1. Executive Summary
Advertisement in India
The year was 1973. The advertising industry was the size of only Rs. 150 crore. The billing of the largest agency was about Rs. 8 crore. It was also a time of recession. The advertising industry was in a state best described as chaotic.
Two young mavericks, Diwan Arun Nanda and Ajit Balakrishnan, decided it was just the time to form the agency of their own. Hell-bent on changing the perception that advertising was only a profession that wrote slogans and drew pictures, they quit MCM and they founded Rediffusion.
Young, lean, mean, and even a little arrogant, it grew into an agency that demanded and got treated as an equal. In the following period Rediffusion attracted the finest talent in the country. Rajiv Agarwal, M.B. Parameswaran, V. Shantakumar and Freddie Birdie, to name just a few.
The benchmark for creative excellence in Indian advertising had been set. The Arrogance of youth had come good.
Overview of health drinks market in India
Indian health drinks market is still in its infancy due to the lack of awareness among the population. In value terms, the health food drink market is around Rs 1, 400 crore and in volume terms around 65,000 tonnes per annum. Glaxo Smithkline (GSK) with four brands - Horlicks, Boost, Viva and Maltova - is the leader in Indian health drink market. Complan, Glucon D from Heinz India and Cadbury India's Bournvita are also popular among the Indian health drink brands.
| The biggest milestone in television was the Asiad '82 when television turned to color transmission. Bombay Dyeing becomes the first color TV ad .13th Asian Advertising Congress in New Delhi. Media planning gets a boost. |
According to retail audit unit ORG Marg, GSK with four brands in the category Horlicks, Boost, Viva and Maltova - has a 69 per cent volume market share and Complan's share is 13 per cent.
No doubt, Horlicks is the leading health drink brands in India since 1930, immediately after its launch in the country. Horlicks is sold in a number of countries across the world. In different countries, the product has different formulations in order to cater to varying consumer segments and serve different consumer needs. In India, the Horlicks available has been scientifically developed and specifically caters to the nutritional needs of the Indian diet. It helps meet the requirements of essential nutrients in children, such as iron and vitamins that aid iron absorption. Boost is health food drink (HFD), which is positioned on the energy platform in India. Developed by the Indian R&D team in 1974, and launched in 1975-76 in Kerala, Boost has been one of the fastest growing brands in the Indian GSK Consumer portfolio. Realizing that the energy segment had a huge potential, GSK India launched the brand as the 'Vitaminised Energy Fuel' with a unique chocomalt taste. The brand was launched nationally in the early 80s and has always been targeted at 8-14 year old boys. This is the section of population most enthusiastic about sports, and also with high-energy needs, in India. According to GSK sources, Viva is based on the belief that a good start to the day ensures that rest of it goes well too. New Viva is Vita health, combination of nine essential vitamins (vitamin A, C, D, B1, B2, B6, B12, Niacin and Folic acid), Iron, Phosphorus and Calcium. Viva contains a natural goodness of milk, wheat and malted barley. Maltova, a chocolate health food drink, was acquired from Jagjit Industries in Feb 2000. According to GSK official sources, to kids Maltova is the fun health drink, which is extremely tasty and makes nourishment truly enjoyable and exciting. It was re-launched in June 2002 with an enriched formulation and improved packaging. The re-launched Maltova had active rechargers, a combination of essential vitamins, minerals and carbohydrates. Maltova has again been restaged in November 2004, with an attractive new packaging that connotes an extremely high taste
| 1993 India's only advertising school, MICA (Mudra Institute of Communications Ahmedabad), is born |
appeal and a sense of fun and excitement.
American foods major H J Heinz's Indian arm Heinz India has a strong market presence with brands like Complan and Glucon-D. Complan contributes 40 per cent to Heinz's sales. Heinz's most profitable products are Complan and Glucon D. Even Glucon D has shed its health tag and repositioned itself as a fun drink. In 2001, Heinz launched a slew of new products - coffee flavored Complan. Complan is ideal for convalescents and the elderly - complete nutrition when you're off your food, pregnant and nursing mothers provides vitamins and minerals necessary for good health, busy people - a satisfying lunchtime snack at home or at work, athletes - who require fluid, carbohydrate and high quality protein without the bulk of solid food.
