Topic marketing strategy analysis of nestlé milo

With a total investment of more than 600million USD, Nestlé not only shows commitment to the company's long-termdevelopment in Vietnam, but also the desire to improve the quality of life

Bộ Tài Chính Trường Đại học Tài chính – Marketing

Class: CLC_20DMA09

What is marketing? Obviously, in the minds of Vietnamese people, Marketing

is still quite strange, but in the world it is really popular Furthermore, that is one of the core elements in the operation of a company There is a lot of confusion when thinking: "Marketing is advertising or sales" and it is worse when many people think

it is a "Multi-level operation" According to the American Marketing Association, marketing is defined as: “Marketing is the activity, set of institutions, and processes

for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” Or simply, Marketing is a popular form to help companies connect with customers That is all an activity to attract customers to your business and maintain long relationships with them.

Nowaday, with an International Economic Integration , competition becomes a most important factor for the development of each enterprise The trend of globalization opens up, it makes the market wider and increases the supply in the market Consumers have more choices about manufacturers and suppliers In addition, the market economy is more and more diverse, all businesses are always grasping and updating the latest trends in the market to create advantages All of which presents businesses with a lot of opportunity and challenge Therefore, it is impossible not to mention the roles of the marketing strategies that have created a bridge between businesses and consumers Marketing is not only a function of business activities, but it is also a key that guides the entire operation of the business in discovering, meeting and satisfying a customer's needs.

Nestlé - one of the biggest transnational companies in the world, which is implementing Marketing strategies for the company and has achieved many successes Surely, everyone has heard of it once, with famous products and attracting a large number of customers to use such as: nescafe; maggi; milo; etc And why can it be so successful? The answer is the marketing strategies of this business Talking to this, it is impossible not to mention a drink made from milk and barley with chocolate flavor which

is not strange to Vietnamese people, that is Milo Nestlé Milo has calculated logically and skillfully in arranging various and creative ways in

their marketing strategies, which has brought a lots remarkable achievements Inaddition, they’re always trying to do everything to build trust and love fromcustomers Nestlé Milo always strives to lead or follow the market's consumertrends, constantly researching, learning to create and meet consumers needs.Through research and research, our team found that Milo had perfect marketingstrategies to help the company grow more and more, so that our team chose thetopic: "Marketing strategy of Nestlé Milo" for study and presentation.

Introduction 1

Chapter 1: Introduce 5

1.1 Introducing about Nestlé S.A 5

1.2 The history of Nestlé Milo 6

1.3 Vision and Mision 7

1.4 Message 8

Chapter 2: Marketing Environment 9

2.1 Macro – environment 9

2.1.1 Demographic 9

2.1.2 Cultural 10

2.1.3 Natural 10

2.1.4 Political 11

2.1.5 Economic 11

2.1.6 Technological 12

2.2 Micro – envỉronment 13

2.2.1 Company 13

2.2.2 Suppliers 15

2.2.3 Marketing Intermediaries 16

2.2.4 Customers 16

2.2.5 Competitor 16

2.2.6 Public 17

Chapter 3: S - T – P Strategy 19

3.1 Segmentation 19

3.2 Targeting 20

3.3 Positioning 21

Chapter 4: Marketing Mix 22

4.1 Product 22

4.1.1 Product Mix 22

4.1.2 Individual Product 22

4.1.2.1 Quality 23

4.1.2.2 Features 23

4.1.2.3 Style and Design 23

4.1.2.4 Branding 24

4.1.2.5 Packaging 24

4.1.2.6 Product support Service 25

4.1.3 Product life – circle 25

4.2 Price 25

4.2.1 Pricing Method 25

4.2.2 Pricing Strategies 26

4.3 Place 26

4.3.1 Distribution network and Channel behavior 26

4.3.2 Distribution Strategy 2

4.3.3 Distribution channel management 28

4.4 Promotion 28

4.4.1 Promotion strategy 28

4.4.2 Promotion mix 29

Chapter 5: Recommendation 31

Chapter 1: Introduce

1.1 Introducing about Nestlé S.A

“Nestlé S.A or Société des Produits Nestlé S.A is a Swiss multinationalfood and drink processing conglomerate corporation headquartered in Vevey,Vaud, Switzerland It is the largest food company in the world, measured byrevenue and other metrics, since 2014 It ranked No 64 on the FortuneGlobal 500 in 2017 and No 33 in the 2016 edition of the Forbes Global 2000list of largest public companies.” - Wikipedia

The founder of Nestle is the pharmacist - Henri Nestlé, was born on August 10 in 1814 in Frankfurt am

Man, Germany He was the 11th out of 14 people in a

wealthy, bourgeois family The Nestlé family originated

in western Swabia, Germany In Swabian, "Nestlé"

means a bird's nest and that is why for over 140 years,

Nestlé has had a small bird's nest in its logo.

