Horlicks Asha An Initiative to target Bottom of the Pyramid market

GSK which is a pioneer in the health food drink industry with its flagship brand Horlicks has now decided to take this product to the rural masses also with a new variation of Horlicks known as Horlicks Asha. It has given it a new sub name Asha which means hope in hindi language, along with the main brand name Horlicks as by launching a new cheaper variant under the same brand name would have diluted the brand equity that Horlicks initially had in the market and would also have made the consumer think that whether the quality has been reduced by horlicks for its new variant . So this initiative to come with a sub brand under the bigger brand that is Horlicks is a well thought out initiative to stop the original brand equity from getting diluted. But will it be successful it remains to be seen. Now one more thing that has to be seen is that this product is still in its market testing stage only and has not been launched commercially and it is being tested in the Horlicks traditionally strong market i.e. southern Indian states of Andhra Pradesh and Karnataka where it moved after initial test launch in Andhra only.
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But one can ask that why Horlicks, which holds the number one position in this health food drink industry with more than 50 percent market share (Source: -A.C. Neilson report on market shares) needs to try and enter the rural market with a cheaper variant and why not with the current alternatives of Horlicks that are available itself. One answer to this question can be that it now wants the market for health food drink category to grow from present ` 2300 crore industry to a larger proportion which has now about to reach a saturation point in recent future, so to keep the pace at which it is growing Horlicks has decided to come up with this cheaper variant to attract the rural price sensitive customerss, which was never done by it prior to this. Another answer to this question lies in the fact that in India there is large population that falls in the not so rich class of people and they do not have that much of disposable income with them to spend on these extra supplements. So to attract this segment, so that they start using the health drink supplements Horlicks has decided to come up with this new and a cheaper variant for this segment which is priced at 40 % below the Horlicks malted beverage (the price actually being ` 85 for the 500 gram pack) and the target market for this cheaper variant is the semiurban and the rural market. Then there are other smaller packages also like that of a 200 gram packet for ` 50. This variant has been launched in the

target market in test stage only in two southern states rural markets to see that whether the main aim of this new product that is to provide the rural consumers with lower disposable income a product that can meet their nutritional requirements in these markets and test market results have shown positive response from the customers who have used it. This localized innovation is only going to enhance the market for health food drinks and help GSK to capture more and more market share as they have a horlicks drink now for all the segments i.e. adults, women, children, pregnant mothers, older people etc. (Except for infants which is a specialized/niche market which not many players have tried to enter) and consolidate its leadership position in this market. To make a product for the rural market a research of around one and a half years led to the discovery of Asha which constituted many vital ingredients such as ragi or finger millet malt and satoo a porridge mix of oats, barley and millet which is mostly used in the rural areas as a staple food to take care of their nutritional requirements.
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This move of Horlicks has been given due respect by its competitors also and one of its competitors Executive Director Sanjay Purohit came out with this statement: If Asha does succeed, it will be a game changer, says Sanjay Purohit, executive director, marketing, for Cadbury India Ltd, which sells Bournvita, the main rival to Horlicks, Indias No. 1 milk food drink with a nationwide presence in about 780,000 outlets. The respect that it is earning even from its own competitors shows that it is a very good move on the part of Horlicks to get its hold in the rural market. And the strategy adopted by it to get the rural consumers to try this product started with its Marketing manager R. Ramakrishnan staying in the villages of rural Andhra to understand the consumer habits in the area to be used as test market for this product. And to interact with the rural women which mainly were involved in preparing staple diets for their families the company used the platform of microfinance groups to break the initial barriers. And these microfinance units were used to distribute the trial packs of Asha to the rural women. Other tools that were used to make the rural consumers to try this brand were the use of street plays, and cinema screenings , participation in local village fairs across the state etc. This shows the amount of investment the company and its management has made in the development of this new variant on which the hopes of companies growth further in the rural market lie upon. The genesis of Asha from Horlicks is in research conducted by the company, which reflected a need to extend a low-cost product for this segment. The name Asha stands for hope, and the brand believes in

supporting the hopes of the emerging consumer class to access a better life, says Sen. Source: -Imagesfood.com

