Marketing Report Nestle Milo

Khái quát chiến lược kinh doanh của tập đoàn nestle

Assalamualaikum WBT,

Alhamdulillah, we are very grateful to the Almighty God, who have bestowed usthe will to complete our assignment about “Nestle Milo” which is connected to ourscheme 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

Thank you to all people who are involved in making our assignment a successfulone and may all your help and effort are blessed

Thank you

(Muhammad Salihin Jaafar) ( Anisha bt Ramli )

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

Executive summary

The main aim of international marketing is to provide solid foundations that areuseful for explanation, prediction and control of the international business activities Weare not an expert in nestle but we have analysis the firm’s global marketing strategy inthe field of their brand awareness, products and system design, product positioning,advertising, packaging, distribution and customer service We have notice that the firmutilized generic marketing strategy such as low cost leader in business, differentiatedgood and services satisfy the needs of customers through a sustainable competitiveadvantage International marketing refer to using common products, price, promotionsand distribution program on a world basis

My secondary data is the most of important for our research and I contributed inthe area such as group or segment those types of potential customers that are mostlikely to benefit from their product line

That is why we effectively utilized the periodical articles which can be a greatsource of product, marketing and industry information (Periodicals refer to magazines,journals and newspapers Although we are living in an electronic age, there is still muchinformation 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 frameworkcompulsory by fundamental policy and strategy decisions requiring increasing flexibilityand operational efficiencies, as well as the group-wide need for alignment and peopledevelopment, may also set limits to decentralization

Introduction

Nestle SA , the world’s leading food manufacturer and the market leader in bothcoffee and mineral water, produces a wind range of products including prepared dishesand cooking aids, milk-based products, cereals, instant coffee, pharmaceuticals andbaby 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 beveragecompany with $71 billion in annual sales and almost 230,000 employees around theworld It markets some 8000 brands that include instant coffee

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

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

Objective of Nestle

“ Nestle business objective is to manufacture and market its products in a waythat 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 conditionfor the firm To obtain more reliable and high qualify source of raw materials, improvedgovernment functioning and regulatory, employed skill and loyal workforce and superiorquality products which successfully complete

Nestle Corporate Philosophy

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

 Produce and sell world-class products of the highest consistent quality, reliabilityand convenience based on business excellence principles throughout ouroperations

 Maximizes the use of good quality local raw materials

 Be an exemplary employer with a progressive human resource and social policy;with a management style that is based on "Management Commitment andPeople Involvement"

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

 Protect the environment by being committed to environmentally sound businesspractices and taking into account the need to preserve natural resources andsave energy

 Guarantee that all products manufactured, imported and distributed by NestléMalaysia are certified HALAL by authorised Islamic certification bodies

 Deliver shareholder value through the achievement of sustainable and profitablelong-term growth

Nestle Marketing strategy

The firm applied a progressive human resource and social policy; with amanagement style that is based on management commitment and people involvement

Moreover, the firm had responsible corporate citizen, fulfilling obligation to government,shareholders, customers, communities and consumers Protest the environment bybeing committed to environmentally sound business practices and taking into accountthe need to preserve natural resource and save energy For example, guarantee that allproducts manufactured, imported and distributed by Nestle Malaysia are certified HALAL

by authorized Islamic certification bodies Perhaps, the firm delivered shareholder valuethrough the achievement of sustainable and profitable long-term growth It’s a wide arearesearch the branding Branding strategy is corporate Part of the branding strategy isthe 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 notenough to win

From its beginning, Nestle developed its business internationally and becameaware of the fact that food products have to be closely linked to local eating and socialhabit That is why Nestle form the very start has always shown respect for diversecultures and traditions Nestle activities to integrate itself as much as possible into thecultures and traditions where it is present, adding also to the local environment its ownset of values Therefore, Nestle embrace cultural and social diversity and does notdiscriminate 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 thecompany if they are the same time beneficial to the local community Precisely, theenvironment 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 throughlocal action and commitment as showed as Nestle Malaysia And of course, Nestleapplied “think globally act locally” as well as thinking out of the box idea in their productand 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

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 alsomanufactured 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 Greekathlete Milo of Crotona, after his legendary strength

Milo is added to hot or cold milk to give it a malted chocolate flavor and extratexture When combined with cold milk, it retains the gritty texture of its raw state Milocan 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 theaddition of sweeteners, appreciating it for its subtle chocolate flavor Another possibleuse is making a normal cup of cold Milo and microwaving it for approximately 40–60seconds This gives the Milo drink a biscuit cover on top Another popular use is tosprinkle it on ice cream, especially vanilla ice cream Milo can also be sprinkled onbreakfast 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 smallamount 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 layersstirring each new layer vigorously to maintain its lightness A final layer of whippedcream topped with extra Milo or chocolate sprinkles This is more of a 'warm' beveragerather than a 'hot' one and is a more popular version of hot Milo for children

Milo manufactured outside Australia is customized for local methods ofpreparation In Ghana, Malaysia, the Philippines, Singapore and Indonesia, it is mixedwith hot or cold water instead of milk, with the instructions "Add milk and sugar ifdesired."