In 1860, the rate of children born in Switzerland had a high mortality rate

up to 15-20%, this was the impetus for the pharmacist Henri Nestlé to think ofthe idea of producing a nutritious powder for infants With his knowledge andexpertise in the field of pharmacology along with another partner is JeanBalthasar Schnetzler - a food scientist with an extremely practical mind In 1867,Henri and Jean invented a nutritious infant formula and experimented directlywith Jean Balthasar Schnetzler's son when he was born

And also in 1867, Nestlé had known a baby was born 1 month prematureand could not be breastfed He brought the baby home and tried his own ready-to-drink cereal Miraculously, the baby recovered very quickly after a few days.Quickly, the news spread and spread to all European countries, reaching allmothers who were unable to breastfeed their babies Since then, Nestle hasshaped its brand in the world in general and in Europe in particular.

Growing to this day, Nestle has more than 400 factories in 85 countriesaround the world Nestle's wide range of products includes baby products,healthy food, bottled water, breakfast cereals, coffee and tea, confectionery,dairy products, ice cream , frozen food, pet food and snacks Nestlé's sub -brand include: Lavie; Kitkat; Oreo; Nescafe; Maggi along with Nestlé Milo -

a foodstuff made from cocoa and aromatic barley from Australia associatedwith childhood memories of many generations

1.2 The history of Neslé Milo

MILO was first introduced in 1934 by chemical engineer Thomas Mayne ofSmithtown, New South Wales, in the Royal Sydney Easter Show The nameMILO is named after a sports legend from Cortona, Italy with extraordinary healthwho has won consecutive championships in 6 international Olympics

At this time, Australia as well as other countries in the world are affected by the great economic recession At that time, Nestlé wanted to develop a water that provides energy for children, thereby providing children with essential vitamins and minerals for the body at an affordable price This drink must be made from local ingredients such as barley, cocoa and dried milk… Nestle has partnered with Mayne, established Nestle Milo and distributes them worldwide In Asia, Milo is very popular in Indonesia, Malaysia and Singapore, where people love chocolate- flavored drinks: Milo has a 90% market share in Malaysia This is because Milo was once used as a nutritional supplement when it was first introduced in the country, and has thus gained a reputation as a 'must have' drink for the young and old.

Nestle joined Vietnam early, in 1912 built its first office in Saigon andhas been with the Vietnamese family for more than 100 years In 1998,Nestle established the first company in Dong Nai and started to build afactory Up to now, Nestlé is operating 6 factories, 2 production lines andnearly 2300 employees nationwide With a total investment of more than 600million USD, Nestlé not only shows commitment to the company's long-termdevelopment in Vietnam, but also the desire to improve the quality of life andcontribute to a healthier future for customers Vietnamese family generation

1.3 Vision and Mission

At Nestlé, with the vision of becoming a leading company in the field ofnutritional and health food for customers Nestle has one mission: “to be theworld's leading health and nutrition company” With the criterion of “GoodFood, Good Life” giving users the best choice in a variety of foods andbeverages from morning to night The aim is to improve the quality of life andcontribute to a healthier future for generations of Vietnamese families

For 80 years, Nestlé Milo has nonstop been providing nutrition and energy

to children in more than 40 countries around the world With 80 years of globalexperience and 20 years of attachment, understanding the nutritional needs of

Vietnamese children, Nestlé Milo aims to develop quality as the foundationfor future success.

