GSK India Market Share

Health Food Drink Industry is a very sensitive market wherein companies participating in such markets can hardly differentiate their product offering as everyone presses on the same key features i.e Taller stronger and sharper. Then, how did GSK capture the majority of the market space i.e. 75% of market share is worth discussing. In such a market company needs to continuously build and bid on innovation to try and sustain in the market with regards to its ingredients which whether pertains to its promises or not is miles apart. But, whether with those features can it pull the customers towards their product is what we must be concerned about. Horlicks is the focal point in this case study as its continuous innovation and repositioning strategies helped it gain majority of the market share.

When GSK launched its product Horlicks in India post world war 1 where it saw Indian soldiers of British Army bringing it back with them as a diet supplement. The Indian formulation of Horlicks is slightly different because here the milk is processed with that of buffalo milk instead of cow milk because of various cultural concerns. Horlicks saw it as one of the hitting challenges as it had to draw a completely new processing strategy to chalk out the above mentioned process. It started of in the India market with the regular White Malt Flavor, but there was a time when Horlicks almost died off from the Indian market with lack of varieties in its flavor as its competitors came up with many flavors. To counter it, in 2003 Horlicks underwent a major revamp and came up with flavors like Vanilla, Toffee, Chocolate, Elaichi and Honey, etc.

Punjab, Madras and Bengal presidencies became early adopters of Horlicks and lot of well-to-do people took it u...

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...or the price sensitive, mass customers.

Priced 40% cheaper than the mainstream brand, Horlicks test marketed itself in pockets of Andhra Pradesh. It was seen as a check and mate move as no other players have ever come up with any such strategy and was completely a localised innovation. While regular Horlicks is priced at 135 per 500 gm the cheaper Horlicks Asha is priced at Rs. 85 per 500 gm.

This was an initiative taken up by the company keeping in mind the relative importance and essence of tapping the rural segment which comprises of the 70% population of India. Only pricing strategies can help companies enter such price sensitive markets.

The company couldn't hold on to its low pricing strategy because the price of it ingredients like sugar, malt, was going up day by day. Hence, the project had to be called off midway due to increase in the cost of production.