marketing report nestle milo

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MKT260 Acknowledgement Assalamualaikum WBT, Alhamdulillah, we are very grateful to the Almighty God, who have bestowed us the will to complete our assignment about “Nestle Milo” which is connected to our scheme Introduction to Marketing, MKT260. Here, we would like to take this opportunity to express our highest gratitude and compliment to the people who are involved directly or indirectly in this assignment especially our beloved Miss Najihah bt Abd Rahim which is our MKT260 lecturer.. In this assignment, we examine that the important of the marketing strategies for the international firm like Nestle. Among the BBC global top 30 brands, we have analysis of how a product’s sales are driven by brand name, weighted for market leadership, stability and ability to cross national borders. The consumers are not aware of their origins. Beside, the product’s prices usually reflect its proper value in the eyes of the consumer. It’s always not a good idea that the strategy of offering lower prices is to penetrate the advantaged economies and to pay the costs for the unknown quality of their goods. Thank you to all people who are involved in making our assignment a successful one and may all your help and effort are blessed. Thank you 1 | Page

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Page 1: Marketing Report Nestle Milo

MKT260

Acknowledgement

Assalamualaikum WBT, Alhamdulillah, we are very grateful to the Almighty God, who have bestowed us

the will to complete our assignment about “Nestle Milo” which is connected to our

scheme Introduction to Marketing, MKT260. Here, we would like to take this opportunity

to express our highest gratitude and compliment to the people who are involved directly

or indirectly in this assignment especially our beloved Miss Najihah bt Abd Rahim which

is our MKT260 lecturer..

In this assignment, we examine that the important of the marketing strategies for

the international firm like Nestle. Among the BBC global top 30 brands, we have analysis

of how a product’s sales are driven by brand name, weighted for market leadership,

stability and ability to cross national borders. The consumers are not aware of their

origins. Beside, the product’s prices usually reflect its proper value in the eyes of the

consumer. It’s always not a good idea that the strategy of offering lower prices is to

penetrate the advantaged economies and to pay the costs for the unknown quality of

their goods.

Thank you to all people who are involved in making our assignment a successful

one and may all your help and effort are blessed.

Thank you

(Muhammad Salihin Jaafar) ( Anisha bt Ramli )

( Nur Adilah bt Md Zain ) (Nurul Zamieza bt Ahmad)

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Executive summary

The main aim of international marketing is to provide solid foundations that are

useful for explanation, prediction and control of the international business activities. We

are not an expert in nestle but we have analysis the firm’s global marketing strategy in

the field of their brand awareness, products and system design, product positioning,

advertising, packaging, distribution and customer service. We have notice that the firm

utilized generic marketing strategy such as low cost leader in business, differentiated

good and services satisfy the needs of customers through a sustainable competitive

advantage. International marketing refer to using common products, price, promotions

and distribution program on a world basis.

My secondary data is the most of important for our research and I contributed in

the area such as group or segment those types of potential customers that are most

likely to benefit from their product line.

That is why we effectively utilized the periodical articles which can be a great

source of product, marketing and industry information. (Periodicals refer to magazines,

journals and newspapers. Although we are living in an electronic age, there is still much

information that can only be or best be found in print resources or books at library.

Nestle management level is a decentralized as possible, within the framework

compulsory by fundamental policy and strategy decisions requiring increasing flexibility

and operational efficiencies, as well as the group-wide need for alignment and people

development, may also set limits to decentralization.

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Introduction

Nestle SA , the world’s leading food manufacturer and the market leader in both

coffee and mineral water, produces a wind range of products including prepared dishes

and cooking aids, milk-based products, cereals, instant coffee, pharmaceuticals and

baby foods. Nestle SA is a publicly owned company, with subsidiaries across the world.

It website addresses in 104 countries. It is also the world largest food and beverage

company with $71 billion in annual sales and almost 230,000 employees around the

world. It markets some 8000 brands that include instant coffee.

Remarkably, its products are sold in every country in the world, including in North

Korea.

Nestle coat of arms, the bird’s nest, which refers to his name, has become a

symbol for the products being a safe care for their consumer product safety and quality.

Research and development based innovation capacity and strong brands are priority for

Nestle.

Objective of Nestle

“ Nestle business objective is to manufacture and market its products in a way

that creates value that can be sustained over the long term for shareholders, employees,

consumers, business partners and national economies in which Nestlé operates”.

The aim of the creating values for the company include with improve business condition

for the firm. To obtain more reliable and high qualify source of raw materials, improved

government functioning and regulatory, employed skill and loyal workforce and superior

quality products which successfully complete.

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Nestle Corporate Philosophy

Be the leading multinational company in food, nutrition and wellness.

Produce and sell world-class products of the highest consistent quality, reliability

and convenience based on business excellence principles throughout our

operations.

Maximizes the use of good quality local raw materials.

Be an exemplary employer with a progressive human resource and social policy;

with a management style that is based on "Management Commitment and

People Involvement"

Be a responsible corporate citizen, fulfilling all obligations to Government,

shareholders, customers, communities and consumers.

Protect the environment by being committed to environmentally sound business

practices and taking into account the need to preserve natural resources and

save energy.

Guarantee that all products manufactured, imported and distributed by Nestlé

Malaysia are certified HALAL by authorised Islamic certification bodies.

Deliver shareholder value through the achievement of sustainable and profitable

long-term growth.

Nestle Marketing strategy

The firm applied a progressive human resource and social policy; with a

management style that is based on management commitment and people involvement.

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Moreover, the firm had responsible corporate citizen, fulfilling obligation to government,

shareholders, customers, communities and consumers. Protest the environment by

being committed to environmentally sound business practices and taking into account

the need to preserve natural resource and save energy. For example, guarantee that all

products manufactured, imported and distributed by Nestle Malaysia are certified HALAL

by authorized Islamic certification bodies. Perhaps, the firm delivered shareholder value

through the achievement of sustainable and profitable long-term growth. It’s a wide area

research the branding. Branding strategy is corporate. Part of the branding strategy is

the brand plan for each product. This is an integrated strategy. The brands of Nestle are

a key strength but the executive levels are very aware today that brands alone are not

enough to win.

From its beginning, Nestle developed its business internationally and became

aware of the fact that food products have to be closely linked to local eating and social

habit. That is why Nestle form the very start has always shown respect for diverse

cultures and traditions. Nestle activities to integrate itself as much as possible into the

cultures and traditions where it is present, adding also to the local environment its own

set of values. Therefore, Nestle embrace cultural and social diversity and does not

discriminate on the basis of origin, nationality, religion, race, gender or age.

Furthermore, Nestle believes that is activities can only be of long term benefit to the

company if they are the same time beneficial to the local community. Precisely, the

environment is changing very rapidly and in particular customers are looking for answer

to their concerns.

To our opinion, global thinking and strategies can best be expressed through

local action and commitment as showed as Nestle Malaysia. And of course, Nestle

applied “think globally act locally” as well as thinking out of the box idea in their product

and distribution with the help of strategic global marketing.