In early 1990s Cadbury reentered the health drink market with Bournvita, the product of essential vitamins and minerals with memorable campaigns based on the 'Tan ki Shakti, Man ki Shakti'. The next big breakthrough happened in 1999 when the brand was re-launched with a new RDA Balanced Formula. The brand was re-launched with a completely new identity in 2001. Bournvita has a unique taste that combines the goodness of malt and chocolate. It gives the child physical and mental alertness resulting in a healthy body and an active mind. In 2001 Bournvita, complete with new packaging and design was re-launched. A loyalty program, in the form of a Bournvita Nutrition Centre, dedicated to counseling mothers on her child's daily nutritional needs was opened. Cadbury Bournvita has been advertising since the 1970s. In the early years the positioning centered on 'Good upbringing' with Bournvita being an essential building block for children. In the 1980-82 years it was 'Goodness that grows with you'. By 1987, it had become the more aggressive 'Brought up right, Bournvita bright'. In the last decade of the 20th Century, competition between children was becoming intense and Bournvita was there with its 'Extra energy to stay ahead'. In the 1992-95 period 'Shakti har din ke champion ki' (Energy for the everyday champion) was its payoff line. In 2000, 'Bournvita poshan, sahi poshan' (Bournvita nutrition, right nutrition) encouraged consumption. In the following year 'Confidence kuch kar dikhane ka' (Confidence to achieve) became the reason to buy. The current Cadbury Bournvita positioning suggests that it contains specific ingredients that augment stamina and concentration in children.
2. Introduction
Advertising is a fascinating subject-“the most fun you can have with your pants on”, as Jerry Della Femina once said.
Horlicks and Complan are the common names of Indian households. These two brands have a decent market share in the Health Beverage market. These two brands are involved in aggressive advertising in print and television over three decades. No doubt both the brands are a grand success in the Indian market but our study aims in disclosing the advertising strategies of both the brands and how they positioned themselves in the minds of the consumers.
The war between these two brands started in the 60’s and is continuing till date. Both the brands have changed a lot in the past 4 decades.
3. Aim of the study
The aim of our study is to analyze the various advertising strategies adopted by the two giants of Health Beverage market namely Horlicks and Complan in the Indian market.
- How they positioned and repositioned in various stages.
- Who is ahead and who is lagging behind and the reasons behind it.
- How did advertising boost up their sales?
- Successful repositioning of Horlicks by means of effective ad campaign.
- How did complan position themselves in various stages?
- What is the present stage of the two brands?
- How did advertisement affect the sales?
4. Theoretical Overview:
4.1 Horlicks:
Quite often, a jar of Horlicks occupies a visible position in Indian kitchens. Successive generations of Indians over the past half-century have consumed it – stirred in a glass of hot milk or water – and become totally confirmed believers in Horlicks’s virtues of good health and nutrition. This is only to be expected for a brand that consumers have been using since the 1930s. Today, Horlicks is one of the best known brands in the health food category. It owes its success to a strong brand heritage, commitment to quality, focused communication, a strong distribution network and a deep understanding of consumer needs.
Health food drinks provide nourishment for the family, particularly growing children and serve as energy providers for adults. The market for malted milk powders in India is huge as the product is widely used as a nutrition and energy supplement by children and adults. The size of the market is estimated at Rs. 10,170 million. Horlicks occupies the leading position with over 50% shares of the market (Source: AC Nielsen ORG-MARG 2002).
Despite Operation Flood, the durability of the Horlicks brand has remained and has, in fact, been strengthened over the years. This is because the brand has been able to reinvent itself – and the market – and create positioning strategies that are in sync with consumer needs. It has created new segments in the market place by introducing sub-brands aimed at specific consumers. Mothers Horlicks is targeted specifically at pregnant and lactating mothers, while Junior Horlicks has been especially formulated for little children. This strategy has expanded the market and brought new groups into the Horlicks fold.
Most brands in the category, today, offer a variety of flavors to cater to the changing tastes of consumers. Product innovations, too, are the norm as the brand that offers the most value to consumers is likely to win. Horlicks’ enviable brand reputation and continuous product improvement has helped it stay ahead of its competitors.
