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.
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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.
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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 attitude-
based relation between the consumer and the company. As a well known saying
goes:
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”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 To understand which brand is seen to have a

on their quality? higher degree of quality and whether the
consumers are quality conscious.
2 Rate the Brands based To understand whether there is differentiation in
on their price offering for the customer and subsequent ability
of the brand to charge a premium.
3 Rate the Brands based To understand the degree of trust the customer
on their trust factor. poses in a brand. And if the brand has been able
to live up to its expectations
4 Rate the Brands based To understand the level of satisfaction of the
on if you would like to consumer for the brand and the esteem that
recommend it to the brand has in the eyes of the consumer, It
others would also assist in understanding the
consumers buying behaviour.
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5 Rate the Brands based To understand the perception of the customer

on the its perceived regarding differentiation in basic product
level of differentiation offering.
6 Rate the Brands based To understand the consumers mindset about the
on value for money product in terms of what the brand offers and
(VFM) what they get in return. If the consumer is
willing to pay a premium for the brand.
7 Rate the Brands based To understand the depth that the brands has
on their availability penetrated into the market.
8 Which Brand will you To understand the buying behaviour of the
Purchase (Please give consumer.
one (1) to that brand)?
9 Out of your next five To understand and measure the extent to which
purchases will you customers are brand loyal towards a particular
purchase the above brand
brand three or more
times?(Please answer
with "y" if yes and "n "
if no)
10 Will you postpone your To understand the psychology of consumers
purchase if the above towards a particular brand in terms of brand
brand is not loyalty. Also, it would assist in measuring the
available?(Please degree to which the consumer sees the brand to
answer with 'y' if 'yes' be differentiated.
and 'n' if 'no')
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.
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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. Price,
2. Quality
3. Trust
4. 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 4-
point 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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quality(%)
PRICE / QUALITY "Superio "Good "Accepta "Poor Category
r Quality" ble Quality" Total
Quality" Quality"
Price not a barrier 16% 18% 2% 2% 38%
Price minor barrier 16% 14% 14% 2% 46%
Price significant 0% 4% 6% 2% 12%
barrier
Price absolute 0% 2% 0% 2% 4%
barrier
Total 32% 38% 22% 8% 100%
Table 1(a)- Belief grid - Horlicks
Brand Bournvita price sensitivity

and quality (%)
PRICE / QUALITY "Superior "Good "Accepta "Poor Category
Quality" Quality" ble Quality" Total
Quality"
barrier
Price absolute barrier 0% 0% 2% 2% 4%
Total 50% 30% 16% 4% 100%
Table 1(b)- Belief grid – Bournvita
Brand Complan price sensitivity

and quality (%)
PRICE / QUALITY "Superior "Good "Accepta "Poor Category
Quality" Quality" ble Qualit Total
Quality" y"
barrier
Total 20% 48% 24% 8% 100%
Table 1(c)- Belief grid – Complan
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Brand Milo price sensitivity and

quality (%)
PRICE / QUALITY "Superior "Good "Accepta "Poor Categor
Quality" Quality" ble Quality" y Total
Quality"
barrier
Total 18% 30% 32% 20% 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
Superior Good Acceptable Poor Category
quality quality quality quality Total
barrier
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barrier
Category Total 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 "Good "Acceptable "Poor Total
Quality" Quality" Quality" Quality
"
barrier
barrier
Total 58% 38% 4% 0% 100%
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

"Superior "Good "Acceptable "Poor Catego
Quality" Quality" Quality" Quality" ry
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Total

Price minor 26% 16% 0% 0% 42%
barrier
barrier
barrier
Total 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

Total
Price not a barrieri 14% 29% 0% 0% 43%
barrier
barrier
Total 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 (%)
Total
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barrier
barrier
Total 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 "Good
"Superior
y Qualit
Quality"
Index y"
Bournv Compl Horlic Bournv Compl
Horlicks Milo Milo
ita an ks ita an
Price
Horlick
not a 88% 67%
s
barrier
Bournv
78% 50%
ita
Compl
100% 50%
an
Milo 75% 0%
Price
Horlick
minor 100% 33%
s
barrier
Bournv
100% 33%
ita
Compl
100% 50%
an
Milo 100% 0%
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
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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 Loyal Non-loyal
Share (%) Contributio Customers customers
n (%) within Brand
Franchise
Horlicks 55.00 79% 44 11.46
Bournvita 18.00 89% 16 1.89
Complan 15.00 71% 11 4.29
Milo 12.00 45% 5 6.55
Category 100.00
Total 76 24.0
Table 8 – Break up of Loyal Customers
Summary of Brand
Equity Metrics
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Market Equity Loyalty Top Box Leveragabilit