Nestle MalaysiaNestlé began in Malaysia in 1912 as the Anglo-Swiss Condensed Milk Company

in Penang and later, growth and expansion made a move to Kuala Lumpur necessary in

1939. Since 1962, with its first factory in Petaling Jaya, Nestlé Malaysia now

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manufactures its products in 8 factories and operates from its head office in Petaling

Jaya, and 6 sales offices nationwide.

Introduction to MiloMilo is a milk beverage with chocolate and malt, produced by Nestlé and

originating from Australia. It was developed by Thomas Mayne in 1934. Milo is also

manufactured in other countries, including Singapore, Malaysia, China, Thailand,

Indonesia, Philippines, Vietnam, New Zealand, Hong Kong, India, Japan, Jamaica,

Trinidad & Tobago, Chile, Colombia, Peru, Nigeria, Kenya, Ghana, Papua New Guinea,

South Africa, Sri Lanka, Syria and Taiwan. The name derives from the famous Greek

athlete Milo of Crotona, after his legendary strength.

Milo is added to hot or cold milk to give it a malted chocolate flavor and extra

texture. When combined with cold milk, it retains the gritty texture of its raw state. Milo

can be stirred into steamed milk or hot water to create something similar to hot chocolate

or cocoa. Sugar can be added to the Milo beverage, but many people enjoy it without the

addition of sweeteners, appreciating it for its subtle chocolate flavor. Another possible

use is making a normal cup of cold Milo and microwaving it for approximately 40–60

seconds. This gives the Milo drink a biscuit cover on top. Another popular use is to

sprinkle it on ice cream, especially vanilla ice cream. Milo can also be sprinkled on

breakfast cereals. Milo is often the favored beverage for the Tim Tam Slam.

Also very popular is the "Magic Milo" which involves adding Milo to a small

amount of milk with sugar and whipping it to increase the amount of air in the milk,

thereby doubling it in size. Then one adds small amounts of hot water and milk in layers

stirring each new layer vigorously to maintain its lightness. A final layer of whipped

cream topped with extra Milo or chocolate sprinkles. This is more of a 'warm' beverage

rather than a 'hot' one and is a more popular version of hot Milo for children.

Milo manufactured outside Australia is customized for local methods of

preparation. In Ghana, Malaysia, the Philippines, Singapore and Indonesia, it is mixed

with hot or cold water instead of milk, with the instructions "Add milk and sugar if

desired."

Other countries the packaging is green and has people playing sports on the tin.

There is an organization called "Milo Cricket" which operates in most areas by

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volunteers, children participating are given small packets of Milo to eat or drink. The

commercials and taglines are "Go and go and go with Milo" and a popular commercial is

4 generations of women on a skipping rope singing "and my mum gave me Milo to go

and go and go" and the line "I need my Milo Today", because it has a low glycemic

index. The packaging of Milo tins in Singapore are also green and also have people

playing sports on the tins.

Milo is very popular in Malaysia, where the brand name is synonymous with

chocolate flavored drinks: Milo has a 90% market share in Malaysia (not the often

quoted 90% worldwide share of Milo consumption)[4], and Malaysians were said to be the

world’s largest consumers of Milo.[5] This is because Milo was once used as a nutrient

supplement when it was first introduced in the country, and has thus gained a reputation

as a 'must have' drink for the old and the younger generations. Milo manufactured in

Malaysia is made to dissolve well in hot water to produce a smooth hot chocolate drink,

or with ice added for a cold drink. Milo in Malaysia is served in kopitiams and mamak

stalls offering versions such as "Milo Dinosaur" (a cup of Milo with an extra spoonful of

powdered undisclosed Milo added to it), "Milo Godzilla" (a cup of Milo with ice cream

and/or topped with whipped cream) and "Neslo" (combined with Nescafe powdered

coffee). It gained popularity in Singapore soon after.

Milo in Hong Kong Differentiation between Milo 1940’s Milo tin

Product Life Cycle

At Nestlé, they apply a product life cycle approach involving their partners from farm to

consumer in order to minimize the environmental impact of their products and activities.

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Their aim at all stages of the cycle is to use natural resources efficiently, to favor the use

of sustainable-managed renewable resources and to target zero waste. In this way, they

intend for their brands to stand for environmental sustainability.

Nestlé's initiatives aim to improve the environmental performance of the products along

their entire life cycle. These include sourcing sustainable raw materials, reducing energy

consumption and minimizing air emissions by moving to different fuel types. Nestlé

invests an average of CHF 40 million a year to reduce its air emissions. Another

significant step in the value chain is transport. Nestlé has initiated a pilot with Schenker,

an international logistics company, to evaluate the effect of different types of transport,

distances driven and fuel type used. Through internal research and development at

Nestlé there have also been significant advances in the environmental impact of

refrigerants and packaging. Without compromising product quality there was a reduction

of 392 000 tones of packaging material between 1991 and 2008.

Product Line width

Nestle Malaysia product consist of 6 main aspect which is beverage, milk, prepared

food, ice cream, cereals and chocolates. There are varieties of each product lines for

each type of products. They also will upgrade their product lines through the changing of

the lifestyle form time to time.

Product Mix WidthBeverage Milk Prepared

FoodIce Cream Cereals Chocolates

Milo Nespray Maggi Drumstick Honey Star Kit Kat

Nescafe Neslac Buitoni Trophy Koko Crunch Smarties

Canned Drink Mat Kool Cookie Crisp Milky Bar

UHT Nestle Crunch

The Marketing Mix of Nestle MarketingThe following consideration included in our marketing analysis of the Nestle.

Product

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Place

Promotion

Price

1. Product Product item

Nestlé seeks to earn consumers’ confidence and preference and to follow and

anticipate consumer trends, creating and responding to demand for its products.

Therefore Nestlé is driven by an acute sense of performance, adhering to and favoring

the rules of free competition within a clear legal framework. We choose Milo since it is a

brilliant example of where as the superior quality, patented technology and basically

selling directly to consumers and this whole business is growing rapidly. Milo has been

around for decades, and it is one of Malaysian favorite chocolate malt drink to

everyone. Malaysia also is the world’s largest consumers of Milo.

Product item depthMilo is a very well known product and Milo also has variety of product items under the

same brand which is Milo. These are the type of Milo that Nestle have been produce.

The original Milo

The original Milo contain nutritional icon on

each pack reinforces the nutritional properties that

consumer can get from every cup of nutritious and

great-tasting Milo.  

Milo Fuze

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Milo Fuze comes in three variants and is the easy tasty way to enjoy nutritious

Milo with Actigen-E and other nutritious ingredients. It is vary by 3 types which is cereals

for hunger pangs, 3in1 for consumer convenience and better taste, and last one is high

calcium for stronger bones.

Pack Extra Nutrition with Milo A healthier choice in new design UHT pack. Milo UHT packs,

the ready-to-drink format of Malaysia’s best-known nutritious

chocolate malt beverage is nutritious and healthier in a new

attractive design. It contains all the nutritional benefits of Milo such

as ACTIGEN-E and PROTOMALT in a convenient pack.

