This document discusses key issues related to brand extensions of Horlicks, a flagship product of GSK Consumer Healthcare. It outlines how Horlicks has introduced several line extensions like Horlicks Lite and brand extensions into new categories like biscuits and oats. While line extensions into similar categories can leverage existing brand equity, brand extensions into unrelated categories are more difficult due to weaker brand associations. The document also discusses factors that customers consider when evaluating brand extensions and both advantages and disadvantages of brand extensions for companies. It concludes by providing suggestions to improve Horlicks' brand awareness and sales in different categories.
Horlicks marketing The current marketing scenario and the way of updating the...Aswathy Gopinathan
The current marketing scenario and the way of updating the trends to compete with others. the new mantra of marketing
presentation for MBA Students, especially for people who loves marketing.
Horlicks marketing The current marketing scenario and the way of updating the...Aswathy Gopinathan
The current marketing scenario and the way of updating the trends to compete with others. the new mantra of marketing
presentation for MBA Students, especially for people who loves marketing.
A Strategic Marketing Plan for Horlicks BangladeshAnthony Nokrek
In this project, our goal was to create a new marketing plan for Horlicks Bangladesh. That will increase their brand value and market position.
And for that, we had to go through Horlicks and their parent company GlaxoSmithKline. And also through their products, offers.
At first, we had to analyze their current market situation. And at last, we suggested making a new product to keep the growth of the business life cycle.
And it was a successful presentation!
A Strategic Marketing Plan for Horlicks BangladeshAnthony Nokrek
In this project, our goal was to create a new marketing plan for Horlicks Bangladesh. That will increase their brand value and market position.
And for that, we had to go through Horlicks and their parent company GlaxoSmithKline. And also through their products, offers.
At first, we had to analyze their current market situation. And at last, we suggested making a new product to keep the growth of the business life cycle.
And it was a successful presentation!
Walton’s strategic is to become a global leader in Electrical and Electronic appliances. Walton
always try to make the best possible products. Moreover, it does not promise any specific quality
standards in service. Walton now try to give service all side in our country. Walton tries hard to
offer the best service quality, though, the quality, consistency and accessibility of service is not
guaranteed as the same are dependent on various technical, physical, topographical, distinctive,
environment, regulatory, legal, and such other factors. Walton has the right to change, vary or
reduce the extra charges, prices, validity period, product/service feature and any other offers
etc. at any time in its sole carefulness for any reason subject to official notification of such offers
prior to giving effect to such changes.
Brand Management 260
Chapter 13
MANAGING BRANDS OVER TIME
“Products have limited life cycles, but brands -- if managed well -- last forever.”
Jean-Marie Dru, Author of “Disruption”
Managing Brands Over Time
Effective brand management requires taking a long-term view of marketing decisions.
Any action that a firm takes as part of its marketing program has the potential to change consumer knowledge about a brand.
These changes in consumer brand knowledge from current marketing activity also will have an indirect effect on the success of future marketing activities.
Today’s Agenda
Reinforcing Brands
Revitalizing Brands
Reinforcing Brands
Reinforcing Brands
Generally, we reinforce brand equity by marketing actions that consistently convey the meaning of the brand to consumers in terms of Brand Awareness and Brand Image.
Consumer response to past marketing activity
Consumer response to future marketing activity
Consumer response to current marketing activity
Brand awareness and brand image
Changed brand awareness and brand image
Questions to the Marketers
The Brand Meaning
Brand Awareness
What products does the brand represent?
What benefits does it supply?
What needs does it satisfy?
Brand Image
How does the brand make products superior?
What strong, favorable & unique brand associations exist in the customers’ minds?
1. Brand Awareness
What products does the brand represent, what benefit does it supply, and what needs does it satisfy?
Kellogg’s Nutri-Grain has expanded from cereals into granola bars and other products, cementing its reputation as “makers of healthy breakfast and snack foods.”
91
2. Brand Image
How does the brand make those products superior?
What strong, favorable, and unique brand associations exist in the minds of consumers?
