in transition’ where products. 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. kids under the age of 15 as it has been found that maximum consumption of HFD is by this generation. consumers. 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.

GSK has introduced various brand extensions in the last few years and notable among these are 'Mother Horlicks' and 'Junior Horlicks'. 'Ribena' is one of the most successful brands of SmithKline Beecham Plc. During 1997. 4. the product has been launched as an Amla based Vitamin C drink.3 PROBLEMS LEADING TO ITS RELAUNCH ARE: 27 . Both the brand extensions have been very well accepted in the market and have shown good growth rates since 1997. 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. 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. The brand launch has been successful and initial trial rates are healthy. In India. GSK launched another health drink under the brand name 'Ribena Amla'.

t. The market for milk food beverages has stagnated for the last three years.4 RELAUNCH OF HORLICKS BRAND 28 .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. 3) In launching other products like Aquafresh. The brand was earlier targeted towards Mothers whereas the actual consumer were mainly children. it was having a boring nutrient image which made its market stagnant. 4) 5) The brand is not available into the ready to drink category. GSK ignored its flagship brand. 2) Positioning of the brand has been a big point of confusion in the consumers mind. 4. Boost e.c. After extensive research it was realised that Horlicks was considered as a boring nourishment drink. 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.

29 .Glaxo SmithKline (GSK) has re launched its Rs 800-crore Horlicks brand in three new variants — vanilla. In a relaunch campaign New TV advertisement has been created. the second phase will talk about the new features of the product. honey and chocolate in addition to its regular malt. The relaunch includes a change in appearance with the change in packaging style. While the first phase of the campaign would talk about the relaunch of Horlicks. 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 positioning has also been changed from mothers to children in the new marketing strategy.

CHAPTER-5 MARKETING MIX 30 .

quality. Horlicks is made from milk. brand name. packaging. 31 .The marketing manager needs to choose a mix of marketing efforts to make a set of tangible decisions. Marketers use these features to attract consumers. design. marketing is instrumental.A Glaxo SmithKline product occupies major share in Health food Drink segment. The mix is commonly referred to as the 4 P's of marketing. what is the differentiating factor in the product and in what stage of the product life cycle is it currently in. But they must be careful when planning the campaign to create a fit between the product's attributes and the needs or desires of the target market.1 PRODUCT Product variety. texture. wheat and malted barley. Product attributes are the characteristics that describe a good or a service. warranties. as it strives always to "satisfy" the customer. Starting from the concept stage to the delivery stage. place and promotion. Decisions regarding a product are dependent on how a product fits in with the existing line. They include product. 5. In all it is the characteristics of product or service that meet the needs of customers. are all components of product itself. Horlicks. sizes. services. price.

Pharma and healthcare company. the decision to make the drink tastier and enjoyable was taken. Vitamin B6. 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'. It also plays a significant role in enhancing internal 32 . and hence. Vitamin B2. GSK has relaunched Junior horlicks. New Horlicks with Smart Nutrients is being manufactured at the company’s modern plants in Nabha and Rajahmundry. Folate and Vitamin C. It was realized that Horlicks was considered as a boring nourishment drink and was beginning to lose its significance. These are Iron. The company research showed that preference for flavours reigned higher than nutrients. The new formulation brings about a significant improvement in this much liked health drink by incorporating vital micronutrients that are known to have a proven direct co-relation with mental sharpness and physical activeness. Vitamin B12.

on consumption. This includes the unique delicious taste that has characterised Horlicks for generations. Customer is the profit. The focus this time is not only on enhancing the nutrient values of the product but major emphasis has been given to different flavours. Two cups of New Horlicks with Smart Nutrients fully meet an individual’s daily requirement of these vital nutrients. 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. everything else is the overhead’ 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. honey and chocolate — apart from the regular malt. it continues to retain all the positive features and advantages of the earlier formulation. 33 . While the product has been substantially enhanced to provide greater benefits.resistance against infections. The company has re-launched Horlicks in three new variants — vanilla.

