RANBAXY

If things move as planned for this brand, its rivals would soon need medical examination!

Eight burly acquisitions Since just the dawn of 2006 – half of it in Europe and South Africa to reduce distribution expenditures and
increase sales of generic drugs – added to a splendid Rs.57.76 billion in sales during 2006 alone, and we have a drug-making
powerhouse! What stands out distinctly is that this Indian pharmaceutical giant has managed to gain the trust of n o t just people
within India but those without! Still recovering from the repercussions of the recent family feud that hit headlines, it took a focused
mind to survive and grow. And grow it did – all thanks to its Herculean brand image. It has succeeded in delivering advantages to over
125 nations and its strong global workforce of 10,500 people representing more than 51 nationalities; only represent the brand’s focus
on human capital. A thorough understanding of the market, vast geographical presence, coupled with a strong product line, are simply
the building blocks which brand Ranbaxy is made of. “Out-of the box thinking, looking ahead of time, reading pulse of the market,
understanding patients’ needs and providing them with innovative and convenient solutions have been the broad tenets of our core
strategy,” a Ranbaxy spokesperson told 4Ps B&M.

LUX

glaxo

REVITALISING WOMEN'S HORLICKS IN INDIA

Faculty Contributor: Moutusi Maity, Ex-Faculty
Student Contributors: Arunava Saha Dalal, Giridhar Rao B.G., Navneet Chahal, Rohini
Ramachandran, Suraj Holla Byndoor
Women's Horlicks is India's first health drink designed specifically for women's nutritional needs. It
targets a hitherto untapped segment as identified by GSKCH (GlaxoSmithKline Consumer
Healthcare), namely, health conscious urban working women, in metros and mini-metros, leading
hectic lives balancing career and family. Women's Horlicks seemed to have all the elements necessary
for success. And yet, at present, sales appear to be flagging, a seeming contradiction that presents an
intriguing case for analysis.
To many of us, the name 'Horlicks' is entwined with memories of childhood - of
getting up in the mornings and gulping down a glass before running to school, or
coming back exhausted from a hard evening's play only to be rejuvenated by it. Since
its creation by the Horlicks brothers in 1873 (originally intended as an artificial infant
food), it has undergone numerous transformations. Though the first factory in India
was built only in 1960, it soon became the biggest market for Horlicks1. Despite its
popularity however, GlaxoSmithKline Consumer Health Care (GSKCH), which
manufactures Horlicks, has taken care to ensure that the product does not stagnate.
It underwent a revamp in 2003 with the introduction of flavours like Vanilla, Toffee,
Elaichi and Chocolate to satisfy the discerning palate. What is perhaps more
interesting, however, is GSKCH's strategy to segment the Indian market and to
produce variants to satisfy each segment's unique needs. This is exemplified by
products like Junior Horlicks, for pre-schoolers, Horlicks Lite, for health conscious
adults and diabetics, and Mother's Horlicks, for pregnant and breast feeding women. In
each case, GSKCH has striven to create a distinct and appealing image.

Women's Horlicks - What is New About It?

The latest case in point is the recently introduced Women's Horlicks. The basic
marketing mix of Women's Horlicks is shown in Exhibit 1. GSKCH's latest offering is
targeted specifically at the modern urban Indian woman who is historically known for
putting everyone else ahead of herself. Women's Horlicks is designed to specifically
address the health needs of women providing 100% of the daily requirement of iron,
 calcium, folate and vitamins B2, B6, B12, and C2. The target segment therefore
consists of health conscious urban working women, in metros and mini-metros,
between the ages 19-50, leading hectic lives focusing on career and family and hence
not able to take care of themselves in the bargain.

Exhibit 1. Marketing Mix of Women's Horlicks

In order to highlight its nutritional aspect, GSKCH is promoting the product both
through traditional print and TV media, and also by enlisting the support of
professionals in the medical field. In a brilliant casting choice, eschewing the current
glamour dolls of Bollywood, Konkana Sen Sharma was selected as the face of the
urban Indian woman of today, balancing career and home, a choice sure to resonate
with most women. This, combined with the baseline, "Because your body needs you
too!", starkly elegant in its very simplicity, captures the essence of the brand image
GSK is trying to build.
GSKCH also introduced a Doctor Engagement Program wherein the company reaches
out to physicians, dieticians and nutritionists to educate them about the product. This in
turn, would hopefully lead to an official or at the very least, unofficial, product
endorsement by these professionals. Their core strategy lies in grabbing the mind space
of the consumers, rather than following the more traditional hard-sell route.