Through product development, Apple Computer (now Apple Inc.) has transformed from a computers manufacturer to a stylish consumer electronics brand, reinforcing its brand association as “Tools for creative minds”
Market Leaders & Failures
From the perspective of maintaining consumer loyalty, inadequate marketing support is a dangerous strategy when combined with price increases.
Brands such as Budweiser, Coca-Cola, Hershey, and Marlboro have been remarkably consistent in their strategies once they achieved a preeminent market leadership position.
Consistency & Change
Consistent marketing support in amount and nature.
Tactical shifts and changes to maintain the strategic thrust and direction of the brand.
Despite tactical changes, certain key elements of the marketing program are always retained..
Keep certain key creative elements in marketing communication to create Advertising Equity
Retro-branding or retro-advertising have enduring ...
Innovation
An approach that seeks to be first to market with a new product or concept.
Follow the leader
An approach that introduces competing products and services soon after the market leader introduces its products and services.
A second goal is to increase brand loyalty, or the repeated purchasing of a firm's brand over time. These limited-time offerings are often a bundling of several products with a reduced price and/or increased portion size to convey a high level of perceived value to the consumer. Companies often call such bundling "value meals," "meal deals," or a similar term to convey better value.
The third example is best illustrated by the manner in which theme parks extend the life of their product-service mix life cycle by engaging in product-service mix development. Each year, thrill seekers want to try the newest and greatest rides at the many theme parks around the country. Among the leaders in this market are Disney, Six Flags, and Paramount. Each of these companies develops new rides each year in an effort to attract consumers to their respective parks. Having the latest, largest, or greatest of these thrill-type rides can have a very positive impact on theme park attendance, sales, and profitability.
Finally, product-service mix development includes additions to and enhancements of the service elements. For example, several restaurant chains, such as Outback™ and Chili's™, have increased sales by encouraging customers to purchase meals via a drive-up or take-away service. This added service allows them to increase unit sales without adding seats in their restaurants. Slight additions to staffing levels allow them to provide this service profitably.
Product development takes two forms: innovation and follow the leader. Innovators are the risk takers, always seeking to be the first in the market with a new product or service. The leader, or innovator, will benefit from being the first to market with a new product or concept. Customers may associate the innovation with the leader or become loyal to that brand. For example, it is not unusual to hear customers at Burger King order a "happy meal" (a McDonald's product).1 However, given the ease with which hospitality products and services can be duplicated, those who subscribe to the follow-the-leader approach can introduce their competing products and services soon after the market leader introduces its own products and services.
INTRODUCTION 257
256 CHAPTER 7 DEVELOPING NEW PRODUCTS AND SERVICES
The Importance of Product Lines
Product line
Firms develop and maintain a portfolio of products and services.
For the continued success of a hospitality or tourism firm, it is important to have a product line, or portfolio of products and services. Few firms can survive and sustain long-term growth with only one or two products or services, because of the high risk associated with the lack of diversification. In addition to diversifying a firm's operating risk, ther.
HOSP 4060 Final Exam Essay One 4 points Pr.docxtrishamassafd7p
HOSP 4060
Final Exam
Essay One 4 points
Provide basic background information about this company. Critique the mission
and vision statements of this company using the tools and techniques presented in
this class. Conversely, if they do not have either of these tools, suggest a sample
mission and sample vision statement for this company then critique each. Include an
analysis of their current goals.
Hostess began in Manhattan as the Ward Baking Company in 1849. It grew
regionally and changed its name to Continental Bakeries in 1925 and bought Wonder
Bread. In 1930 the iconic Twinkie was created. The company changed hands several
times, and in 1995 Hostess was sold to Interstate Bakeries and became the largest bakery
in the United States, with $3.2 billion in sales, 58 factories, 1,250 outlet stores and 10,500
delivery routes. Eventually consumer tastes changed toward more health conscious
snacks, the price of flour and sugar rose, and costs for things such as pensions for
unionized workers lead Hostess to file for bankruptcy in 2004. The company emerged
from bankruptcy in 2009, with a new owner but with many of its old problems – high
pension expenses, inefficient manufacturing, shipping and delivery systems, and still high
debt. Despite union concessions to save the company money, Hostess filed again for
bankruptcy in 2012. It was in liquidation when Andy Jhawar and C. Dean Metropoulos
purchased the company and began to rebuild and reinvent the Hostess brand.