packaging was expected to serve the purpose of protection and economy. It has also gone in for a packaging change with more convenient-to-handle jars. While the product packaging has been designed by Tata Elxsi. Then. the pack designing has been done by J.2 PACKAGING The role of packaging has increased significantly in recent times. Walter Thomson. new packaging technology has enabled most FMCG companies to significantly reduce their packaging costs. The new jars are more convenient to handle and dispense from.5. The packaging of the Great Family Nourisher has been made Modern & contemporary. 34 . Traditionally. The new avatar of Horlicks has the highest shelf appeal and maximum visibility. The new Horlicks formulation is accompanied by contemporary packaging in hues of bright blue and orange. partly due to improvement in packaging technology. Besides. Today. packaging is used as an effective tool for promotion. packaging was expected to fulfill the objective of convenience.

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.Horlicks has substantially increased the value for money proposition for its consumers. 35 .

5. Horlicks Three-in-one and Horlicks Smart Nutrients positioned on health platform and targeted at children.2. 36 . The brand variants targeted different consumer segments such as Junior Horlicks for infants. is now positioned for children in the one to three agegroup. Mother’s Horlicks for expecting mothers. Junior Horlicks.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.

the concept of mother has not been fully given up. The company's communication strategy.It is been realised 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. which is positive. therefore. focuses on children who have an attitude . Although the relaunch has targeted the children segment this time . 37 .an attitude. livewire and spirited.

5. 38 . • Premium Pricing It is decided to use a high price when the product or service is unique. Depending on the product the marketing department adopts various pricing strategies. Once this is achieved. economy pricing. For e. which form the bases for the pricing exercise. This approach is adopted in order to attract a new customer base. the price is increased.g. This approach is used where a substantial competitive advantage exists. Such high prices are cpharged for luxury products. Premium pricing. and price skimming are the four main pricing policies or strategies. penetration pricing.3 Price 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.: 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.

Junior Horlicks is available in three SKUs — • 500 gm jar (Rs 114). • Price Skimming If a product is unique and has a considerable competitive advantage. dal etc. 5. The cost of marketing and manufacture are kept at a bare minimum.1 PRICE OF HORLICKS Similarly the GSk has chosen the price for horlicks keeping in mind the value addtion done to the product by the company along with the consumer comfortability. 45/. When Dove was launched in the market it was the only soap with ¼ moisturizer and was priced at a premium price of Rs.3. then the product may be introduced at a high price so that before competitors come in you can make maximum profits. Supermarkets often have economy brands for atta.per soap. today the soap is available at a lower price.• EconomyPricing This is a basic price of the product. • 500 gm GP (Rs 105) 39 .

• 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. 40 .

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 involves :

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 will be involved in the mega programme called Activity 2003. The Activity, an organisation 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 Organisation 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 Jamshedpur. The fest will feature more than 40 different competitions in

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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 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 contained a new a new claim “twice the calcium of fresh milk”, which boosted it ‘s sales.

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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 it’s ads reverberated through the television sets of every Indian household and they just couldn’t get it out of their heads. It’s campaign was well received by Indian mothers. Also there campaigns are still lodged in consumers memory.

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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. the Horlicks brand is also being aggressively pushed in the market through a mix of refill-packs and bundled gifts (like katoris). The rationale behind this is that bottles arranged in this fashion attracts consumers attention.4.4.5. 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. PROMOTIONS TO CONSUMERS Besides relying on conventional bottles. 5. 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.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.4. 44 .

All this is done in an effort to vie for the top spot in consumers’ minds. 45 .• OTHER PROMOTIONS There are also various sampling programmes in schools. shopping malls and at sponsored events. For instance.The brand had begun to look dated and was losing its significance. it is exploring the possibility of introducing ready-to-drink version of its popular drinks. The company is looking at innovative ways to increase consumer base in the health food drinks segment. It is also looking at opportunities in joint marketing with companies that have strong rural networks.

