SHOULD HORLICKS EXTEND INTO NEW CATEGORIES?

Abhishek Singh

DM22204

SHOULD HORLICKS EXTEND INTO NEW CATEGORIES? 1

 Table Of Content

S. Topic Page no.

No.
1. Overview: Horlicks 3

2. Industry Overview 3

3. Lesson learnt from the failure of: 4

a. Aquafresh
b. Ribena
4. Brand’s current Diversification 4

5. Failure of foodles 6

6. Where Horlicks went wrong? 7

7. Current Market Strategy 8

8. Associate Network Model of Memory 8

9. Future Strategy for Growth 9

Marketing Strategy 10

10.
11. Conclusion 11

12. References 11

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 Overview: Horlicks:

Whenever you or a family member has been prescribed medication, a colourful bottle has been

brought along with it, and it's none other than a Horlicks jar. The image of Horlicks that every

consumer has in their head is this.

As a part of Glaxo Smith Kline, a healthcare based firm in the United Kingdom, GSK Consumer

Healthcare As part of the Glaxo Smith Kline Consumer Healthcare portfolio, Horlicks is

available in India. Boost, Eno, Horlicks, Crocin, Viva, and Iodex are just a few. Horlicks has

remained the most profitable product for nearly two decades, despite the competition. Few new

inventions or innovations occurred in this field because there were a few goods that did not

perform effectively. "Aquafresh" toothpaste and "Ribena" juice failed to make a mark on the

market in 1990. When it came to tastes in 2003, they had chocolate , kesar badaam, vanilla and

honey on the menu! Zubair Ahmed, a former P&G Gillette employee, has been promoted to the

role of managing director. A alternative approach to diversification appealed to him, and he had

a number of proposals for diversifying his portfolio. A compound annual growth rate of 17.5%

was achieved in revenue, while a net profit of 24.2% was achieved.

INDUSTRY OVERVIEW:

Close to 20% of the world's retail volume sales come from India, the world's largest malt-based

beverage market. Malted beverages are regarded as health drinks in India. In the Indian malt

health drinks industry, there are a number of players, including GSK, Mondelez, Abbot, etc.

Horlicks, Bournvita, Complan, Boost, Milo, Amul Pro, etc. are some of the most popular malted

health drink products available in India. New brands such as Milo and Danone have been

introduced by Nestle in recent years. The malted drinks business is dominated by South India.

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 Lessons learnt from the failure of the product:

 Aquafresh

 Ribena

Reasons for the failure of Aquafresh:

This product was described as Headonic goods, and it came in three hues. In addition, white

toothpaste provided cavity protection, blue toothpaste eliminated foul breath, and red toothpaste

strengthened gums. What became known as the triple protection formula was a result of this.

When it came to entering the FMCG industry, it was the wrong product and at the wrong

moment Due of the popularity of Colgate and its perceived utility at a lower price, customers

preferred Colgate over Aquafresh. As a result, users returned to Colgate or Early Use toothpaste

because they did not find the Triple Protection composition enticing.

Reasons for the failure of Ribena:

It was launched in 1990, when individuals had plenty of time to prepare juice and were very

price conscious. Aside from that, individuals prefer drinking fresh juices over canned juice

Second, Indians were unfamiliar with Black current's taste and did not want to purchase it

because it was unfamiliar. As a result of working culture and urbanisation, if the product had

been launched today, it would have

Brand’s Current diversification:

Horlicks, the company's umbrella brand that includes gourmet biscuits and noodles as well

as cookies and cream, accounted for 70% of GSK's revenue in 2010. From babies to the

elderly, there were a variety of line extensions, including women's Horlicks, the original

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 Horlick and the lite version of the product, junior Horlicks and children's & infant Horlicks.

