HOW HORLICKS AVOIDED BEING

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PREFACE•Current Market Share•History•Handling Competition•Innovation & Campaign•Major Product Contributing In The Success•Other Important Campaign•Some Failure•Current Scenario•Reference

CURRENT MARKET SHARE

•GlaxoSmithKline Consumer Healthcare’s (GSKCH) health food drink (HFD) brands - Horlicks, Boost, Maltova and Viva - account for 58.6 per cent by value and 65.1 per cent by volume of a some Rs 5,000-crore market, per date from market researcher Nielsen for 2013.• The HFD category contributes 77 per cent to GSKCH's revenues of Rs 3,079 crore for calendar 2012.• Cadbury India's Bournvita had a share of 17 per cent and Heinz's Complan, 11 per cent.

HISTORY•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 celebrities such as Amitabh Bachchan in the 1970s to endorse its brand over radio.• The company then recognised that there was a specific need for toddlers in the one to three years age group and launched Junior Horlicks in 1995.•This was a period of turmoil in the consumer products market, as India, after liberalisation, saw the entry of several new brands both from domestic and international players.

HANDLING COMPETITION

•Bournvita and Complan were seen to be strong contenders in west and northern parts of the country, so was local player Jagatjit Industries with its brand Maltova and Viva in the north.•GSKCH acquired Maltova and Viva and effectively prevented competition from opening a new front.

 •"We would visit homes and the company wanted to listen in to the consumer needs even in the early 1980s,"says Bindu Sethi, Chief Strategy Officer at ad agency JWT.• "It was this consumer voice that found reflection in the repositioning of Horlicks as a drink targeted at children in 2003, with the 'Epang, Opang, Jhapang' campaign," she says.•Horlicks was a family drink until then, the great "family nourisher". All branding and communication spoke to different family members and how it meant different things to different people, while the new campaign spoke to children directly.

HANDLING COMPETITION (contd…)

INNOVATION & CAMPAIGNS

•In 2003, it offered its newly formulated Horlicks to the National Institute of Nutrition (NIN) at Hyderabad, which conducted research to prove its effect on the growth of children. "We clearly identified three key benefit areas to do with bone health of children, muscle health and their ability to focus better," says Jayant Singh, Executive Vice President, Marketing, GSKCH. This led to the "Taller, Stronger, Sharper" campaign.•In this, the company tapped into the growing pester power of children who now were key decision makers not only with what they ate, but also other key decisions around the household.•The company had speeded up its brand variant launches with Horlicks Lite in 2005, aimed at diabetics and Horlicks NutriBar in 2006 (this launch did not work as planned). 

MAJOR PRODUCT CONTRIBUTING IN THE SUCCESS•The company found that women were an ignored segment as there was no specific product addressing their specific need. This led to the launch of Women's Horlicks in 2008, creating a BLOCKBUSTER PRODUCT.•"It has been growing 60-65 per cent year on year [even if] on a small base," says Singh. But the effect has been that Horlicks Lite combined with Women's Horlicks ensured that the company clocked growth of more than 17 per cent in revenues until 2011.

OTHER IMPORTANT CAMPAIGNS

Aided by its R&D centre, it formulated a blend of Horlicks that was guided by its earlier study done by NIN. The results showed five clear areas of benefit: more bone area, more muscle, better concentration, more active nutrients, and healthier blood. This led to its launch of the "5 Signs of Growth" positioning and campaign.

SOME FAILURES…

•GSKCH had its hiccups with its Horlicks extensions. The 2010 launch of Chill Dood, its flavoured milk range, did not take off. Nor did its attempt to launch cream biscuits and noodles, under the brand Horlicks Foodles, in 2009.•Industry insiders say much of the company's success has come from adjacent brand variants such as Horlicks Junior, Women's Horlicks, Horlicks Lite and Mother's Horlicks and not from extensions into biscuits, noodles and, even low-priced HFD variants such as Asha.

CURRENT SCENARIO

•Latest extensions like Horlicks ProMind and Horlicks Gold are yet to establish themselves conclusively, though they have shown promising off take in their test markets in the south. GSKCH thinks successes far outnumber failures.•"We are already the second-largest brand in the south after Quaker Oats," points out Singh. GSKCH is certainly on a fast track.

According to the Ace Equity database, Horlicks and its brand variants have helped the company

accelerate its revenues and profits in the last five years (till December 2012) to 19.2 per cent and

23.4 per cent, respectively, against 13.1 and 20.8 per cent in the preceding five years.

Taller, Stronger, Sharper, indeed.

Thank You