GSK-CH Portfolio Analysis (GlaxoSmithKline Consumer Healthcare - Nutritional)
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A thorough analysis of the nutritional portfolio of GSK-CH (GlaxoSmithKline Consumer Healthcare) and its evolution over years. Over-dependence on Horlicks has been studied as well as appropriate recommendations to the current portfolio have been made to balance the portfolio.
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GSK-CH Portfolio Analysis (GlaxoSmithKline Consumer Healthcare - Nutritional)
- 1. This document was prepared in May 2014 as part of an academic group project by PGDM Participants of SPJIMR, Mumbai. Portfolio Analysis of Nutritional Offerings
- 2. Health Food Drinks HorlicksBoost Maltova Viva Packaged Foods FoodlesBiscuits Oats GSKCH Horlicks Ninja Junior Horlicks Mother’s HorlicksHorlicks Lite Horlicks ProMind Horlicks Gold Horlicks Kesar Badam Horlicks Biscuits Horlicks Nutribic Boost NRG Plain Classic Masala Southern Spices GSK – Consumer Healthcare (Nutritional) GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS With the mission " To improve the quality of human life by enabling people to do more, feel better and live longer", GSKCH India was started in 1958. Headquarters: Gurgaon Employee Strength: 3000+
- 3. Production starts in India 1958 1992 First brand line extension with Biscuits Junior Horlicks launched 1995 Repositioned Horlicks strongly for children rather than entire family 2003 Horlicks Lite, a low fat and low sugar alternative launched 2005 2008 Women’s Horlicks unveiled Taller, Stronger, Sharper Campaign starts 2009 2011 Horlicks Gold introduced 2014 Kesar Badam flavor of Horlicks launched New ad campaign showing 5 signs of growth 2012 Right from its inception, Horlicks as a brand for GSKCH has done wonders and has helped GSKCH gain a market share of 65.1% in HFD domain HORLICKS : THRIVED OVER YEARS GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS
- 4. HORLICKS JUNIORHORLICKS HORLICKSLITE MOTHER’SHORLICKS Highest selling HFD 5 Signs of Growth Original, Chocolate, Elaichi Family Specially formulated for preschool children Two stage product Chocolate, Vanilla Toddlers (1-2-3) Preschoolers (4-5-6) Superior nutritional supplement with 26 vital nutrients Chocolate Caramel Pregnant and breast feeding women Since 1930s 1995 1997 2005 Horlicks Lite & Lite Bite Original Malt and Badam Diabetics Specially designed for adults. No added sugar and no fats. 500g Rs.230 200g (refill), 400g, 500g Rs.199, Rs. 240, Rs. 375 200g, 500g Rs. 111, Rs.216 200g, 500g, 1kg Rs.95, Rs. 194, Rs. 358 HORLICKS : LINE EXTENSION GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS
- 5. HORLICKSGOLD Double action nutrition Golden Malt & Chocolate Delight Urban niche HORLICKSPROMIND To help support brain development and functions Real almonds and chocolate Mothers who want to channelize their kids talents 2011 2013 WOMEN’SHORLICKS India’s first HFD designed specifically for women's nutritional needs Caramel & Chocolate Health conscious urban working women 2008 HORLICKSKESAR BADAAM Tasty nourishment Mothers who want to provide nutrition in a tasty format to their children 2014 400g Rs.225 Goodness of real kesar and badam 400g Rs.238, Rs. 228 (refill) 500g Rs.205 (refill) 400g Rs.240 GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS HORLICKS : GOING SPECIALITY
- 6. The brand Horlicks has seen a constant change in its Packaging right from its inception 1990 Horlicks as ‘The Family Nourisher’ 1994 Horlicks as ‘The Pleasurable Nourisher’ 2005 ‘Taller, Stronger and Sharper’ 2010 ‘Doodh ki Shakti Horlicks’ Involvement of Mother and Regional Language Ads have helped boost the connect that Horlicks wanted to establish GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS HORLICKS : CHANGES IN COMMUNICATION
