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.

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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.
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.

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Nestle Malaysia
Nestlé 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
manufactures its products in 8 factories and operates from its head office in Petaling
Jaya, and 6 sales offices nationwide.

Introduction to Milo
Milo 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

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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
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

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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.

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 Width

Beverage Milk Prepared Ice Cream Cereals Chocolates
Food
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 Marketing

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

• Product
• 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 depth

Milo 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.

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• Milo Fuze

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.

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Product nutrition

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.

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

Energy
Carbohydrates 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.

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

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

Protomalt
PROTOMALT 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.

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Product branding
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 Packaging
The 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.

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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
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.

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Information in Milo Packaging

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Product Differentiation

Improve the packaging

Nestle 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 enhancement

Milo 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 recommendation
For 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.

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2. Place
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.
HEAD OFFICE UNIT Fax : 03-7965 6767

Nestlé (Malaysia) Berhad National Distribution Centre

Nestlé House, 4 Lorong Persiaran Barat Lot 1, Persiaran Waja
46200 Petaling Jaya, Kawasan Perindustrian Bukit Raja,
Selangor 41050 Klang, Selangor
Tel : 03-7965 6000 Tel : 03-33447850
Fax : 03-33436171
BRANCH ADMINISTRATION
OFFICES & AREA SALES OFFICES
PENINSULAR MALAYSIA
Kuala Lumpur Branch Penang Branch
Nestlé Products Sdn Bhd Nestlé Products Sdn Bhd
Lot 14, Jalan Delima 1/1 Tingkat 12, Wisma TNB
Subang Hi-Tech Industrial Park, No. 30, Jalan Anson,
Batu Tiga40000 Shah Alam, Selangor 10400 Pulau Pinang
Tel : 03-56297000 Tel : 04-2381700
Fax : 03-56297154 Fax : 04-2381898

Johor Bahru Branch Kuantan Branch

Nestlé Products Sdn Bhd
4th & 5th Floors, Bangunan Petronas,
Bandar Baru UDA,Jalan Skudai
81200 Johor Bahru, Johor
Tel : 07-2334500
Fax : 07-2334600/2334670
Nestlé Products Sdn Bhd
No. 23, Jalan Gambut 2
P.O. Box 162,
25720 Kuantan,Pahang
Tel : 09-5118600
Fax : 09-5118798/5118799

EAST MALAYSIA

Sabah Branch Sandakan Area Sales Office

Nestlé Products Sdn Bhd Nestlé Products Sdn Bhd
Level 4 (3rd Floor) Wisma 202018 c/o Harrisons Trading (S) Sdn Bhd

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Jalan Belia 88100 Kota Kinabalu, Sabah 2nd Floor, 20 Jalan Tiga
Tel : 088-243030 90000 Sandakan, Sabah
Fax : 088-237498 Tel : 089-223201
Fax : 089-225498
Tawau Area Sales Office
Nestlé Products Sdn Bhd Sarawak Branch
4th Floor, Man Tong Shing BuildingTB 20, Nestlé Products Sdn Bhd
Jalan Dunlop, Tawau, Sabah Menara MAA, Level 7
Tel : 089-776365 Jalan Ban Hock / Central Timur,
Fax : 089-753211 93100 Kuching, Sarawak
Tel : 082-235918
Miri Area Sales Office Fax : 082-417066
Nestlé Products Sdn Bhd
Lot 1894, Block 4 Sibu Area Sales Office
Miri Concession Land District, Nestlé Products Sdn Bhd
Piasau Industrial Estate Lot 480, Jalan Then Kung Suk, Upper
Jalan Dtk Patinggi Hj Abd Rahman Yakub Lanang,
98000 Miri, Sarawak P.O. Box 1319
Tel : 085-653054 / 663415 96008 Sibu, Sarawak
Fax : 085-661648 Tel : 084-214672 / 213064
Fax : 084-214727

FACTORIES
Nestlé Foods (Malaysia) Sdn Bhd Petaling Nestlé Foods (Malaysia) Sdn Bhd Shah
Jaya Alam
25,Jalan Tandang Shah Alam Complex
P.O. Box 8081, Pejabat Pos Kelana Jaya Jalan Playar 15/1
46781 Petaling JayaSelangor P.O. Box 7010
Tel : 03-77811822 40700 Shah Alam, Selangor
Fax : 03-77813823 Tel : 03-55195333
Fax : 03-55102028
Nestlé Foods (Malaysia) Sdn Bhd Batu
Tiga Nestlé Foods (Malaysia) Sdn Bhd Raja
Jalan Playar 15/1 Muda
40000 Shah Alam, Selangor Shah Alam Complex
Tel : 03-55195333 Jalan Playar 15/1
Fax : 03-55106263 P.O. Box 7010
40700 Shah Alam, Selangor
Nestlé Foods (Malaysia) Sdn Bhd Tel : 03-55195333
Chembong Fax : 03-55102028
Jalan Perusahaan Utam