Other countries the packaging is green and has people playing sports on the tin.There is an organization called "Milo Cricket" which operates in most areas by

volunteers, children participating are given small packets of Milo to eat or drink Thecommercials 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 goand go and go" and the line "I need my Milo Today", because it has a low glycemicindex The packaging of Milo tins in Singapore are also green and also have peopleplaying sports on the tins

Milo is very popular in Malaysia, where the brand name is synonymous withchocolate flavored drinks: Milo has a 90% market share in Malaysia (not the oftenquoted 90% worldwide share of Milo consumption)[4], and Malaysians were said to be theworld’s largest consumers of Milo.[5] This is because Milo was once used as a nutrientsupplement 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 inMalaysia 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 mamakstalls offering versions such as "Milo Dinosaur" (a cup of Milo with an extra spoonful ofpowdered undisclosed Milo added to it), "Milo Godzilla" (a cup of Milo with ice creamand/or topped with whipped cream) and "Neslo" (combined with Nescafe powderedcoffee) 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 toconsumer in order to minimize the environmental impact of their products and activities

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

of sustainable-managed renewable resources and to target zero waste In this way, theyintend for their brands to stand for environmental sustainability

Nestlé's initiatives aim to improve the environmental performance of the products alongtheir entire life cycle These include sourcing sustainable raw materials, reducing energyconsumption and minimizing air emissions by moving to different fuel types Nestléinvests an average of CHF 40 million a year to reduce its air emissions Anothersignificant 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 atNestlé there have also been significant advances in the environmental impact ofrefrigerants 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, preparedfood, ice cream, cereals and chocolates There are varieties of each product lines foreach type of products They also will upgrade their product lines through the changing ofthe lifestyle form time to time

Product Mix Width

Food Ice Cream Cereals Chocolates

Milo Nespray Maggi Drumstick Honey Star Kit KatNescafe Neslac Buitoni Trophy Koko Crunch SmartiesCanned Drink Mat Kool Cookie Crisp Milky Bar

The Marketing Mix of Nestle Marketing

The following consideration included in our marketing analysis of the Nestle

 Product

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

Milo Fuze comes in three variants and is the easy tasty way to enjoy nutritiousMilo with Actigen-E and other nutritious ingredients It is vary by 3 types which is cerealsfor hunger pangs, 3in1 for consumer convenience and better taste, and last one is highcalcium 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

Nestlé Milo is not just any chocolate malt drink In growing with Malaysia, NestléMilo stands firm in its commitment to provide every child the nourishment and energyneeded every day Over the years, the nutrient content has been improved to meetevolving demands The current formulation of ACTIGEN-E, in combination withPROTOMALT, 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 differentingredients of Milo, mainly malt extract, skimmed milk, palm oil and sugar If consumedmoderately, as part of a balanced diet, Milo provides the energy required for an activelifestyle 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 isimportant to build and repair body tissue It is essential for healthy growth anddevelopment The protein needs (per Kg of the body weight) is highest when growth israpid, 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 andprotein, excessive fat intake may also contribute to overweight and obesity problems

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

Energy

Carbohydrates supply the main source of energy for the body Carbohydratescan be in the form of complex and simple carbohydrate Simple carbohydrates aresugars that our body can easily and quickly use for energy Complex carbohydrates arechains of sugar units For example, fiber and starches Starches are broken down duringdigestion into glucose before being absorbed into the body Fibers are not digested byour 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 outnecessary body activities such as breathing, regulating body temperature, andmaintaining a heart beat

Energy balance is the key to weight management It has to do with energy intakeand energy output Energy intake is the number of calories we gain from food Energyoutput is the number of calories you use for BMR and activities Imbalance of energy willresult 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 ofgrams) every day These are carbohydrates, protein and fats Micronutrients are thoseneeded in small quantities (micrograms or milligrams) These are vitamins and minerals

Vitamins are micronutrients essential to the human body A deficiency of somevitamins can lead to diseases or metabolic disorders For example, lack of vitamin C canlead to scurvy; lack of vitamin D lead to rickets

