4p's of marketing of Horlicks- A marketing management project
1. BRCM COLLEGE OF BUSINESS ADMINISTRATION
LIBRARY ASSIGNMENT2012-13
MARKETING MANAGEMENT -II
SYBBA SEM-IV
DIVISION-I
TOPIC: APPLICATION PART OF PRODUCT, PRICE, PLACE AND PROMOTION
BRAND NAME: HORLICKS
BY,
36-GANDHI SANI B.
ROLL NO-36
SUBMITTED TO: DR. PRATIK PATEL
SUBMITTED ON: 30TH
MARCH, 2013
Name of the product: Horlicks
Head question 1 (Product)
Answer: a classification of product
Classification of product: consumer good
2. Sub classification of Horlicks: convenience good
so Horlicks is the consumer good falling in convenience good category
Answer: b product life cycle
Horlicks is in maturity stage of product life cycle
Reason for Horlicks in maturity stage are listed below
1. Their sales are at peak level and increasing every year by year
2. Profit is very high
3. Their customers are of middle majority and having a child in home prefer to a health
drink and many prefer Horlicks
4. Their cost per customer is very less as fixed costs are decreased as number of customers
are more
5. Number of competitors are stable, their competitors are boost, bornvita, complan and
pedia sure etc and no new competitors have entered into this market
6. Their main objective is to maximize the profit and protecting their own market from
competitors.
Marketing strategies for Horlicks can be as following
1. Product:
o Here they can provide many diversified products from competitors. For example they
can offer product with new innovative flavors like mango, mix fruit different from
common chocolate and strawberry flavors. Or they can offer product which can
provide more vitamin or nutrition to babies. Or which can help in dieting as weight
decreasing helping product.
o So go for different and innovative product
2. Price:
o Here Horlicks can go for setting prices according to the price of competitors mainly
Bornvita, complan and pedia sure and boost as they provide tough competition to
Horlicks. For example if boost sets its price 200 rs then Horlicks should keep its price
between 190 to 210 rupees.
3. o If Bornvita is providing in the packet of 20rs than they also keep price of their small
packet around it.
3. Distribution channel :
o Here Horlicks should go for intensive distribution channel. Here they should go for
maximum distribution channel for ex. Three level distribution channel of
manufacture-wholesaler-dealer-retailer-customer. Company should have a
distribution channel by which a consumer can get the product at nearest store so that
customer will not prefer another product.
o For example if Horlicks is not available in nearest area and customer have to go 2
kilometers to purchase it and if bornvita and complan and pedia sure is available near
to them then they may purchase the other product
o So go for maximum distribution channels which available near to your customer.
4. Advertising:
o Here company should be able to express and stress about how their product differs
from competitors and how it is beneficial for them. For example they should be able
to express that our Horlicks is able to develop brain of child and is helpful for baby to
be a TALLER, STRONGER AND SMATER boy or girl and also helpful to pregnant
women and help to overcome from daily fatigue .This part refers to advertise in mass
media like television advertising or newspaper advertising etc.
5. Sales promotion:
o Her company should be able to generate brand switching which means motivating to
change brand. Here company can go for switching by showing how their brand is
better than competitors by using various methods of free sampling or providing your
product free with other products.
o So here show how your product is better than your competitors and make them to
change their brand.
Answer: c product level
Different product level of Horlicks can be as following showed in table
Horlicks
1. Core product Flavored milk drink
4. 2. Basic product Testy, nutritious
3. Expected product Different flavors, vitamins, packaging in
durable bottles
4. Augmented product Brain developing and Bones protecting
drinks for women and babies
5. Potential product Special sweet health drink for diabetes
patients
Answer: d product items of Horlicks
Product items of Horlicks(health drink) are listed below:
1. Horlicks ninja
2. Junior Horlicks 1-2-3
3. Junior Horlicks 4-5-6
4. Mother’s Horlicks
5. Horlicks lite
6. Woman Horlicks
7. Healthy preschool combo
Answer: e product items of Horlicks other then Health drink
Product items of Horlicks( other than health drink) are listed below:
1. Horlicks biscuits
2. Horlicks corn flex biscuits and cookies
3. Horlicks Foodles
4. Horlicks Nutribic Digestive Biscuits
5. Horlicks Nutribic diabetes Biscuits
Answer: f: packaging
Answer f (I): Expert comment on Packaging of Horlicks
By evaluating the packaging of Horlicks we can say that it is the best packaging a company
is providing to it customer as brand identification is very easy and clear as name is written on
three side of bottle and bottle is too strong and durable that storage and transportation is done
very easily and it provides all the fundamental and other persuasive details so that no
5. confusion regarding product can be found and by the packaging of Horlicks one person who
is illiterate can easily identify that it is Horlicks bottle.