Milo Wafer bar

Milo Wafer bar made with layers of crispy wafer and

sprinkled with Milo kibbles on top. It contains ACTIGEN-E and it has

3.6% of our daily energy needs (based on 2000 Kcal). It will also

tantalize children senses.

Product nutrition

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Nestlé Milo is not just any chocolate malt drink. In growing with Malaysia, Nestlé

Milo stands firm in its commitment to provide every child the nourishment and energy

needed every day. Over the years, the nutrient content has been improved to meet

evolving demands. The current formulation of ACTIGEN-E, in combination with

PROTOMALT, is well-placed to fuel the action packed days of today’s children.

There are 3 main components in each Milo product which is;

Natural Goodness ~ of malt, skimmed milk, and cocoa.

ACTIGEN-E ~ a combination of 8 vitamins and 4 minerals which helps in the

optimal release of energy.

PROTOMALT ~ a malt extract with a mixture of different Carbohydrates that

provides energy and nutrients the body needs.

Nutrition in Milo Right balance in nutrition

Milo provides energy (calories). These calories come from the different

ingredients of Milo, mainly malt extract, skimmed milk, palm oil and sugar. If consumed

moderately, as part of a balanced diet, Milo provides the energy required for an active

lifestyle and will not be fattening. On its own, Milo powder is nutritionally balanced,

providing the right ratio of protein, carbohydrates and fats.

The 6 basic classes of nutrients in food are: carbohydrate, fats, protein, vitamins,

minerals and water! A mug of Milo of drink contains these nutrients.

Protein is one of the macronutrients (along with carbohydrate and fats) that is

important to build and repair body tissue. It is essential for healthy growth and

development. The protein needs (per Kg of the body weight) is highest when growth is

rapid, such as during infancy, childhood and adolescence.

Sources: Protein is found in meat, fish, poultry, dairy products, beans, peas and lentils.

Fats are essential component of body cells that are important for the absorption

of fat soluble vitamins. As fat contain higher calorie compared to carbohydrates and

protein, excessive fat intake may also contribute to overweight and obesity problems.

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Sources: Fats are found in animal and dairy products, as well as vegetables oils and

margarines.

EnergyCarbohydrates supply the main source of energy for the body. Carbohydrates

can be in the form of complex and simple carbohydrate. Simple carbohydrates are

sugars that our body can easily and quickly use for energy. Complex carbohydrates are

chains of sugar units. For example, fiber and starches. Starches are broken down during

digestion into glucose before being absorbed into the body. Fibers are not digested by

our body, though it helps to regulate bowel function.

Sources: sugars, starch (e.g. grains, potatoes) and fiber (e.g. fruits, vegetables).

What is BMR? Basal metabolic rate (BMR) is the energy used to carry out

necessary body activities such as breathing, regulating body temperature, and

maintaining a heart beat.

Energy balance is the key to weight management. It has to do with energy intake

and energy output. Energy intake is the number of calories we gain from food. Energy

output is the number of calories you use for BMR and activities. Imbalance of energy will

result in weight gain and weight loss.

Atigen-E(vitamin and mineral)Here are two main groups of nutrients: macro-nutrients and micro-nutrients.

Macro-nutrients are those that are needed in large quantities (tens or hundreds of

grams) every day. These are carbohydrates, protein and fats. Micronutrients are those

needed in small quantities (micrograms or milligrams). These are vitamins and minerals.

Vitamins are micronutrients essential to the human body. A deficiency of some

vitamins can lead to diseases or metabolic disorders. For example, lack of vitamin C can

lead to scurvy; lack of vitamin D lead to rickets.

Calcium is an important mineral in childhood. Calcium is essential for proper

development of bones and teeth. During infancy, childhood and adolescence period,

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bone growth is the greatest. So, it is important to get adequate amount of calcium at

these stages of growth.

Sources: dairy milk products, soy-based foods, dark green leafy vegetables, sardines

and anchovies with bones, beans, and calcium fortified products e.g. breakfast cereals,

breads and juices.

The B Vitamins are needed for the release of energy from foods and some are

important for red blood cell formation. It is, therefore, important to consume adequate of

B Vitamins.

Sources: B Vitamins are found in a variety of animal, vegetable and grain products.

ProtomaltPROTOMALT is proprietary to Milo powder which is a quality malt extract that

provide a mixture of different types of carbohydrates that provide energy and nutrients

the body needs.

General information The great choc malty taste of Milo is made from the natural goodness of malt,

milk, and cocoa.

Did you know that besides reading the nutritional information on pack, another

good source of information to learn about the product ingredients/ contents would be

from the ingredient list. It informs us what the product is made from. Ingredients are

listed in descending order by weight. Based on the ingredient listing on Milo packaging,

the most ingredients in Milo is malt extract as it is the first ingredient listed on pack.

Product branding

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Branding is the collection of attributes that the consumer has come to expect

from a product, which will strongly influence their buying patterns. Branding can be

achieved using a company name - it can be applied generically or, as in the case of Milo,

on an individual basis. The brand name promises the consumer particular benefits, such

as quality and value for money, with these expectations being built up over many years.

A brand name is often considered by a company to be its most important intangible

asset. In a market where repeat purchases are the key to profitability, a brand name

becomes paramount to a product's success.

A catchy name and distinctive packaging are vital ingredients in any brand

image, but the true essence of a brand identity lays in the consumer's mind i.e. the

perceptions of the product. A company must be constantly aware of these perceptions

and try to preserve and build on them through advertising and other promotions.

Branding enables marketers to build extra value into products and to differentiate them

from their competitors.

Product PackagingThe Milo Nestlé’s packaging is the most direct and largest communication vehicle

that the organization had with the most impressions they can deliver. And on the

packaging, the firm’s communicate wellness benefits in our beverage business. But it’s

not just there, also in confectionery, and condiments, nutrition communication through to

the new and existing consumers. The packaging materials continue to be the main

source of concern, mainly in plastics, but also to a lesser extent across metals and paper

and broad.

Eco-efficient packaging Packaging is essential for food safety. It also helps to avoid wastage before and

after purchase by maintaining freshness for the consumer. Nestle strategy is based on

optimizing materials, developing eco-efficient packaging, and providing meaningful

information to consumers on recycling and disposal.

A key initiative in 2008 was their collaboration on PIQET, an important new

packaging eco-design tool adopted by Nestlé. Design and technology innovations go

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hand in hand in order to reduce environmental impacts without compromising consumer

needs.

Nestlé is firmly committed to finding packaging solutions that contribute to a better

environment. The company supports an integrated approach that favors source

reduction, reuse, recycling and energy recovery. Wherever possible they use recyclable

packaging materials. For example, for Easter 2009, Nestlé UK replaced non-recyclable

plastic with recyclable cardboard packaging in most of the 25 million Easter eggs it

makes. Nestlé UK managed to use 30% less packaging overall, saving a huge 700

tones of packaging materials

Packaging Source Reduction In 1991 Nestlé initiated a continuous review and assessment of packaging source

reduction opportunities. As a result, packaging material savings from 1991 to 2008

amounted to 392 000 tones and CHF 683 million on a worldwide basis. We have

reduced the volume of packaging material used per liter of bottled water by 20% over the

last 5 years. This represents a saving of 44 000 tones of packaging material in 2008

alone.