- 7. MALTOVA Acquired from Jagatjit Industries in 2000, relaunced in 2002 The yummy choco-malt drink Positioned against Nestle’s Milo and Cadbury’s Bournvita Low-end customers of North, West India VIVA Acquired from Jagatjit Industries in 2000 Start to a bright and healthy day! White powder category Low-end segments 2000 2000 BOOST Boost is the secret of winning energy! Chocolate Children Age 5-18 1975 500g Rs. 180 500g Rs. 179 15g, 85g, 200g 500g, 1kg Rs. 340 (1kg) For active young people, specially who play sports First with shrink sleeved packaging (1999) OTHER HEALTH FOOD DRINKS IN BASKET GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS
- 8. FOODLES A healthy instant noodle Foodles Ala Masala ( 4 grains) Foodles Crazy Curry Foodles Regular Masala Mothers seeking healthier options for kids HORLICKSNATURALOATS A healthy breakfast cereal Mild Kurma, Classic Masala, Southern Spices Urban working population 2009 2010 HORLICK’SNUTRIBIC Healthy fiber rich digestive biscuits Smart healthy food option which is tasty ,also takes care of nutritional needs Working population above the age of 25 2012 HORLICKSBISCUITS Biscuits for healthy people Variants are cornflakes and Cream biscuits Family looking for variety in tastes 1992 Cereal and fruit fiber, five grains, Honey and Crispy oats Health maker sachet contains the essentials of 9 power vitamins SKU- 80gm Rs. 15 Rs. 50 SKU- 300gm SKU-1 kg Rs. 165 Rs. 85 SKU- 500gm Elaichi and Standard SKU- 120gm Rs. 10 Rs. 25 SKU- 310gm Standard Biscuit SKU- 120gm Rs. 10 Elaichi Biscuit SKU- 100gm Rs. 20 Rs. 50 SKU- 250gm Cereal and fruit fiber SKU- 75gm Rs. 25 SKU- 150gm Zero added sugar Rs. 50 Crunchy chocolaty Biscuits Launched in South India Family looking for variety in tastes 2013 Only chocolate Rs. 15 BOOSTNRGBISCUITS SKU- 75gm Rs. 18 Rs. 35 SKU- 150gm PACKAGED FOOD OFFERINGS GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS
- 9. Complan Horlicks Bournvita Boost Pediasure Company Heinz GSK-CH Mondelez GSK-CH Abbott Nutrients High Medium Medium Medium Very High Market Share 12% 50% 16% 5% 1%1% POD Stronger Bones and Muscles Taller, Stronger, Sharper Physical Energy and Endurance Energiser for Daily Sports Complete Nutrition; (with Fiber) Base Malt Malt Cocoa Cocoa Soy SKUs 25g, 200g, 500g, 1kg 100g, 200g, 500g, 1kg 100g, 200g, 500g, 1kg 100g, 200g, 500g, 1kg 200g, 750g Price (per 400/500g SKU) ~240 ~200 ~200 ~200 ~600 US $ 1 Billion 7% Malt Based Health Drinks US $ 12 Million 11% Probiotics US $ 200 Million 15% Packaged Juices DIRECT COMPETITOR S CATEGORY COMPETITIO N GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS
- 10. PRODUCT Nutri Choice Mc Vittie's Digestive Parle G Tiger PARENT COMPANY Britannia United Bicuits Parle Agro Britannia MARKET SHARE 55% 20% 70% 17% FLAVORS Digestive, 5 grain Natural, Chocolate, Dark Chocolate NA Butter Scotch, Strawberry, Pineapple PRICE SEGMENT 50 , 20,15 22 (75g) 5 6 SKU 250g, 100g, 75g 75g, 100g, 230g, 500g 75gm 75 gm POINTS OF DIFFERENTIATION Has extended to other line extensions like cookies, crackers, thins, roasties etc More than 23% whole wheat with high fibre Synonymous to energy and nutrition Iron Zor - address iron deficiency DIRECT COMPETITOR S GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS Horlicks Nutribic Horlicks Biscuits
- 11. PRODUCT Maggi Yippie Quaker Saffola PARENT COMPANY Nestle Sunfeast PepsiCo Marico MARKET SHARE 70% 10% 40% 12% FLAVORS Masala, Chicken, Curry, Tomato, Atta noodles, Multigrain Classic Masala, Magic Masala Lemmony veggie, Masala, Strawberry, kesar Masala, Corriander PRICE SEGMENT 10,20,40, 60, 75 10, 40 10, 130 15, 120 SKU 70, 150, 300, 450, 560 85gm, 320 gm 28gm . 400g 43gm, 400 g POINTS OF DIFFERENTIATION Established in 1983, unique 2 min proposition connects with audience Expertise of the use of its aashirwaad Noodles does not lump even after 30 mins Attractive Packaging, Pepsico brand, Variety of flavours Comes with recipe book DIRECT COMPETITOR S GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS Horlicks Foodles Horlicks Foodles