Because of the liquidation, many of the problems that plagued the company
previously were gone – pension costs, union contracts, debt, outdated factories and
unprofitable routes. Mr. Jhawar and Mr. Metropoulos had a brand and saw opportunity.
They re-built the Hostess brand from the ground up. They modernized the factories,
invested in software to manage inventory and logistics, and invested in research and
development to lengthen the shelf life of the Hostess products. They developed a
marketing plan to announce the comeback of Twinkies and demand skyrocketed. Future
plans for Hostess include targeting new markets, creating updated versions of the Hostess
classic products with new flavors, and perhaps there is a sale or an IPO possible for the
company.
Mission and Vision statements for Hostess brands were not available but they
may be something like this:
Vision Statement: Hostess brands will continue to grow and change to provide future
generations the snack products they desire.
Mission Statement: Our mission is to offer value to all our stakeholders – our investors,
employees and consumers – by producing quality bakery and snack products in a cost-
effective manner that is safe for our employees and the environment. We are proud to
have served generations of consumers the products they desire and our goal is to change
and update our products to match the changing needs and d.
1. Discuss the key issues in
the Horlicks Case
10/13/2014
Sumit Arora (FT153107)
Section B
2. Introduction
Horlicks,a maltedmilkdrink,isaflagshipproductof GlaxoSmithKline Consumer Healthcare (GSK) a
subsidiary of GlaxoSmithKline plc. of UK, a global science based healthcare company. It was first
invented to substitute milk as baby food. GSK Consumer Healthcare has a robust distribution and
marketingnetworkencompassingaround700 distributorswhichcoversover 8 lakh outlets. Horlicks
is the cash cow for GSK India which dominates at the bottom left quadrant on BCG matrix. Other
products produced and marketed by GSK include Maltova, Boost, Viva, that serves a different
marketaltogether.Healthdrinkportfolio continues to hold around 60% of market share (GSK Press
release,2014). Barriersto entrycreatedby GlaxoSmithKline Consumer Healthcare prevented other
strong players such as Dabur and Nesle from selling their products.
By effectively propelling variants at distinctive focuses in time, GSK has reinforced its core brand
values, addressed new customer needs and consequently brought such buyers into its fold. Zubair
Ahmed,IndiaMD GSK ConsumerHealthcare,came in 2007 who implemented innovative strategies
whichrevampedcompany’s conservative style of thinking. He made significant changes to Horlicks
productline,productportfolioandmarketingstrategies which went through initial resistance from
highermanagement.GSKhassince invested in consumer research and strategies to improve brand
awareness and brand image. Horlicks has been gradually introducing brand and line extensions to
keep itself relevant. Horlicks Lite, Biscuits and Cereal bars (Horlicks Nutribar) were introduced,
followed by Horlicks Foodles, Horlicks Oats.
"We were alreadyapart of the morningmenuwith milk. Now we are growing in our presence with
various extensions and adjacents," says Ahmed
Thisis notto say that Horlickshasbeendisregarding its core business. The malt-food drink has also
been pushed to aim diverse consumer sets - from Junior Horlicks, Horlicks Women to the most
recent premium variant Horlicks Gold, with considerable success.
Product Line Extension
When customer awareness of a brand is very high, it gets identified with the parent category, and
therefore gets difficult to diversify. So, diversifying Horlicks is not easy. But diversifying it into
categories in the immediate neighbourhood might be easier than diversifying it into distant ones.
Horlickshave beentryingtobuild Consumerbasedbrand equity so that knowledgeaboutthe brand
can be increased. Sales figures of different variants of Horlicks (Mother's Horlicks, Horlicks Lite,
Junior Horlicks, etc) have shown significant growth.