Distribution network refers to the consumer buying points where products are available (almost always). dealers etc and establish their loyalties.5. Infact 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. To derive success in the FMCG segment it is important to have a good distribution channel. retailers. develop. one of the most critical success factor is the ability to build. Therefore dealers/ retailers are reluctant to allocate resources and time. It takes enormous time and effort to build a chain of stockists. 46 . and maintain a robust distribution network.5.DISTRIBUTION In this sector. There are entry barriers for a new entrant as a new product is typically slow moving and has lesser consumer demand.

The product is supplied to wholesalers from over there. Its packing facilities are located at Hyderabad and Ballabgarh. The company now has 34 sales depots (one in each State).800 at present.317 in 1998 to 1.25.000 tonnes per annum capacity. GSK has total workforce of over 3.000 retail outlets. GSK has four regional Sales Offices in the four metros which co-ordinate the sales.000 people at its manufacturing plants located in Nabha and Rajahmundry. which has been designed to produce Horlicks formulations.Distribution Channel followed by GSK for Horlicks: FACTORY ► DISTRIBUTION CENTERS ► WHOLESALERS ► RETAILERS The first link in the channel is the factory situated at Sonepat. The Sonepat plant is of 26. It has a strong marketing network in India comprising over 1. as against 28 in 1998. Its wholesaler network has grown from 1. distribution and collection activities in their respective regions.800 wholesalers and direct coverage of over 4. These wholesalers further 47 .

48 .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..

CHAPTER-6 DATA ANALYSIS AND FINDINGS 49 .

changing behaviour in the area of diffusion of innovation.Changing consumer profiles. attitudes to technology. are some examples of macro trends of consumer environment. shifts in value systems. changing cultural labels of product categories. 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 g) To find out the image of horlicks h) To find out the prospects of success of promotional plan of horlicks 50 .

Even complan have a good recognition. 51 .Q1) What Brand(s) comes to your mind first in the Milk based health food drink? Horlicks 14 Boost 4 Maltova 2 Milo 2 Complan Bournvit 9 a 19 Others 0 Choice of Brands 0% 38% Horlicks Boost Maltova Milo Complan Bournvita Others 29% 7% 18% 4% 4% The survey indicates that Bournvita enjoys the most recognized brand among the milk based health food drink category. Thus Horlicks should work upon building such promotional programs which increase its visibility among the health food drink segment. followed by Horlicks.

Q2) What do you prefer in Health food Drink? Nutritional Value Taste 26 22 Colour 2 Other 0 Preferences 4% 0% 44% 52% Nutritional Value Taste Colour Other 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. Q3) Which flavor do you prefer to take? 52 .

Q4) Time period of usage 53 .Chocolate 35 Malt 8 Vanilla 5 Honey 2 Taste 9% 4% 17% 70% Chocolate Malt Vanilla Honey 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.

Less than 1 yr 10 1-3 yrs 15 3-5 yrs 18 More than 5 yrs 7 Loyalty 14% 21% Less than 1 year 1-3 years 3-5 years 36% 29% More than 5 years 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 54 Indifferent .

Magazines Newspaper 55 Word of Mouth . Q5) What do you think is the most effective in creating an impact on decision making process regarding Health food Drink.6 30 8 6 Satisfaction Level 15% 12% 12% 61% Highly Satisfied Satisfied Dissatisfied Indifferent The survey shows that the customers are more or less satisfied with their current brand. Hence it will prove to be difficult for horlicks to tap the customers of different health food drink. T.V.

V. Q6) Given a chance would you like to shift to another brand? Shift 35% Yes 17 No 33 Yes No 65% 56 . Magazines Newspaper Word of Mouth It is evident from the survey that T. 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.V.32 8 2 8 Medium of information 16% 4% 16% 64% T.