But Horlicks Packaging is not perfect as sometimes people use Horlicks bottle for other uses
also and sometimes it is found that duplicate product is served in Horlicks bottle and
customers are not getting the original product as the bottle of Horlicks can be used as it is not
perishable after Horlicks powder is consumed.
Answer f (II) :
Various functions performed by the packaging of Horlicks brand can be listed below:
1. Protection is provided by Horlicks packaging as they provide it in glass and plastic
bottles and protection from external environment.
2. Packaging of Horlicks has product containment means its bottles can also again used for
household purposes.
3. Self services in big stores, super markets and ready for selling getting attention of the
customer
4. Consumer affluence and product attractiveness, specially it attracts many children as they
have used many colours and in some packets cartoons which attracts more customers
5. Company and brand differentiation can be done from packaging only and Horlicks have
totally different packaging then competitors.
6. Horlicks of packaging is an effective promotion tool, as Horlicks uses to good packaging
and very attractive and very different from their customer and act as a packaging tool.
7. Product identification is easy from Horlicks packaging.
8. As Horlicks frequently changes their packaging from time to time and hence creates an
innovation opportunities to company.
Answer f (III) :
Various objectives fulfilled by the packaging of Horlicks brand can be listed below:
1. Transportation and protection of Horlicks powder means packaging in plastic and glass
bottle helps to move product from one place to other place with ease and it also protects
from external environment.
6. 2. The most important objective is Brand identification and here packaging of Horlicks
satisfies the Brand identification objective in true sense as they have totally different
packaging and can be identified very easily.
3. Assist at home storage means its bottles can be used to store product at home and can use
our product with convenience and its bottles can also be used for household purposes.
4. Details regarding use of Horlicks, where we always find that first take 1 cup of milk and
then add sugar in it and then add powder in it and shake it for time and your Horlicks are
ready to drink like related information is being satisfied by Horlicks packaging.
5. Conveying decrypting and persuasive information and details are displayed on package
of Horlicks.
Answer: g: labeling
Answer g (I)
Type of label is a Descriptive label because it gives details regarding use, care, performance
and etc.
Answer g (II): Horlicks labeling provides the following information
Date of manufacturing and expiry date
Name of the producer where it was produced (address)
Batch number of production
Ingredients used
Brand name
Gross and net quantity of the content
Direction to use
Precautionary measures
Nature of the product
Retail pricing
Suggestions to Horlicks for labeling can be as following:
7. As it provides full details and fulfils all the objective of labeling but it does not show
what to do after use of Horlicks powder, bottles are used for filling duplicate products
and served by the name of Horlicks and it happens because company is not telling
customers that how to destroy that bottle of package after use.
Answer g (III)
Various functions performed by the labeling of Horlicks brand can be listed below:
1. Labeling of Horlicks provides to give clear information and instruction about the uses of
product.
2. Price of Horlicks is printed and maintained so that frauds related to price can be avoided
and some misappropriation from middlemen can be avoided.
3. Easy identification of Brand as Horlicks in capital letter is written on three sides.
4. Standard product can be maintained and duplicate products can be avoided as company’s
logo is there.
Answer g (IV)
Various objectives performed by the Horlicks brand Labeling can be listed below:
1. The main objective of labeling is to provide information about the product, its uses, how
to use and other necessary information is served through labeling of Horlicks.
2. To give warnings against the Risk and to provide customer care number.
3. Basic aim of labeling is to provide Brand name.
Head question: 2 (Price)
Answer: a
Factors affecting pricing decision of Horlicks are listed below:
8. 1. Competition: here Horlicks have to survive in tough competition with Bornvita boost and
maltova and many other companies and if they charge higher price than they will be out
of market and may not be able to survive in the competition. So Horlicks have kept their
pricing according price of Bornvita, complan and pedia sure and boost.
