Horlicks

Presented By

Joyeeta Sarkar

Praveen Kumar Reddy

Aswin Christie

Sharath Ghosh

Shyamal Bhattacharya

Brand Dossier

Content

History......................................................................................................3 Timeline....................................................................................................4 Facts..........................................................................................................4 Evolution...................................................................................................5 Product Analysis........................................................................................6 Positioning Repositioning..........................................................................7 Segmentation............................................................................................8-9 Distribution................................................................................................10 Competition...............................................................................................11 Competitor Analysis...................................................................................11-14 Brand Equity...............................................................................................15 Promotion and Advertising........................................................................16 Strategies Adopted over time to tackle Competition................................17 ASHA Project..............................................................................................18 Summary regarding future direction of the Brand....................................19 Reference...................................................................................................20 Hypothesis..................................................................................................24 Questioner..................................................................................................26 Data Analysis..............................................................................................30 Conclusion..................................................................................................36

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Phase I

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History

In 1873 James Horlick, a pharmacist with his brother William established a company J & W Horlicks in Chicago, USA to manufacture a “malted milk drink” , which claimed to promote sleep. In 1883 they got patent for this product. Horlicks was thus the first invented to substitute milk baby food. In 1890 the product was imported to the United Kingdom and later a factory was established in slough, Berkshire, England.

Horlicks became popular during the world wars 1 and 2. The drink became popular at home and the battle front. In world war two, Horlicks tablets were sold as a candy, used as an energy booster by US, UK and other soldiers.

Coming to India, Horlicks bottles were imported and sold.This was during 1930 ‘s . In the latter part of 1958, a plant was set up, and was named Hindustan milk food manufactures. After this the company was acquired by Beecham which later became Smithkline Beecham and finally became Glaxo SmithKline Beecham Consumer Health care ltd.

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Timeline

1865 : William and James Horlicks started the company 1875 : Business moved to Racine, Wisconsin for its supply of spring water 1883 : William was given a US patent for Horlicks being the first

Malted milk drinks mixing powder

1906 : Factory constructed at slough UK 1909 : Horlicks became popular in north pole and south pole expeditions as a

Provision

1921 : Death of James led the company to split, William having the Americas

And the sons of James the rest of the world

1931 : “Night Starvation” was a story developed to promote Horlicks as a

bed time drink

1945 : Company acquired by British Horlicks business 1952 : Horlicks was said to cure gastric ulcers and some forms of diabetes 1960 : Factory established in Punjab to make Horlicks from Buffalo Milk 1968 : Factory built in Bangladesh and Pakistan to satisfy local demand 1975 : factory built in Andhra Pradesh 2000 : Glaxo and Smithkline merger

Facts

Horlicks was first invented to substitute milk as baby foodThe brand has been endorsed by Amitabh Bachchan on the radio(1960-70), Moon Moon Sen and her daughters Raima and Riya (1980s) and Vishwanathan AnandIn India, over 2 billion cups of Horlicks are drunk every year!Biggest market is India6th most trusted brand in India (AC Nelson)Most trusted health drink brand (Economic Times 04)More than 50% market share in health drink market

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Evolution

The company believed in Growth through innovation. Previously Horlicks was imported but as the demands exceeded they set up 2 production units in India to fulfill the demands of the Indian population. This came as a solution to Indian market as a health drink.

Then Horlicks entered the biscuit market and later in 1995 they came up with Junior Horlicks as a baby food supplement. Viva and Maltova were acquired by the company in 200 and 2001 that increased the product range.

Women’s Horlicks came into picture initially nursing mothers and then to catering specific needs of women. Horlicks adopted certain strategies to deal with competitors and came up with attractive packaging and various flavours.

Horlicks conducted clinical trials and campaigned “Taller Stronger Sharper”. Horlicks segmented the market to increase its market share. Horlicks focused on children to encash their increasing population. Then it launched Horlicks Lite which is specially formulated keeping in mind nutritional needs of adults and also for use by people with diabetes.

Horlicks also entered the instant noodle market with Foodles and Nutribar came as a energy bar focused on the young generation, these two products were focused as a healthy solution to the existing fad market (plain maggi and energy bars). Recently Chill Dood is launched in the instant milk shake focused on children.