Packaging Waste Recovery Nestlé Malaysia has established national waste recovery schemes for the

collection, separation and recovery of used packaging. Nestlé has participated actively in

setting up and managing these schemes. Nestlé use recycled material whenever it

makes sense and it is legally permitted.

Information in Milo Packaging

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Product Differentiation

Improve the packagingNestle Milo have improve the packaging by replacing the old one with adding the

interesting picture. Before this, Milo packaging only have their brand name, but

nowadays Milo have been through the transformation by using faces of national athletes

to attract more customers. Besides, Milo also has adding more colorful color beside of

their green color which is their main color. This improvement can attract children to drink

Milo. By doing this transformation Milo will be more up to date and can build loyal

customer and as well as to be more different than their competitor such as Oligo Coco

which are using the same green color for their packaging.

Milo product enhancementMilo has realized and able to fulfill customer needs, so that they produce 3 in 1

Milo from the normal powder Milo. This is for the customers that do not have enough

time or in rush because they only need a short time to make it. This is because 3 in 1

Milo already has added creamer and sugar for consumer convenience. Even kids also

can do it by themselves because it already complete and they do not have to add

anything.

Add more ingredients To differentiate Milo from other product they have produce a healthy Milo by

adding cereal in Milo Fuze. This Milo is very suitable for consumer that concern about

healthy and on diet because cereal can avoid people from feeling hungry and contain

fiber that good for digestion. Milo also contains a lot of nutrition which does not

contained in the other competitor’s product such as Oligo Coco. Oligo Coco is just a

normal chocolate malt drink and they do not have nutrition such as Milo.

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Add more items.Besides produce Milo for beverages, Nestle Milo also have create new product

item such as Milo ice cream, Milo wafer and Milo energy bar. This product item is

suitable for children and also adult. By doing this, consumer will have a lot of choices to

buy Milo product and as well as positioning Milo as an established brand with a lot of

choices than the competitors such as Oligo Coco and Ovaltine.

Product recommendationFor product recommendation, Milo can make their product more variety by

adding new flavor. In our opinion, Milo should add some vanilla flavor in order to make

their product line more variable.

Other than that, Milo also can specify their target market based in their age and

lifecycle. For example, they can produce their product according to their customer age.

Milo for a diabetic patient, or people in high cholesterol, is also sort of our idea because

nowadays, there’s a lot of people who were suffering the diseases. So that, Milo will be

part of the compulsory product that will include in their shopping list.

2. Place

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Place relates to decisions about the storing and transporting of products, and

also about selecting the products channel of distribution. These decisions are critical to

the success of an organization. Effective inventory management drives down costs and

enhances product quality. Choosing the right distribution channel (i.e. should we sell

through middleman firms or should we sell directly to the end-user) Direct energy cost

pressures have eased in recent months. The major distribution channel include with

geographically consideration with the manufacturing place situated. It’s very cost

effective way for the firm’s expenses in distribution its products to targeted market.

H EAD O FFICE U NIT

Nestlé (Malaysia) BerhadNestlé House, 4 Lorong Persiaran Barat46200 Petaling Jaya,SelangorTel : 03-7965 6000

  Fax : 03-7965 6767

National Distribution CentreLot 1, Persiaran WajaKawasan Perindustrian Bukit Raja,41050 Klang, SelangorTel : 03-33447850Fax : 03-33436171

B RANCH A DMINISTRATION O FFICES & A REA S ALES O FFICES

 

PENINSULAR MALAYSIAKuala Lumpur BranchNestlé Products Sdn BhdLot 14, Jalan Delima 1/1Subang Hi-Tech Industrial Park,Batu Tiga40000 Shah Alam, SelangorTel : 03-56297000Fax : 03-56297154

Johor Bahru BranchNestlé Products Sdn Bhd4th & 5th Floors, Bangunan Petronas,Bandar Baru UDA,Jalan Skudai81200 Johor Bahru, JohorTel : 07-2334500Fax : 07-2334600/2334670

Penang BranchNestlé Products Sdn BhdTingkat 12, Wisma TNBNo. 30, Jalan Anson,10400 Pulau PinangTel : 04-2381700Fax : 04-2381898

Kuantan BranchNestlé Products Sdn BhdNo. 23, Jalan Gambut 2P.O. Box 162,25720 Kuantan,PahangTel : 09-5118600Fax : 09-5118798/5118799

EAST MALAYSIA

Sabah BranchNestlé Products Sdn BhdLevel 4 (3rd Floor) Wisma 202018Jalan Belia 88100 Kota Kinabalu, SabahTel : 088-243030Fax : 088-237498

Sandakan Area Sales OfficeNestlé Products Sdn Bhdc/o Harrisons Trading (S) Sdn Bhd2nd Floor, 20 Jalan Tiga90000 Sandakan, SabahTel : 089-223201

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Tawau Area Sales OfficeNestlé Products Sdn Bhd4th Floor, Man Tong Shing BuildingTB 20,Jalan Dunlop, Tawau, SabahTel : 089-776365Fax : 089-753211

Miri Area Sales OfficeNestlé Products Sdn BhdLot 1894, Block 4Miri Concession Land District,Piasau Industrial EstateJalan Dtk Patinggi Hj Abd Rahman Yakub98000 Miri, SarawakTel : 085-653054 / 663415Fax : 085-661648

Fax : 089-225498

Sarawak BranchNestlé Products Sdn BhdMenara MAA, Level 7Jalan Ban Hock / Central Timur,93100 Kuching, SarawakTel : 082-235918Fax : 082-417066

Sibu Area Sales OfficeNestlé Products Sdn BhdLot 480, Jalan Then Kung Suk, Upper Lanang,P.O. Box 131996008 Sibu, SarawakTel : 084-214672 / 213064Fax : 084-214727

FACTORIES

 

Nestlé Foods (Malaysia) Sdn Bhd Petaling Jaya25,Jalan TandangP.O. Box 8081, Pejabat Pos Kelana Jaya46781 Petaling JayaSelangorTel : 03-77811822Fax : 03-77813823

Nestlé Foods (Malaysia) Sdn Bhd Batu TigaJalan Playar 15/140000 Shah Alam, SelangorTel : 03-55195333Fax : 03-55106263

Nestlé Foods (Malaysia) Sdn Bhd ChembongJalan Perusahaan UtamKawasan Perindustrian Chembong71300 Rembau, Negeri SembilanTel : 06-6853944 / 6853952

Nestlé Foods (Malaysia) Sdn Bhd Shah AlamShah Alam ComplexJalan Playar 15/1P.O. Box 701040700 Shah Alam, SelangorTel : 03-55195333Fax : 03-55102028

Nestlé Foods (Malaysia) Sdn Bhd Raja MudaShah Alam ComplexJalan Playar 15/1P.O. Box 701040700 Shah Alam, SelangorTel : 03-55195333Fax : 03-55102028

