Positioning of Horlicks against competitors

The maker of Horlicks is GSK Consumer GlaxoSmithKline Consumer.

In Fy19 The maker of Horlicks and Boost saw its value share declining to 53.8. Mondelez,
maker of Bournvita, increased its share by 30 bps to 15.2% while the share of Abbott, maker
of Pediasure and Ensure, rose 50 bps to 9.2%. The biggest gainer is Bournvita.
Before the competitors of Horlicks wipes it out, Horlicks requires Revamp or rebranding

COMPARISON OF COMPETITORS

Direct Horlicks Bournvita Boost Complan Pediasure

Competitors
Company GSK Cadbury GSK Heinz Abbott
Base Malt and Cocoa Malt and Cocoa Soy
cocoa Cocoa
Market 53 17 13 11 1
Share
POD Taller, Physical Energizer for Stronger Complete nutrition
Stronger and energy and daily sports bones and with Fibre
Sharper endurance muscles
Price Rs. 394 Rs. 380 Rs. 400 Rs. 464 Rs. 1050

Market Share
1%
12%

14%

56%

18%

Horlicks Bournvita Boost

Complan Pediasure
Revamp or Repositioning for HORLICKS

Major Reasons why Horlicks Market share is Decreasing

1. Existence of Substitutes- Analysts and experts reckon that the main reason is
structural issues within the category which leaves little room for growth in the future.
As availability of milk increased, Horlicks began being stirred in milk itself as an
extra dose of nutrition to children. Now, there are many more nutrition substitutes
available in the marketplace, pushing children and parents away from brands such as
Horlicks and bringing down growth rates in the process.
Horlicks needs to focus on Customer Preferences Product Attributes Influencing the
Purchase Decision
The following product attributes were identified as influencing the purchase decisions of the
customers:
a) Nourishment- Horlicks has a number of brand extensions and needs to communicate
effectively to the public about the nutritional benefits of each product to the
consumers by ways of advertisements etc.

b) Colour- Colours tend to have an impact on the customer preferences. Therefore, the
dominant colour i.e. Blue needs to be changed.

c) Packaging- Horlicks needs to change its packaging. For brands, it becomes easy to
offer the products when there is the bouquet of products for each of the segments of
the market. Horlicks, in order to ensure that it does not restrict itself to a particular
group of customers, has introduced Horlicks for every age group of customers with
different SKU’s along with different flavours and easy to use refill packs.

d) Shelf-presence- The store shelf is the shoppers’ first point of interaction with your
product. As a result, your brand presence or how your product looks at the retail shelf
becomes almost imperative. When shoppers approach the shelf, their eyes are
constantly scanning the shelf to see what else there is — this is the moment when
another brand can catch the attention of the shopper and become part of the purchase
consideration. It is very important for Horlicks now to make sure that the retailers
stack their products properly to maintain visibility.

e) Brand Image- Horlicks has a strong brand image. Physical health campaign
And Mental nutrition campaigns could be introduced in order to build a better brand
image in minds of consumers. The brand revenue in the year 2017 stands at £680
million. Horlicks associate itself with the targeted audience through different
mediums such as at schools, colleges, pre-schools etc. The brand has been creating
awareness about the health benefits of drinking the cereals and milk-based Horlicks
which help in creating immunity, maintaining blood flow, healthy weight gain, and
better concentration.

f) Promotions Source- increasing promotions will increase brand image and further
boost sales for products. Advertising by using the new concept Of Nutrition
Supplement Value Proposition of filling the nutrition gaps. Increase its efforts in
advertising as well as distribution channel in the rural market
 2. Demand for Ayurvedic Products - Consumers are now increasingly demanding
more herbal and natural products, the participation of Ayurveda-based companies in
health food drinks is expected to grow. Ayurveda-based companies including
Baidyanath and Dabur are planning to enter this category as demand for ayurvedic
products increases. Existing players (Horlicks) are also expected to revamp their
product portfolios in line with changing consumer preferences and demands as people
feel natural ingredients are supportive of physical and mental wellbeing.

Horlicks has been competing with the energy drinks, essential vitamins/minerals supplements
and substitutes like milk, and packaged fruit juice.

The company has been broadening its product line and brand offerings in order to create the
large array of products under one brand name and through new product offering it is
increasing customer retention and repeat purchases.

The Health & nutritional drinks market is innovating itself to increase its market share and
growth numbers through market penetration, and brand/ product extensions. Horlicks can
revamp their product portfolios by introducing Ayurvedic Products.