Horlicks is also involved in several campaigns one being the ASHA project catering exclusively to the needs to the rural markets.

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Product analysis

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Positioning and repositioning

Horlicks went for a revamp in 2003. From a boring nutritional drink, GSK has positioned Horlicks as `pleasurable nourishment', by launching it in vanilla, chocolate and honey variants.

The new positioning strategy adopted via product packaging which now carry a logo saying — `Now Proven - Taller, Stronger, Sharper.' Ever since the re-positioning, Horlicks has grown by four per cent in volume and by seven per cent in value.

Junior Horlicks – a 150 crore brand has positioned a product exclusively for children between the ages of two and five

Horlicks Lite for the elderly who often have a sugar problem. For the youth GSK Consumer Healthcare has leveraged the brand to venture into an

entirely new product category Nutribar - energy cereal bars. Horlicks Nutribar positioned on the twin planks of health and convenience

Horlicks introduced Women’s Horlicks and Mother Horlicks with specific composition for women consumers.

GSK launched Chill Dood an instant milkshake in the dairy based product market. The brand today talks to every member of the family rather than the entire family The idea is to address all age groups. The Horlicks visual identity has undergone a complete makeover. The packaging of

its various segments of products was designed according to the target consumers. The brand strengthens its market position with the power of advertisement and

distribution network. Horlicks is involved in promoting events, organizing shows (Wizkids), Clinical Trials, Advertisements and involvement in social activities.

Horlicks excels in its distribution network. It reaches the rural market in depth. Horlicks is flourished in more than 25% of the rural market and moving on.

Horlicks introduced Vending Machines via Nutritional Food Services Division established in July 2003 to extend the availability of nutritional brands such as Horlicks & Boost. Vending Machines was identified as one of the important source to make them conveniently available 'out of home'. Nearly 500 vending machines for Horlicks and Boost have been placed at institutions such as Corporates, Schools and Hospitals, at cities across the country. These trendy machines offer a frothy great tasting cup of Horlicks (Standard and Vanilla) and Boost in attractive cups on-the-go.

Horlicks entered the 1000 crore instant noodle market launching Horlicks Foodles. Foodles - instant noodles with the nutrition and goodness of wheat.

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Segmentation

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Distribution

The Packaging is done in different in different plants spread across various states to save transportation costsHere the powdered in transported in bulkThen bottled and packaged and supplied to the distributorsIt created a second layer of distributors in the smaller towns to supplement the existing chain of around 500 big distributors. Most of these 4,000 sub-distributors were appointed in the eastern and southern parts of the country.

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Competition

It is a 135 year old brand constantly reinventing itself. Horlicks has long been the favourite health drink of India.The brand commands above 50% market share in Indian Health Drink industry which is valued at around Rs 1300 crore.

It is dominating the Rs 2,200-crore malted food drinks (MFD) market, enjoying steady growth and 66.5 per cent of the market share via its brands Horlicks, Boost, Maltova and Viva.

Competitor Analysis

AC Nielsen (2008)

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Horlicks vs. Complan

Heinz Complan is its nearest competitor.Complan provides its consumers with the necessary nutrients for all round growth, but due to the fact that Horlicks was the first to come out with various flavours, which ensured its current market position.Horlicks has always been able to price itself lesser than the competition, thus being able to appeal to the price conscious Indian consumer. Complan has never reinvented its product design while Horlicks attracts the consumers (mainly children) with its attractive design. Each of its products has a consumer centric design, e.g. Junior Horlicks has animalistic design to target infants, Women’s Horlicks it’s shaped as a slim healthy lady and in a feminine red colour.

Sales of Horlicks in different flavor

AC Nielsen (2008)

Horlicks vs. Boost

Both brands belong to the same company.But since boost is segmented as a chocolate energy drinks its only competition to Chocolate Horlicks.Although boost has been promoted by important sporting personalities like Kapil Dev and Sachin Tendulkar it is still far behind Horlicks in terms of sales.Since Boost is an energy drink it cannot compete with a wholesome nutritional drink as Horlicks.Boost has never given variety flavors to its consumers; it comes only in one i.e. chocolate.

