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)

(

Nur Adilah bt Md Zain

(

)

Anisha bt Ramli

)

(Nurul Zamieza bt Ahmad)

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MKT260 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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MKT260

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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MKT260 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.

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Maximizes the use of good quality local raw materials.

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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"

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Be a responsible corporate citizen, fulfilling all obligations to Government, shareholders, customers, communities and consumers.

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Protect the environment by being committed to environmentally sound business practices and taking into account the need to preserve natural resources and save energy.

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Guarantee that all products manufactured, imported and distributed by Nestlé Malaysia are certified HALAL by authorised Islamic certification bodies.

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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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MKT260 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 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

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MKT260 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 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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MKT260 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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MKT260 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 Food

Ice Cream

Cereals

Chocolates

Milo

Nespray

Maggi

Drumstick

Honey Star

Kit Kat

Nescafe

Neslac

Buitoni

Trophy

Koko Crunch

Smarties

Mat Kool

Cookie Crisp

Milky Bar

Canned Drink UHT

Nestle Crunch

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

Product

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MKT260 •

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.

•

Milo Fuze

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MKT260 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 10 | P a g e

MKT260 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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MKT260 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.

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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MKT260 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.

Product branding 13 | P a g e

MKT260 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.

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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MKT260 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 15 | P a g e

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MKT260 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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MKT260 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.

2. Place 18 | P a g e

MKT260 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 Nestlé House, 4 Lorong Persiaran Barat 46200 Petaling Jaya, Selangor Tel : 03-7965 6000

National Distribution Centre Lot 1, Persiaran Waja Kawasan Perindustrian Bukit Raja, 41050 Klang, Selangor Tel : 03-33447850 Fax : 03-33436171

BRANCH ADMINISTRATION OFFICES & AREA SALES OFFICES PENINSULAR MALAYSIA Kuala Lumpur Branch Nestlé Products Sdn Bhd Lot 14, Jalan Delima 1/1 Subang Hi-Tech Industrial Park, Batu Tiga40000 Shah Alam, Selangor Tel : 03-56297000 Fax : 03-56297154

Penang Branch Nestlé Products Sdn Bhd Tingkat 12, Wisma TNB No. 30, Jalan Anson, 10400 Pulau Pinang Tel : 04-2381700 Fax : 04-2381898

Johor Bahru 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

Kuantan Branch 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 Nestlé Products Sdn Bhd Level 4 (3rd Floor) Wisma 202018 Jalan Belia 88100 Kota Kinabalu, Sabah Tel : 088-243030 Fax : 088-237498

Sandakan Area Sales Office Nestlé Products Sdn Bhd c/o Harrisons Trading (S) Sdn Bhd 2nd Floor, 20 Jalan Tiga 90000 Sandakan, Sabah Tel : 089-223201 Fax : 089-225498

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MKT260 Tawau Area Sales Office Nestlé Products Sdn Bhd 4th Floor, Man Tong Shing BuildingTB 20, Jalan Dunlop, Tawau, Sabah Tel : 089-776365 Fax : 089-753211 Miri Area Sales Office Nestlé Products Sdn Bhd Lot 1894, Block 4 Miri Concession Land District, Piasau Industrial Estate Jalan Dtk Patinggi Hj Abd Rahman Yakub 98000 Miri, Sarawak Tel : 085-653054 / 663415 Fax : 085-661648

Sarawak Branch Nestlé Products Sdn Bhd Menara MAA, Level 7 Jalan Ban Hock / Central Timur, 93100 Kuching, Sarawak Tel : 082-235918 Fax : 082-417066 Sibu Area Sales Office Nestlé Products Sdn Bhd Lot 480, Jalan Then Kung Suk, Upper Lanang, P.O. Box 1319 96008 Sibu, Sarawak Tel : 084-214672 / 213064 Fax : 084-214727

FACTORIES Nestlé Foods (Malaysia) Sdn Bhd Petaling Jaya 25,Jalan Tandang P.O. Box 8081, Pejabat Pos Kelana Jaya 46781 Petaling JayaSelangor Tel : 03-77811822 Fax : 03-77813823 Nestlé Foods (Malaysia) Sdn Bhd Batu Tiga Jalan Playar 15/1 40000 Shah Alam, Selangor Tel : 03-55195333 Fax : 03-55106263 Nestlé Foods (Malaysia) Sdn Bhd Chembong Jalan Perusahaan Utam Kawasan Perindustrian Chembong 71300 Rembau, Negeri Sembilan Tel : 06-6853944 / 6853952 Fax : 06-6853926

Nestlé Foods (Malaysia) Sdn Bhd Shah Alam Shah Alam Complex Jalan Playar 15/1 P.O. Box 7010 40700 Shah Alam, Selangor Tel : 03-55195333 Fax : 03-55102028 Nestlé Foods (Malaysia) Sdn Bhd Raja Muda Shah Alam Complex Jalan Playar 15/1 P.O. Box 7010 40700 Shah Alam, Selangor Tel : 03-55195333 Fax : 03-55102028 Nestlé Foods (Malaysia) Sdn BhdKuching Lot 844, Block 7 Muara Tebas Land District

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Nestlé Manufacturing (Malaysia) Sdn Bhd [Formerly known as Nestlé Cold Storage (Malaysia) Sdn Bhd] Chembong Jalan Perusahaan 4 Kawasan Perindustrian Chembong 71300 Rembau, Negeri Sembilan Tel : 06-6853944 Fax : 06-6857602

Demak Laut Industrial Park, P.O. Box 710 93714 Kuching, Sarawak. Tel : 082-439439 Fax : 082-439097

Nestlé Manufacturing (Malaysia) Sdn Bhd [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 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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MKT260 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 Channe l Producer

Wholesale r Channel Producer

Wholesaler s Retailers

Retailers

Consumers

Consumers

Product transportation

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MKT260 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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MKT260 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 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.

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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 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

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MKT260 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 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

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

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

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MKT260 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: 28 | P a g e

MKT260 •

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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MKT260 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 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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MKT260 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 Establish Establish price price goals goals

High $

Estimate demand, Estimate demand, costs, and profits costs, and profits Choose a Choose a price strategy price strategy

Evaluate Evaluate results results

Fine-tune Fine-tune base price base price

Skimming Status quo Penetration n Low $

Set price Set price $x.yy $x.yy

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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.

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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MKT260 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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MKT260 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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MKT260  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 37 | P a g e

MKT260 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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MKT260 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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MKT260 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

Development in technology gives rise to

by a range of economic factors such as

new products and market opportunities,

income levels, inflation, taxes,

e.g. the rapid growing use of

unemployment, exchange rates and

computerized reservations systems.

mortgage rates.

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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MKT260 * 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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MKT260 

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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MKT260 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

1

Acknowledgement

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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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