Marketing Mix

Product

Products: Milo is considered an example of a type of patented high-tech product, which the enterprise
will manufacture and distribute directly to customers. In its brand strategy, Milo always builds the trust
and love of customers. Not only that, Milo always strives to discover and create products that are at the
forefront of market trends and meet the needs of its products. In addition to powdered milk, Milo
produces many other products such as instant milk, lozenges, sandwiches, etc. have similar flavors
and are all branded Milo. Therefore, the name Milo has helped customers diversify their choices for the
most convenience of their products more than Vinamilk, Abbott, etc.

Figure 1, Milo's Product Variety (Thanh Huyen, 2021).

Brand
Nestlé has established nearly 150 years but the brand Milo just more than 80 years. For more than 80
years, NESTLÉ MILO has provided nutrition and energy to children in more than 40 countries around
the world.

Packaging:
Nestlé uses paper packaging for Milo, thereby giving a message of environmental protection instead of
plastic packaging. In addition, the company also organizes events to collect packaging for recycling.
Recently, Milo has launched Milo can product with youthful packaging, bringing inspiration to become a
hot trend for young people in Vietnam. Not to mention, Milo is also a pioneer in the use of paper
straws. (Thanh Huyen, 2021)

Figure 2, Nestle milo's environmental campaign (Nestle Milo)

Price

The concept of ethnocentric pricing strategy helps to design and develop similar price for per units in
each geographical location which has greater impact on buying behavior of consumers. Nestle Milo
also used polycentric pricing policy in independent distributors’ scenario in local market. Nestlé Milo is
using penetration pricing strategy to market Milo where the organization initiated with low price to target
mass market. A part from this the Nestle Milo focus on concept of different other pricing techniques
based on Quantity discount, cash discount, functional discount, seasonal benefits and offer, direct and
indirect promotional offers and benefits, geographical pricing strategies that involves free on board
pricing pattern, Zone pricing methods, single and flexible pricing and other customized pricing
techniques the Nestle Milo is using.
 Figure 3, Milo's Promotions (Milo Vietnam, 2020)

Place:

Currently, in Vietnam, there are many large factories and distribution centers operated by Nestle. The
main distribution channels used by Nestle are wholesale and retailer. Although these are two basic
distribution channels, they have their own advantages with a large number of customers.

In addition to cooperating with agents, grocery stores as well as supermarkets nationwide, Nestle also
uses e-commerce to promote its image as well as to easily reach customers. Currently, the trend of
online shopping in Vietnam is increasing stronger than ever (Huyen, 2021).

Figure 4, Nestle Milo on Shopee E-Commerce platform

Promotion:

Sales promotion

Milo's sales promotion activities take advantage of mass media such as television, newspapers, radio,
videos in supermarkets, posters, etc. Along with that, other forms of promotion such as program
sponsorship Programs, participation in product fairs, free gifts when buying products, PR, discounts are
all applied by Milo in its marketing strategy. These sales promotion strategies have helped Nestle gain
popularity and a large number of loyal customers.

Figure 5, Discount strategy of Milo

Advertising via TVC

Nestlé Milo using a TVC attracted a lot of public attention when talking about a boy and girl who
became more active after using Milo products, at the end of the advertisement were pictures of parents
giving them for children Milo products. This ad convinces consumers to buy Milo products when
parents and children find it interesting and attractive to watch.

Figure 6, One of Milo’s best TVC (Nestle, 2020)

Outdoor Communication

Sports events across the country, tournaments between elementary and middle schools with the
participation of Milo's sponsored activities have helped make the brand's name extremely popular. Milo
also cooperates with youth sports units to organize sports events at home and abroad. At those events,
Milo products will be displayed and free drinks will be given to attendees. In this way, Milo has shown
the association of its products with fitness activities, sports activities and helped the Milo brand gain a
lot of sympathy from customers.

Figure 7, Nestle Milo sponsored for basketball championship

Social Media

Social networking is growing and becoming an essential need in daily life. Businesses have used this
medium to the maximum to increase sales through campaigns on Facebook, Instagram, Youtube, etc.
Nestle has also implemented a lot of its brand strategies, especially brands Milo has a lot of marketing
campaigns deployed on these social platforms. The campaign “Dynamic Vietnam” closest to us was
carried out by Milo in 2017. This campaign has made a big splash when using social networks as the
main method of communication. This campaign has helped to change the perception in the
Vietnamese community about an active lifestyle and encourages regular exercise towards children
between the ages of 6 and 17.