Nestlé Foods (Malaysia) Sdn BhdKuchingLot 844, Block 7

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Fax : 06-6853926

Nestlé Manufacturing (Malaysia) Sdn Bhd[Formerly known as Nestlé Cold Storage (Malaysia) Sdn Bhd] ChembongJalan Perusahaan 4Kawasan Perindustrian Chembong71300 Rembau, Negeri SembilanTel : 06-6853944Fax : 06-6857602

Nihon Canpack (Malaysia) Sdn BhdPlot 47, Lorong Bemban Bemban Industrial ParkP.O. Box 37,31000 Batu Gajah, PerakTel : 06-6853944Fax : 06-6857602

Muara Tebas Land DistrictDemak Laut Industrial Park,P.O. Box 71093714 Kuching, Sarawak.Tel : 082-439439Fax : 082-439097

Nestlé Manufacturing (Malaysia) Sdn Bhd[Formerly known as Nestlé Cold Storage (Malaysia) Sdn Bhd] KuchingLot 915, Block 7Muara Tebas Land DistrictDemak Laut Undustrial Park,P.O. Box 71093714 Kuching, SarawakTel : 082-439439Fax : 082-439097

Product positioning

Having decided its corporate objectives and strategy, Nestlé can set marketing

objectives for each of its product, in this case an individual product which is Milo. The

primary objective for Milo is to maintain its position as the Malaysia’s number one selling

chocolate malt drink brand. In order to achieve this, Nestlé has to develop a marketing

strategy that will take into account all the elements of the marketing mix. This will involve

individual strategies for pricing, product development, promotion and distribution.

Since Nestle Milo is an established brand name, these strategies must be flexible

and relevant to each new generation of consumers, but at the same time, great care

must be taken not to damage the perceptions of the product built up over decades of

marketing.

Channel functionNestle Malaysia have 8 factories and 6 sales offices nationwide. Nestle Malaysia

are using two type of channel intermediaries to market its product which is Milo. The two

types of channel are by using retailer and merchant/wholesaler. It is convenience for

Nestle Malaysia since both channel have a lot of advantages in high frequency of

ordering, shorter time for shipment and have high number of customers.

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These channel also have their own function such as transactional function

(contacting, promotion, negotiating, risk taking), logistical function (physically distributing,

storing, sorting) and facilitating function (researching, financing).

Channel structure

Product transportation

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Producer Producer

Consumers Consumers

Retailers Retailers

Wholesalers

WholesaleWholesalerr

ChannelChannel

RetailerRetailerChanneChanne

ll

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Methods have been developed to ensure that vehicles, containers etc are used

in the most efficient way. Examples of initiatives include the development of Opal, a

software tool to assess and recommend pallet layouts. This led to a significant reduction

in numbers of pallets, and therefore vehicles and journeys. Paper board “slip sheets”

and innovative pallet designs have also improved load utilization, as has the

development of dual temperature vehicles enabling consolidation of deliveries of

products such as ice cream and confectionery.

Optimizing Networks

Working with contractors and co-operating with other producers allows the free

vehicle capacity of one company to be matched with the available loads of another.

Combining road and rail transport also helps to optimize distribution and reduce vehicle

journeys. Computerized milk-collection systems have reduced driving distances by as

much as 10%.

Pilot with Schenker

Nestlé initiated a pilot with Schenker, one of the leading international integrated

logistics companies, to determine the environmental impact per unit of product delivered

in one of their European land transport networks. The results of this study showed that

transport generated on average some 15 kg of CO2 emissions per ton of product

delivered. This represents about 10% of CO2 generated during the manufacturing

process and is equivalent to emissions released by a standard passenger car travelling

for 100 kilometers. Improving transportation and distribution of products from factories

and distribution centers to customers and consumers leads to environmental benefits

and cost reductions. It results in less noise, less fuel consumption, less congestion,

fewer emissions and less waste. Therefore, specific Nestlé guidelines highlight

opportunities and best practices related to managing transport resources.

Place recommendation For the place that we recommend, Milo can build their own shop in a mall or any

other strategic place whereby the shop only sell Milo’s product. Besides, they also can

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sell miscellaneous item such as a unique mug with Milo’s logo, a key chain, a school bag

complete with the stationary for children, or a backpack for the sporty person.

Other than that, Milo’s can put their vending machine in a place that always full of

people such as shopping mall, airport, hospital, school and any other place.

3. PromotionFew good or services, no matter how well developed, priced or distributed,

cannot survive in the marketplace without effective promotion which is a communication

by marketers that informs, persuades and reminds potential buyers of a product in order

to influence their opinion.

Promotional strategy is a plan of optimal use of the elements of promotions that

is used by Nestle to promote Milo. The main function of Nestle promotional strategy is to

convince target customers that their goods and services offered provide a differential

advantage over the competition. A differential advantage is a set of unique features of a

company and its product that are perceived by the target market as significant and

superior to the competition. Such features can include high product quality, low prices,

excellent service or a feature not offered by other competitor. As example, Milo

convinced their customer that children will be more energetic if they consume Milo. They

also effectively communicate this differential advantage through advertising featuring

Malaysia top national athlete such as Datuk Nicol Ann David.

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Nestle carries their promotional effort trough traditional mass media such as

television, radio, newspaper and etc. With the increasing fragmentation of traditional

mass media choices, Nestle also sending their advertisements to consumer in many new

and innovative ways, such as with interactive video technology located in departmental

stores and supermarkets and through Internet Web.

Beside the promotion or communication above, Nestle are also using other form

of advertising such as non-media communication or advertising. Some of the ways that

Nestle have done are by participating exhibitions, sponsorship activities, public relations

and sales promotion such as giving freebies with good, or reduced price offers on Milo

product. Those are the tools that used by Nestle to persuade customer and build

customer relationship with their product. Nestle does not emphasis too much in attracting

competitors customers since 90% Malaysian consume Milo.

Advertising Advertising is defined as any paid form of product information that is delivered to

potential customers in a non-personal way (such as through newspapers, magazines,

television, radio, billboards, or the Internet). The communication is not just about

advertising only, and the communication often creates a creative slogan in order to make

sure consumer will remember Milo.

Type of Advertising Media used by Nestle Television

Nestlé applied this source for Milo product, which in the commercial break is

about a boy or a girl that are more energetic in their daily live if after they consume

Milo. Also shown in the commercial break is the boy’s parent provide Milo for their

children. This strategy is to attract the consumers especially children and parents to

buy this product.

Outdoor mediaNestle Milo is well known for their commitment and sponsorship efforts for any

sport events in Malaysia especially for any primary and secondary school. Milo

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sponsors almost all type of sport event and Nestle also collaborate with Ministry of

Sports and Youth in order to organize national and international sport event. They

normally open a booth in every event they sponsored and giving out free Milo drinks.

It is really effective since it can instill relationship between product and consumers.

InternetNestle have their own website which is www.nestle.com and there are more than

100 countries are registered under this website. Nestle also have their own website

for each countries that is under Nestle including North Korea and Israel. Uniquely,

Nestle also have their own website for each product that they sell (e.g.

www.milo.com.my ) which is estimated around 30,000 products worldwide. It is

established so that consumer can easily find information about their particular

product and also as a medium for consumer to leave their suggestion in order for

Nestle to improve their product.

