Wednesday, November 09, 2011

Brand Update : Horlicks Extends to Breakfast Segment

In pursuit of the stated objective of making Horlicks a megabrand, GSK announced the launch of Horlicks Oats. According to ET, packaged, ready-to-cook oats market is worth around Rs 200 crore and growing at 25% . Horlicks expects to leverage its equity in the new product category also.
From healthy malt drink, Horlicks has come a long way. Now  the brand has become so big and diversified, there is no point in criticizing these extension. ( one can only pray for its survival).
Regarding the brand extension towards oats, the existing health based brand association of Horlicks will be a huge advantage . According to academic researches, consumers evaluate brand extension on the basis of these parameters - 
Brand loyalty towards parent brand
Confidence of consumers about the competence of parent brand in the new category
Perceived quality 
Positive brand associations 
Perceived fit between parent brand and the extensions
Attitude of consumers towards the brand.

For Horlicks, because of its rich heritage and product performance, it scores well in most of the above parameters. Hence the chances of consumer trial will be high compared to any new brand.Brand dilution will happen for sure since the brand is trying to leverage its expertise in too many categories. 

There are also chances of the oats to be viewed as a Kid's product since Horlicks in India traditionally targeted kids. This kid's association may prevent many adults to switch to the brand. However Horlicks will be addressing this issue in the launch ad. My feeling is that Horlicks oats will be targeting the family as a unit rather than adults.

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