Figure 8, The campaign "Dynamic Vietnam" (Nestle, 2017)

 Milo brand with delicious and easy-to-drink products has become a favorite drink of both the
elderly and children and has become indispensable in many families. In order to have such
 great success today, in addition to quality and nutritious products, Milo's marketing strategy has
been implemented extremely rationally, skillfully and creatively.

Core competitor – Vinamilk

The company is a leading enterprise in the dairy processing industry, currently holding 75% of the dairy
market share in Vietnam.

Vinamilk objective is become a world grade brand in food and beverage industry, where people put all
their trust in nutrient and health products. To deliver the most valuable nutrition to community with all
respect, love and responsibility (Vinamilk, 2016).

Marketing Mix

Product

Product

Vinamilk's dairy product line includes many products with many flavors and packaging sizes for users
to choose from, including added sugar, chocolate or strawberry flavor, high calcium or low-fat milk, etc.

Vinamilk focuses on constantly innovating technology, improving product quality management,

shortening the quality gap between imported milk and domestic milk, and improving Vinamilk's trust
and reputation in the competitive market.

Vinamilk has invested in a modern pasteurization technology system, which helps to keep the best
nutritional ingredients such as vitamins and minerals from pure cow's milk while preserving the taste.
 Figure 9, Vinamilk's pasteurized milk flavors

Brand

Accounting for 75% of dairy market share in Vietnam and over 40 years of development, Vinamilk's
network has now reached nearly 200 domestic distributors with nearly 100,000 selling points spread
across Vietnam. Not only that, Vinamilk's products are also exported. to many other countries such as
France, USA, Germany, etc.

Packaging

Vinamilk cooperates with two of the world's leading packaging suppliers, Tetra Pak of Sweden and
Combibloc of Germany, to make high-quality packaging for their dairy products. Vinamilk chooses
paper packaging instead of plastic packaging to give a message of environmental protection (Vinamilk,
2015).

Figure 10, Tetra Pak and Combibloc milk box (Vinamilk)

Price

Some pricing strategies that Vinamilk is implementing include:

 High quality comes with high price: Vinamilk always improves the quality of fresh milk products
and has more nutritional value than previous products. In the minds of consumers, high product
quality is the cause of Vinamilk's high prices.
 Same price but higher quality: Stable prices will attract and satisfy the needs of consumers.
Many dairy companies with a large market share in the Vietnamese market have increased
prices by 7-15%. However, Vinamilk still kept the selling price unchanged, creating the trust and
support of customer.

Place

Vinamilk is distributed through traditional channels (including 220 independent distributors and more
than 140,000 retail points) and modern channels (such as supermarkets, shopping malls, etc.).
Traditional channels distribute more than 80% of the company's products with 14 showrooms in big
cities such as Hanoi, Da Nang, Ho Chi Minh, etc. Meanwhile, modern channels have a wide distribution
network and strong, through many invested dairy factories spread across the country; with 1,400 first-
level channels and a series of direct distribution channels such as schools, hospitals, supermarkets,
etc.
Promotion

To bring its products to a large number of consumers, Vinamilk has used all means of advertising such
as media, newspapers, outdoor advertising, even building Vinamilk's online marketing strategy. In
addition, Vinamilk's marketing campaign also includes many successful public relations and community
activities such as Vinamilk scholarship fund for young Vietnamese talents, Arsenal Football School -
Vinamilk, Milk Fund for Vietnam's Poor Children. With many communication strategies that contribute
and bring benefits to society, which are well received and enthusiastic by consumers, Vinamilk brand
becomes more and more friendly to consumers outside of production and sales activities.
 Figure 11, Dairy Fund Rise Vietnam

Milo Vinamilk
Product Quality both improve the user's nutrition
The commitment to provide keeping the best nutritional
complete nutrition and energy ingredients such as vitamins and
every day in products. minerals from pure cow's milk
Packagin Both use paper packaging.
g Collaborated with PIQET in cooperates with two of the world's
2008. leading packaging suppliers, the
Swedish company Tetra Pak and
the German Combibloc in 2015.
Price Due to the fact that if one of two items costs more than the other, buyers
may decide to buy the cheaper one instead. 1 pack Milo and Vinamilk, for
example, are both price between 10,000 and 8,000 VND.
“High quality comes with high price” and Penetration pricing strategy
“same price but higher quality”
Place Wholesale and retailer across the country

Promotion Sponsoring domestic and international sports Fundraising for charity, supporting
tournaments. poor children.