Thus on the whole it seems that it can be a success if launched commercially because its main target market is the bottom of the pyramid segment which has not been touched by any of its competitors and it has got the most potential in the Indian market as this segment forms the largest segment which still is unexploited and this can be a product that can give brand Horlicks an edge over its competitors in this largely untapped market. But the only problem that this product may face in the market can be that people may consider it to be a horlicks with a lower quality than its parent brand.
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Lets wait and watch to see that how this new avatar from the stable of GSK fares and how this new avatar is able to fulfill the hope(ASHA) of GSK to gain the first mover advantage in the rural markets with this product and further consolidate the position of Horlicks as a market leader and when does the company decide to commercialize the product nationally.

GlaxoSmithKline Consumer Healthcare (GSKCH) added a touch of glamour to its latest CSR initiative. It recently roped in Bollywood actress Vidya Balan as the brand ambassador for Horlicks CSR campaign called Ahaar Abhiyaan, which will address the problem of malnutrition among children. An avid consumer of Horlicks since her childhood, the actress is keen to support the cause. Her presence and popularity is claimed to help create mass awareness about the campaign. Positive marketing tool Hence, CSR or corporate social responsibility (CSR) is being heavily used by established brands as a strategic tool for brand building exercise in the most respectable way. It is believed that CSR works as a catalyst for responsible consumption among consumers. Most of the big business houses and brands in the Indian market follow a CSR strategy to drive growth with the consent of the stakeholders.

Marketing experts feel that it not only generates goodwill among a companys stakeholders (consumers, business partners and community at large) but also helps generate strong brand recognition and awareness. Helping the economically weaker sections of society through CSR efforts always creates a positive view of the companys contribution to the society at large. On its part, GSKCH aims to address the issue of malnutrition among young children through an integrated programme that will be implemented in a phased manner beginning with a pilot project, in partnership with the Child In Need Institute (CINI), in the state of West Bengal. As part of this project, Horlicks aims to partner with its consumers to raise funds for the integrated child development programme developed by CINI. During the campaign period, with the sale of every large pack of Horlicks in West Bengal, the company will contribute Re 1 towards the initiative, which will be deployed by CINI in the state. A similar initiative is followed by FMCG major P&G for the empowerment of women and education of girl child. Thus, GSKCHs initiative will not just help create responsible stakeholders but also increase brand building efforts for Horlicks. Its partnership with CINI will help the brand communicate with the end consumer more noticeably.

Jayant Singh, Marketing Director- GlaxoSmithKline Consumer Healthcare Reaching out to grassroots Explaining the partnership with CINI further, Jayant Singh- Marketing Director, GSKCH said, In order to make this effort a successful one, we are delighted to partner with the Child in Need Institute in West Bengal. We believe they are the right partners for us as they bring in close to four decades of grass-root experience in the field of working with mothers and children. CINI is a national level organisation reaching approximately 50 lakh people across the country and we believe that they will be able to implement the programme in the best possible manner. The company has taken the onus of improving the nutritional status of about 9,500 children and reach out to more than 15,000 families with the campaign. Talking about the pilot in West Bengal, Singh added, Our consumers in West Bengal are our biggest strength and we share a strong bond of trust with them for more than 100 years. Horlicks as a brand is synonymous with nutrition and our consumers have always believed in the same and supported us in all our efforts. Ahaar Abhiyan goes beyond just fulfilling the nutritional needs of our consumers and aims to reach those who do not have access. We are confident

that our consumers will partner with us whole heartedly in this effort and make this collaboration a truly successful one. The TVC, featuring Balan as the brand ambassador, will go on air from May 16, 2012.