2. Objective of company: here company’s objective is survive in market from competitors
and maximizing their profit so for achieving their objective they have pricing policy is to
price at average price means they charge less then Boost and Bornvita and same as
complan and pedia sure and Maltova because Maltova and complan and pedia sure are
their biggest competitor and they charge same in all size of packaging so that they can
survive through pricing and through publicity they can achieve maximum market share.
3. Nature and type of customer: here company is targeting children and aging more than 30
women and pregnant women so they have to price different for each group and pricing
policy of Horlicks is different where company is targeting children with chocolate
Horlicks and kesar-pista Horlicks and its price is kept low while pricing of women and
mother Horlicks is high as if they like Horlicks if it is beneficial for their physicality then
they will purchase it any price.
4. Distribution channel: here company have three level distribution channel viz,
manufacturer to wholesaler to dealer to retailer to customer and commission of all
intermediaries are there in price so they have not kept price too low but a middle price so
that all intermediaries also get satisfied and customer do not have to pay high.
5. Quality: here quality of the product is kept at its maximum level as they provides 23 vital
nutrition in their product and hence there price of women Horlicks and mother Horlicks is
high and for junior Horlicks also they are charging high price.
Answer: b price discrimination
Yes price discrimination is possible here.
Bases for discrimination can be as following
1. Customer segment pricing
Here price can be charged by Horlicks may be different for each segment. Here company
has segmented market in categories as following:
children of aging between 1and 3 and for them Horlicks 123 is there
9. children of aging between 4and 6 and for them Horlicks 456 is there
special Horlicks for women aging above 30 for strengthening their bones and here they
have women’s Horlicks
Mother’s Horlicks for pregnant women and they are charging high for pregnant women
for providing special health drink.
2. Product form pricing
Here price may be different from where it is sold. For example if it is sold in small shop
then shop keeper may charge full 200 rs for a bottle but if it is sold in big mega store like
big bazaar may be less ranging between 180 to 190. Hence here price discrimination is
also possible.
Answer: c price discounts and allowances to customer and intermediaries:
Here company provide following discount and allowances:
1. Functional discount:
Here Horlicks gives certain amount of discount to wholesaler and various intermediaries
if they perform various functions like storage, transportation, selling, providing feedback
to company about product from customers etc. Probably 25 to 30% discount is offered to
intermediaries.
2. Quantity discount
Here discount is given if customer or retailer or wholesaler is going to purchase in large
quantity. If one bottle is of 200rs for 1 bottle and if one is going to purchase 2000 bottles
then company may provide one bottle at 195rs.
Answer: d pricing method:
Here company have adopted going rate pricing where the Horlicks charge the price on the
bases on prices of Bornvita, complain, boost, and maltova. Here Horlicks charge almost
same price for their products like chocolate Horlicks, kesar-pista Horlicks and other
flavors of Horlicks are charged almost same price as competitor’s price.
While prices of junior Horlicks are charged as per the prices of Pedia sure and Maltova
which is also made for preschoolers.
10. It is based on market situation. Here Horlicks will adjust its own price policy in time with
the general pricing structure prevailing in the industry.
Alternative pricing method is Mark up pricing method:
Here Horlicks can have Mark up pricing method in which Horlicks have to decide the
mark up on production cost for example 20% on total production cost.
For example if a Horlicks 1kg bottle have following cost structure then,
Variable cost per unit= 80 rs,
Fixed cost 50, 00, 00,000 rs
Expected unit sales is 100, 00,000 bottles
Then unit cost= variable cost + (fixed cost/unit sales)
=80 + (50, 00, 00,000/100, 00,000)
=80+ 50
=130
So here unit cost of Horlicks is 130 rs per bottle of 1kg
And if company have mark up of 40% then
Mark up price= unit cost/ (1-desired return on sales)
= 130/ 0.60
=217rs
So according to mark up price Horlicks can sale 1 kg bottle at 217 rs
Head question: 3 Distribution channel
Answer: a levels of distribution channel
Here company is providing daily use product as consumer don’t make more effort to buy
such product so Horlicks have tried to make it available as near as possible to customer
reach.
11. Alternative distribution channel:
The alternative distribution channel can also possible where Horlicks can also make their
outlets from where wholesaler, retailer and customer can directly purchase Horlicks from
there.
