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Key issues in

the Horlicks
case

Shreyash Kandarkar
FT161087

Horlicks came to India at the end of World War I when Indian warriors of
British Indian Army carried it back with them as a dietary supplement.
Punjab, Bengal and Madras Presidencies ended up being early adopters of
Horlicks and some well-to-do Indians took to drinking Horlicks as a family
drink in mid 1940s and 1950s. It turned into a kind of materialistic trifle in
upper working class Indians and rich classes. The main flavour accessible
in India, as in Britain, was malt. India, where it has customarily been
advertised as The Great Family Nourisher, is the biggest market for
Horlicks. The Indian detailing for Horlicks is somewhat unique in relation to
most other nations, as there it is fabricated from wild buffalo milk as
opposed to dairy cows milk because of social concerns. In 2010, Horlicks
represented 85% of the 23.06 billion (US$350 million) income of
GlaxoSmithKline in India. It is as of now the most broadly expended
packaged beverage in India, after packaged water. GSKCH's health food
drink (HFD) brands - Horlicks, Boost, Maltova and Viva - represent 58.6 by
value and 65.1 by volume of around Rs 5,000-crore market, per date from
market researcher Nielsen for 2013. Horlicks and its variations represent a
large portion of the HFD market by volume. Cadbury India's Bournvita had
a share of 17% and Heinz's Complan, 11%.
Brands and products tend to age through the years if not nurtured
properly. As a result, Horlicks felt the need for brand extension. The
motive behind this was to build Consumer based brand equity.

Need for Product Line Extension


Horlicks was locally manufactured in India only since 1958, though it had
been available via imports since the early 1900s. It was one of the early
starters with aggressive advertising and it pulled in big names, for
example, Amitabh Bachchan in the 1970s to endorse its brand over radio.
"But Horlicks remained largely a family drink till the 1990s," says Jayant
Singh, Executive Vice President, Marketing, GSKCH.

Product Line Extension

In 1992, Horlicks made its first brand line extension with biscuits. It
positioned biscuits as nutritional food in the solid form. Horlicks was
associated closely with milk and hence biscuit extension led to same

brand knowledge.
Horlicks then targeted kids by launching Junior Horlicks for kids in
1995. The advertisements were purely targeted towards kids the
'Epang, Opang, Jhapang' campaign with message Taller stronger

and sharper.
After liberalisation, India saw the section of a few new brands both
from domestic and universal players. Bournvita and Complan were
seen to be solid contenders in west and northern parts of the nation,
so was nearby player Jagatjit Industries with its brands Maltova and
Viva in the north. GSKCH acquired Maltova and Viva and successfully

kept rivalry from opening another front.


Horlicks launched NutriBar in 2009. It was a cereal bar snack in

three flavours - Nuts 'n Raisins , Choco Crispy and Cereal 'n Milk.
In 2009, Horlicks launched Foodle- the health nourishing noodle
and positioned it as a more nourishing noodle filled with power
vitamins.

The organization found that women were an overlooked section as


there was no particular product tending to their particular need.
Horlicks presented "Horlicks Women" and focused on the women
section with different advertisements indicating why a woman needs
the drink. They include core utilitarian characteristics of nutrition,
distinctive necessity of a female body and used catchy lines like
"Your body needs you too" alongside variations in pose a flavor like
Elaichi, Toffee, Vanilla and chocolate.

Horlicks further extended its malt-food drink business and presented


variations like Horlicks Women, Horlicks Lite, Asha, Horlicks Gold
and Horlicks Light chocolate.
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Chil Dood( flavored milk) , Aquafresh toothpaste and blackcurrant


based fruit drink Ribena were additional extensions.

Issues faced by Horlicks


In case of foodles, it was a clear instance of affecting the brand of
Horlicks. Horlicks has for a very long time been known for its high
nutritional value and the launch of this brand with its high maida
substance went altogether against the product's objective and promise.
Foodles obtained the nutritional value of Horlicks and gave back the taste
value to the mother brand. The obvious question that challenged the
brand's image was Is taste an important aspect as compared to
nutritional value? particularly from a brand which projects nutritional
value since ages".
Horlicks has extensively low penetration in Northern and Western markets
on India and that has been the state for half of the century. Not utilizing
your core competencies is not a wise action. What's more, the same can
be said for Horlicks that hasn't worked or put to expand its share of the
overall industry in the districts specified previously. These are the areas
where their distribution frameworks were negligible and Horlicks would
without a doubt face a hit.
Indeed, even rural penetration is of essential significance to GSK as the
present market share for rural section is just 30%. The rural portion has an
immense potential in India as the significant hurl of India falls under the
rural category. Unless GSK moves more profound into rural showcases, its
present state will simply be a state where it creates a huge number of
variations than consumers need or can take. It is dependably less
demanding to increase beginning market however extension is what is
troublesome. This is particularly essential for the Indian consumers as
Indian consumers today have turned into sensitive consumers. Horlicks
Asha that was launched for the Below the poverty line BOP portion causes
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disharmony in the psyche of consumers as the product offered was of a


