BRAND EXTENSION ASSIGNMENT

BRAND – HORLICKSBy Nikita Singh

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HORLICKS- brand overviewProduct Category

HFD (HEALTH FOOD DRINKS)

Parent Company

GLAXOSMITH KLINE CONSUMER HEALTHCARE LTD (GSK CH)

Countries where manufactured & marketed

UK, Sth Africa, New Zealand, Bangladesh, India, Pakistan, Jamaica, Philippines, Malaysia

UK 140 years old brand

India Imported since early 1900sManufactured since 1958

GSK – about the company

• Consumer Healthcare division of GSK, world’s 6th largest pharma company

• Percentage shareGSK pharma GSK Consumer

Worldwide 85% 15%

India 35% 65%

GSK CH India

NUTRIONALS (horlicks +Boost and extensions,

Viva and Maltova

Wellness - OTC (Eno, Iodex, Crocin,

Ostocalcium) & OHC (Sensodyne)

Foods (Horlicks biscuits, Foodles,

Oats)

GSK CH India – Snippets from Annual Report

• Net Revenue – 5144 Cr• PBT – 1016 Cr • PAT – 674 Cr

• 13.1%– higher than the industry average

• All Horlicks and Boost variants recorded strong double digit growth during the year

• The Foods portfolio continued to deliver strong growth. Horlicks Oats more than doubled its business during the current year and now ranks second in terms of market share in South India

• The year also witnessed the launches of Horlicks ProMind and Horlicks Kesar Badam. Horlicks ProMind, positioned as specialized nutrition for brain function

Horlicks India – Line & Brand Extensions

Line Extensions

Flavors (Chocolate,

Women’s Horlicks

Mother’s Horlicks

Junior Horlicks

Horlicks Lite

Horlicks Gold

Horlicks India – Line & Brand Extensions

Horlicks – brand arrow

Parent Brand- Horlicks (Classic Malt

• Original Horlicks flavour• Market leader in the South of India, where health benefits of the

product preferred over chocolaty taste• Marketed as the “Great Family Nourisher” • Recent campaign focusses on Horlicks kids as “taller stronger sharper”

Core Value Stands for Nutrition

Emotional benefit

Appeals to mother’s with a promise of making kids “Taller, Stronger, Sharper”

Functional benefit

26 Vital Nutrients that are know to improve concentration, blood quality, muscle mass etc

Attribute Malt Taste, Family Nourisher (pre 2000’s)

BRAND LADDER FOR HORLICKS

Facts about the brand Horlicks & HFD

HFD market in India 5190 Cr

% market share of Horlicks

46.4%

Growth of HFD, last 3 years (%)

2014 --- 4%2013 --- 11%2012 --- 13%

Growth of Horlicks, last 3 years (%)

2014 --- 9%2013 --- 12%2012 --- 13%

Comments Due to its line extensions strategy – where extensions like Junior hlx, mother hlx etc cater to the need of a specific niche, and are charged at a premium, Horlicks is outperforming the category.

HLX Oats – Horlicks brand extension

• Current Market for Oats – Rs 280 crores• Projected Market in next 2 yrs- Rs 500 crores• Emerging as a quick healthy breakfast option in

Indian Cities

MAJOR PLAYERS % SHARE

Quaker 39.32%

Horlicks Oats 16.96%

Saffola 7.27%

Kellog’s 4.12%

Others 32.1%

HORLICKS OATS

• Brand Endorsement- Launched as “Horlicks Oats” to drive on the brand equity of Horlicks

• TG- 30+ working professional, leading to a healthier life style

Core Value Health and Nutrition

Emotional benefit

Move to a healthier you and a healthier lifestyle

Functional benefit

3 way health advantage – known to reduce weight, maintain cholesterol, blood pressure

Attribute Low on sodium, High on protien

BRAND LADDER FOR HORLICKS OATS

Category overview - Oats

Oats market in India 280 Cr

% market share of Horlicks Oats

16.96%

Growth of Oats, last 3 years (%)

2014 --- 2%2013 --- 24%2012 --- 36%

Growth of Horlicks Oats, last 3 years (%)

2014 --- 11%2013 --- 46%2012 --- NA

Comments Being a new entrant, backed by stronger distribution compared to market leader, Horlicks Oats is outperforming the category.