Reasons Behind the Failure of Women's Horlicks

Women's Horlicks appeared to have a hit combination - a winning brand, a double-
edged promotional campaign, an excellent distribution system already in place,
courtesy the other Horlicks variants and a well-established brand name. In spite of
these advantages, it has not been able to make an inroad into the Indian health drinks
market. This failure could be attributed to a number of strategic causes. To get a better
understanding, we conducted a survey. The results, from 50 respondents, are shown in
Exhibit 2.
 Exhibit 2. Is the price of Women's Horlicks justified?
Price
The product is perceived to be expensive by the customers surveyed. Women's
Horlicks is available in a 200 gm jar, which costs Rs.100 while traditional Horlicks is
priced at Rs.124 for 500 gm3. This disparity in cost might be due to the special formula
that is used to prepare Women's Horlicks but primary research showed that the
consumers perceive the price difference negatively. The fact that the retailer's margins
for this product is higher compared to that of similar products seems to further validate
this perception. It can also be interpolated that at all stages of the value chain the
margins might be in a similar range. This translates to an expensive product and results
in lower sales.

Packaging
Moreover, one of the most important facts discovered through the primary research
was that when customers opened the container for the first time after purchase, they
were disappointed with the amount (volume) of Women's Horlicks in the container.
They felt cheated and swindled. In other words, the container for the product was
disproportionately large for its actual content. This only served to add to the existing
perception that the product is over-priced and deterred future purchases of the product.

Taste
Finally, the primary research also brought to light another revealing fact4. Women
place an enormous amount of emphasis on taste even for health product as can be seen
in Exhibit 3. Now, Women's Horlicks and regular Horlicks are fairly similar in taste;
therefore, women inadvertently do not perceive a difference between the two products
and hence do not find any justification to buy the more expensive product.
 Exhibit 3 Most Important Feature of Health Drinks
Place
The combined effect of all these factors has led to sales figures significantly lower than
predicted and with no signs of improvement in the near future. Possibly due to this lack
of demand, Women's Horlicks is not easily available in all supermarkets and retail
stores, further exacerbating the situation. Even where available, it is usually relegated
to the bottom shelf, resulting in minimal visibility.
Sales are low, especially in comparison with other Horlicks products. Thus, despite its
high retailer margins, retailers are not enthusiastic to carry the product at their stores,
implying that lost sales aren't significant enough i.e. they don't expect sales to increase
significantly.

What Can Women's Horlicks do to Revive Itself?

Based on our analysis we believe that GSKCH could consider adopting the following
strategies to turn around the fate of Women's Horlicks.

Price Rationalization
The sales of Women's Horlicks are lower compared to that of regular Horlicks and
Junior Horlicks and consequently retailers hardly have an incentive to push the
product. This is despite the fact that retailer margins on Women's Horlicks are higher
than the industry average. Since our study indicates that there is a general perception
about the product being pricey, GSKCH should consider reducing retailer margin in
order to bring down the MRP slightly and thus boost sales.

Alternate Packaging
One of the striking revelations of our study is that people perceive a mismatch between
the size of the container and the volume of Women's Horlicks actually contained. This
adds to the existing perception that the product is expensive and deters future
purchases of the product. A change in packaging is therefore recommended, more
specifically, reducing the container size to make it better aligned with the actual
quantity inside it. Alternatively, GSK could consider increasing the volume contained
in each jar. This would improve people's perceptions of the product's value-for-money,
though at a cost of reduced profits per container.
Push Marketing Strategy
GSK did a fantastic job of TV advertisements to promote the Women's Horlicks brand.
As a result brand awareness and brand recognition among the sample target population
is fairly high. However, a very small percentage of this has translated into actual sales.
This calls for an aggressive push strategy, because although awareness is already very
high due to extensive TV communications, potential consumers have not experienced
the product.