Brand Extension
Extensionsbeyondthat into new categories like biscuits, oats have always been difficult given the
brand's equity.Thus,Horlicksintensiontoextendintofoodsectorneedsmore careful interrogation.
Productslike HorlicksBiscuits,Horlicks Oats, NutriBar, Chill Dood were few products launched into
different category than malted beverage which fail to fetch as much acceptance as the Horlicks
flagship products.
3. How customers evaluate a brand extension
Consumer’sattitude towardsthe brand
Strengthof brand associations
Brand Image
Non-productrelatedattributeslike price,packaging,userimagery,usage imagery
Perceivedqualityof motherbrand
Brand loyalty
Trust inbrand competence innew category
Logical fitin newcategory
Beloware fewadvantages of brand extension
Lofus and Lofus in 1980 said ‘Cognitive psychologists believe memory is extremely durable, so that
once information becomes stored in memory its strength of association decays very slowly.’
Marketers leverage this to strategically increase brand awareness and brand recall by diversifying
intodifferent unrelated product categories. Each product has its own target segment, thus, selling
products across different target group will increase brand awareness and accessibility across the
population.
Brand Awareness– Parent brand can be used while promoting the extended brand to help
increase awareness of the new product. eg. Name Horlicks has been kept with all the new
extensions by GSK so that customer can relate the health benefits of parent brand to the
new products.
4. Brand Accessibility –The numberof time the customer is exposed to the brand greater will
be brand recall.Thus,if the brand has been diversified into different product categories, it
will be betteraccessible/visibletocustomers/future customers. This is not an alternative to
advertising; however, this considerably improves brand recall.
Consumer Trust – The goodwill and image of the parent brand helps in pitching the
extended brand as a compelling value proposition. Customers that are happy about the
parent brand will be willing to try out extended products.
Cost Benefits - The newproductwill getafree publicityascustomersmostlyknow aboutthe
brand. This help to significantly reduce the advertisement budget and branding cost.
AttackingStrategy – Extensionwillprevent competitors to gain complete market share due
to presence of your products in different product segments.
Below are few disadvantages of Brand Extension
Wasted Effort – Lots of R&D go waste once the brand don’t pick after being launched. Thus
the company should do a proper market research before venturing into new product
categories.
Long term dilution of mother brand – Many experts believed that Horlicks foray into the
noodles segment might dilute its brand value as connecting noodles with healthy Horlicks
brand will bringindistrustaboutthe brandto consumers.Horlicksimmediatelyrealised that
and run a campaigns showing AD benefits of foodles like – 9 vitamins and the more
nourishing noodles
.
Cannibalization–Newproductswithinthe same brandcanreduce the sale of parent brands
as customermight try out new variant instead of the parent product. If the customer is not
happy with the child product, it can also lead to customer switching away from the parent
brand.
5. Suggestionsfor improvingbrand awareness and salesin differentcategories
Needtotarget northand east
Target BOP category
Enter alliedfoodandbeveragecategories
Providingnutritionthroughsingleserve lowunitprice packs
Accessingnewcustomersinrural andin emergingconsumerclassinurbanIndia
ELM model – Since the receiverof the advertisementcanbe distractedbycompetitorsAD
and there ishighprobabilityof brandswitching.Thus peripheral route of advertisement
shouldbe usedtopromote Horlicks.
Focuson hedonicbenefits of productto gainadvantage overcompetitors.
References
http://www.business-standard.com/article/management/stretching-the-horlicks-core-
111111100016_1.html
http://www.zenithresearch.org.in/images/stories/pdf/2011/Oct/EIJMMS/6.excel_vol-
1_issue-1.pdf
http://articles.economictimes.indiatimes.com/2003-07-30/news/27566635_1_horlicks-nick-
massey-brand-equity/3
http://en.wikipedia.org/wiki/GlaxoSmithKline
http://www.mbaskool.com/business-articles/marketing/5195-should-horlicks-extend-to-
new-catagories.html