But the good news for horlicks is that most of the respondents in this segment are users of horlicks itself. Q7) Who influences choice of health food drink in your family? Parents 12 Children 9 Knowns 1 Influencers 5% Parents Children Knowns 41% 54% 57 .Most of the respondents in the survey were not willing to shift from their brand.

So GSK should concentrate over both segments to build equity. survey indicates that parents are still the deciding force in the health food drink segment.Contrary to the popular opinion. Though pester power also play its part. Q8) What image does horlicks carry in your mind? Image of Horlicks Nutritional Drink 21 Fun Drink 2 Other 4 8% 4% Fun Drink Nutritional Drink Other 58 88% .

Q9) Have you tried new variants of Horlicks? Yes 8 New Variants No 42 17% Yes No 83% 59 . 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.No matter how hard GSK is trying.

It should plan proper channels to get its product to the customer. GSK should take efforts in this field.Most of the respondents of the study have not tried the new variants of horlicks. Q10) Would you like to have horlicks in ready to use out of vending machine form? Yes 31 Out of Home Consumption No 19 38% 62% 60 Yes No .

CONCLUSION 61 . GSK should go ahead with its plan to setup Vending machines to sell Horlicks.Most of the respondents from the study are willing to consume Horlicks outof-home ready to drink form.

the category in which GSKCH operates. Market leader GlaxoSmithKline is looking to put the spring back in its brands and the market through repositioning and relaunches of the product. 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 62 . line extensions. supported by advertising and brand promotion. offers scope for steady growth through development of high-quality branded products with good consumer acceptance. Milk food drinks. So. new formulations and packaging innovations.The health food drinks industry has been facing testing times with stagnant markets.

which is currently low. Speed and reach will become critical and differentiation in supply-chain capabilities would determine the success of competing companies.the North and the West as well as their ability to drive penetration amongst the lower SECs. chocolate remains ever preferred choice of health food drink consumers irrespective of gender. We have done Consumer analysis through questionnaire which covered different aspects of the consumer opinion in the Northern Region. Horlicks should not change its positioning of Nutritional Health Drink but it should also focus on its image building as Nourishment with fun. 63 . 2. 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 enjoys the most recognized brand among the milk based health food drink category in the northern region. 3.

7. 5. Horlicks should concentrate on tapping new customers along with more innovative marketing strategies while giving value to their existing customers. In case of health food drinks the consumers are more or less loyal towards their brand. Parents are still the deciding force in the health food drink segment. People rarely shift their brands but they do so when they are being enticed by the freebies or other promotion. Horlicks has not been able to break its image of Nutritional Drink in the northern region. 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. 64 . 9. 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. 8. GSK should concentrate over both segments parents and children to build equity.4. 6.

SUGGESTIONS 65 .

Apart from this GSK has to focus it’s energy towards rural markets which have huge potentials and are highly unexploited. 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.PRE-EMPTIVE MOVE A sustainable competitive advantage can sometimes be built by a preemptive move . 66 . which is currently low. 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. 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.

. DIFFERENTIATION STRATEGIES 67 .So GSK will do well to improve its distribution channels in time to build sustainable competitive advantage. 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.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. 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.

LIMITATIONS During research and making this project some limitations that could affect the effectiveness of the study are:  Survey sample is done from geographical region. This may result in the sample not being true representation of entire market of health food drink segment. non-metro. flavoured milks etc. or distribution channels. GSK should constantly differentiate itself from the competitors on the basis of newer products. lassi. semi-urban and rural areas. product features. 68 . The sample is selectively selected from the families which are known to the brand.  Usage pattern may differ from metro.The concept is to make the product different from those of its competitor.  Several products from health food drink segment are left such as juices. This differentiation could be on the basis of product quality.

 Sample size was not big enough.  Time was also a limiting factor. 69 .