Their next step was to expand their product line with cookies, oats, and biscotti. And lastly –

noodles. It was also planned to discontinue use of Horlicks after a successful brand

extension. This is good example of classical conditioning. Where Horlicks brand is

conditional stimulus while after removing the brand of Horlicks people still buy the

products. Let’s consider some of the products in detail

 Women’s Horlicks: Originally designed for women, this drink was an instant success. It

was available in a variety of flavours, including toffee, eliachi, chocolate, etc., and

concentrated on the nutrients that females require.

 Line variants: Variants of the malt drink Horlicks were produced, including Horlicks

Lite, Gold, and Asha. 'Junior Horlicks' was a malt drink for infants that provided

nourishment for their development.

 Biscuits, cookies: Biscuits with all the nutrition of a regular Horlicks were introduced.

 Foodles: With the Horlicks brand, they believed they could position noodles as a

nutritious snack. The nutritional benefit of Horlicks is well-known, and it is used as a

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 food supplement. Health Maker was provided, which contained nine important vitamins

and the goodness of corn, wheat, rice, corn and ragi, as well as a variety of grains.

 Nutribar: As a meal snack, Nutribar was designed to be the equivalent of a regular healthy

dinner. It comes in three different versions, with prices ranging from Rs 15 to Rs 18 per.

With 11 essential nutrients, honey for sweetening, and iron to boot.

Failure of foodles:

” Customer based brand equity involves consumer reaction to an element of the marketing

mix for the brand in comparison with their reactions to the same marketing mix element

attributed to a product” -by Kevin Lane Keller

Dietary supplements such as Horlicks have long been associated with the word "nutrition."

People put a lot of faith in them and their products (the malted drinks). As soon as foodles

are introduced, the brand touts that the noodles are also nutritious and share their unique

selling proposition (USP). Because the noodles are derived from refined flour (maida), and

because Maggi contains lead, many are unable to eat it. Which left a terrible taste in my

mouth regarding the noodles. Even though Maggi came out guilt free. Despite this, the

negative impact of unhealthy noodles is still felt keenly by the population. Moreover,

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 consumers do not regard foodles to be nutrient-dense, according to research. People cannot

assume that foodles is nutritious simply because it was introduced by Horlicks. Foodles by

Horlicks caused consumers to experience cognitive dissonance. This will not only harm

Foodles as a standalone offering. It may also result in brand dilution of the product—

Horlicks. Finally, Horlicks and GSK will no longer be associated with nutrition and healthful

eating.

Where Horlicks Went Wrong?

 It was the distribution network that posed the greatest difficulty to GSKCH HUL has 6.5

million outlets, Nestle has 3 million, and ITC FMCG has 2.5 million outlets covered. In

comparison to these brands, GSK had a total of 800,000 outlets. A large distribution

network is required for a line extension.

 • A weak distribution network in rural areas made it difficult to reach rural populations.

There was a significant market lacking because a large section of the Indian population

still lived in villages.

 • In Northern and Western India, Horlicks had a low market share.

 • Horlicks Asha was introduced for persons living below the poverty level. Horlicks'

image suffered as a result of customers' cognitive dissonance, who viewed the product as

inferior to the original Horlicks.

 Horlicks' Product Line Expansion has been more successful than its Brand Expansion in

the long run.

 Associative Memory Network Theory can demonstrate this. To us, Horlicks is

synonymous with a malted hot drink. As a result, Horlicks' other products like instant

noodles and NutriBar did not succeed since we could not associate them with Horlicks'.

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  In order to persuade kids to drink milk, HFDs were utilised as an incentive. In recent

years, however, cereals with milk have become increasingly popular, so parents are less

concerned about HFDs.

 Sachets account for less than 10% of total sales. A little more than 40 percent of the

market is covered The introduction of Women's Horlicks, Mother's Horlicks, and

Horlicks Lite came too late, and their impact is still minimal.

