Brand Equity -horlicks

PRAXIS BUSINESS SCHOOL

Contents THE EXECUTIVE SUMMARY.................................................................................. ...3 BRAND EQUITY..................................................................................................... ..4 The 4 Legs of our Table (Model).............................................................................5 RATIONALE FOR QUESTIONNAIRE..........................................................................6 Our Brand Equity Model................................................................................ ........7 RATIONALE – for our metrics..................................................................................7 MODEL 1: (Price and Quality)............................................................................... ..8 Model 2 – (Trust and Recommendation)...............................................................14 MODEL 3 (Price premium )............................................................................... ....18 Conclusion....................................................................................... ....................19 RECOMMENDATIONS FOR HORLICKS...................................................................19 BIBLIOGRAPHY.......................................................................................................... ............................21

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THE EXECUTIVE SUMMARY Our last finding which was based on the BAV model and laddering method was to find out the brand image of the brands wherein our brand horlicks emerged as the leader with its competitors on its back giving it tough competition. This time round we work towards finding out the brand equity of the brand which in turn actually means the brand strength. It helps us find out how the brands exist in the minds of their potential consumers and that what those consumers think of a particular brand determines the value it has for its owner. For this we have chosen the Price and quality matrix which will check the premium that the brand can charge from its consumers for the quality that they provide. Our next model checks on the parameters of trust and recommendation which will check the emotional connection that the consumers have with the brand and the amount of trust it has been able to develop in the last few years and the relationship it has developed with them in these years. This would also help us in determining the loyalty the consumers have towards the brand if they recommend it to others. Our third model checks on the brand strength and if it has reached that stage of nirvana wherein they can charge a premium for their product. It will help us to determine the premium that the brand can charge from its consumers in turn the brand equity. Through our first model we infer that where quality is concerned Horlicks stand second and has lost the race to Bournvita which enjoys a 80% loyalty while it is at 70%.Complan with its 68% is gaining momentum fast and could displace Horlicks from its second position fast. As far as quality goes Horlicks will need to work hard to win the gold in this race. In our second model where the trust factor is tested we infer that though the quality is perceived not upto mark yet when it comes to trust there is a lot of trust that consumer have on its brand which could be attributed to its long existence in the market and because of its market leader position and the brand is also highly recommended by the consumers to their family and friends. As far as the last model goes in which we test the brands ability to charge a price premium we find that the brand has a high ability to charge a premium and the brand is highly trusted by the consumers. There is high chance of 51% for it to charge a premium. 3 | Page

PRAXIS BUSINESS SCHOOL Thus to sum it all up though it may scored a bit low where loyalty is concerned than the other brands , it had leveraged it by scoring high where trust and a price premium is concerned.The overall Brand equity of Horlicks is also on the higher side.

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BRAND EQUITY Brand equity has become one of the most important marketing concepts since the late 1980s, both in academic research and business practice “Brand are at the heart of marketing and business strategy” and building brand equity or strong brands, is considered to be one of the key drivers of business success. From this perspective, it is essential to have a brand equity measurement and management system. When we talk of a brand’s equity, we mean a brand’s mental equity or strength. Our approach to measuring brand equity is customer-based, concentrating on measures related to the consumer mindset; that is, the associations, evaluations and relationships customers have towards the brand. The importance of this approach in writing that: “How the brands exist in the minds of its potential consumers and that what those consumers think of that particular brand determines the value it has for its owner. A brand’s foundations are, therefore, composed of peoples’ intangible mental associations about it. In placing a value on a brand, we are placing a value on the strength and resilience of those associations”. For many years, theoreticians have perceived the consumer as a rational decision maker, who chooses a product based solely on its fulfilment of functional needs .Within the customer satisfaction area, this has resulted in a primary focus on the functional attributes as determinants of customer satisfaction and loyalty However, the consumer is no longer satisfied with high quality products and services alone. Today, the consumers’ decision processes are also influenced by the emotional benefits related to a brand. Thus, it is difficult to differentiate products based on functional attributes and benefits alone, especially since these are easy to copy. Consequently, today’s companies attempt to differentiate themselves by creating associations in the minds of the consumers that add extra value in the form of emotional benefits, which extend beyond product attributes and functional benefits. According to Aaker, brands create emotional benefits, if the consumer experiences a “feeling” when buying or using brands. Emotional benefits add depth and value to the experience of owning, using or being in contact with a brand. Because of feelings’ unique influence upon the rational evaluation of a brand, describe the emotional benefits as “the heart of a brand”. If the consumer chooses brands with the heart, this is because of the emotional benefits. When planning the marketing strategy, it is important to gain a deeper understanding of how brand associations and evaluations are created, whether their nature is rational or emotional and to which extent the rational and emotional brand associations and evaluations affect each other. 5 | Page