ANNEXURE ANNEXURE I Key Nutrients 70 .

for breathing. Horlicks drinks provide the following essential nutrients: Nutrient Energy Function Essential for the basic metabolic processes of the body (for the heart to beat. Protein can also be used as a source of dietary energy. The most concentrated form of dietary energy. Also needed for proper functioning of the heart and Protein Fat Vitamin A Niacin Vitamin B1 71 . for growth and repair of tissues. lactose (the sugar found naturally in milk). A vitamin which aids the conversion of food into energy. Horlicks provides a mixture of carbohydrates including maltose (the sugar obtained by the breakdown of cereals in the Horlicks process).). Carbohydrate The main source of dietary energy. Essential for healthy growth and development in children and for cell maintenance and repair throughout life. Required for healthy eyes and skin. wheat and dairy ingredients. A vitamin which aids the conversion of food into energy. to maintain body temperature etc. sucrose (ordinary table sugar) and more complex carbohydrates.Horlicks is a nourishing malted food drink which combines the wholesome goodness of malted barley. for all movement.

Involved in energy release from foods.Vitamin B2 nervous system. Necessary for the proper formation of red blood cells and nerve fibres. An adequate intake of calcium is vital in childhood and adolescence to ensure that strong bones are formed. Optimising peak bone mass in early adulthood may help guard against the development of osteoporosis in later life. Helps protect against infection. Essential for the production and functioning of red blood cells. Vitamin C Folic Acid Vitamin D Vitamin B12 Vitamin E Vitamin B6 Iron Calcium 72 . Aids iron absorption for healthy blood. for healthy blood and for the metabolism of protein. Important for a healthy nervous system. required for the proper functioning of nerves and muscles. Essential for healthy bones and teeth. Needed for the production of red blood cells. Helps in growth and repair of tissues. Helps to keep skin and eyes healthy. An important dietary antioxidant. Needed for proper calcium absorption and therefore healthy teeth and bones.

• Where there’s a problem taking solid food. Horlicks is consumed by over 120million people daily and enjoy an annual growth rate of over 22% in global sales. including liquid diets or any diet devised for gastric disorders.Annexure-II Some facts about Horlicks • Horlicks was first invented to substitute milk as baby food. two billion cups of Horlicks are drunk every year. • People on special diets. • • In India. • In Britain. can benefit from the nutritional convenience of Horlicks. Horlicks can provide the nutrition that would otherwise be missing from the diet. Horlicks is positioned as a sleep enhancing night time drink. 73 . South Africa and Australia.

ANNEXURE-III QUESTIONNAIRE 74 .

1) Which is the Brand that comes to your mind first in the Health Food Drinks? Horlicks Milo Boost Complan Maltova Bournvita Others 2) What do you prefer in Health Food Drink? Nutritional Value Taste Colour Other________ 3) Which flavor do you prefer to take? Chocolate Malt Vanilla Honey 75 . As a part of our curriculum. I am supposed to undertake a survey on “A STUDY OF CONSUMER BRAND PREFERENCE OF HORLICKS”. I am a student of MBA at SKYLINE INSTITUTE OF ENGINEERING AND TECHNOLOGY.Dear Respondant. Greater Noida.

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___________ 76 . Magazines Newspaper Word of Mouth 8) Given a chance would you like to shift to another brand? Yes No If Yes.4) Which Brand(s) are you currently using? _________________________________ _________________________________ _________________________________ 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.

“SmithKline to add muscle to boost Horlicks. Sanjay. Bhanu. “GSK relaunches Horlicks” http://www. Distributor of GSKCH. Chandigarh. Viva” http://www. 77 . “Cup Half Empty”.BIBLIOGRAPHY 1.com 4.sharekhan.com 5.com 3. Pande. New Delhi.sharekhan. “Glaxo SmithKline consumer not in pink of health” http://www. Kailash.sharekhan. 2. “The Economic Times Brand Equity”.