4. MARKETING PROCESS AND MARKETING STRATEGY OF NESTLE MILO

Segmentation, targeting, positioning, differentiation

Segmentation

Geographic

Nestle is the world’s largest food company that did marketing segmentation very well. They also base
on the geographic segmentation. Here they consider the world region, country region and rural area:

1) World or country region:

- Nestle understands the geographical different in needs and wants. For example: in Viet
Nam, Nestlé has the Milo brand with many kinds of Asia milk, but Milo do not exist in Europe
because of the different in the geographical taste. While, Nestlé sell pet food in Europe but
they do not sell in Viet Nam. So, we can easily understand that this company considers
geographical segmentation.
2) Rural area:
- Nestle also considers the rural area segmentation. For example, in the city, super market of
Viet Nam keeps Maggi sauce/Milo milk and in rural areas Nestlé supplies a much less
product like Maggi or Milo.

Demographical

Nestlé segments their customer into the different of age, family size, family life cycle, income, etc.

1) Age:
- Nestle never offers the same product for the people whose is 30 and whose age is 13. For
example, Nestle offers Nescafe for adult people and offering Milo for teenagers.
2) Family Size and Family life cycle:
- Nestle offers their same product in different size of containers to fulfill the different type of
needs according to the size of the family. For example, Nestle chocolate offers different size
of containers. The family with many members can buy a large container to satisfy everyone
in the family, where a small family can take the small one to do the same.
3) Income:
- The people with small income can buy a Nestle product. They produce that product which
will save money. Like, Nestle Milo has a mini pack for instant Milo which saves the money of
limited income people.

Psychographic
Nestle offers their product considering customers psychographic segment, like, social class, lifestyle,
and personality.

1) Social class:
- Many products of Nestle company are highly affordable by different the people of different
social class, such as Nespresso, the high-quality coffee machine of Nestle.

Figure 12, Nespresso Logo

2) Lifestyle and personality:

- Nestle Breakfast Cereals is the best choice for busy people as well as drink milk Milo also
help them more alert in study and working. Besides, there are more some people who love to
eat an eat every time and everywhere.

Behavior:

1) Benefit:
- Nestle offers the best quality, taste and price for milk, coffee and chocolate. Customers may
buy other companies’ milk/coffee/chocolate, but no other company can provide the quality
and flavor that Nestle provide.
2) Readiness stage:
- Nestle is one of the most well-known company in the world. A very few people can found
who do not know about this company product. Nestle figure out the stage of their customer
and make them more aware about their foods and nutrition.
3) Attitude toward product:
 - Nestle is always concern about the attitude of people toward their product. They consider the
feedback of their customers and the other people and make their product better to get the
positive opinion of their customers.
4) User status:
- A market has all types of customers into their segment, so that all types of customers get
opportunity to buy the product of Nestle. All the following criteria are followed by the Nestle
Company for their segmentation.

Targeting

Market segmentation reveals the firm’s market segment opportunities. It now must evaluate the various
segments and decide how many and which segment it can serve best. Customer now look at how the
company evaluate and target segments.

1) Right size and growth:

- Nestle company collets information about different type of customer from market
segmentation. Then analyze to select a target market. They complete this task considering
the size and growth of the target market. Nestle mostly focus on the geographic and
demographic segmentation because, their product is made based on these two segments.
2) Structural Attractiveness:
- Most of the companies have their similar competitors. Nestle also considers its competitors
so that, they can attract their target market. They try to made a better product in a good price
then their competitors. Nestle is also concern about the buyer’s power and the supplier’s
power. To achieve the target market Nestle need to satisfy the buyers as well as the
suppliers. To avoid the bargaining problem that is created by the buyers, Nestle companies
all products are at a fixed price. There is another problem of substitute product. But because
of the high quality and affordability Nestle do not need to be worried about that problem

Selecting target market

After evaluating, different segments, Nestle Company decides which and how many segment it will
target. Buyers have unique need and want. So, Nestle divided their products according to the different
segments of market.