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The 4 Legs of our Table (Model) Product quality Consumers’ rational brand associations are based on perceived product quality. Quality may be seen from the consumer’s perspective, i.e. the consumer’s subjective evaluation of a product’s quality is what counts. Different consumers have different needs and wishes, and the products of the highest quality can best satisfy these needs. Price Price is one of the elements of the traditional marketing mix, and price is often stressed as a driver in customer satisfaction and loyalty models .Especially in branding, price is important as an explanatory variable, because a significant contribution to a brand’s financial equity is the price premium, which the consumers are willing to pay, compared to the price for competing brands or private labels Accordingly, emphasises price as an “important type of attributes and benefits that often underlie brand performance” Consequently, it is important to include perceived price as a functional driver in the brand equity model, as price and perceived quality result in the perceived value of the brand emphasise price as a driver of value and thus customer equity. Trust An essential and very important part of a brand is the trust consumers have in the brand living up to their expectations, both regarding functional and emotional benefits. The consumers’ trust is something that the company should earn and it may be seen as a prerequisite for the development of an attitudebased relation between the consumer and the company. As a well known saying goes: 6 | Page

PRAXIS BUSINESS SCHOOL ”Honesty is expected. Trust is engaging and intimate. It needs to be earned” From a consumer perspective, trust helps to reduce the perceived risk linked to the purchase or use of a company’s products. Trust also provides assurance of quality, reliability, etc. and is thus a factor in providing the consumer with an experience of dealing with a credible and reliable company – a factor that is important in connection with the consumer’s decision process. Thus, the company should be careful not to communicate values that they cannot live up to. Recommendation Brands should create value, but what does that mean in concrete terms? It means that when the consumer compares the actual brand experience with the expectations hereof, the experience should equal the expectations or exceed them .If the perceived quality is less than expected, the consumer will be dissatisfied. If the actual experience exceeds expectations, positive disconfirmation results and the customer is assumed to be “delighted”. This leads the consumer to recommend the brand to friends and family members and also entails to the consumer using the brand for a long time to come and ensuring the consumers loyalty towards the brand.

RATIONALE FOR QUESTIONNAIRE S.no

Question

Rationale

1

Rate the Brands based on their quality?

2

Rate the Brands based on their price

3

Rate the Brands based on their trust factor.

4

Rate the Brands based on if you would like to recommend it to others

To understand which brand is seen to have a higher degree of quality and whether the consumers are quality conscious. To understand whether there is differentiation in offering for the customer and subsequent ability of the brand to charge a premium. To understand the degree of trust the customer poses in a brand. And if the brand has been able to live up to its expectations To understand the level of satisfaction of the consumer for the brand and the esteem that the brand has in the eyes of the consumer, It would also assist in understanding the consumers buying behaviour. 7 | Page

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6

Rate the Brands based on the its perceived level of differentiation Rate the Brands based on value for money (VFM)

To understand the perception of the customer regarding differentiation in basic product offering. To understand the consumers mindset about the product in terms of what the brand offers and what they get in return. If the consumer is willing to pay a premium for the brand. To understand the depth that the brands has penetrated into the market.

7

Rate the Brands based on their availability

8

Which Brand will you Purchase (Please give one (1) to that brand)?

To understand the buying behaviour of the consumer.