Horlicks Oats Marketing Mix – Product

•Not much differentiation on product per se from competition

•Launched in 2 variants – Base oats and Savory oats

•Savory Oats launched to counter the “Low on taste perception” – Being taken off from the market now.

•Packing in line with holicks HFD – projecting oats as a healthier option.

Horlicks Oats Marketing Mix – Price

• Aggressive pricing, inline with the competition and the category

Pack MRP

500 gms 94

1 kg 175

Savory (15 gm) 15

Horlicks Oats Marketing Mix – Place

• All India Category Penetration – 13%, South India – 32%

• Nearly 72% of the category sales comes from South India

• Based on the category facts and the fact Horlicks is already enjoys a strong equity and distribution –GSK CH has only launched oats in South India and Modern Trade

• Trade focus is still on upper end grocery and chemist stores

• Promoting at corporate offices and Messes

Horlicks Oats Marketing Mix – Promotion

•Strong ATL presence with roughly half the A&P spends going on ATL (Mainly TV)

•Key Proposition - 3 way health advantage•Brand supported by 4 consumer promotions during the year – a category fact (Common promotion include horlicks extensions and horlicks)

•Strong presence on digital media – share your own recipe with Horlicks oats etc

•Consumer activations in modern trade revolve around experience and sampling

Part 4 - STP

Market Segmentation – Horlicks Oats

• Shades of Demographic, Geographic and Psychographic segmentation

• GEOGRAPHIC• Limited currently to South India

due to existing Horlicks equity and category skew

• DEMOGRAPHIC• Targeting 30+ working

professionals• PHYSCHOGRAPHIC

• Targeted towards SEC A and B• People inclined towards a healthy

lifestyle• Resulting in a premium, upmarket

imagery.

THE TG – Aspirational, SEC A/B, Corporate working The key Lifestyle attributes of the TG that

have impacted the promotion strategy are: Little time for self due to a hectic

lifestyle Conscious of the fact, and actively

seeking alternatives to make up for lack of exercise

Enough disposable income, can spend on a costlier but healthier option

PROMOTION STRATEGY TO CATER TO THE TG TV plan heavily skewed towards lifestyle shows, shows speaking to sec A/B

housewifes Experiential activations in Modern trade and top end grocery stores where the

TG shops Heavy promotions in corporate offices and messes High presence in digital space (FB, Twitter, Youtube), where the TG spends

considerable time

The competitive landscape

Quacker Oats• Market leader, enjoys the first movers and legacy advantage• Plays on the healthy heart platform and leverages strong

distribution from pepsico• Synonymous with the category in many geographies

Saffola Oats• Brand extension of saffola oil – has stronger right to win with

“healthy heart positioning” of the mother brand• First brand to bring any innovation in the category – flavored

Oats; • Tried to rejuvinate the category and bring it closer to healthy

snacking even overlapping with instant noodles.

Kellogs Oats• From Kellogs – the market leader in breakfast cereals.• Launched as a natural extension for completing total basket

of breakfast options from kellogs• Heavily promoted in trade, especially modern trade, with price

offs, discounts and promotions.

Horlicks Oats v/s competition – POPs and PODs

POPsPackaging – similar grammage

and price pointsVariants and Flavors – similar

to the competitionPositioning – the core

positioning is still around heath which is a category benefit.

PODsMother brand equity – Horlicks

brand nameDistribution advantage – with

Horlicks being one of the most distributed brands

Moving beyond the category benefit of only health – 3 way

advantage

3 way health advantage – the key differentiator

Differentiates the brand through stronger relevance and tilt preference towards Horlicks Oats as only oats that deliver benefits beyond the category benefits.

Dials up the perception of the brand as based on high science

References

• http://www.gsk-ch.in/AnnualReports.aspx• http://marketingpractice.blogspot.in/2011/11/brand-update-

horlicks-extends-to.html• http://www.campaignindia.in/Video/281456,launch-tvc-of-h

orlicks-oats-asks-people-to-change-for-a-healthier-tomorrow.aspx

• http://www.hindustantimes.com/business-news/breakfast-appeal-with-oats/article1-1099931.aspx

• http://articles.economictimes.indiatimes.com/2013-10-30/news/43528911_1_horlicks-nutribar-biscuits

THANK YOU !!!