Current market strategy:

GSK has done successfully in toothpaste “Sensodyne,” where they built a niche product for

themselves and achieved product distinction among all the tooth paste on the market. If you

have bleeding gums or any other dental issue, this toothpaste is for you. People who use

toothpaste regularly aren't affected by these problems because they're so few compared to the

amount of people who do. In spite of this, they have managed to carve out a niche for

themselves. Currently, they are working on two new medications: Nicotine to help smokers

stop and Alli to help obese people lose weight. Due to urbanisation, changing eating choices,

and westernisation. They have the ability to increase product sales.

ASSOCIATE NETWORK MODEL OF MEMORY:

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 Healthy has a very strong association with Horlicks, as can be seen from this memory map

(node). When the link is shorter, the long-term memory is more quickly activated, allowing

for rapid retrieval of data. If someone mentions Horlicks, they should think of a malty,

healthful drink. Node Node Horlick is the epitome of a healthy and malty drink. Means they

are able to reap the benefits of the healthy food and malt drink in their everyday lives.

Horlicks will serve as a prototype for the healthy food product category. When they leave

their primary capability of being healthy to make noodles, they generate cognitive dissonance

in people's minds. This causes misunderstanding and, as a result, dilution of brand equity.

They should be continually expanding their fundamental capabilities, which will strengthen

the link between nodes and have an impact on people's long-term memory stores. To stay in

people's long-term memory, one must focus, rehearse, and encode. They should have a

different appeal to the product that they expand when evaluating the focus attribute.

Rehearsal refers to the repeated flashing of an ad, which might be costly, hence they are

classified as secondary. Encoding can have a fantastic slogan showing a healthy lifestyle.

Future strategy for growth:

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 When comparing GSK, the brand extension for a firm like this should be done with great

care because they are transitioning from the USP of healthy beverage producer to FMCG

company. They should not weaken their brand value and USP by claiming to be completely

committed to nutrition and healthy eating. They should now align the products with the

brand's USP.

Rather than entering the noodles portion, they can enter the breakfast segment, where they

have already begun to explore “OAT” s. They can target these portions because they fall into

RTE or RTC. Because of urbanisation and a hectic lifestyle, these two sectors are rapidly

expanding.

Marketing strategy:

Elaboration Likelihood Model (ELM MODEL)

 Alternatively, they can use a more affective appeal (decision taken by heart). Those

places where they can emotionally connect with their audience For example, the

Horlick's mothers' ad and the women's ad, which will have a bigger influence on the

audience and compel them to purchase the product.

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  They can use the "Central Route to Persuasion" to persuade people if they want to

relaunch the foodles. They need a celebrity to support the foodles.

 Because Horlicks now offers a variety of offerings, a central route can be used to

emphasise how each of these many categories is personalised to provide the most

advantage to the target client. Women's Horlicks, for example, should describe how

women have higher nutritional and calcium demands and how the product meets

these.

 • They have to get over the idea that Horlicks is expensive. Adverts should emphasize

that it is affordable for people of all income levels.

Conclusion:

We have observed that Horlicks has a considerably closer and more stringent recognition as a

malted drink than as a brand of solid edible products. As a result, they should concentrate on

expanding on this great recognition. While they already have a wide range of product offerings

that are tailored to specific target consumers, some sectors remain untouched, such as adults,

diabetics, and the elderly. So Horlicks should initially focus on providing variety for these

sectors before considering other solid foods.

References:

 https://www.business-standard.com/article/management/horlicks-stretches-out-

109071400065_1.html

 https://blog.hubspot.com/marketing/brand-extensions

 hbr.org/1965/11/exploit-the-product-life-cycle

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  https://india-consumer.gsk.com/en-in/products/horlicks/

 https://www.marketing91.com/marketing-mix-of-horlicks/

 https://lite.horlicks.in/product-range.html

 https://www.marketing91.com/marketing-strategy-of-horlicks/

 https://www.businesswire.com/news/home/20181004005296/en/India-Malted-Health-

Drinks-Market-Overview-2018-2023

 https://www.slideshare.net/ShubhamJain643/gsk-horlicks-presentation

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