Stretching the Horlicks core

By Preeti Khicha, afaqs!, Bangalore, November 11, 2011 Section: News Category: Marketing

GlaxoSmithKline is piggybacking the Rs 1,600-crore brand to step into newer product categories.
This move is in line with the company's vision to be perceived as more than just a health food drinks company. A concerted effort over the last few years has been made to enter allied food and beverage categories. Despite commanding more than 70 per cent in the malted health drinks market, with its basket of brands - Boost, Maltova, Horlicks and Viva - the company is hungry for more. And Horlicks, the breadwinner in its portfolio which contributes over 60 percent to GSK Consumer's topline, is paving the way. Cereal bars (Horlicks Nutribar) and biscuits came first, followed by instant noodles (Horlicks Foodles) last year. Now, the company has decided to enter breakfast foods with a product called Horlicks Oats. The product will be available in shelves in the South, before it is scaled up nationally. The pricing of Horlicks Oats is in line with the market - Rs 32 for a 200 gm pack, Rs 58 for 400 gm and Rs 125 for 1kg. So what will the Horlicks brand look like in the years to come? The plan is to be an overarching brand for family nutrition and one, which is present in all occasions wherever there is a need for nutrition. "So, while the powdered drink has helped us tap the in-home consumption market, the extension into biscuits is for nutrition consumption on-the-go," says Jayant Singh, director (marketing), GlaxoSmithKline Consumer Healthcare. This is not to say that Horlicks has been ignoring its core business. The malt-food drink has also been stretched to target different consumer sets - from Horlicks Women, Junior Horlicks to the most recent premium variant Horlicks Gold, with considerable success. "The extensions of the malt food drink brand contribute 20-25 per cent, but is growing faster than the base variant," claims Singh, who spearheaded Henkel India until recently. So what makes the breakfast food segment attractive? And why has the brand chosen oats as a niche to begin with? "While breakfast foods as a category is a logical extension of our 'nutrition' plank, we chose oats specifically as it is an emerging category (worth Rs 250 crore) growing at a healthy pace of 25 per cent," says Singh.

Horlicks is entering a market which has seen considerable action in the last few years. Players like Kellogg (Heart to Heart oats), Marico (Saffola Oats), Britannia Industries (Healthy Start) and Pepsi (Quaker Oats) have stirred up the market in recent times with packaged breakfast offerings. Pepsi for instance has been pushing its Quaker Oats brand hard by making it more culturally relevant. To increase occasions for use, the brand has a recipe book which offers Indian oat recipes like oats idli and oats halwa. With Horlicks Oats, the company is going after low-hanging fruit. First, the brand will be available in the South, which accounts for 75 per cent of total sales in the oats category. The company will go beyond harping on heart benefits (similar to rivals), and focus on other health benefits like managing blood pressure and weight management. Communication will be directed towards home-makers in the age group of 25-45 years in the metros, who are decision markers for such purchases. The company is also banking on its existing network of experts, which include doctors and nutritionists who have played a key role in driving awareness for the Horlicks malt drink. Sampling is not on the cards for now, but the company may consider it at a later date, says Singh. Given that the company is not new to diversification, might give it some confidence. For instance, in the instant noodles category, Horlicks Foodles which initially suffered supply side bottlenecks has garnered a 3 per cent market share in South India. Likewise, it is counting on the economy product Horlicks Asha to be one of the tickets to success in rural areas. But other extensions like Horlicks Nutribar and Horlicks Chil Dood (flavoured milk) are still struggling due to product and supply chain issues. Yet, analysts claim unlike extensions like noodles and biscuits, which is not a consumption item on the breakfast table, the entry into oats is a more strategic fit with the Horlicks core brand. "Both are breakfast items which are consumed with milk," says an FMCG analyst who works with MG Global and wishes to stay anonymous. Also, culturally, oats which is consumed with warm milk is similar to Indian porridge and has a better chance to succeed compared with cereal. Today, roughly 8 per cent of total Horlicks sales come from food (biscuits and noodles). However, if consumers take a taste for it, Horlicks Oats could well be one of the trump cards for the company's success in foods.