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

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

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

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. 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.

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 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 ye a r s ,generations after generations of children wakeup to a mug of Horlicks pre p a red by mothers in their own special way, yet providing the same nourishing goodness unrivaled by any competitive pro d u c t s. 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. 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 provides 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.

1.4 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- 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

1.5 RESEARCH DESIGN AND METHODOLOGY

Research design Exploratory Research Exploratory Research seeks to discover new relationship and establish hypothesis. . Exploratory studies are used when little is known about a given area . . The research process tends to be circular over a period of time.

Sources of information : Primary Data Secondary Data The research is a combination of both primary and secondary data. For the primary data purpose we had visited companys sales office and tried to collect as much information as we could. A survey was done covering various aspects of the customer opinion regarding the product Horlicks. Sampling for the research is convenience sampling . The sample size was 50 people

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

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CHAPTER-2

COMPANY PROFILE

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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 Beechams Indian subsidiary 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
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company SmithKline Beecham Plc. has been merged globally with Glaxo Wellcome 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 GlaxoSmithkline Consumer Healthcare Ltd to reflect the new association. 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

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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 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 GSKs sales come from south and west India though it plans to increase coverage in the northern and eastern parts of the country. GSKs main competitors are HJ Heinz, Cadbury India and Nestle India. But GSKs brand, Horlicks is the market leader and accounted for over 55% of the market while Cadburys 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

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drinks, GSKS 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 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 wellestablished brands, is expected to capitalize on this growth. ICRA does not perceive any threat to the leadership position of GSK in the near future.

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
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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 GSKs operating income. GSK set its long-term revenue growth target at 25% year on year.

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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CHAPTER-3 MARKETING ENVIRONMENT

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The white malted category comprises 60 per cent of the overall Rs 1,200crore 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. 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.

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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 consumers expectation. Glaxo SmithKline Beechams 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, marketing and the promotion efforts and distribution capabilities of the manufacturer in the HFD market. GSKs 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:

3.2 MARKET SHARE

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The market size of health food drink is : Rs. 1,300 Crores. Percentage Share of Major Brands In The Health Food Drink Market

MARKET SHARE OF HFDs MARKET SIZE : Rs.1300 crore

2.2 1.4 11.6 8.3 59 13 3.3 1.2 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, 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, which is currently low.

3.3 MARKETING LANDMARKS

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

bedtime drink. 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.
The testimonial advertising campaign, one for now, one for the

future with tactical advertising such as Iced Horlicks.

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CHAPTER-4 MARKETING STRATEGIES

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

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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 highquality branded products with good consumer acceptance, supported by advertising and brand promotion, line extensions, new formulations and packaging innovations. Glaxo SmithKlines 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.

4.1MARKET SEGMENTATION
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
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adults and children. Three major players exist in this product-market: Cadburys 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 or 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 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 Nutrients, Horlicks Lite).

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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.

4.2 Brand Extensions

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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 1997. During 1997, 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.

4.3 PROBLEMS LEADING TO ITS RELAUNCH ARE:

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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 were mainly children. 3) In launching other products like Aquafresh, Boost e.t.c. GSK ignored its flagship brand. 4) 5) The brand is not available into the ready to drink category. 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.

4.4 RELAUNCH OF HORLICKS BRAND

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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 relaunch of Horlicks, the second phase will talk about the new features of the product.

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CHAPTER-5

MARKETING MIX

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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. Product attributes are the characteristics that describe a good or a service. Marketers use these features to attract consumers. 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. Horlicks- A Glaxo SmithKline product occupies major share in Health food Drink segment. Horlicks is made from milk, wheat and malted barley.

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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 companys 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'.

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. These are Iron, Vitamin B2, Vitamin B6, Vitamin B12, Folate and Vitamin C. It also plays a significant role in enhancing internal

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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 individuals 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

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. 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.
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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 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.

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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.

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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 agegroup. The brand variants targeted different consumer segments such as Junior Horlicks for infants, Mothers Horlicks for expecting mothers, Horlicks Three-in-one and Horlicks Smart Nutrients positioned on health platform and targeted at children.