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Horlicks vs. Bournvita

Children always go for the tastiest option, and Cadbury Bournvita offers two options one being Cadbury Bournvita 5 star magic and the other being Cadbury Bournvita ++.Bournvita 5 star magic offers a mix of rich chocolate and caramel flavor of the famous Cadbury five star.New Bournvita ++ offers taste and essential nutrients for all round growth.Horlicks beats Bournvita Five Star Magic by providing new flavors in chocolate vanilla honey etcHorlicks edges over new Bournvita ++ with their slogan “Exams ka booth bhagao”.

Horlicks vs. Viva and Maltova

Viva, though a good product i.e. it has Vita health (a combination of 9 essential vitamins, iron and calcium) but Horlicks beats it with their superior supply network.Even though Maltova is a yummy chocolate drink with essential vitamins, minerals and carbohydrates, but Horlicks scores through the brand loyalty of their customers by sponsorship of consumer interactive events like school fairs etc.

Sales of Horlicks and other products of GSK

AC Nielsen (2008)

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Horlicks Foodles vs. Nestle Maggi

Horlicks Foodles launched in 2010 in the battle for the 1000 crore instant noodle market with market leader Nestle Maggi having 90% market share.It has gone past the other small players like Nissin Foods Top Ramen, Future Groups Tasty Treat etc.The above holds true as it gives the taste of instant noodles with the goodness of wheat.

Horlicks Nutribar vs. Mars Snickers

Mars Snickers launched in 2004 is currently leader in energy bar market while Horlicks Nutribar is launched recently.Snickers came up with its 1st advertisement after 4 years while Nutribar came with the brand name of Horlicks which excels in brand promotions.Snickers are only available in Mega Stores and select cities. Horlicks have a strong distributor network and thus beats Snickers in availability.Snickers are tagged as a 4PM snack while Nutribar is tagged as anytime snack for hungry.Nutribar is one step ahead of Snickers for its composition. Snickers have 512cals and 27g fat while Nutribar is as low as 312cals and 7.5g fat

Horlicks Chill Dood vs. Amul Kool

Horlicks Chill Dood a ready to drink milkshake just launched in the dairy based product market as an instant milkshake. Amul is the most visible in this segment with its product Amul Kool.Horlicks chill dood comes in a variety of flavors like chocolate targeting kids, while Amul has no segmentation.The ad campaign for chill dood was animated which attracts children, while Amul Kool targeted the mature audience to compete with the cola majors.

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Brand Equity

Brand loyalty is a reputation of the brand which the customer has towards it. Horlicks is a brand the consumer is satisfied using it but with minute change in price the consumer has chances to switch the brand.

Despite strict competition in the market, Horlicks holds a formidable position through effective marketing.

Trade leverage:

Horlicks definitely hold a shelf space because customers expect the product to be available as it is an essential product in their monthly grocery list. Since Horlicks has extended into various categories as Junior Horlicks, Mother’s Horlicks, Horlicks Lite they require a store space.

Attracting new customers:

Via campaigning they constantly explain its features like Junior Horlicks , Mother’s Horlicks and Horlicks Lite providing the nutritious benefits it creates a strong awareness thereby pulling in new customers via segmentation startegy.

The reassurance of the brand is achieved by the existing customers, since it holds a better market share and strong awareness.

Time to respond to competitive threats:

GSK Horlicks is one of the brand which comes up with innovative product line they were able to withstand threats at each stage of their growth.

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Promotion and Advertising

In 1961 Horlicks started promoting the brand, with the 1st television advertisement, with Billy Raymond with the tagline “Horlicks, the food drink of the night.”In India to reaches rural masses it started promotions through the radio, by Amitabh Buchan (1960-1970), which is still effective in Bihar and Orissa.Horlicks whiz kids an inter school fiesta was launched in twenty five cities targeting school children.Horlicks conducted a clinical trial with 869 students in Hyderabad before launching new Taller Stronger Sharper CampaignIn 2005 it came up with an interesting advertisement saying that Horlicks makes you “taller, stronger, and sharper.” This advertisement was huge hit which led to increase in the sales of Horlicks. “Video on wheel” (showing magic shows) is another sort of promotion adopted by Horlicks in rural areas.Later Horlicks started the Hut campaigns in rural areas where every village did not have a market place, but two or three of them share a common one. Thus to capture those consumers these market places were lined with glow sign boards and banners. In urban areas promotion was through Banners and Hoardings.