9

Out of your next five purchases will you purchase the above brand three or more times?(Please answer with "y" if yes and "n " if no) Will you postpone your purchase if the above brand is not available?(Please answer with 'y' if 'yes' and 'n' if 'no')

To understand and measure the extent to which customers are brand loyal towards a particular brand

10

To understand the psychology of consumers towards a particular brand in terms of brand loyalty. Also, it would assist in measuring the degree to which the consumer sees the brand to be differentiated.

Our Brand Equity Model

In order to measure the marketing and financial value of the brand’s strength we are calculating the brand equity metrics for our brand, horlicks operating in the malt based drink category. The rationale behind doing this can be summed up by our health metaphor - just as all calories are not equally nutritious, not all market share points contribute equally to the health of the brand; the caloric contribution of loyal customers is “nutrient rich,” while those of less loyal customers can be thought of as “empty.” Understanding how a brand is nourished provides useful information for evaluating brand health and, if necessary, prescribing a new brand diet. 8 | Page

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RATIONALE – for our metrics The parameters that Shave been captured by us relates to the latent value in the mind of customers -that is exhibited through their impact on buying behaviour. Positive equity results in behaviour that benefits the brand through purchase frequency, brand loyalty, price insensitivity, willingness to recommend, etcetera and by identifying the components of this advantage, it would allow us to create measures that reflect the true brand equity. Therefore, we propose that there are two active components—resiliency and leverage. Resiliency: - is a brand’s ability to protect itself and generate consistent volume and revenue, year after year. Resiliency also describes a brand’s ability to gain more than its fair share of category revenue and profits in the face of inadequate marketing or competitive attack. Leveragability: - is the potential to extend a brand successfully into related, or even unrelated. This brand equity measurement will done by our stated four parameters 1. 2. 3. 4.

Price, Quality Trust Recommendation.

We need to begin, as always, with the customer. The simple fact that some brands are more resilient and leverage-able than others suggests, that at the core of each brand exists a group of loyal customers whose behaviour is different from less loyal customers and that the size and vitality of this loyal core, varies brand by brand and in final run turns out as the differentiator between successful and not so successful brands. Again, working on the premise that not all share points are equally valuable, the ability to differentially value share points by understanding the motivations and behaviour of loyal customers will be our way forward in understanding brand equity.

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MODEL 1: (Price and Quality) We propose using a model that suggests three components to defining loyalty: beliefs, behaviour with the likelihood of these two factors remaining constant in the future. Both belief and behaviour are required to describe loyalty because one cannot be loyal to a brand that they have never bought, no matter how great the admiration - expressed. Likewise, unless the brand is the only option, there must be some cognition or belief that drives one to choose it over another. The third component—future trend—represents one’s likelihood of continuing to purchase a brand in the future at the same (or greater) rate as in the past. Without the future component, we have no way to determine whether belief and behaviour are sustainable. Together these three components— beliefs, behaviour, and future trends — provide a complete picture of an individual’s “loyalty” to a brand. 1. Beliefs. The beliefs that drive behaviour across most categories are “price” and “quality” after considering the distribution of price sensitivities in the marketplace. These two situations represent scenarios where consumers make a decision based on either quality/price. At the other end of the price-sensitivity spectrum are consumers for whom price, at least in this category, is never a barrier; once they decide to purchase in the category, only the best will do. Also, loyal customers think their brand is superior for some reason, and this superiority has the effect of minimizing their price sensitivity. Non-loyal or occasional users have differing quality perceptions that result in greater price sensitivity. Both price sensitivity and quality can be easily measured using a 4point scale. •

Level of quality for a brand can be determined by classifying it as either “superior,” “good,” “acceptable,” or “not acceptable.”

•

The level of price sensitivity can be classified as either “not a barrier,” “a minor barrier,” a “significant barrier,” or an “absolute barrier” to purchase.