- 12. • 4 Healthy Ingredients – Rice, Wheat, Ragi & Corn • Tastemaker also nutritional • Targeted mothers to provide the child a healthy desirable snack • Noodles perceived as unhealthy • Weak distribution network • Competing with Maggi – very strong brand Our View: Rare bold move at diversification. Competes against noodle giant Maggi. Inconsistency Horlicks = nutrition, consumer’s perception of noodles = junk food • Breakfast category is a good bet • In line with the overall positioning • Positive perception, unlike Foodles • Distribution is a problem • Not the first mover. Quaker and Marico have taken the lead • Competing with super brands like Kelogg’s Our View: Well thought out extensions. Breakfast category is fast growing. Right step in sync with HFD Not the first mover. Competition from more established biscuits brands like Britania • Healthy snacks is a good category • Growing awareness and interest • Product has been well received Our View: A good product for on-the-go nutrition. In alignment with Horlicks’ positioning PORTFOLIO EVALUATION GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS
- 13. Unrelated diversification: Launching Foodles and Cream based Biscuits(now withdrawn) which are in dissonance with the health proposition of Horlicks Unsupportive distribution system- Hence they could not leverage the distribution system for other products. A major cause for the withdrawal of Nutribar and Chil-dood, meant to be consumed on the go. Brand Perception-Hindrance for the bottom of the pyramid-perception of the Horlicks is “urban” or “premium”, hence failed to penetrate the bottom of the pyramid to that extent. They tried with “Asha” but it was not a success Irrelevant product line extension -Too many flavours with different packaging diminishing brand recognition Products Lack Strategic fit with umbrella brand- Product lack in synergy with the brand personality, like Foodles Cannibalising products- Horlicks gold (premium) and Horlicks , similar tasting products at a higher price point, eating each other’s market share. INCONSISTENCIES OBSERVED IN THE PORTFOLIO GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS
- 14. 2009- 2012 2010-20112009-2013 2010- 2013 2011- 2012 HORLICKS ASHA NUTRIBAR GLAXOSE-D LUCOZADE HORLICKS CHILLDOOD Launched to target the lower end segments, mostly to cater the rural segment Withdrawn due to poor response and cases of the brand eating into the share of the parent brand Launched to target at Health Conscious younger generation Withdrawn due to inefficient supply chain and distribution model and Mediocre sales Launched to target kids who prefer having milk for on the go consumption Withdrawn due to poor response and strong competition from AMUL Launched to target youngsters who are involved in sports and do workout Withdrawn due to poor response ,inability to connect with TG and strong competition from Gatorade and Tang Launched as Boost Glucose in North & West India and as Glaxose D for East India Withdrawn due to poor response and stiff competition within the glucose powder market DISCONTINUED PRODUCTS GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS
- 15. 0% 10% 20% 30% 40% 0 20000 40000 60000 80000 100000 2008 2011 2014 2017 GSK-CH : GOING STRONG BUT… Net Profit Growth % (in lacs) • Fear of over-leveraging brand “Horlicks” • Dilution of the flagship brands by products like Foodles • Beefing up of distribution network in the North and West to further gain stronghold. • Horlicks Oats has been a successful launch and the company will be extending its availability GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS BUT… New launches have not found much success with non-core business still contributing only 6.5% of sales
- 16. SUGGESTED PORTFOLIO ALTERATIONS GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS : Existing Product Portfolio • Introduce new flavors in existing line extensions • Resolve the issue of taking Horlicks with a spoon and adding to milk, make a bottle with a smaller aperture • Similar tasting line extensions to be improvised on (Horlicks Gold) Avenues for new products • Probiotic range of products (build capability) • Soy milk for lactose intolerants • Nutrition powder additive (for flour) • Infant foods category (sold off Farex very early)