1.4 Message

This is the message Milo wants to convey for many years, with thedesire that the young Vietnamese generation to have health training andtoughness Besides training Vietnamese children will learn lessons aboutdetermination to overcome all challenges, nurturing passion and buildingteamwork in a healthy body That's all the value sport brings

Nestlé Milo has become a close friend in the child's development journey Not only providing energy every day Nestlé Milo also encourages children to participate

in physical activities and sports that are beneficial to health For 12 consecutive years Nestlé Milo accompanies the football tournament ”Hội Khỏe Phù Đổng” since

2007 Since 2016, Nestlé MILO has cooperated with the Ministry of Education & Training and the General Department of Sports to implement programs ”Năng động Việt Nam” towards building a dynamic Vietnam generation and health.

Nestlé Milo is the pioneer brand in the work of encouraging children toparticipate in sports with a long-term energy source to help children learnvaluable life values to become their own true champions

Chapter 2: Marketing Environment

When starting a business in a market, the company is dependent onthe market environment The environment of markets can bring a lot ofadvantages or challenges for a company In Marketing, analysing amarketing environment is a very important step to help the company make adecision and solve all the problems surrounding their business

2.1 Macro – environment 2.1.1 Demographic

As one of the developing countries with the golden population pyramid along with the top 15 population in the world, as of December 31, 2020, Vietnam's population is estimated at 97,757,118 people In which, under 15 years old accounts for about 25.2% Vietnam is a country with a young population structure and an average of 4234 children are born every day, creating very good conditions for products to provide nutrition for children Currently, the urbanization rate in Vietnam

is quite fast, along with the population distribution has also changed a lot The structural transformation of economic sectors by decreasing the share of the value

of the agricultural sector and increasing the share of industry and services also changes the structure of the population According to statistics, the proportion of the population working in agriculture accounts for over 50%, so this gap can be shortened Not to mention the increasing income of people, this number has exceeded 2000 USD/person/year in 2019 In today's life, the needs of people are extremely diverse and rich, this is a great opportunity for dairy businesses to conquer Vietnamese people.

Children between 6 and 15 years old often refuse to eat nutritious foods such as shrimp, crab, fish, leading to calcium deficiency along with nutrients According to research by scientists, children from 4 to 10 years old require a Calcium intake of 450-

500 mg/day and from 11 to 18 years old the body needs more calcium with about 1000mg/day, so the need for calcium-fortified milk is very large On average, a child needs at least 12 cans of milk a day Because of this feature, Milo with chocolate

800-barley flavor is different from milk produced mainly from cows like other brands,which has stimulated the sensitive taste buds of this age group Thanks to suchpopulation characteristics, Vietnam is a potential market for Nestle Milo.

2.1.2 Cultural

With the long-standing concept of Vietnamese people that there is nothing better than breast milk, it is quite difficult to consume products for children aged 1-3 years old, so Nestlé Milo focuses on older age Therefore, mothers will consider it

as a supplementary drink instead of giving their children soft drinks that are harmful

to health The condition of Vietnamese people is quite small compared to international friends, so the nutritional needs of children are an extremely urgent need, especially Calcium to help children develop fully in all aspects.

In Vietnam, the habit of using sweets as well as canned products or dairyproducts belongs to a small part of the urban population On the other hand, theability to access dairy products by the majority of the population with below-average living standards is very difficult With economic growth, people's access

to information resources becomes more easily Therefore, people increasinglyneed the care and satisfaction of physical needs, so milk and products like juice,coffee, are extremely good For many people using that kind of product hasbecome a daily routine Especially, creating trust in prestige and quality, Milo hasmade loyal customers use their products, because one of the points in theconcept of Vietnamese people who often use one kind of products that they feel

is secure, trust so that they rarely change using another products

2.1.3 Natural

VietNam is a country having a humid tropical monsoon climate lengthened from the North to the South Therefore, Nestlé Milo and all the milk companies have the same problem is how to keep in good repair their milks and products Because milk is a health product, preserving milk is very important If they use canisters for their product, in hot weather like Vietnam Milk will deteriorate quickly So, using the paper box is the best way to preserve the product Milk preservation needs extremely

strict requirements when it is best stored between 4-6 degrees Celsius Ifhigh or lower, it will break down the structure of milk, causing changes insubstances into harmful elements that greatly affect the health of users.Besides, VietNam is a developing country, it's becoming more and moreurbanized There are a lot of places to build factories, with abundant humanresources Vietnam is a bestway for a company to come and invest.