Brand Horlicks price sensitivity and

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PRAXIS BUSINESS SCHOOL quality(%) PRICE / QUALITY

Price not a barrier

"Superio r Quality" 16%

Price minor barrier Price significant barrier Price absolute barrier Total

"Good Quality" 18%

"Accepta ble Quality" 2%

16% 0%

14% 4%

0% 32%

"Poor Quality"

Category Total

2%

38%

14% 6%

2% 2%

46% 12%

2%

0%

2%

4%

38%

22%

8%

100%

"Poor Quality"

Category Total

0%

34%

Table 1(a)- Belief grid - Horlicks

Brand Bournvita price sensitivity and quality (%) PRICE / QUALITY "Superior Quality"

"Good Quality"

Price not a barrier

22%

10%

"Accepta ble Quality" 2%

Price minor barrier Price significant barrier Price absolute barrier Total

26% 2%

18% 2%

4% 8%

0% 2%

48% 14%

0% 50%

0% 30%

2% 16%

2% 4%

4% 100%

Table 1(b)- Belief grid – Bournvita

Brand Complan price sensitivity and quality (%) PRICE / QUALITY "Superior Quality"

"Good Quality"

Price not a barrier

10%

6%

"Accepta ble Quality" 2%

"Poor Qualit y" 0%

Category Total

Price minor barrier Price significant barrier Price absolute barrier Total

6% 2%

22% 8%

8% 8%

0% 6%

36% 24%

2% 20%

12% 48%

6% 24%

2% 8%

22% 100%

18%

Table 1(c)- Belief grid – Complan

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Brand Milo price sensitivity and quality (%) PRICE / QUALITY "Superior Quality"

"Good Quality"

Price not a barrier

12%

16%

"Accepta ble Quality" 10%

"Poor Quality"

Categor y Total

0%

38%

Price minor barrier Price significant barrier Price absolute barrier Total

4% 0%

8% 6%

10% 10%

6% 4%

28% 20%

2% 18%

0% 30%

2% 32%

10% 20%

14% 100%

Table 1(d)- Belief grid – Milo

Analysing, the above 4 belief grids of the 4 brands we can see that 70% of the respondents view Horlicks as good or superior quality, while the figure for the other brands stands at Bournvita – 80% Complan – 68% and Milo – 48%. This is backed up by a large majority of people for whom price is not a barrier or a minor barrier – Horlicks (84%), Bournvita (82%), Complan (54%) and Milo (66%). Thus, we can see that for a superior or good quality product consumers are willing to pay a higher price.

2. Behaviour:- This is more objectively measured than beliefs, and there could be many alternatives for obtaining behavioural data including survey self-report, purchase diary, and store purchase records such as that generated by scanners. For our product, we have determined loyalty with a minimum of three of the last five purchases (60 percent) being for a particular brand.

Category Sales by Price/Quality perception

Price not a barrier Price minor barrier Price significant barrier

Superior quality 36% 23% 0%

Good quality 18% 15% 2%

Acceptable quality 2% 3% 2%

Poor quality 0% 0% 0%

Category Total 56% 41% 3%

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PRAXIS BUSINESS SCHOOL Price absolute barrier Category Total

0%

0%

0%

0%

0%

59%

34%

7%

0%

100%

Table 2 – Category These contributions represent the aggregated purchases of brands Horlicks, Bournvita, Complan and Milo. The expected outcome is that those who find “price not a barrier” and base their decisions on product quality alone contribute disproportionately to category volume. In fact, that is the case in this example; the “Top Box” accounts for nearly one-third of total category sales.

Brand Horlicks sales by price and quality perception (%) PRICE / QUALITY "Superior Quality" Price not a barrier Price minor barrier Price significant barrier Price absolute barrier Total

"Good Quality"

"Acceptable Quality"

33% 25% 0%

25% 13% 0%

0% 4% 0%

"Poor Quality " 0% 0% 0%

Total

0%

0%

0%

0%

0%

58%

38%

4%

0%

100%

58% 42% 0%

Table 3 - Horlicks The above Horlicks table signifies that 58% of the respondents feel that the brand horlicks is of superior quality and for the same percentage of people price is not a barrier. The other significant number is captured by the brand being seen as good quality – 38% and for 42% of them price being a minor barrier.