- 17. • Avoid launching products which are not perceived as healthy by the consumers: Noodles in India, are still perceived as junk food and the introduction of Horlicks Foodles in this category has still not been able to change that perception • Improve availability and display of the Specialized products in the retail shelf: Bournvita seems to occupy around half of the shelf space in all modern retail and this hampers not only the sale but also the brand connect • Like other FMCG companies, start launching new products online: Launching products online has a two-fold advantage; a larger reach and an increase in online connect with the potential customers • Tie-up with online grocery vendors to sell the GSK product line: With more and more people going online, having an online connect becomes the need of the hour • Consumers increasingly becoming health conscious • Compete for more shelf space- Retail shelf space will become more expensive , and increasingly dominated by large brands like Cadbury’s • Shopping on-the-go and e-commerce will rise • Rural penetration will improve GSK-CH PRODUCT MIX COMPETITION INCONSISTENCIES MODIFICATIONS FUTURE RECOMMENDATIONS GOING FORWARD CONSIDERATIONS FOR FUTURE PLANNING RECOMMENDATIONS
- 18. THANK YOU Prepared by: Nitesh Bhasin Nupur Bansal Prakhar Jain Ruchir Gupta Tanya Malhotra Tulika Choudhury
Editor's Notes
- Complan has recently introduced a 25g pack for rural markets and has also changed its positioning from “increases height” to one focusing on stronger bones and muscles Pediasure is priced Rs. 920 for 750g pack, Hence for a 500g corresponding pack it should cost approx INR600 Probiotics are organisms such as bacteria or yeast that are believed to improve health. They are available in supplements and foods.
- Our View: A rare bold move by gskCH. Have tried to reduce dependence on Horlicks (HFD) and diversify into an adjacent segment. The low rate of adoption can be attributed mainly to the weakness in distribution and strength of Maggi as a brand. The extension is an inconsistency, because despite a bold attempt by gsk, it’s the consumer’s perception of noodles as junk food which matters. Our View: It is a well thought out extension of the brand. The breakfast category is a fast growing category. It is also well established that, breakfast is the meal in which people are most adaptable as compared to lunch or dinner. It is the right step towards providing complete nourishment for the family by targeting breakfast.
- 1.Unrelated diversification creates a negative perception about the brand, because these normally are perceived as junk food. 2.Horlicks has traditionally been strong in the East and South, and reached the regional north markets through its acquired brands 3.Products that aren’t in sync with the breakfast category are not in synergy with the parent brand
- ASHA: Even towards the bottom of the pyramid, perception of the brand Horlicks is “urban” or “premium”. Hence, Horlicks failed to penetrate the bottom of the pyramid to that extent. It did not go down well with the bottom-of-the-pyramid audience NUTRIBAR: It was unable to generate repeat purchase and thus made profitability for the product a concern. Also the inefficient supplies were an issue, owing to which the product was withdrawn from the market by 2013. CHILL DOOD: It was meant to be an on-the-go i.e. an unsupervised product but the concept of flavored milk was yet to pick up. Also, there was stiff competition with AMUL KOOL and the company could not match to their distribution levels LUCOZADE: The product could not take-off in the Indian market. The connect with Football and Gymnasiums was unable to create the desired pull for the product. Thus leading to the eventually phasing out of the product. GLAXOSE-D: It was launched to tap the expanding glucose powder market but there were a few takers for the product. Overtime, GluconD and Tang had already developed their loyal user base and thus, the product was unable to penetrate deep into the market.
- Net Profit as a percentage of sales has been growing faster than 10% consistently. Past 2 years, the company has recorded a growth of 13% in it’s net profit. Turnover has recorded growth of 15% over the past financial year.
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