Achievements
Horlicks has a significant presence in over fifteen countries. Today Horlicks is the best known brand in the health foods category in India. The brand enjoys the trust of generations of Indian mothers and this relationship has been nurtured by the brand by fortifying the product from time to time. In 1998, Horlicks was fortified with Smart Nutrients – a unique combination of vitamins and minerals – intended to imbibe growing children with mental agility and physical fitness. Junior Horlicks was relaunched with extra nutrients to build the immunity of little children. Today, Junior Horlicks contributes 11% to Horlicks’ total sales turnover and has been one of the fastest growing product extensions to the Horlicks brand.
But it isn't just product development that Horlicks has concentrated upon. It has also created new attractive packaging options including jars, refill packs and sachets. Horlicks was the first brand in India to introduce a refill pack option and also the first to shrink-wrap bottles. In a way, there’s a Horlicks pack for every occasion and mood.
History
Some malted barley, pinches of wheat flour with a dash of evaporated milk. That's Horlicks recipe for success. James Horlicks, after whom the brand is named, was a chemist who worked for a company which produced dried infant food. He became ambitious after inventing some recipes of his own. So along with his brother William, they found J and W Horlicks of Chicago.
In the 1870s, babies often fell sick as fresh milk soured quickly without refrigeration. It was this recipe, invented by James and William that saved the day. From then on, their business grew rapidly. It was in 1906 that James returned to Britain and opened the Horlicks Malted Milk Company. Later, their sons sold the brand to SmithKline Beecham, now known as Glaxo SmithKline, (GSK) for £20 million.
Up until the 1960s Horlicks was positioned as an adult restorative drink that gave extra energy, especially during convalescence. The 1970s saw its position shift to ‘The Great Nourisher’. It was in this phase that the brand saliency shot up. Suchitra, the protagonist, epitomized the modern housewife of those days. She was the gatekeeper of her family's health. The medical credentials were reinforced through the depiction of a doctor as the rational voice.
The next decade saw Horlicks face an immense external challenge. Thanks to Operation Flood, there was availability of milk and the raisins détre for buying the brand became weaker. Horlicks fought back. In 1984, Horlicks aimed at growth by growing the consumer base. By 1994, it had created ‘Ideal Horlicks’ – and improved product formulation that also brought back the taste people reminisced about. In 2002, Horlicks was re-launched on the immunity platform.
Product
Put a couple of tablespoons full into a mug. Add warm water or milk and you’re ready to enjoy a drink that’s tasty and nourishing. Add ice cubes, cold milk or water to reconstituted Horlicks and it turns into a delicious, thirst quenching drink on a hot afternoon. That is why Horlicks is considered to be ‘the great nourisher’ for the entire family. The medical credentials and heritage of the brand have reinforced the image of the brand for years.
'Beverages like Horlicks, now don't talk to the mothers but to the kids. Kids are providing an interesting repositioning opportunity'
4.2 J.W.T- the Ad agency for Horlicks
J Walter Thompson is one of the most famous names in advertising history. It was arguably the world's first advertising agency, although it now prefers the term global brand communications. Owned since 1987 by WPP, the company also took steps to brighten up its image in 2005, dropping the J Walter Thompson name in favor of its well used abbreviation JWT and a new logo. Under any name, the agency has an enormous geographical spread, with offices in 150 cities in 86 countries. Advertising Age ranked JWT as the #3 agency network worldwide in 2005 with revenues of $1.3bn
'The Great Family Nourisher'
Horlicks is the leading Health Food Drink in India and as the ‘Most Trusted Drinks Brand' (Economics Times Survey, 2004) in India, enjoys more than half of the Health Food Drink market.
Although it has been a popular brand in the Indian market since the 1930s, Horlicks underwent a revamp in 2003 to further increase its relevance. The modern & contemporary Horlicks offers 'pleasurable nourishment' with a delicious range of flavors including Vanilla, Toffee, Elaichi and Chocolate.
With revitalized packaging synergistic with the new brand personality, it is a favorite with both mothers for its nourishment and kids for its great taste and variety.
Horlicks is sold in a number of countries across the world. In different countries, the product has different formulations in order to cater to varying consumer segments and serve different consumer needs.