Brand Bournvita sales by price and quality perception (%) "Superior Quality"

"Good Quality"

"Acceptable Quality"

"Poor Quality"

Catego ry

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PRAXIS BUSINESS SCHOOL Total Price not a barrier Price minor barrier Price significant barrier Price absolute barrier Total

47% 26%

11% 16%

0% 0%

0% 0%

58% 42%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

74%

26%

0%

0%

100%

Table 4 - Bournvita Alternatively, 74% of the respondents view Bournvita as superior quality, with relatively 100% of them categorizing price to be a minor or no barrier. Brand Complan sales by price and quality perception (%) "Superior Quality"

"Good Quality"

"Acceptable Quality"

"Poor Quality"

Price not a barrieri

14%

29%

0%

0%

Catego ry Total 43%

Price minor barrier Price significant barrier Price absolute barrier Total

14% 0%

29% 14%

0% 0%

0% 0%

43% 14%

0%

0%

0%

0%

0%

29%

71%

0%

0%

100%

Table 5 - Complan The drink starting with a “C” Complan gets a C grade as only 29% of respondents feel it is superior quality and for more than 50 % of them, its high price is actually a barrier. Brand Milo sales by price and quality perception (%) "Superior Quality"

"Good Quality"

"Acceptable Quality"

"Poor Quality"

Price not a barrier

36%

9%

9%

0%

Catego ry Total 55%

Price minor barrier Price significant

18% 0%

9% 0%

9% 9%

0% 0%

36% 9%

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PRAXIS BUSINESS SCHOOL barrier Price absolute barrier Total

0%

0%

0%

0%

0%

55%

18%

27%

0%

100%

Table 6 - Milo Milo is slightly different from the other brands in the sense that around 45% of the population view it as good or acceptable quality and also its price being a a significant barrier for few – a trend that was not visible in the case of earlier brands. 3. Future Trends: These can be assessed by simply asking consumers to evaluate the normality of their recent purchase behaviour and project future purchase behaviour in terms of brands, and amount.

Loyalt y Index

"Superior Quality" Horlicks

Price not a barrier

Horlick s

Horlick s Bournv ita Compl an Milo

Compl an

Milo

88%

Bournv ita Compl an Milo Price minor barrier

Bournv ita

"Good Qualit y" Horlic ks

Bournv ita

Compl an

Milo

67% 78%

50% 100%

50% 75%

100%

0% 33%

100%

33% 100%

50% 100%

Table 7 - Percentage of Loyal Customers by Price/Quality Classification This chart indicates for each cell, the percent of customers who are behaviourally defined as “loyal” to the brand. For Brand Horlicks, 88 percent of customers lie in the superior quality and price not a barrier quadrant. We see that for Brand Bournvita quality is a bigger driver of sales than price, with the reverse being 15 | P a g e

0%

PRAXIS BUSINESS SCHOOL true for Brand Complan. For Brand Horlicks & Milo there is equilibrium between the two factors. Top Box” classification of price/quality beliefs is loyal; conversely, only 12 percent are not loyal. Examination of the other cells for Brand Bournvita shows the loyalty percentages are highly consistent with classification: those with more positive perceptions of the brand exhibit greater loyalty. Interestingly, the consistent differences across brands between the cells adjacent to the “Top Box” suggest that the product “superiority” belief is more influential with respect to loyalty than price.

Brand Equity Vs Market share: This can be analysed table 8 below which shows conceptually how share can be tiered according to its contribution to brand health. Thus, even though horlicks enjoys the highest market share, it is Bournvita that has the highest chunk of loyal customers, but even Horlick’s brand loyalty is greater than the category loyalty. This helps us in examining underlying consumer behaviour patterns. The behaviour of the core group i.e. “loyal” more closely reflects the “true equity” of the brand, or at least the dynamic underlying its leveragability and resilience at a given point in time, and as we know all brands can benefit from having the core group representing a larger share of their total franchise.