Moon Moon Sen and her daughters Raima and Riya (1980s) and Vishwanathan Anand were the other brand ambassadors

Horlicks Lite was promoted by Bomang Irani in the year 2005.Ninja Horlicks is endorsed by Darsheel Safari of Tare Zameen Par fame.In 2008 Chocolate Horlicks was promoted by signing up with the blockbuster “Spiderman 3”.

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Strategies Adopted over time to tackle Competition

The following strategies were adopted to ensure Horlicks had maximum market share:

Horlicks evolved from a malted dairy drink to an energy drink that was nutritionally fortified with essential vitamins and minerals.In 1983 Nestle Nestomalt (globally having more market share than Horlicks) was launched in the Indian markets. Horlicks immediately expanded their advertising, trade promotions and medical promotions, and thus blocked Nestomalt, which lead to Nestomalt’s disappearance. Horlicks acquired Maltova (February 2000) and viva (2001) from Jagjit industries and expanded its market share before HUL and Nestle get hold of it.While other brands were promoted by athletic sports personalities, Horlicks roped in Grand Master Vishwanathan Anand to promote Horlicks as an all round health drink.Horlicks formulated DHA (Decosahexaenoic Acid) for brain development in Junior Horlicks which got recommendation from the World Health organization in the year 1995. Thus the product is recommended by doctors.In 2003 Horlicks introduced a long line of flavours like elichi, vanilla, chocolate and toffee. In 2003 Horlicks launched the jingle “epang, opang, jhapang”, epang for iron, opang for vitamin c and jhapang for vitamin d. This campaign truly launched Horlicks as a nutritional drink.In 2003 GSK launched Vending Machines (Horlicks and Boost), the first of its kind in the health drink market, that were installed in corporate houses, schools and hospitals. This product/service is still expanding. Horlicks conducted clinical trials at the National Institute of Nutrition Hyderabad, involving 869 school going students (age 6 to 16) and then after completion of the successful trial, they repositioned Horlicks giving it the tag line “taller, stronger, shaper”. This was done to respond to Complan’s campaign that claimed to make kids taller.After the successful campaign of Bournvita via the Bournvita Quiz Contest, but this campaign slowly declined and eventually vanished. Thus ceasing this opportunity Horlicks in 2004 launched one of the largest National School Talent contests named “Horlicks Wizkids”.The best strategy of Horlicks was its idea to capture the rural market before its competitors. They achieved this through HUT activities (advertisement campaigns in rural markets), promotional shows (magic shows) and above all expanding its distribution network. Horlicks expanded its Sub distribution network to Satellite networks who fed the adjacent rural markets, which ensured that 30% to 35% of all Horlicks sold was at the rural markets.

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ASHA PROJECT

This project is a new innovation by Horlicks and is acknowledge by the company’s key competitor.

This product is priced at 40% less than the main stream brand.ASHA is being test marketed in pockets of Andhra Pradesh.Rural markets already contribute 30-35% to GSK Consumer Healthcare’s sales.Along with low unit packs (90 gm sachets of Boost) are tailored for rural

consumers.Regular Horlicks cost Rs 135 while ASHA is priced at Rs 85 for 500 gm.SKS Micro Finance (Hyderabad) 75000 ASHA samples via 16 office branches across

Andhra Pradesh.The company believes that if ASHA succeed it will be a game changer.

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Summary regarding future direction of the Brand

Horlicks gained a prominent brand name and trusted brand image in the consumer market by time. Horlicks is now designing the product and planning future strategies to capture the teen age market. Also Horlicks is looking forward to flood the market with vending machines. Moreover Horlicks is planning to expand its market share by introducing new products in different segmentations.

The major advantage of Horlicks over its competitors is in rural reach. 30-35% of Horlicks sales come from the rural market. Horlicks is trying to penetrate deeper into the rural market via satellite distribution chain and promotions. The urban market capture strategy is mainly via promotions, campaigns and segmentation (launching new products).