2.1.4 Political

Politics in Vietnam is very stable That's why a lot of foreign enterprises come

to Vietnam for investing and development, including Nestlé Milo Besides taxing imported goods and products, the government in Vietnam has a lot of policies that are really helpful for businesses According to Policy Decision 3399/QD-BCT in

2010 approving the planning of the dairy processing industry to 2020 with a vision to

2025 has brought many opportunities to reduce raw material costs to create potential for development On the other hand, there are still a lot of threats for companies from competitors and suppliers can easily become a dỉrect competitors.

2.1.5 Economic

Nestle's first office was first opened in "Hòn Ngọc Viễn Đông" in 1912.Therefore, it is not exaggerated to say that this group has almost grasped theeconomic situation of Vietnam right from the early days of industrialization inorder to take the right steps into the Vietnamese market

Specifically, from 2002 to 2019, GDP per capita increased 2.7 times, reaching over USD 2,700 in 2019, with more than 45 million people escaping poverty The poverty rate dropped sharply from more than 70% to less than 6% With the strong and rapid growth of GDP, the purchasing power for health and personal services also increased According to the Center for Industry and Trade Information (Ministry of Industry and Trade), in a market report by Euromonitor, in 2020, Vietnam's consumption

of milk and dairy products will reach 1.76 million tons, an increase of

8 6% compared to 2019 According to the forecast, sales of milk and dairy products in Vietnam are expected to maintain at 7-8%/year in the period 2021-2025, reaching a total value of about 93.8 trillion dong in 2025 With such a continuous increase in milk consumption, it shows that milk is a potential market in Vietnam Vietnam in the period of integration and globalization led

to the penetration of many new dairy companies, including a prominent event that changed the Vietnamese dairy market when the milk price dropped by 5-10% in 2014.

2.1.6 Technological

As a country in the process of industrialization and modernization, the application of industrial parks as well as advanced production lines will increase production capacity and increase the competitiveness of enterprises Recently, Milo

is gradually making technological advances such as investing about 37 million USD (2014) in Milo's instant milk production line Next, Nestle Milo is produced at Bong Sen factory (Hung Yen) belonging to one of six factories of the parent company Nestle in Vietnam Bong Sen factory was put into operation on May 18, 2017 with a total investment of 1,600 billion VND (about 70 million USD), with an area of 10 hectares to develop the MILO water nutritional drink product line to meet domestic demand The strong investment to modernize, increase productivity, product quality and diversify dairy products also presents many challenges and opportunities The current production lines are highly synchronous, used in automatic and semi- automatic forms to meet the needs of food safety and hygiene, and environmental protection is getting more and more attention According to Nestlé Vietnam, the factory uses the latest environmental technology, including an eco-friendly cooling

system and a heat and energy recovery system, with no emissions harmful tothe soil With modern technology and techniques, the new factory not onlyensures the production of the best quality products, but also minimizesenvironmental impacts and optimizes the use of natural resources.

2.2 Micro - environment 2.2.1 Company

Strengths

In terms of company strengths, Nestlé S.A is the most famous brand in the world.

It has developed a respectable reputation in the food and beverage sector providing high quality products for daily use across the globe According to Fortune Global 500, Nestle is ranked 69th in all the largest corporations in the word in 2018, which proves that Nestle SA has gained a great global recognition With the support and investment of the parent company, Nestlé Milo is now present in many countries around the world with huge consumption sources such as: China, India, Malaysia, Singapore, etc Nestlé Milo always tries to develop, strives to create a huge revenue.

In Vietnam, not only Nestle Milo but also most foreign companies enteringVietnam have the support of the world's largest corporation, so it is not difficultfor Milo to dominate a large market with the same network They have a team ofseasoned experience from production to sales to bring products to consumers

As you know, in the food industry, the trust of customers must be on the toppriority, so all the products from Nestlé Milo always focus on quality, they alwaysachieve a high rating of almost 5 stars on the market forums Next is theirMarketing team with two years receiving the APAC Effie Awards - a prestigiousaward in the field of communication and marketing in the Asia Pacific region, andthis is the right direction of Nestlé MILO

Weakness

Besides the strengths that Nestlé Milo has, they still have problems such as: Price fluctuations at retail stores; Control gap and organizational structure; etc But

most of all, the biggest weakness is Nestlé Milo needs to improve the quality oftheir products in the near future Milo had made the mistake of mixing milk tomake a chocolate barley drink containing up to 50% sugar This is extremelydangerous to the health of users, especially young people - the future of anentire country Especially, the number of people with diabetes is increasing, soMilo needs to consider and fix this weakness in the near future.