Brand Equity Shares versus Market Share Brands Market Loyalty Share (%) Contributio n (%) Horlicks Bournvita Complan Milo Category Total Table 8 – Break up

55.00 18.00 15.00 12.00 100.00

79% 89% 71% 45%

Loyal Customers within Brand Franchise 44 16 11 5 76

Non-loyal customers

11.46 1.89 4.29 6.55 24.0

of Loyal Customers

Summary of Brand Equity Metrics 16 | P a g e

PRAXIS BUSINESS SCHOOL Market Equity Loyalty Share Share Contributio (%) (%) n (%) Horlicks 55.00 57% 79% Bournvita 18.00 21% 89% Complan 15.00 14% 71% Milo 12.00 7% 45% Table 9 – Summary brand statistics

Top Box Sales (%)

Leveragabilit y Index

88% 78% 100% 75%

60 83 50 100

The summary of metrics suggests that Brand Horlicks offers equity disproportionate to its market share. Its value to the firm goes well beyond immediate sales and profits. Brand Horlicks is more likely to be responsive to marketing efforts and more resilient to adverse market forces. We can make this determination based on a deeper understanding of the consumer beliefs and behaviors that underlie Brand Horlicks performance, and the likelihood those beliefs and behaviors can be sustained into the future.

Model 2 – (Trust and Recommendation) Trust The malt based food industry in which we are trying to gauge the brand equity is highly dependent on trust factor. The product is consumed not only by children but also from all the other age groups so it become extremely necessary for these brands to earn and maintain the trust factor of the customer so maintain their market positions.

Recommendation Recommendation is the factor which is somewhere dependent on trust. A particular brand is recommended to someone when the person who is 17 | P a g e

PRAXIS BUSINESS SCHOOL recommending it has used the brand and is satisfied with the quality, taste and other parameters related to the brand. And hence would also like other people to try the particular brand. The matrix of these two parameters will highlight that if a person who has used a particular brand,will recommend the same brand to someone else. This will show the trust that the consumer has on its brand and his loyalty towards it which is a result of good quality and a reasonable price which is acceptable by the consumers. Here this could lead to a increase in the core group of loyal consumers which will in-turn increase or decrease the brand equity depending how trustworthy it is.

Category Sales by trust/recommend ation perception Trust / Recommend

Very Trustworthy

Trustwor thy

Highly Recommended Recommended

38%

8%

Not trustwor thy 0%

16%

21%

Not Recommended Don’t Know

2%

3%

7%

Category Total

62%

Don’t Know

Category Total

0%

46%

2%

0%

39%

0%

3%

8%

0%

0%

0%

7%

33%

2%

3%

100%

Table 10: Category – trust and recommendation grid The above matrix indicates that 62% of the people have trusted the brand and 85% (i.e. 46+39 %) people have recommended the brand which they use.

Brand Horlicks by trust and recommendation perception (%) Trust / Very Recommend Trustworthy Highly

58%

Trustwor thy 0%

Not trustwor thy 0%

Don’t Know 0%

T otal 58

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PRAXIS BUSINESS SCHOOL Recommended

%

Recommended

13%

17%

0%

0%

Not Recommended Don’t Know

0%

0%

0%

0%

13%

0%

0%

0%

Category Total

83%

17%

0%

0%

29 % 0% 13 % 1 00 %

Table 11: Trust and Recommendation grid Now when we analyse the data collected about the brand Horlicks we can see that more number of customer who thinks that the brand Horlicks is very trustworthy have recommended the brand to others. Again this is the same for the case of people who thinks brand Horlicks as trustworthy. Almost 58% of the people think that the brand horlicks is highly trustworthy and they will highly recommend the brand to others, 13% of the people who think that horlicks is highly trustworthy recommends the brand to others, and 17% of the people who think that the brand is trustworthy recommend the brand to others. Only 13% people are there who think that the brand is very trustworthy but they are not too sure about recommending the brand to someone else. When asked about the reason behind it, the reason was that it might not suit to the health and the need of the person who is enquiring about which brand to be used.