Nestle wants to offer some kind of product that is mainly based on demographic segmentation:

No Different consumer Product

.
 1 Age: 6 months and onwards Cerelac, Nestum, Nan
2 Coffee lovers Nescafe, Coffee Mate
3 Chocolate lovers Kitkat, Crunch, Galak
4 Age: 8 years and onwards Maggi, Nan, Nutren

5 Age: Teenagers Milo, Aero, Turtles

These are some of different type of products that Nestle Company offers for different types of
customers. They offer these different types of products because there are different types of demand in
the market.

Positioning map

“A company must differentiate its offers by building a unique bundle of benefits that appeal to a
substantial group within the segment.”—Nestle knows this pretty well.

Figure 13, Position of Nestle in Global

 Figure 14, Vietnam Dairy Market Share

Figure 15, Position map of nutrition milk in Vietnam

These figures show a positioning map for the world’s leading food brand-Nestle. Nestle leads the world
in food production with high quality and high prices, but in Vietnam, in the dairy industry, Nestle Milo
only accounts for about 9.1% of the market share. Therefore, it can be seen that Nestle's position in
Vietnam is lower than that of some competitors, in term of domestic and accessible, Nestle only ranked
fourth in the market.

Different strategies

Service: Nestle wants to make sure that their service is better than other competitors. They print the
nutritional values and other health facts related to the product on the packet of the product. They also
provide contact number and mailing addresses etc. for queries or any other facts. For example, on the
packaging of milo milk, Nestle has listed all the information about this product such as the nutrition
facts as well as their Active-go technology.

Figure 16, packaging of milo milk (Nestle)

Product: Nestle provides the best products and they are quite self-confident about it. They know very
well that they have a very few competitors which makes it easy for them to capture the market.

Image: Nestle knows that a company cannot develop an image in public mind overnight using only a
few advertisements. Nestle has a different image in public eye which it has earned over the years. A
typical example is the advertising war between Milo and Ovaltine.

Figure 17, Milo and Ovaltine in advertising campaign

People: Their number of target people is very high because they have much demand for baby food
and nutrition.

Analysis 7Ps

Product

Nestle provides a wide range of products with their line extensions in the market. They have been
providing variety with quality to the consumers. Some of the Nestle’s top brands are Maggie, Nestea,
Nescafe, Kit Kat, and etc.

Figure 18, Nestle Product (Nestle, 2020)

Price

The cost is dependent on the market of each single product. For example, Nescafe and Maggi being
the clear leaders are priced with higher gross profits for the company as compared to the competitor.
This is because the product quality is good enough and a act of skimming price will not induce the
client to change brands.
The intensity level of pricing for Nestle comes from its packaging or consumption-based pricing. For
Nescafe as well as Maggi, Nestle offers a bunch of sizes and package options. In supermarkets, you
can even find a 16 packet Maggi whereas in small retail shops, you can find 5 Rs Maggi.
Place
Nestle has been displaying its product in the supermarkets and the malls. It has been managing its
own sales and distribution network all over the Vietnam market to supply their product. It has been also
placing it products in hospitals, canteens of colleges, companies and public places.
Promotion

One of the most widely known tunes is the Nescafe tune. It was one of the best advertising campaigns
and was launched at least 2 decades back. However, that campaign brought Nescafe strongly in the
market.

On the other hand, Nestle’s brand was pushed by the excellent product quality of Milo and the witty
and innovative campaigns of Milo. Where Nescafe focuses on value and the good things in life, Milo
focuses on nutritional value and physical development of Vietnamese children. The recent campaign
was completely focused on your magic story, where people had to come out with various innovative
ways that they had their magic.

Promotions for other products too is done smartly. Kitkat focuses on “Take a break” and has done
some good marketing for the same. KitKats website too is very innovative and shows nothing but asks
the visitor to take a break and have a Kitkat. The major push expected of an FMCG company is in
sales promotions at the ground level. This is where Nestle really rocks. Nestle focuses on its strength
which is Maggi, Nescafe and Kitkat which are the most

Figure 19, Some promotion campaign of Nestle

People

Nestle Vietnam has been recruiting thousands of people to join their company. They have been training
their employees to handle the queries of their customers and also provide better customer service.
Various campaigns are organized by their employees for the purpose of the sales promotion in different
cities of Vietnam.

Process

The company has been manufacturing the products by processing it using better technology. The way
Nestle has been using its vending machine to serve the customers easily shows that they have
understood the requirements of the consumers in Vietnam.

Physical Evidence

Nestle has been creating a better evidence connectivity by setting up the corners with their logo of Milo
in vending machines.

Figure 20, Nestle Milo vending machine in HCM city