With the company Nestlé Milo in particular and Nestlé S.A in general,both have received many criticisms from society Therefore, Nestlé S.A and itsbrands have lost a lot of their trust in customers, it has left many bad images inthe minds of customers In 2014, with the destruction of more than 37,000 tons

of Maggi noodles in India due to lead contamination with the scandal ofexcessive use of water and forced child labor in developing countries, Nestlehas discredited its products to customers in general and countries in particular

Opportunity

According to a number of research articles, consumers nowaday tend to buy products with clear and accurate labels Up to 62% of consumers will choose products with no harmful elements Consumers are increasingly concerned and conscious about where the food they are using comes from and how it is prepared And the habits of some young people today tend to put sustainability as an important deciding factor when buying products Therefore, with the scandal about the label providing nutritional information about Nestle Milo's products in the past, they need to improve, fix the production line and provide accurate information about the product for customers Then, customers will have more trust in Milo and put their loyalty in it.

Besides, under the 4.0 era, everything is becoming faster, convenience comes first, FMCG products will be an advantage for Nestle Milo Each box of pre-packed cool milk will be a delicious bait for customers who are children Furthermore, the huge consumption in Vietnam has opened up great opportunities for Milo With that, Nestle Milo has a notable opportunity to promote its e-commerce websites and online shopping platform A very few FMCGs are offering online services to make the

shopping experience more comfortable and pleasant While Nestle hasonline stores in a few countries, expanding its online offerings into moreareas would prove a rewarding decision for the company.

Threats

The dairy market in Asian and Southeast Asian countries is no different from

a "cake", so every year there are many competitors participating in the competition Combined with the strong development of the media and consumer demand strictly from customers, Milo mustn’t make any mistakes, even the smallest.

Besides, Government regulations play an equally important role, whichcan affect Nestle's business In addition, increasing commodity prices forcethe company to increase product prices It will lead to a decrease in sales asconsumers can switch to other brands that are available at a low cost

2.2.2 Suppliers

Following Nestlé S.A: “We rely on more than 5 million farmers in rural areas

to supply raw materials for our production We are working on a variety of programs

to ensure that rural areas become places to live, work and invest in for future generations” With requirements that Nestlé Milo Service Providers need to comply with business practices It is these rules that have created Nestlé Milo a system of reliable suppliers and more than half guaranteed to maintain product quality: Integrity in business; Sustainability ; Standard labor; Safety and health; Environment.

Nestlé has worked wisely with partners including the Ministry ofAgriculture and Rural Development to distribute more than 28 million diseaseresistant seedlings with high yield for farmers Increase over 30% of people'sincome without affecting the ecosystem and environment In addition, ThanhDat company provides product preservation services for Nestlé Milo Theyare Supplier providing transport services and quality reputation are manyleading companies choose as DHL, YAMAHA, VNPT, Ariston, etc

2.2.3 Marketing Intermediaries

In the micro environment, marketing intermediaries play the primary role ofselling and distributing the company's products The more the company's marketingintermediaries the greater the number of products that reach users

+ Shopping mall: Aeon Mall, Big C, Coopmart

+ Convenience stores: GS25, Circle K, Family Mart

+ Large and small household grocery stores

Thanks to the reseller, Milo's products have great coverage After aperiod of exposure to milo's products Customers will form thoughts “Milo is

an essential product”

2.2.4 Customers

When starting a business, all businesses need to define the market ascustomers that have the ability to meet their needs The customer is the coreelement of the micro environment Because all marketing activities are customer-centric and customer satisfaction

+ Consumer markets: Households, students and children, …

+ Business markets: Businesses doing services such as schools, … + Reseller markets: Supermarket chains such as Big C, Coopmart, Eon,

convenience stores, …

+ Government markets: Volunteer organizations belonging to the

government, charitable organization

2.2.5 Competitors

In terms of the dairy market in Vietnam, Nestle Milo has to face two giants, Vinamilk and TH true milk, who have a wide variety of products and equally wide customer belief They have great technology and a huge influence on the Vietnamese people For example: Vinamilk is a dairy company in Vietnam, associated with many