In India, the Horlicks available has been scientifically developed and specifically caters to the nutritional needs of the Indian diet. It helps meet the requirements of essential nutrients in children, such as iron and vitamins that aid iron absorption. From the available data, it has been seen that children in India are not getting enough of these vitamins and minerals from their daily diet. Research shows that these nutrients are very important for school age children for their attention, concentration and memory as well as their physical performance and growth. Thus, Horlicks is a beneficial supplement for children to aid not only their growth, but also enhanced attention and concentration. In fact, we have established this through a large clinical trial among school going children.
4.3 GSK History
Merger history
There are four main companies in the history of GSK: Burroughs Wellcome & Company, Glaxo Laboratories, Beecham, and SmithKline and French.
In 1880, Burroughs Wellcome & Company was founded. Wellcome Tropical Researches Laboratories was opened in 1902. McDougall & Robertson Inc. was bought by the Wellcome Company to be more active in animal health. Also, the production center was moved from New York to North Carolina in 1970 and the following year another research center was built.
| Drink well……..sleep well…………. Horlicks is positioned as a bed time drink in Uk. |
Glaxo was founded in Bunnythorpe, New Zealand. Originally a baby food manufacturer processing local milk into an early baby food by the same name, which was sold in the 1930s under the slogan Glaxo builds bonny babies. Still visible on the main street of Bunnythorpe is a derelict dairy factory (factory for drying and processing cows' milk into powder) with the original Glaxo logo clearly visible, but nothing to indicate that this was the start of a major multinational.
Glaxo became Glaxo Laboratories, and opened new units in London in 1935. Glaxo Laboratories bought two companies called Joseph Nathan and Allen & Hanburys in 1947 and 1958 respectively. After it bought Meyer Laboratories, it started to play an important role in US market. In 1983, Glaxo Inc. moved to Research Triangle Park (US headquarters/research) and Zebulon (US manufacturing) in North Carolina. To be stronger in the medicine market, Burroughs Wellcome and Glaxo, Inc merged in 1995. The new name of the company was GlaxoWellcome. Same year, GlaxoWellcome opened Medicine Research Center in England. Three years later GlaxoWellcome bought Polfa Poznan Company in Poland.
Beecham opened its first factory in St Helens, Lancashire, England for rapid production of medicines in 1859. Beecham Inc. bought companies for various products. It added Lucozade energy drink and Macleans tooth paste to its product chain in 1938. The following year it added hair products for men by buying another company. In 1943 it decided to focus more on improving its research. It built Beecham Research Laboratories and six years later it bought C L Bencard Inc. which specialized in vaccines.
The GSK Headquarters in Brentford.
In 1830, John K. Smith opened its first pharmacy in Philadelphia. Over the years Smith, Kline and Company favorably amalgamated with the French, Richard and Company because of their successful management decisions. It changed its name to Smith Kline & French Laboratories to more focus on researching in 1929. Years later, Smith Kline & French Laboratories opened a new laboratory in Philadelphia; furthermore, it bought a laboratory called Norden Laboratories which was doing research into animal health to benefit their research in various other areas.
To move on this path, Smith Kline & French Laboratories bought Recherche et Industrie Therapeutiques in 1963 to focus on vaccines. The company also wanted to spread all over the world to capture shares in various medicine markets. Because of this, Smith Kline & French Laboratories bought 7 more laboratories in Canada and US six years later. In 1982, it bought Allergan which was making products about eye and skin. It also merged with Beckman Inc. After this merge, it changed its name to SmithKline Beckman.
In 1988, SmithKline Beckman bought its biggest competitor, International Clinical Laboratories, and enlarged by 50%. The next year, Beecham and SmithKline Beckman became one and changed the name of the company to SmithKline Beecham plc. The headquarters of the company were then moved to England. To improve the R&D in US, SmithKline Beecham bought a new research center in 1995. Yet another new research center was opened in New Frontiers Science Park two years later.
| Second…… GSK is the world’s second largest Health Care company in the world. |
The latest merge occurred in 2000 with GlaxoWellcome. Since 2000, the name of the company has been GlaxoSmithKline.
4.4 Ad critizism:
Junior Horlicks 2000