Printed MediaPrinted media includes newspapers, magazines as well as posters. Nestle

normally promotes Milo in children’s magazine since they are the main target market

for the product and Nestle also sponsor sport column in the newspapers. The

advertising normally sports public figures such as Datuk Nicol Ann David in order to

attract sportsmen and children who are involves in sports. Posters are usually

distributed to all wholesaler and retailers who are selling Milo which can help people

to recognize the places that do sell Milo.

Effects of advertising

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PromotionThe pictures below show some example on how Milo’s promote their products to the

customer;

Free Raya Cards for any 6 cans purchaseIf the customer buy 6 cans of Milo, they will get 3

special edition Raya cards with different design and

this promotion valid on the period that have been

stated.

Buy Milo 1 Kg free 1 Juara Cup

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This is the second example on how Milo’s promote their product. If the customers

buy 1 KG pack of Milo, they will get 1 Juara Cup. This kind of promotion will attract all

the kids and even the adult to buy it.

Buy MILO 400g free 50g

This promotion is for customer that likes to save their money. This is

because Milo’s have make a promotion which is they will get free 50gm with

every purchased of Milo 400gm pack.

FREE 1 MILO sporty tumbler with every purchase of MILO 1kg pack.

This promotion will attract sporty person to buy it. This is because the

tumbler is easy to carry everywhere and it is very fit to sporty person that

have to move a lot.

Segmented and Target Market

A market segment consists of a group of customers who share a similar set of

wants. The marketer does not create the segments; the marketer’s task is to identify the

segments and decide which one (s) to target. Segment marketing offers several benefits

over mass marketing. The company can create a more fine-tuned product or service

offering and price it appropriately for the target segment. The company can more easily

select the best distribution and communications channels, and it will also have a clearer

picture of its competitors, which are the companies going after the same segment. Our

market segment is based on our observation; analysis as well as we is in Nestle shoes.

The customers can be classified according to the following variables:

1. Geographic Segmentation:

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Regions: Commonly people prefer to drink Milo throughout the year. But

Nestle can segment the market on the basis of season. The consumption

of cold Milo goes down during the rainy season as people prefer to have

hot Milo. In hotter regions the consumption pattern doesn’t change much.

Cities: Consumption of Milo is more in the cities as compared to the

villages due to various factors such as income and education level. Nestle

should focus more on making Milo available in the every places where

people are willing and able to buy.

2. Demographic Segmentation: Age: Nestle can easily target various age groups. The most important of

these groups are children and old people. For children it can introduce

Milo with additional nutritional contents such as vitamins and minerals.

For older people it already has clinical nutrition. It just needs to get its

product known among these people.

Gender : It will be very beneficial to target women as they usually shop

for their family. If they are convinced that the Milo will be good for their

families, they will purchase.

Income and occupation: People will buy Milo when they have enough

monetary

resources. Nestle should target people in the higher income groups.

People with blue collar jobs can be targeted by telling them that the Milo

will help them in their daily routine.

Life cycle stage can also be important because families with younger kids

will want to buy Milo.

3. Psychographic segmentation: Social class and life style: People belonging to the higher social classes

tend to spend more on luxuries as compared to people in the lower

classes. Such people can be easily targeted as they are very health

conscious. Nestle can urge these people to buy Milo which is rich in

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nutrition.

Personality: People who are outdoorsy and are involved in sports can

also be targeted by tagging the brand with some sport celebrity.

Promotion RecommendationTo make Milo being well-known all over the country, they should make a lot of

promotions which is dissimilar with the promotions that they have done before. After we

have been through the discussion, we have all agreed that Milo can wider their

promotion by making a contest or a lucky draw. They just need to put a lucky number

behind the packaging and the end of the month, the will pick a lucky number and the

lucky customer can redeem their price at the nearest Milo’s branch.

Besides that, Milo can make a different packaging style. They should combine all

their products in one pack that include mini pack of Milo powder, Milo energy bar, Milo

fuze, and so much more.

By doing this style of packaging, Milo can promote all their delicious product to

the customer so that they are able to try all the product that produced by Milo. If they

interested with one or all the product, for sure they will but it again and again. This will

increase the profit.

4. Price

The firm has several options for addressing the price. Domestically Nestlé’s Milo

manufactured finished products may be force to switch to offshore sourcing of certain

component to keep costs and prices competitive. Another factor is a through audit of the

distribution structure in the target markets.

An extension or ethnocentric pricing policy describe that the per-unit price of an

item to be the same no matter where in the world the buyer is situated. Nestlé’s

executive level monitor consciously on the freight and import duties according to the

Malaysia market.

Adaptation or polycentric pricing policy allows subsidiary or affiliate managers or

independent distributors to establish whatever price they feel is most desirable in their

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circumstances. The firm utilizing independent distributors were the most likely to apply

polycentric pricing. This type of approach is sensitive to the local market.

The disadvantage facing in the company is local managers are free to price in

the way they see fit, they did not fully informed about company experience when they set

prices. The price harmonization from headquarter is necessary in dealing with

international accounts. The management level consciously and systematically seeks to

ensure that accumulated national pricing experience is influenced and applied wherever

relevant. The organizations revenue represented that the food and beverage like Milo’s

product gain more return on investment than other. It represent that the potential

sustainable growth market for the firm.

Price strategy

Price strategy is a basic, long-term pricing framework, which establishes the

initial price for a product and the intended direction for price movements over the product

life cycle. It consists of 3 type of pricing strategy which is Price skimming, Penetration

pricing and Status quo pricing.

Nestle Malaysia currently practicing penetration pricing to market Milo which is a

way where Nestle charges a relatively low price for a product (Milo) initially as a way to

reach the mass market.

Setting the right price

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Establishprice goals

Estimate demand,costs, and profits

Choose aprice strategy

Fine-tunebase price

Set price$x.yy

Evaluateresults

SkimmingStatus quoPenetrationn

Low $

High $

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Establishing pricing goalsMarketers have 2 choices whether to use profit oriented profit maximization or

satisfactory pricing. The marketers need to have an understanding of trends and

changes in the market place to set a goal. If Nestle Milo have decide to go for profit

maximization objective, they must be able to afford large sum of investment. It is easy to

follow competitors pricing but they may not have the best considering cost, demand and

changes in Product Life Cycle. So they have to require a careful analysis before setting

the price.

Estimate demand, costs and profit. After the pricing goals have been established, Nestle Milo have to estimate

demand, costs and profit. It is important for Nestle Milo to know the corresponding cost

for each product price. So they need to estimate the profit that they will earn, determine

level of price and how much market share they will get.

Choose the price strategy When Nestle Milo has decided the product price, they will choose a good pricing

strategy that will give them direction of price movements over the Product Life Cycle.

Nestle Milo are aware about higher price. If they set higher price, they have to produce a

good quality of Milo. Besides that, the competitors also will influence the pricing strategy.

For example, if Nestle Milo introduces a new product that same with competitors, the

price will be restricted and close to the price of competitors. Unless, Nestle Milo can

differentiate and convince consumers, they can set the higher price for the product.