3. Inability to Price well- Experts say that pricing power has been slowly but steadily
slipping out of the hands of brands such as Horlicks owing to slowing category
growth as well as competitive intensity from substitutes. Barring the last two to three
years, health food drinks such as Horlicks saw a price increase of 5-6 per cent per
annum. This ensured that gross margins were the highest in the industry for this
category at over 65-66 per cent. This is now coming down. In case of GSK owned
Horlicks gross margins for the financial year 2017-18 stood at 66.8 per cent versus
67.5 per cent in the previous year (2016-17). Analysts estimate this number could slip
further as the company focuses on volume growth rather than price growth.  
SEGMENTATION, TARGETING, POSITIONING IN THE MARKETING
STRATEGY OF HORLICKS –

Based on the nutritional requirement of the different age groups and product usage such as
that of malt beverage is for toddlers & pre-schoolers, growing kids and for adults including
mothers & women.

Since the brand is present in different product categories like healthy biscuits, noodles,
nutritional drinks, and energy drinks, therefore, it uses differentiated targeting strategy.

The brand has been positioned as a healthy nutritional food for every life stage and for
consumers of every age. It is being liked so much India that approx. 30 million Cups is being
drunk in India every year.

SEGMENTATION FOR HORLICKS

Segmentation is the process of sub-dividing a whole market in different groups or subsets.

The market of Horlicks is segmented as follows:

GEOGRAPHIC SEGMENTATION-
In the northern part of the country, it has a huge demand as a white drink whereas chocolate
Horlicks is very popular in the southern part of the country.

DEMOGRAPHIC SEGMENTATION-
Here the market is segmented on the basis of the age groups & income level
 Age: Junior Horlicks- for preschool children
Horlicks regular- for general use
Women's Horlicks-for pregnant and breast-feeding women
Horlicks Lite- for health-conscious adults and for diabetic people
Chocolate and other flavoured Horlicks- for teenagers.

 Income Level: Customers of Horlicks are middle-income group customers who like to
be healthy and therefore take healthy supplement drink which is filled with a large
number of vitamins and minerals.

PSYCHOGRAPHIC SEGMENTATION-
 Health Conscious
 Recovery/ Energy Gain

BEHAVIORAL SEGMENTATION
 Growth oriented
 Sports
TARGET FOR HORLICKS
Once the firm has segmented the total market, it should select the target market segment or
segments for marketing. This is called targeting. This is an every day product. Target differs
with each variety of offering Consumer Insight Food drinks that are nutritious and available
at competitive pricing and easily available Customer need state. A milk additive that
improves the nutrition level and taste of the milk.

 Geographic dispersion Urban, suburban Family life cycle Full nest, single parents
 Social Stratification Upper class, lower upper class, upper middle class
 Age segments Infants (0-5), mothers (18-45)
 Income Average, above average (50 k to 100 k per month)

POSITIONING FOR HORLICKS

Positioning of a product or service is creating an image in the consumer's mind.

 Horlicks was initially introduced as both an additive and substitute to milk and
positioned itself as a nutritional supplement for the kids.
 In 2003, it positioned itself as a "pleasurable nourishment" by launching its vanilla,
honey and chocolate variants.
 It adopted a new positioning strategy via product packaging which now carries a logo,
taller, stronger, sharper.
 Junior Horlicks brand has positioned a product exclusively for children of the age
group 1-3.
 Today, the brand talks to each member of the family. Its objective is to cater to the
needs of all the age groups.
 Women’s Horlicks differentiated the brand from the others by positioning it on a
“bone health” platform, which is a common health issue among older women. The
positioning benefited the brand’s performance.
PRODUCT DIFFERENTIATION

Points of difference

 Variety of Products- Horlicks provides a variety of products to its consumers.

Horlicks which includes products such as Horlicks, Horlicks Lite, Horlicks Oats.
For Toddlers: Junior Horlicks and Horlicks Growth+.
For Women: Women’s Horlicks and Mother’s Horlicks.
Plus+: Horlicks Cardia+ and Horlicks Protein+.
 Nutritional Value- Supplement nutrition
 Taste- Improves the taste of milk because of its availability in different flavours
 Pricing innovation
 Brand Mantra
 Trust worthy- Brand with long history
 Variety- 9 brand Extensions
 Availability – excellent distribution
The brand distributes its offerings through the variety of channels of distribution such
as pharmacies, medicine stores, wholesalers, retailers, kirana stores and e-commerce
websites. It has recently tied up with eCommerce giant Amazon through which
customer is redirected to Amazon while clicking buy option on Horlicks website.