Horlicks is looking forward to its project ASHA which will contribute much in the rural market sales. With gradual success of ASHA Horlicks it is looking forward to bring its other product also under the same category. Besides, Horlicks is sampling its 200g satches for test marketing and thereby creating awareness among the consumers.

GSK is contemplating to expand its Rs 12 billion flagship brand Horlicks into 8-10 new product segments over the next 12-18 months.

Leverage on Brand Equity.

Intensive growth – use it twice/day.

To capture the upcoming teenage market segment.To test the marketing strategy of using 200 gm scathe (sampling).Right now there are 500 Horlicks vending machines and they are planning for more installations.

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Reference

www.gsk-ch.in Business Standard Website The Hindu Online Wikipedia.com JWT News AC Nielsen Economic Times Online Mr Aninda Ghosh (ASM, GSK)

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Phase II

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Hypothesis

Is the product segmentation strategy working for Horlicks ?

Horlicks started with a single product i.e. “malted milk drink”, but gradually expanded its market with consumer specific products. They were the first to convert the malt drink to a health drink. They segmented their consumers by introducing Junior Horlicks, Women’s Horlicks and Horlicks Lite to the basket. These products are giving strong competition to the

respective market leaders.

Why this Hypothesis?

Horlicks is the giant in the health drink market. It constantly came up with consumer specific variants. This shows us that as a market leader it wants to expand the cake not the slice, by targeting specific consumers like Horlicks Lite targets diabetic patients. We intend to find out whether, this strategy has worked?

Information Required?

To study the above hypothesis we intend to find out the following from existing Horlicks consumers

Product Awareness: Are the consumers familiar with the uniqueness of the specific products?

Usage and frequency of purchase : What is the rate of consumption of different variants and also the frequency of purchase?

Consumer Profile : Are the variants used by targeted consumers for the specific purpose assigned?

Consumer Satisfaction and Recall : Are the consumers satisfied with the product quality and do they think it as a good value for money? If so, do they stick to the product or try other option?

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Sample size and Sampling plan

Horlicks is a FMCG product, and now through segmentation it has reached specific consumers of all ages. We plan to survey 60 Horlicks consumer families, whose members are of different ages, both sexes and specific segments. We are mainly planning to cover Kolkata. We will use handouts containing questions and related information gatherings that will help to judge hypotheses.

Instruments for data collection

Personal Interviews: Through questionnaire’s to the purchasing member of the family.

Telephonic Survey: If the above is not possible then we will call consumers and find out the relevant information.

Data analysis tools

.

Pie Chart : To represent the above in a pictorial form showing the segmentation.

Bar Diagram : To show the difference between the core product and its variants.

Report : To summarise the above two pictorial tools.

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Questionnaire

Name:

Gender:

1) Does your family consume Horlicks?

Yes

No

2) Kindly let us know how many members are there in your family

2 3 4 5 6

3) Please mention, how many of your family members falls in the age bracket provided below

1-5 6-18 19-50 50+

(In accordance to the data collected we will analyse Q6)

4) What are the different variants of Horlicks you are aware of?

Chocolate Horlicks

Junior Horlicks

Women’s Horlicks

Horlicks Lite

(This will check the awareness of the variants and how successful GSK have been to advertise the variants)

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5) Given below are some variants of Horlicks and some of the unique features of these variants. Kindly tick mark the box, which you feel matches the variant with its unique feature:

Feature

Variant

DHA for brain development

26 Nutrients Low cholesterol/No Sugar

Junior Horlicks 38 25 2

Women’s Horlicks 23 42 12

Horlicks Lite 6 12 49

(This will check the awareness of the consumers of the about the specific features of the respective products. This is to show how the company have successfully delivered the message about product features to the consumers.)

6) Kindly tick the variants used by your family members under each age bracket :

1-5 6-18 19-50 50+

Horlicks

Junior Horlicks

Chocolate Horlicks

Horlicks

Junior Horlicks

Chocolate Horlicks

Horlicks

Women’s Horlicks

Horlicks Lite

Chocolate Horlicks

Horlicks

Women’s Horlicks

Horlicks Lite

(This will show us whether the variants are used by the target age group or consumers still use the mother product heavily.)