Aggressive Trade Promotions

GSK being the market leader in the health drinks industry could pursue an aggressive
promotional strategy to give a free small trial pack of Women's Horlicks (approx. 50
Gms) with two large jars of any other GSK product line health drink. Such a lucrative
offer will stimulate purchases on the part of the consumers and would increase the
probability of it entering their consideration set the next time they make a purchase.

Revamp Taste
Consumers, especially women consider the taste of health drinks as a primary
determining factor while choosing one. In this aspect Women's Horlicks has failed to
create any differentiation, as consumers perceive no significant taste difference
between Regular Horlicks and Women's Horlicks. This factor also results in
cannibalization of Women's Horlicks sales, as the regular Horlicks is relatively
cheaper. Therefore, a strategy to reconsider the taste so as to introduce it as a
differentiating factor is recommended. A completely new flavour, associated only with
Women's Horlicks, should be developed which consumers should perceive positively.

Conclusion: Is Women's Horlicks Ahead of Its Time?

There seems to be a disconnect between the intended core message of Women's
Horlicks and the interpretations made by the target consumers. While the key emphasis
appears to be the health aspect, from a consumer perspective, substantial
differentiation from other Horlicks products appears to be absent. In addition, women
in India generally consume health drinks when they are ill or during pregnancy. Since
Horlicks already has a product for pregnant women, it is possible that it could
cannibalize into Women's Horlicks' market. It is therefore open to debate whether
Women's Horlicks is ahead of its time in the Indian market. There is possibly a latent
need for the product but at present Women's Horlicks hasn't been able to expose that
perceived need and satisfy it.
Contributors

Horlicks

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Horlicks is a health drink brand existing in India since decades. Horlicks holds 50%
market share of milk beverage market of India that is around 2300 crore (source: The
Nielsen Company). GlaxoSmithKline Consumer Healthcare is a proud owner of such a
strong brand. The brand has created such a great entry barrier that other big players like
Nestle and Dabur have got a hit.. Nestlé has stopped making Milo and new entrant Dabur
India has decided to stay clear of Horlicks and pitch its Chyawan Junior against GSK
Consumer Healthcare’s other beverage brand, Boost.

One of the important reasons of Horlicks domination since years is because of constant
innovation not intems of product only but also marketing. GSK Consumer Healthcare has
decided to use the brand to get into new categories. In the last few months, it has
launched biscuits for children, a nutrition drink for women, an energy bar and chilled
milk.

The crazy thing is that Nestle and Dabur fell into the trap of Horlicks. It is GSK who
dictates terms, all these new categories always existed in the market and GSK identified
the market gap and filled it with its new product line. GSK is fully utilizing the strong
brand equity of Horlicks to promote its new products and now Horlicks is India’s 6th
trusted brand.

When marketers see saturation in the market, they have either two choices one expand
the market second increase the usage of its existing products. As of now Horlicks is
banking on the first strategy and that is very obvious Young kids would like to continue
with Horlicks when they grow older.. As increasing the usage is very difficult. Again,
five years ago, GSK Consumer Healthcare had reached out to pregnant and lactating
mothers with Mother’s Horlicks; last year it came up with Women’s Horlicks catering for
women across age groups.
There’s Horlicks Lite for the elderly who often have a sugar problem and for the youth
there is Horlicks Nutribar

With Horlicks Nutribar, positioned on the twin planks of health and convenience, GSK
Consumer Healthcare has leveraged the brand to venture into an entirely new product
category — energy cereal bars. A strong brand, opens up doors to new variants and even
new categories.

In 2003, the brand was revamped: It was made tastier and launched in two new flavours
— vanilla and honey. The company had earlier launched a chocolate version to try and
win over consumers in the North and West who typically prefer chocolate-flavoured
drinks. Not just higher tonnage, the company does succeed in extracting a price from
consumers. In January this year, for instance, prices were upped by about 5 per cent. But
it has been seen that parents in India can spend to maximum limit on two things Child’s
nutrition and education. Horlicks cover the first part.

Horlicks has used media mix to its full capacity to reach out to every customer be it TV,
radio, Print, Point of sales etc. Now it seems the next big task and if it succeeds, Horlicks
would become the biggest brand in India is to sell Horlicks in rural India and make every
villager drink Horlicks Milk.