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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. 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.

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5.3 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. 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.

Premium Pricing
It is decided to use a high price when the product or service is unique. This approach is used where a substantial competitive advantage exists. Such high prices are cpharged 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 achieved, the price is increased. This approach is adopted in order to attract a new customer base.

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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 come in you can make maximum profits. When Dove was launched in the market it was the only soap with 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

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. Junior Horlicks is available in three SKUs 500 gm jar (Rs 114), 500 gm GP (Rs 105)

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 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.

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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 childrens 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 childs future, hence its tagline: Horlicks, nourishment for life. In late 90s its ads reverberated through the television sets of every Indian household and they just couldnt get it out of their heads. Its campaign was well received by Indian mothers. Also there campaigns are still lodged in consumers memory.

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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 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 attracts 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.

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 OTHER PROMOTIONS
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.

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5.5.DISTRIBUTION
In this sector, one of the most critical success factor 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. 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. Distribution network refers to the consumer buying points 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.

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

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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.

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CHAPTER-6

DATA ANALYSIS AND FINDINGS

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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 g) To find out the image of horlicks h) To find out the prospects of success of promotional plan of horlicks

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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, 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.

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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?

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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. Q4) Time period of usage

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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

30

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.

Q5) What do you think is the most effective in creating an impact on decision making process regarding Health food Drink.

T.V.

Magazines

Newspaper
55

Word of Mouth

32

Medium of information

16% 4% 16% 64%

T.V. Magazines Newspaper Word of Mouth

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. Q6) Given a chance would you like to shift to another brand?

Shift

35%
Yes 17 No 33

Yes No

65%
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Most of the respondents in the survey were not willing to shift from their brand. 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%

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Contrary to the popular opinion, survey indicates that parents are still the deciding force in the health food drink segment. Though pester power also play its part. So GSK should concentrate over both segments to build equity.

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

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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 8

New Variants

No 42

17%
Yes No

83%

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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.

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

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

CONCLUSION

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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

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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 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.

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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. 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.

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SUGGESTIONS

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PRE-EMPTIVE MOVE
A sustainable competitive advantage can sometimes be built by a preemptive 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 its 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 its 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.

DIFFERENTIATION STRATEGIES

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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.

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. The sample is

selectively selected from the families which are known to the brand. This may result in the sample not being true representation of entire market of health food drink segment. Several products from health food drink segment are left such as juices, lassi, flavoured milks etc.
Usage pattern may differ from metro, non-metro, semi-urban and rural

areas.
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 Sample size was not big enough.

Time was also a limiting factor.

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ANNEXURE

ANNEXURE I Key Nutrients

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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 Energy Function 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. 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), sucrose (ordinary table sugar) and more complex carbohydrates. The most concentrated form of dietary energy. Required for healthy eyes and skin. A vitamin which aids the conversion of food into energy. A vitamin which aids the conversion of food into energy. Also needed for proper functioning of the heart and

Protein

Fat Vitamin A Niacin Vitamin B1

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Vitamin B2

nervous system. Helps to keep skin and eyes healthy. Involved in energy release from foods. Helps in growth and repair of tissues. Aids iron absorption for healthy blood. Helps protect against infection. Needed for the production of red blood cells. Needed for proper calcium absorption and therefore healthy teeth and bones. Necessary for the proper formation of red blood cells and nerve fibres. An important dietary antioxidant. Important for a healthy nervous system, for healthy blood and for the metabolism of protein. Essential for the production and functioning of red blood cells. Essential for healthy bones and teeth; required for the proper functioning of nerves and muscles. 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.

Vitamin C

Folic Acid Vitamin D

Vitamin B12

Vitamin E Vitamin B6

Iron

Calcium

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Annexure-II 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. 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 theres 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.

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ANNEXURE-III QUESTIONNAIRE

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Dear Respondant, I am a student of MBA at SKYLINE INSTITUTE OF ENGINEERING AND TECHNOLOGY, Greater Noida. As a part of our curriculum; I am supposed to undertake a survey on A STUDY OF CONSUMER BRAND PREFERENCE OF HORLICKS.

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

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