Share Share Contributio Sales (%) y Index
(%) (%) n (%)
Horlicks 55.00 57% 79% 88% 60
Bournvita 18.00 21% 89% 78% 83
Complan 15.00 14% 71% 100% 50
Milo 12.00 7% 45% 75% 100
Table 9 – Summary brand statistics
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
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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 / Very Trustwor Not Don’t Category
Recommend Trustworthy thy trustwor Know Total
thy
Highly 38% 8% 0% 0% 46%
Recommended
Recommended 16% 21% 2% 0% 39%
Not 2% 3% 0% 3% 8%
Recommended
Don’t Know 7% 0% 0% 0% 7%
Category Total 62% 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 Trustwor Not Don’t T
Recommend Trustworthy thy trustwor Know otal
thy
Highly 58% 0% 0% 0% 58
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Recommended %
Recommended 13% 17% 0% 0% 29
%
Not 0% 0% 0% 0% 0%
Recommended
Don’t Know 13% 0% 0% 0% 13
%
Category Total 83% 17% 0% 0% 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 Trustwor
Recommend Trustworth thy
y
Highly 58% 0%
Recommended
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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 Trustworth Not Don’t Know Total
Recommend Trustworthy y trustworth
y
Highly 21% 21% 0% 0% 42%
Recommended
Recommended 21% 32% 5% 0% 58%
Not 0% 0% 0% 0% 0%
Recommended
Don’t Know 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.
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Brand Complan sales by trust

and recommendation
perception (%)
Trust / Very Trustworth Not Don’t Know Total
Recommend Trustwort y trustworth
hy y
Highly 29% 14% 0% 0% 43%
Recommended
Recommended 0% 29% 0% 0% 29%
Not 0% 0% 0% 14% 14%
Recommended
Don’t Know 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 Truswo Not Don’t Total
Recommend Trustwo rty trustwo Know
rty rty
Highly 27% 0% 0% 0% 27%
Recommended
Recommended 27% 9% 0% 0% 36%
Not 9% 18% 0% 9% 36%
Recommended
Don’t Know 0% 0% 0% 0% 0%
Category Total 64% 27% 0% 9% 100%
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Table 15: Milo– Trust and Recommendation grid
MODEL 3 (Price premium )

Brand Premium Index in
overall sales
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Sales Mark Av Avg Price Price In total % of

(Rs et g Price Premiu Premium Sales Premiu
Crore). Shar Pri with m Differnce Price m
e (%) ce out Differnc (%) Premiu Change
wit Bran e (Rs) m in
h d Contrib overall
Br Nam ution market
an e
d
Na
me
Horlick 1000.00 55.00 11 57 61 52% 519.97 28.60%
s 8
Bournv 327.27 18.00 12 60 61 51% 165.52 9.10%
ita 1
Compla 272.73 15.00 12 67 54 45% 121.54 6.68%
n 1
Milo 218.18 12.00 10 57 47 45% 98.20 5.40%
4
Catego 1818.18 100.0 11 60.15 56 48% 905 49.79%
ry Total 0 6
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%.
24 | P a g e
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
• 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.
25 | P a g e
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
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-equity-
model.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
27 | P a g e

Brand Equity - Horlicks

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PRAXIS BUSINESS SCHOOL

THE EXECUTIVE SUMMARY

When we talk of a brand’s equity, we mean a brand’s mental equity or strength.

For many years, theoreticians have perceived the consumer as a rational

According to Aaker, brands create emotional benefits, if the consumer

The 4 Legs of our Table (Model)

Consumers’ rational brand associations are based on perceived product quality.

”Honesty is expected. Trust is engaging and intimate. It needs to be earned”

RATIONALE FOR QUESTIONNAIRE

1 Rate the Brands based To understand which brand is seen to have a

5 Rate the Brands based To understand the perception of the customer

Our Brand Equity Model

RATIONALE – for our metrics

Resiliency: - is a brand’s ability to protect itself and generate consistent volume

Leveragability: - is the potential to extend a brand successfully into related, or

MODEL 1: (Price and Quality)

We propose using a model that suggests three components to defining loyalty:

Together these three components— beliefs, behaviour, and future trends —

These two situations represent scenarios where consumers make a decision

• Level of quality for a brand can be determined by classifying it as either

• The level of price sensitivity can be classified as either “not a barrier,” “a

Brand Horlicks price sensitivity and

Brand Bournvita price sensitivity

Brand Complan price sensitivity

Brand Milo price sensitivity and

These contributions represent the aggregated purchases of brands

Brand Horlicks sales by price

Brand Bournvita sales by price

Price not a barrier 47% 11% 0% 0% 58%

Alternatively, 74% of the respondents view Bournvita as superior

Brand Complan sales by price

Brand Milo sales by price and

3. Future Trends: These can be assessed by simply asking consumers to

Table 7 - Percentage of Loyal Customers by Price/Quality Classification

Brand Equity Shares versus Market

Market Equity Loyalty Top Box Leveragabilit

The summary of metrics suggests that Brand Horlicks offers equity

Model 2 – (Trust and Recommendation)

Brand Horlicks by trust and

Table 11: Trust and Recommendation grid

Brand Horlicks by trust and

Recommended 13% 17%

Brand Bournvita sales by trust

Brand Complan sales by trust

Brand Milo sales by trust

Table 15: Milo– Trust and Recommendation grid

MODEL 3 (Price premium )

Sales Mark Av Avg Price Price In total % of

RECOMMENDATIONS FOR HORLICKS

Building Brand Equity: A Customer-Based Modelling Approach - Journal of

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