Thursday, August 18, 2011

Brand Update : Horlicks Goes Premium With Gold

GSK's megabrand Horlicks has launched a premium variant - Horlicks Gold in select cities. The new variant is priced around 30% premium over the regular Horlicks. The new variant's USP is the presence of double nutrients and a premium looking packaging.According to news reports, Horlicks Gold has better taste and aroma compared to regular one.
Horlicks has been on an extension spree in the last couple of years launching both product-line extensions and brand extensions. The brand touted itself to be a megabrand which endorses a wide range of products across categories. The latest is the foray of Horlicks into Premium Health Drink market.

Infact there is no such category in the Indian market. Most of the brands are priced in similar lines and it is the first time that a brand is aiming to create a premium segment in the Malted Health Drink market. The move also marks a shift in the segmentation strategy of Horlicks. Horlicks has used predominantly Age based segmentation for all its product development . It used gender as a segmentation when it launched Women's Horlicks. Now the brand has used Income as a segmentation variable. Although Age, Gender , Income etc comes under Demographic segmentation, using Income as a segmentation is first in this category of products.

The challenge for this variant is to convince the customer to pay a premium for Horlicks Gold. In the store shelf both Horlicks regular and Horlicks Gold will be dispayed and what will prompt consumer to chose Gold over Regular is the critical question. I don't think that double nutrients or packaging is a strong enough reason for consumers to pay a 30% premium. Does that mean Regular Horlicks is inferior product to Gold ? Is the brand targeting first-time users or expect the regular users to switch to the premium brand ? These questions will be cleared once the brand starts communicating. 

Horlicks is now in a extension trap. The brand in pursuit of market share is using extensions as a strategy . Too many extensions are bound to confuse the customers. As I understand, Horlicks Gold is aimed at the entire family . But this Premium variant so far fails to offer a very powerful differentiation to justify its premiumness over its own Regular variant. That can be a problem for Horlicks. Its too early to make a prediction but in the store both these variants looks the same except for the price. It is now upto the brand communication to do the convincing.