Pricing Tactic Diagram

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Pricing tactics

Quantity discount

When buyers get a lower price for buying in multiple units or above specified dollar

amount, they are receiving a quantity discount.

Cash discounts

Cash discount is a price reduction offered to a consumer, or a marketing intermediary in

return for prompt payment of a bill. This is to avoid bad debt.

Functional discounts

When distribution channel intermediaries, such as wholesaler and retailer, perform a

service or function for the manufacturer, they must be compensated. This compensation,

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typically a percentage discount from the base price, is called a functional discount or

trade discount. Functional discounts vary greatly from channel to channel, depending on

the tasks performed by intermediaries.

Seasonal discount

Seasonal discount is a price reduction for buying merchandise out of the season. It shifts

the storage function to the purchaser. Seasonal discounts also enable manufacturers to

maintain a steady production schedule year-around.

Promotional allowances

Is also known as trade allowance which is a payment to a dealer for promoting the

manufacturer’s products. It is both a pricing tool and a promotional device.

Rebates

A rebate is a cash refund given for the purchase of a product during a specific period.

The advantage of a rebate over a simple price reduction for stimulating demand is that a

rebate is a temporary inducement that can be taken away without altering the basic price

structure.

Geographic pricing

FOB origin pricing

FOB is “free on board” is a price tactic that requires the buyer to absorb the freight costs

from the shipping point. The farther buyers are from the sellers, the more they pay.

Uniform delivered pricing

If the marketing manager wants total costs, including freight, to be equal for all

purchasers of identical products, the firm will adopt uniform delivered pricing or “postage

stamp. With uniform delivered pricing, the seller pays the actual freight charges and bills

every purchaser an identical, flat freight charge.

Zone pricing

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A marketing manager who wants to equalize total costs among buyers within large

geographic areas, but not necessarily all of the seller’s market area which will may

modify the base price with a zone pricing tactic. The price will be divided into segments

or charges based on the zone that given.

Freight absorption pricing

In freight absorption pricing, the seller pays all part of the actual freight charges and

does not pass them in the buyer. The manager may use this tactic in intensely

competitive area or as a way to break into new market area.

Basing point pricing

With this tactic, the seller designates a location as a basing point and charge all buyers

the freight cost from that point, regardless of the city from which the goods are shipped.

Other tactics

Single price tactic

A price tactic that offers all goods and services at the same price ( or perhaps two or

three prices)

Flexible pricing

A price tactic in which different customers pay different prices for essentially the same

merchandise bought in equal quantities.

Price lining

A price tactic in which a product is sold near or even below cost in hope that shoppers

will buy other items once they are in the store.

Bait pricing

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A price tactic that tries to get consumers into a store through false or misleading price

advertising and then uses high pressure selling to persuade consumers to buy more

expensive merchandise.

Odd-even pricing

A price tactic that uses odd-numbered prices to connote bargains and even numbered

prices to imply quality.

Price bundling

Marketing two or more products in a single package for a special price.

Unbundling

Reducing the bundle of services that comes with the basic product.

Two-part pricing

A price tactic that charges two separate amounts to consume a single good or service.

Consumer penalty

An extra fee paid by the customer for violating the terms of the purchase agreement.

Factor Affecting the Pricing

Cost Product

To produce one product, we need a good raw material. For Nestle Milo, they

need get raw material such as cocoa from the cocoa supplier. If the supplier increases

the cocoa price, it also will affect the price of Milo because the Milo’s cost of production

will also increase.

Promotion To make Milo more well-known all over the world, they need to make a lot of

promotion and using different way such as advertising, through television, internet,

newspaper and so much more. These promotion activities will cost a lot and sometimes,

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Milo need to pay high for the individual who involves in this promotion activity. And to

cover the money that they have spent, they will increase the price of Milo’s product.

PlaceTo set up price for Milo’s product, they also will determine the geographical

factor. For example in West Malaysia, Milo’s sell the 3 in 1 Fuze at RM12.00 but in East

Malaysia, they sell it at RM12.50. This is because the transportation cost to East

Malaysia is very high compare to West Malaysia.

CompetitionDifferent kind of product will have different level of demand from the

communities. If a product has a high demand, it will attract other producer to produce the

same or even better product. As a result, there will be a lot of competitors and

competition. All the producers will ‘fighting’ with each other to make their product more

well-known or more favorable. The competitors will start to offer a discount or they will

offer bargain price. Because of competition, the price will be change.

QualityTo make Milo more variety and more interesting to buy, they will make something

that can increase their product quality. For example, they add some cereal in Milo 3 in 1

Fuze. The cereal will increase the cost of production and at the same time, the price of

Milo will also increase. That is why quality factor can affect the price of Milo.

Price recommendation

For the price, Milo should make a good pricing strategy. If they want to put a high

price for the particular product, they have to make sure that the quality and the quantity

are suitable enough with the price.

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Other than that, they also can do the packages which contain the chosen

product in one pack and they will set the price for the pack in a moderate value. This is

also known as eco pack. This pack is affordable whereas not only the high income

persons who are willing to buy it but people from low income are also able to buy.

By doing so, consumers can make a good perception for the company who are

concern with the society. Generally we can conclude that Milo are not bias and are

suitable for all level of person.

S.W.O.T Analysis for Milo

We are going to produce a SWOT analysis to find out how effective Milo is

operating and what internal factors may influence its success. A SWOT analysis

analyses the internal factors that may influence the success of a business. The initials

SWOT stand for:

Strengths

Weaknesses

Opportunities

Threats

Here is a SWOT analysis on Milo:

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Strengths * Focusing only on chocolate energy

drink.

* Unique selling point.

* Big sales in other countries.

* Part of Nestle (reputation) funds

available for re-launch.

* It is available in different sizes, shapes

and type.

* Value for money.

* Promotion/advertising done in other

countries.

* Widely available

Weaknesses * Not enough diversity in flavors

* Packaging (design of tin + labeling)

Opportunities * Increased media available

(mobiles/internet)

* Increased fitness industry

* Increase awareness of health and

fitness

* Sponsorship (through sporting events)

Threats * Competitors (hot chocolate, energy

drinks)

* Well known successful brands as

competitors

* Competitors could use aggressive

marketing tactics cut prices/increase

promotion

* Competitors bring out similar products

* Competitors have diversity in

packaging (bottles, pouches, cans, etc)

PEST Analysis

We are going to produce a PEST analysis to find out what external influences

may be affecting the product (Milo) and to what extent to which customers decide to buy

them. The purpose of the PEST analysis is to analyze the organization (Nestle Milo)

operates and to identify how it may influence marketing decisions. A PEST analysis

analyses the external environment in which an organization operates and identifies how

it should influence marketing decisions.

The initials P.E.S.T stand for:

Political

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Economical

Strengths

Threats

Political Factors The actions of governments can have

major effects on business and markets,

including creating or reducing demand

for particular products and services.

Economical Factors Consumer spending may be controlled

by a range of economic factors such as

income levels, inflation, taxes,

unemployment, exchange rates and

mortgage rates.

Social Factors Social trends are important because

they have a direct influence on the

demand for particular types of product.