Brand Horlicks by trust and recommendation perception (%) Trust / Very Recommend Trustworth y Highly 58% Recommended

Trustwor thy 0%

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PRAXIS BUSINESS SCHOOL Recommended

13%

17%

Table 12 : Horlicks – brand trustworthiness

When we analyse the matrix, for the brand Horlicks we see that almost 87% of the respondent are in the matrix of highly recommended and very trustworthy to recommended and trustworthy. This piece of information shows that brand horlicks is successful in earning the trust factor from the customer as well as it is recommended by the people who trust it.

Brand Bournvita sales by trust and recommendation perception (%) Trust / Very Recommend Trustworthy

Trustworth y

Highly Recommended Recommended

21%

21%

Not trustworth y 0%

Don’t Know

Total

0%

42%

21%

32%

5%

0%

58%

Not Recommended Don’t Know

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

Category Total

42%

53%

5%

0%

100%

Table 13: Bournvita – Trust and Recommendation grid When we check brand Bournvita on the same parameters, we can see that this brand is also having a good percentage of trust and recommendation, but the noticeable thing in this brand is that the values are disbursed in the top left matrices i.e. very trustworthy and trustworthy & highly recommended and recommended as against the brand horlicks where more than 50% of the values were located in the single matrix of very trustworthy and highly recommended. This shows that the brand Horlicks is more successful in earning the crucial trust and recommendation factor which is important for the industry which it is serving. 20 | P a g e

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Brand Complan sales by trust and recommendation perception (%) Trust / Very Recommend Trustwort hy Highly 29% Recommended Recommended 0%

Trustworth y

Don’t Know

14%

Not trustworth y 0%

Total

0%

43%

29%

0%

0%

29%

Not Recommended Don’t Know

0%

0%

0%

14%

14%

14%

0%

0%

0%

14%

Category Total

43%

43%

0%

14%

100%

Table 14: Complan– Trust and Recommendation grid For brand Complan when we see the matrix we can say that the percentage are much more dispersed than both the brand above. In the case of Complan this is 72% but in that range also the people`s trust and recommendation factor is not very alike. There are some people who haven’t used Complan as a brand or who don’t know about the trust factor which complan promises to deliver. Again when there are some people who don’t know about the brand obviously don’t recommend it to others and this is the reason why 14% of the respondents have not recommended or don’t know about recommending the brand Complan.

Brand Milo sales by trust and recommendation perception (%) Trust / Very Recommend Trustwo rty Highly 27% Recommended Recommended 27%

Truswo rty 0%

Not trustwo rty 0%

9%

Don’t Know

Total

0%

27%

0%

0%

36%

Not Recommended Don’t Know

9%

18%

0%

9%

36%

0%

0%

0%

0%

0%

Category Total

64%

27%

0%

9%

100%

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PRAXIS BUSINESS SCHOOL Table 15: Milo– Trust and Recommendation grid

MODEL 3 (Price premium ) Brand Premium Index in overall sales

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PRAXIS BUSINESS SCHOOL Sales (Rs Crore).

Mark et Shar e (%)

Horlick s Bournv ita Compla n Milo

1000.00

55.00

327.27

18.00

272.73

15.00

218.18

12.00

Catego ry Total

1818.18

100.0 0

Av g Pri ce wit h Br an d Na me 11 8 12 1 12 1 10 4 11 6

Avg Price with out Bran d Nam e

Price Premiu m Differnc e (Rs)

57

61

60

Price Premium Differnce (%)

In total Sales Price Premiu m Contrib ution

% of Premiu m Change in overall market

52%

519.97

28.60%

61

51%

165.52

9.10%

67

54

45%

121.54

6.68%

57

47

45%

98.20

5.40%

60.15

56

48%

905

49.79%

From the above analysis we can conclude the average price difference after using the brand name Horlicks and without the brand name comes to Rs 61 per 500 gram pack which is 52 % of total price of Horlicks, indicating that customers are ready to pay 52% of a premium for the brand. In the case of Bournvita the premium is 51 %, and in the case of Milo and Complan it is 45% each. Taking an aggregate sales for all the brands(category sales) which is Rs 1818.18 crore, 49 % of them – Rs 905 crore come from the brand name. Also, from our study we found out that the highest amount of brand premium is being charged by Horlicks – around 29% of the total 50% being charged by the category – which could be a resultant of the high market share that it enjoys.