7) How often you buy the product? (Tick the appropriate) Data will be filled in /kg basis

Product Frequency of purchase per month

Horlicks once in 2 months 1 2 3 >3

Chocolate Horlicks once in 2 months 1 2 3 >3

Junior Horlicks once in 2 months 1 2 3 >3

Women’s Horlicks once in 2 months 1 2 3 >3

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Horlicks Lite once in 2 months 1 2 3 >3

8) Will you continue to buy the product ? Please tick the appropriate option :

Yes No Can’t say

If yes, please tick the characteristics of the respective products that encourage you to buy the product frequently :

Product

Characteristics

Horlicks Junior

Horlicks

Women’s

Horlicks

Horlicks

Lite

Chocolate

Horlicks

Price

Taste

Quality(Benifits)

Brand

(This will analyse the reason of repeat purchase and weather it tally with the charecters assigned to the respective variants.)

If no, please tick the characteristics of the respective products that discourage you to buy the product :

Product

Characteristics

Horlicks Junior

Horlicks

Women’s

Horlicks

Horlicks

Lite

Chocolate

Horlicks

Not Aware

Price

Taste

Quality(Feature)

Brand

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Phase III

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Hypothesis

Is the product segmentation strategy working for Horlicks ?

Horlicks started with a single product i.e. “malted milk drink”, but gradually expanded its market with consumer specific products. They were the first to convert the malt drink to a health drink. They segmented their consumers by introducing Junior Horlicks, Women’s Horlicks and Horlicks Lite to the basket. These products are giving strong competition to the

respective market leaders.

Data Analysis

Sample size : 100 Horlicks consumers.

We have taken a sample size of 100 Horlicks consumers, along with their family members. We have surveyed them on the following parameters :

Product awareness (general) Product feature awareness Use of variant’s Purchase frequency Consumer loyalty Consumer feedback

After the survey of these 100 Horlicks consumers, we shall proceed to answer our hypothesis i.e. prove the hypothesis.

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Product awareness (variants)

We questioned the consumers on their awareness of the variants of the mother product Horlicks. From the results we infer that the marketing strategy of GSK for the variants of horlicks has been successful and they have managed to widen the Horlicks umbrella.

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Product awareness (feature)

After this we questioned the consumers about the unique features of the specific variants of Horlicks. The results clearly show that GSK has been successful in conveying the message of the uniqueness of the variants. This is shown as in case of Junior Horlicks maximum no of consumers know of its DHA property. Similarly both Women’s Horlicks and Horlicks Lite have made consumers aware of their unique features.

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Use of variant’s

Horlicks had positioned its variants with respect to the age groups of the target audience.From the results we see that Junior Horlicks is popular in the age groups one to five and also six to eighteen. Also chocolate Horlicks has wide acceptance amongst kids and adults for its taste. While Women’s Horlicks and Horlicks lite have found acceptance amongst adults and senior citizens.

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Purchase frequency

We now asked the consumer on the frequency of purchase (fig in months). From the results we clearly see that Horlicks products are purchased regularly once in two months or once in a month. The flagship product Horlicks is done, with a large no of consumers purchasing once a month, while the variant’s are not that far behind with healthy number of consumers purchasing once a month. So it can be said that the variants have successfully made it of the homemakers shopping list.

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Consumer loyalty and feedback

We finally concluded our survey by asking two important questions, will you continue to buy the product? And what factors of the product influenced you for its purchase?

The data for the first question is represented in the pie chart, which shows that 91% of the surveyed consumers will continue to buy the product. For the second question the data is shown in the bar graph, here we can infer that of the four attributes benefits and brand are

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the key ones that encourage consumers for the purchase of the product. The only exception being Chocolate Horlicks whose attribute is taste.

ConclusionFrom the results it can be inferred that the segmentation of Horlicks has been successful. In accordance to the mother product the different variants are gradually making their way to become the expertise it their respective segments. GSK have been successful to generate the awareness of the individual variants to the consumers mind. From the purchase frequency, it is clear that the sales have been boosted up by the fair contribution of the different variants. GSK has been successful to read the consumers and design the variants for each group. The results show the acceptance of the consumers towards the success of the segmentation venture.

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