low quality. This was as opposed to consumer desires, which even in the
rural category were prepared to pay more for a decent nature of the
product. This plainly shows that transforming and tweaking the product
without really conveying core qualities to it would withdraw the consumer
from receiving the product.
Horlicks does not have enough proficient supply chain and distribution
model for their leader product. Consequently they couldn't influence the
distribution framework for different products.
Comparative consequences of disappointment were found in the instances
of products launched by GSK. A few products were launched much
relatively ahead and some failed to bestow quality to the consumer. While
some were launched as variations, some couldn't even draw in buyers
who had more proclivities towards the parent brand and any change in it
was related as a noteworthy movement. This turned into an issue of fix for
Horlicks as both its strength and weakness lay in the way that it was a
malt based beverage.

Evaluation of a brand extension


Following are the parameters that measure brand extension:

Consumers attitude towards the brand


Strength of brand associations
Brand image
Non product related attributes like price, packaging, user imagery,

usage imagery
Perceived quality of mother brand
Brand loyalty
Trust in brand competence in new category
Logical fit in new category

Past learning and Future prospects


The health image specifically spills out of the parent brand. The product exhibits
great development under umbrella marketing and consumers get the same trust
from the child product. Launching another brand would be another venture
absolutely covering all parts of new product development. In such cases, brand
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extension is an exceptionally plausible situation where in both the parent and


child product enjoys an advantageous relationship.
Extending into different categories is a good idea but there should be logic and
extensive research to every aspect. They could launch something like Corn
Flakes and health juices. The company is already selling Horlicks Oats, extending
that line wont be such a bad idea. The Indian Consumer has associated health
with Horlicks over the years and thus keeping itself to the health segment is a
necessity.
Brand extension works just when there is a strong relationship of the child item
with parent item. Foodles was an undesirable item and Horlicks was an image of
health. The relationship was basic and brand association was a bad decision for
this situation.
The current juice market has a lot of Sugar Free fitness juices but they dont have
a high differentiating factor. A health drink (juice) coming from the house of GSK
under Horlicks would connect to the masses and they will easily relate to it as a
healthy drink.
To target another market it can enter into packaged milk for older people with
low calories, low sugar etc. This market is hard to target as people of this age
usually dont try new products but you never know if a brand like Horlicks clicks
in this segment. The senior citizens are also aware of Horlicks so it has a good
brand image and recall. The brand attitude will also be positive because the
health factor is not compromised in this product.
Horlicks can create a product for infants of age 0 1 year as they do not have
any product in that range. The only product Horlicks 1 2 3 is aimed at toddlers
from age 1 to 3. Their main competition in this market is Cerelac. So if they can
create a product and start to pitch the fact that their product can make infants
healthier, maybe they can succeed.

Conclusion
Horlicks had tried the test of times till 1990 when it hadn't presented quite
a bit of variations and hadn't worked much on product and brand
extension. While on one hand, Horlicks has been fruitful in strengthening
its core brand values of health products like "Horlicks Women", it has
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neglected to extend its brand image to different products like biscuits and
nutri bars. Horlicks had almost about 10 years of no innovation after which
it began to concentrate on development and reduced the risk aversion
processes. It approached as an intense brand that was prepared to
attempt new products and present danger by broadening its existing core
values into new product offerings. Some of them have been fruitful
because of their solid relationship with parent brand. Yet, some of them
were a major disappointment and that was because they needed solid
relationship with brand, had little compatibility and that didn't resound
with Horlicks consistency and cohesiveness of brand image. An
unsuccessful brand extension hurts the core brand image by making
undesirable affiliations. Extension so far has been a mixed bag for
Horlicks, however utilizing its core competency will be the most ideal path
forward.

References
https://en.wikipedia.org/wiki/Horlicks
http://marketingpractice.blogspot.in/2011/11/brand-update-horlicks-extends-to.html
http://www.afaqs.com/news/story/32146_Stretching-the-Horlicks-core
http://articles.economictimes.indiatimes.com/2011-02-03/news/28428186_1_horlicks-brand-gsk-consumerhealthcare-breakfast-and-mid-day-meals

http://businesstoday.intoday.in/story/case-study-horlicks-appeals-acrossgroups/1/205238.html