Villanova Business Dynamics Spring Marketing Project FINAL PRESENTATION

Horlicks: The Original Malted Milk Drink

Patrick Shields, Keira Keane, Andrew Chen, Jack Trunz, & Priyanka Chodhari

What is Horlicks? ● Combination of buffalo milk, malted

barley, wheat● Nutritional food powder that is added

to additional liquids (hot milk/water)● Our US introductory products w/new

flavors (chocolate, vanilla, strawberry, etc.)o Horlicks powdero Horlicks pre-mixed cold drinko Horlicks pre-mixed athletic drink with added

protein

Key benefits? ● 23-26 vital nutrients → keep you 100% well-

nourished, WHO/FAO guidelines● Natural ingredients manufactured using a

unique process by breaking down carbs and proteins, making it easier to digest

● Helps height, weight, and brain development ● Fights cavities, lowers cholesterol, increases

circulation, and contains antioxidants● Can potentially cater to needs of adult lifestyle,

nutrition requirements, diabetics, childbearing mothers

Buffalo Milk > Cow Milk● Thicker, creamier, & sweeter● Less cholesterol and sodium● Additional 30 calories (marginal

difference)● More minerals (calcium, iron,

phosphorous)o Great for healthy bones, dental health,

cardiovascular health, weight gain● Higher amount of protein● Can be preserved for longer time

period

Target Market Segments● Mothers (28-40 yrs) & Young Children

(3-12 yrs) = approx. 60 million people● Elderly (65+ yrs) = approx. 62 million

people● Athletes or “health crazed” people (18-

30 yrs) = approx. 12 million people

Message/Positioning● Overall brand message: “pleasurable

nourishment”● Children and athletes: “taller,

stronger, sharper” (clinically proven) ● Elderly: “sleep well, eat well” (bedtime

drink)

Constantly Changing Look

Packaging (customized)

Advertising & Promotion● Objective: inform and persuade● Primary Medium: Television &

Magazineso Nickelodeon, NBC, ESPN, ABCo Men’s Fitness, Sports Illustrated, People

● Other Mediums: Billboard/Signs, Website, Social Media, Interactive, Word-of-Mouth

Advertising & Promotion (cont’d)● Promotional & Informational Website

o Horlicks’ products information (nutrition information, comparisons vs. competitors, manufacturing process, etc)

o Recipeso Tips about working out, studying, and leading

a healthy lifestyleo Live social feed o Section to send in questions, comments,

concerns, feedback

Advertising & Promotion (cont’d)● Social Media/Contests/Sweepstakes

o Facebook, Instagram, Twittero Example: Submit 6 boxtops to receive a free

sippy cup, blender bottle, or plush toyo Horlicks Fan of the Weeko Writing contest o Win a trip to a destination o Be the first to answer question of the week

correctly

Advertising & Promotion (cont’d)● Interactive PR & Word-of-Mouth

o Zoo animals in the classroom o Sponsor schools with Horlicks school

supplieso Horlicks kiosks in store fronts o Billy the Buffalo cutouts in storeso Work actively with charity o Host events in local communities to

encourage healthy and enjoyable family fun o Promote Horlicks and importance of health

and education in schools

Distribution

● Intensive distribution ● Channels of Distribution

o To supermarkets: manufacturer → wholesaler → retailer (supermarkets) → consumer

o To school cafeterias: manufacturer → broker → retailer (schools) → consumer

Industry● Health food industry

o 2011: $31 billion within USo Expected to grow 14% from 2013-2018

● Convenience stores are looking to shape up their image by offering better-for-you food, drink, and food service items

● Weight control and nutritional product sales have grown 146% in stores from 2008-2012

Industry (cont’d)● Nutritional and performance drinks

sales grew 48% from 2008-2013 → $12.3 billiono Nutritional drinks grew 38% → $3.2 billion,

forecasted to grow 62% → $5.2 billion o Protein drinks grew 233% → $2.1 billion,

forecasted to grow 90% → $4.1 billion● Consumer interest in

healthy/nutritious eating habits → boost sales sports, nutrional, and protein drink

Industry (cont’d)● 39% of consumers 18+ use nutritional drinks,

31% protein drinks● 16% of teens 12-17 use nutritional drinks● Supermarket sales for nutritional food and

drinks = $1.8 billion● Protein’s ability to build muscle, help weight

loss efforts, and provide benefits● Men/older consumers use as source of

protein/vitamin/minerals; women use as meal supplement/weight loss

Competition

Competition: Muscle Milk

● Nutrition Bars○ Chocolate○ Peanut Butter

● Ready-to-drink Bottle○ Rich Milk

Chocolate○ Classic French

Vanilla○ Creamy

Strawberry

● Powder Drink Mix○ Rich Milk Chocolate (& No Sugar

Added)○ Classic French Vanilla (& No Sugar

Added)○ Classic Chocolate Malt○ Dark Chocolate○ Strawberry Sensation○ Variety Pack (& No Sugar Added)

Competition: Carnation Breakfast

Horlicks Product Line

Pricing (competitive strategy)● Horlicks powder

o 12 oz. 340 gramso $9.95

● Horlicks pre-mixed athletic drink (+ protein)o 14 fl. oz. o $2.50 individuallyo $12.95/6-pack

● Horlicks pre-mixed drinko 6 fl. oz o $0.99 individuallyo $5.95/6-pack

Market Share/Sales ForecastsHorlicks pre-mixed athletic drink with added protein Market

Share

● United States is the largest consumer of protein shakes with just over ⅔ of the entire market share

● Global retail market for sports nutrition = $4.2 billiono 6.2 % of global market is devoted to protein drinks =

$260,400,000o United states protein drink market 63% of $260,400,000 =

$164,052,000 in total sales of US protein drinks (pre-made)

● 1st year with .5% market share = $820,260= 328,104 units● 2nd year with 1% market share = $1,640520= 656,208 units● 3rd year with 1.5% market share = $2,460,780= 984,312 units

Market Share/ Sales Forecasts

Horlicks powder Market Share

● Only one company other than Horlicks offers a milk powder that is fully organic (Northwoods Group LTD)

● Sales for non-organic powdered milk account for $89.1 million annuallyo With a product differentiation of buffalo milk that is fully

organic vs cow milk, an entry to market share could go above the initial .5 %

o With a breach of market share of 2% in the 1st year Sales of Horlicks powder could generate $1,872,000 in

the first year= 188,140 units 5th year results with a market share of 5% → results in

sales $4,455,000=447,738 units

Market Share● Hot Drink market shares

o Nesquik → 13.8%o Carnation → 9.8o Ovaltine → 8.8%

● With Horlicks currently representing 0.00% of market share in the United states, there is only one way to go: Up

● If we were able to reach the same percentage of market share that Horlicks represents in India (52%), sales of Horlicks would be able to generate up to $45 million annually

Why will Horlicks be successful? ● Unique health benefits● Growing health conscious attitude

o Last year, 61% of Americans have visited a natural foods store

o 2013 reported 51.3 million gym memberships

● Buffalo milk → new, experimentive● Care about customers, willing to go the

extra mile, adapt to customers’ needs● Attractive design

We need to make the move before someone else does!