The alternative channel can be as following
Customer ( final consumer)
retailer (small shops , malls, mega stores)
Jobber
Wholesaler
Manufacturer ( Horlicks company)
Manufacturer (Horlicks)
Retailer
Wholesaler
Retailer
Outlets of Horlicks
Final customer
12. Answer: b list of various type of intermediaries involved in distribution channel
merchant wholesalers
Jobbers ( full function wholesaler)
Small shops keepers
Mega stores like Big bazaar and Dhiraj sons
Super stores
Medical stores ( In certain stores women Horlicks and mother Horlicks is available)
Departmental stores
Answer: c functions of intermediaries
Function of merchant wholesaler and jobber :
Here functions performed by wholesaler can be as listed below:
1. Selling and promoting:
Here they try to promote sales by using various promotional tools and try to
generate more demand and sale more which benefits company.
2. Buying and assortment building
Here wholesalers purchase various products of Horlicks and assort them category
wise so at the time of sales it is easily available. For example they buy all Horlicks
product and arrange them in category like women Horlicks , junior Horlicks when
sales are done no problem of assortment are found.
3. Bulk breaking
Wholesalers purchase in large quantity and save a lot by purchasing in large
quantity as company provides quantity discount and it ultimately benefits retailers
and customers only.
4. Warehousing
They store the various Horlicks product in their warehouse and reduce inventory
cost of suppliers.
5. Transportation
They can provide quicker delivery to buyer as they are closer to buyer and retailers
13. 6. Financing
They provide Horlicks customers and retailers on credit bases and facilitate
financing for them.
7. Risk bearing
They reduce some risk by taking the ownership of the goods and bear the cost of
damage, spoilage and obsolescence.
8. Market information
Wholesaler supply information regarding complaints and feedback to the company
taken by them from customers.
Function of small shop keeper, mega store and departmental store :
1. Personal service to all customers
2. Two way communication where they provide information to customers regarding use
of the product and on other hand supply information regarding complaints and
feedback to the suppliers taken by them from customers.
3. Physical movement and storage of Horlicks is taken care.
4. Extend credit facility to customers.
5. Create demand by window display as customer will see that Varity of Horlicks
product is available and motivates them to purchase.
6. Sales promotion they do by showing benefit to children and women as it has 23 vital
nutrition in it.
7. Risk sharing by taking the ownership of the goods and bear the cost of damage,
spoilage and obsolescence.
Answer: d factors affecting choice of channel distribution:
Market consideration
1. Nature of market
Here large number intermediaries are hired as it is a consumer market and to reach
each customer more number of intermediaries are required.
2. The number of potential customer
Here the potential customers are more in number so company requires more
intermediaries to reach each customer.
14. 3. Geographical concentration of market
Here direct selling is not possible as India is a very market and here to sale more
large number of intermediaries are required.
4. Customer buying habit
Here as it is a convenience consumer product customers are going to purchase it
frequently and hence more intermediaries are required.
Product consideration
1. Unit sale value of product
Here the unit value of the Horlicks is low so to gain more profit we require more
sales so for sale more number of intermediaries are required
2. Nature of product line:
Here the product line is narrow having only 7 to 8 products only and hence more
number of intermediaries is required.
3. Newness and market acceptance
Here company having high degree of acceptance indirect distribution channel is
more possible.
4. Perishable product:
Here Horlicks is perishable product having expiry date within 36month of
packaging so here more number of intermediaries is required.
5. Standardization:
Horlicks is ISI marked product and hence Indirect distribution channel is beneficial.
Company consideration
1. Reputation
Here intermediaries are proud to be a part of such reputed company and Horlicks is
also such reputed company and hence it is beneficial to have a indirect channel.
2. Market control:
Here price are more or less stable and hence indirect channel is also helpful.
Middlemen consideration
If intermediaries are able to provide good facility of storage transportation and able
to facilitate more sale and able to generate more sales then number of intermediaries
hired should be high.
15. Consumer consideration
Here buyers purchasing more quantity and at frequent interval and they are
geographically widely spared and hence large number of intermediaries is required.
Answer: e various physical activities involved in channel distribution:
Inventory management
The location of inventory and number of sites from inventory is supplied by Horlicks is
affected by the total sales and mode of transportation.
Storage
o Here Horlicks decides where they have to store their finished products.
Warehousing
o In this part it involves assembling, dividing and preparing for transportation, for
example caps of bottles are fitted on bottles.