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Kawasan Perindustrian Chembong Nestlé Foods (Malaysia) Sdn

71300 Rembau, Negeri Sembilan BhdKuching
Tel : 06-6853944 / 6853952 Lot 844, Block 7
Fax : 06-6853926 Muara Tebas Land District
Demak Laut Industrial Park,
Nestlé Manufacturing (Malaysia) Sdn Bhd P.O. Box 710
[Formerly known as Nestlé Cold Storage 93714 Kuching, Sarawak.
(Malaysia) Sdn Bhd] Chembong Tel : 082-439439
Jalan Perusahaan 4 Fax : 082-439097
Kawasan Perindustrian Chembong
71300 Rembau, Negeri Sembilan Nestlé Manufacturing (Malaysia) Sdn
Tel : 06-6853944 Bhd
Fax : 06-6857602 [Formerly known as Nestlé Cold Storage
(Malaysia) Sdn Bhd] Kuching
Nihon Canpack (Malaysia) Sdn Bhd Lot 915, Block 7
Plot 47, Lorong Bemban Bemban Industrial Muara Tebas Land District
Park Demak Laut Undustrial Park,
P.O. Box 37, P.O. Box 710
31000 Batu Gajah, Perak 93714 Kuching, Sarawak
Tel : 06-6853944 Tel : 082-439439
Fax : 06-6857602 Fax : 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 function
Nestle 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

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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.
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
Retailer Wholesale
Channe r
l Channel
Producer Producer

Wholesaler
s

Retailers Retailers

Consumers Consumers

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Product transportation

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

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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
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. Promotion

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Few 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.

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

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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 media
Nestle Milo is well known for their commitment and sponsorship efforts for any
sport events in Malaysia especially for any primary and secondary school. Milo
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.
• Internet
Nestle 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 Media

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Printed 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

Promotion
The pictures below show some example on how Milo’s promote their
products to the customer;

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• Free Raya Cards for any 6 cans purchase

If 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

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

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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:
• 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

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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
nutrition.
• Personality: People who are outdoorsy and are involved in sports can
also be targeted by tagging the brand with some sport celebrity.

Promotion Recommendation
To 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

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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
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.

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Setting the right price

Establish
price
goals High $
Estimate demand,
costs, and profits
Skimming
Choose a Status quo
price strategy Penetration
n

Low $
Evaluate Fine-tune
results base price

Set price
$x.yy

Establishing pricing goals

Marketers 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.

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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

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

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

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 Zone pricing
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

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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
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.

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 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,
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.

 Place
To 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.

Competition
Different 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.

Quality
To 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

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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.

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

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Threats

Here is a SWOT analysis on Milo:

Strengths Opportunities
* Focusing only on chocolate energy * Increased media available
drink. (mobiles/internet)
* Unique selling point. * Increased fitness industry
* Big sales in other countries. * Increase awareness of health and
* Part of Nestle (reputation) funds fitness
available for re-launch. * Sponsorship (through sporting events)
* It is available in different sizes, shapes
and type. Threats
* Value for money. * Competitors (hot chocolate, energy
* Promotion/advertising done in other drinks)
countries. * Well known successful brands as
* Widely available competitors
* Competitors could use aggressive
Weaknesses marketing tactics cut prices/increase
* Not enough diversity in flavors promotion
* Packaging (design of tin + labeling) * 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

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it should influence marketing decisions.

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

Political
Economical
Strengths
Threats

Political Factors Social Factors

The actions of governments can have Social trends are important because
major effects on business and markets, they have a direct influence on the
including creating or reducing demand demand for particular types of product.
for particular products and services.

Economical Factors Technological Factors

Consumer spending may be controlled
by a range of economic factors such as
income levels, inflation, taxes,
unemployment, exchange rates and
mortgage rates.
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

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* 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

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)

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Technological

* Advanced in technology change product/packaging/flavors

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

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 Tenpin Bowling Championship

 Milo International Junior All Stars International Squash Championship

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.

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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
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

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

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 CONTENT

No Title Page

1 Acknowledgement 1

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 MKT260

2 Executive summary 2

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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