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Conclusion Brand equity refers to the marketing effect or outcome that are given to a product with its brand name compared with those that would be there if the same product did not have the brand name In our case the brand loyalty measures for the brand horlicks is 70%, for brand Bournvita it is 80% and for brand complan it is 68%. So we can see that horlicks although being the leader in the market is not having the highest brand loyalty. When we try to measure the brand equity of horlicks on parameters like trust, recommendation, price and quality, we came with the results showing the brand equity for each brand wherein we see that brand horlicks scores well on the trust and recommendation parameters and outperforms its competitors complan, Bournvita and Milo. But when we compute these brands on the basis of price and quality perception of the buyer, we get the results showing that the brand Bournvita score more in it. This shows that people thinks that quality and the price in comparison with it is justified for the brand Bournvita while it is not the same in the case of Horlicks. When we test the consumer on the basis of the price which they are paying for the individual brands now and price which they will be willing to pay for the same quality, taste but without the brand name and in this we get the result that all the brands are charging the premium. In case of horlicks and Bournvita the premium charged as per the consumer`s perception was almost 50%. All this analysis throw up the result that the brand equity for brand Bournvita is highest i.e. 80%, then comes for the brand horlicks which is 70% and then complan which is 68%.

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RECOMMENDATIONS FOR HORLICKS As we have seen that the brand horlicks is leader in the market and also have the highest brand equity so we can say that the recommendation for the brand will not be on the parameters of making changes in the brand or its positioning . So the recommendations for the brand horlicks will be •

•

•

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As horlicks is having good score on brand equity it has high leveragability. This means that horlicks should use its brand name and power to get into some other products which are related to energy. It has already entered into the biscuits segment but horlicks can also think of getting into accessory or food items which are related to energy. Horlicks can use some of the promotional schemes for children to attract them to the brand. As it is high on other parameters the customers who have shifted to the brand once can stay with the brand because of its quality. It should sponsor some of the sports competition or sports tournaments which can create the brand image for Horlicks as good for health and can increase the customer base. It would help perceive the brand as a brand for achievers and outgoers. Horlicks can also come up with the idea of drinking milk with horlicks twice in a day. If horlicks become successful in making this, it will increase the per head consumption for horlicks which in turn increase the sales and the loyalty would also in turn increase for horlicks.

Should bring in more variants with better taste which will lead people to believe that the quality of the brand is also good as sometimes for people if taste is not good the quality is not good.

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BIBLIOGRAPHY PBM slides (undoubtedly) Building Brand Equity: A Customer-Based Modelling Approach - Journal of Management Systems, http://www.zibs.com/knowles.shtml Brandcool marketing http://www.netmba.com/marketing/brand/equity/ http://www.venturerepublic.com/resources/Brand_Equity__managing_by_marketing_metrics.asp http://www.1000ventures.com/business_guide/marketing_brand_equity.html 26 | P a g e

PRAXIS BUSINESS SCHOOL http://www.brandingstrategyinsider.com/brand_equity/index.html http://www.sdr-consulting.com/article12.html http://www.bbdo.de/de/home/studien.download.Par.0003.Link1Download.File1Titl e.pdf http://brandnbranding.blogspot.com/2007/10/interbrands-brand-equitymodel.html http://www.solvay.edu/PDF/cours/advancedmarketing4.pdf http://www.mudvalley.co.uk/collateral/content/32.htm http://www.brandamplitude.com/brand_equity/page2.htm http://www.brandamplitude.com/whitepapers/All%20Market%20Share%20Aint%2 0Created%20Equal%20by%20Carol%20Phillips.pdf http://www.marketingnpv.com/articles/bylined/brandequity

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