Distribution centers
o Here an integrated system is developed for the flow of products and acceptance
and execution of orders and their deliveries.
Material handling
Horlicks prefer to proper material handling system to reduce the time and cost where
mechanized equipments are used to move material internally while containerized
equipments are used for external movement at Horlicks.
Inventory control
A proper inventory control will help to reduce capital blockage and fluctuation in in
inventories and fulfillment of orders are done in time. Inventory control involves ordering
cost and inventory carrying cost.
Horlicks always prefer to order right amount of order quantity by using the concept of
economic order quantity.
Order processing
This step involves billing, credit extension; invoice making and collection of dues and
Horlicks Company have to make decision regarding procedure for doing billing, credit
extension, invoice making and collection of dues.
16. Transportation
Here decisions regarding the mode of transportation and specific carrier company and
selecting the mode from railway, truck, ship, airplanes and here for Horlicks railway and
trucks are only appropriate and economical.
Head question: 4 communication process
Answer: a: promotional tools
Advertisement
o This is very commonly used by Horlicks and they give advertisement on
television, targeting mass market and show various advantages of using Horlicks
as a Health drink.
o They also sponsor some program as a part of advertisement.
o by using advertisement Horlicks were able to gain following advantages
I. Sales were increased and sales targets were found to be achieved.
II. They were able to influence buyer to purchase Horlicks.
III. They made women and pregnant ladies familiar with women and mother
Horlicks and they were also gave information regarding benefits of using
junior Horlicks as a health drink.
Sales promotion
o Here for promoting sales company tries to increase sales by giving certain free
gifts like Horlicks printed Mugs, Shippers, water bags etc. and few years ago they
gave small toy cars to influence small children to purchase Horlicks rather than
other Brand.
o Here they used experts who told about advantage of using Horlicks, and they took
Dr. Varsha, nutrition specialist who also preferred to use women Horlicks.
o By using sales promotion Horlicks got following benefits:
I. Immediate return through increase in sales
II. Sales promotion made Horlicks most popular health drink brand.
17. Events:
o Here Horlicks do promotion by showing an advertisement on certain program like
zoot review where they show advantage of using Junior Horlicks 123 and 456 on
small babies and preschoolers and their overall development.
o By using events they were able to influence customer more as many experts were
used to promote Horlicks.
Answer: b: appeals used by Horlicks
Rational
o Here company tries to increase sales by generating self interest and here Horlicks
always tells advantage of using mother Horlicks by a pregnant women to her
upcoming child’s health and how women Horlicks is helpful to 30+ women in
their day today life where they have to work to hard in their household works.
Informational appeals:
o Here Horlicks do appealing by giving the information why some kids do not have
appropriate price or why they are not able to remember what they read and they
always inform that due to some vitamins and nutrition they are not able to grow
up by what amount others have grown up and they inform that Horlicks have all
vitamins and nutrition that will help their Kids to achieve their desired level of
growth. And for such they use Zoot review and such program to appeal to
purchase junior Horlicks for their kids.
Indirect appeals:
o Here Horlicks always try to appeal that their product is superior then complan
when complain during an advertisement tried to show that how complain is better
than Horlicks then Horlicks also indirectly appealed that they have 23 vital
nutrition that complain don’t have.
Answer: c: Type of communication channel used by Horlicks
Here Horlicks uses non personal communication channel which can be as following.
1. Media :here media consists of following parts
I. Print media: through news papers, magazines, direct mail promotion
18. II. Broadcast media: promotion through radio and television and Horlicks
uses television media up to a large extend.
III. Electronic media: promotion of Horlicks by webpage and website and
videotape.
IV. Display media: Horlicks uses posters and hording for promotion.
2. Sales promotion:
o Here for promoting sales company tries to increase sales by giving certain free
gifts like Horlicks printed Mugs, Shippers, water bags etc. and few years ago they
gave small toy cars to influence small children to purchase Horlicks rather than
other Brand.
o Here they used experts who told about advantage of using Horlicks, and they
took Dr. Varsha, nutrition specialist who also preferred to use women Horlicks
3. events
o Here Horlicks do promotion by showing an advertisement on certain program
like zoot review where they show advantage of using Junior Horlicks 123 and
456 on small babies and preschoolers and their overall development.
o By using events they were able to influence customer more as many experts were
used to promote Horlicks.