Technological Factors Development in technology gives rise to

new products and market opportunities,

e.g. the rapid growing use of

computerized reservations systems.

Here are the advantages and disadvantages of using a PEST analysis:

Advantages * Outlines government law on businesses

* Can be compared to previous PEST analysis therefore changes in the market may

possibly be anticipated

* It indicates whether business has improved or not

Disadvantages * May be erroneous

* Expensive (takes time to produce)

* Problems in the PEST analysis cannot be rectified as they are all external issues

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Here is a PEST analysis on Milo:

Political

* Stay within the law (being aware of legislation health and safety,

advertising standards, consumer protection, trades description

* Restriction on imports

* Government back ‘Milo’ as an energy drink

Economical

* Exchange rates (what are they here/abroad, If your buying from

another country and the rates differs, it changes the price you

end up paying)

* Taxes (if they go up so will the costs for consumers)

* Recession (people have less disposable income – would they buy

Milo?)

* Inflation (prices go up for the company and for the consumer)

Social

* Society more aware of healthy lifestyle/rise in fitness industry

* More focus on leisure time

* More disposable (can afford to buy luxury goods) income

* Fashion (could Milo be the next fashionable drink)

Technological

* Advanced in technology change product/packaging/flavors

* Advance in science (add to Milo formula more energy/healthier)

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* Advances in production technology (more efficient + better

quality/ less staff required = cheaper for Nestle = cheaper for

customers)

* Improved media/communication internet/mobiles etc.

Corporate Social Responsibility

The period under review posed considerable challenges to Milo, attributable to

the sharp increase in commodity prices in 2007 and the introduction of Private Label

competitors. However, Milo products maintained its strong market share and the

ubiquitous beverage remains a perennial favorite amongst Malaysian consumers.

During the period under review, Milo Gold nutritious chocolate malt drink was

launched; further strengthening the brand’s nutritional image amongst its consumers by

offering a complete Milo drink with more milk and nutrition. The Milo Fuze drink range

also continued to grow in popularity and demand due to its attributes of convenience and

nutrition for young adults.

The highlight of the year was a new communications campaign, which emphasized

the nutritional benefits of Milo chocolate malt powder under the header “10 Reasons Milo

Does More for Your Child”. The brand continued its strong legacy of sports development,

and sponsorship programmers for the development of grass root sports continued

unabated; as part of the commitment to build a healthier society through sports. Some

200 events were held at both the local and international level, which included:

2008 Le Tour de Langkawi

2008 SEA Junior Table Tennis Championship

1st Asian Indoor Hockey Championship

Milo International Junior All Stars

Tenpin Bowling Championship

Milo International Junior All Stars International Squash Championship

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Local support included the National Schools Sports Championships, various youth

development programmers organized by the Malaysian School Sports Council, Olympic

Council of Malaysia, Ministry of Youth and Sports and National Sports Association.

Milo also supported the Malaysian 2008 Beijing Olympic contingent by being the

Official Nutritious Chocolate Malt Drink of the contingent. Malaysia was represented by

33 athletes; the largest Malaysian contingent in more than five (5) decades.

Nestle Research and Development

Based at Nestle Product Technology Centre in York, Nestle Malaysia join the

various international teams which are together responsible for creating the new

confectionery products and processes that will guarantee Nestlé's Malaysia future

success.

Depending on each Nestle R&D team specialist, this might mean researching

and developing new process technologies or renovating existing products and

technologies. Each product involves research, analysis, development and a huge

amount of hard work and commitment. They comprise of quality ingredients as well as

incredible amounts of passion from all who make them. Nestle push limits, blend

technical curiosity with professional expertise and work with confectionery at a molecular

level. All in all, producing confectionery here involves a freedom that means your day

doesn't follow routine, just since Nestle are here to help the consumer which is you.

The global breadth of the firms networks both inside and outside nestle Research

Center (NRC) give their scientists a unique working environment. In addition to the eight

scientific department’s specializing in highly focused disciplines, the scientist have

access to the collective knowledge of the rest of the R&D Network and the whole Nestle

group, as well as many opportunities to work with leading scientists in universities and

research institutes worldwide.

Opened in 1987, NRC established the scientific knowledge base for Nestle. It

accumulates know-how in support of all sectors of activity and is the hub for all nestle

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R&D network. The role of NRC within Nestle is pivotal in helping fulfill Nestlé vision of

making good food for good life. Nestle has a well established reputation for excellence in

research on food and nutrition that has benefited consumers for over a century. Today,

the Nestle Research Center is universally recognized as one of the world leading

laboratories in the food and life sciences and as definite leader in several region.

To lead into 21st century, Nestle management made the strategic decision to

position Nestlé not just as a trusted food company, but also as the world leading

nutrition, health and wellness company as embodied in the corporate logo, “good food,

good life”. This decision firmly positioned nutrition as a major driver for the Nestle

Research center. T recognized the scientific challenges in this area, and clearly defined

the direct role and responsibility of the Center in Nestle future.

This change responds to the modern consumers need and desires for food that

offer both enjoyments and nutritionally proven health benefits at all stages of life. Health

and enjoyment are the elements of wellness and well-being and the NRC is playing an

important part in bringing precisely these qualities to consumers.

Conclusion

As the conclusion, we believe that the best way to research Nestle strategy in

Malaysia is to try and contact Nestle and perhaps, brief interview should conduct with

the global brand such as Nestle, I think wider marketing strategy is universal across the

globe.

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But again we think it is differs from one region to another. Nestle is a brand,

brand name for the company and family name for all nestle products in the market. It is

also an umbrella name for, for instance Nestle Milo or Nestle Nescafe. Unlike P&G or

Uniliver, Nestle shares its name with all its products, like Maggi for example. This is

instance part of their branding and their wider marketing strategy.

Nestle also is a product for everyone which suitable for all income level since the

price that set by the company is affordable and perhaps, cheap. It is very competitive

since the price is high in quality and most of the consumer does not thinking too much

about the price.

The marketing channels that have been used by Nestle to distributed Milo are

also one of the key successes of the product. The efficiency and high frequency in

distributing Milo nationwide has been a convenience for consumer since they can buy it

easily at any store such as Mydin Mart, Carrefour and any convenience shop.

Although Nestle Milo is very established in Malaysia which 90% Malaysian

consumer Milo, but Nestle never take it for granted. Nestle push their R&D team in order

to make sure the product is up to date and attractive to stand out from competitor. Nestle

also never run out of idea and they always introduce new Milo product for the customer

convenience.

TABLE OF CONTENTNo Title Page

1 Acknowledgement 1

2 Executive summary 2

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3 Introduction to Nestle 3

4 Nestle Corporate Philosophy 4

5 Nestle Marketing Strategy 5

6 Nestle Malaysia 6

7 Introduction to Milo 6

8 Product Life Cycle 8

9 Product 9

10 Place 19

11 Promotion 25

12 Price 31

13 S.W.O.T Analysis 39

14 P.E.S.T Analysis 40

15 Corporate Social Responsibilities 42

16 Nestle R&D 43

17 Conclusion 45

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