Calcium is an important mineral in childhood Calcium is essential for properdevelopment of bones and teeth During infancy, childhood and adolescence period,

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

Sources: dairy milk products, soy-based foods, dark green leafy vegetables, sardinesand 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 areimportant for red blood cell formation It is, therefore, important to consume adequate of

Product branding

Branding is the collection of attributes that the consumer has come to expectfrom a product, which will strongly influence their buying patterns Branding can beachieved 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 intangibleasset In a market where repeat purchases are the key to profitability, a brand namebecomes paramount to a product's success

A catchy name and distinctive packaging are vital ingredients in any brandimage, but the true essence of a brand identity lays in the consumer's mind i.e theperceptions of the product A company must be constantly aware of these perceptionsand try to preserve and build on them through advertising and other promotions.Branding enables marketers to build extra value into products and to differentiate themfrom their competitors.

Product Packaging

The Milo Nestlé’s packaging is the most direct and largest communication vehiclethat the organization had with the most impressions they can deliver And on thepackaging, the firm’s communicate wellness benefits in our beverage business But it’snot just there, also in confectionery, and condiments, nutrition communication through tothe new and existing consumers The packaging materials continue to be the mainsource of concern, mainly in plastics, but also to a lesser extent across metals and paperand 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 newpackaging eco-design tool adopted by Nestlé Design and technology innovations go

hand in hand in order to reduce environmental impacts without compromising consumerneeds.

Nestlé is firmly committed to finding packaging solutions that contribute to a betterenvironment The company supports an integrated approach that favors sourcereduction, reuse, recycling and energy recovery Wherever possible they use recyclablepackaging materials For example, for Easter 2009, Nestlé UK replaced non-recyclableplastic with recyclable cardboard packaging in most of the 25 million Easter eggs itmakes Nestlé UK managed to use 30% less packaging overall, saving a huge 700tones 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 thelast 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 insetting up and managing these schemes Nestlé use recycled material whenever it makes sense and it is legally permitted

Information in Milo Packaging

Product Differentiation

Improve the packaging

Nestle Milo have improve the packaging by replacing the old one with adding theinteresting picture Before this, Milo packaging only have their brand name, butnowadays 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 oftheir green color which is their main color This improvement can attract children to drinkMilo By doing this transformation Milo will be more up to date and can build loyalcustomer and as well as to be more different than their competitor such as Oligo Cocowhich 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 1Milo from the normal powder Milo This is for the customers that do not have enoughtime or in rush because they only need a short time to make it This is because 3 in 1Milo already has added creamer and sugar for consumer convenience Even kids alsocan do it by themselves because it already complete and they do not have to addanything

Add more ingredients

To differentiate Milo from other product they have produce a healthy Milo byadding cereal in Milo Fuze This Milo is very suitable for consumer that concern abouthealthy and on diet because cereal can avoid people from feeling hungry and containfiber that good for digestion Milo also contains a lot of nutrition which does notcontained in the other competitor’s product such as Oligo Coco Oligo Coco is just anormal chocolate malt drink and they do not have nutrition such as Milo

Add more items.

Besides produce Milo for beverages, Nestle Milo also have create new productitem such as Milo ice cream, Milo wafer and Milo energy bar This product item issuitable for children and also adult By doing this, consumer will have a lot of choices tobuy Milo product and as well as positioning Milo as an established brand with a lot ofchoices than the competitors such as Oligo Coco and Ovaltine

Product recommendation

For product recommendation, Milo can make their product more variety byadding new flavor In our opinion, Milo should add some vanilla flavor in order to maketheir product line more variable

Other than that, Milo also can specify their target market based in their age andlifecycle 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 becausenowadays, there’s a lot of people who were suffering the diseases So that, Milo will bepart of the compulsory product that will include in their shopping list

2 Place

Place relates to decisions about the storing and transporting of products, andalso about selecting the products channel of distribution These decisions are critical tothe success of an organization Effective inventory management drives down costs andenhances product quality Choosing the right distribution channel (i.e should we sellthrough middleman firms or should we sell directly to the end-user) Direct energy costpressures have eased in recent months The major distribution channel include withgeographically consideration with the manufacturing place situated It’s very costeffective way for the firm’s expenses in distribution its products to targeted market

H

EAD O FFICE U NIT

Nestlé (Malaysia) Berhad

Nestlé House, 4 Lorong Persiaran Barat

46200 Petaling Jaya,

Selangor

Tel : 03-7965 6000

Fax : 03-7965 6767

National Distribution Centre

Lot 1, Persiaran WajaKawasan Perindustrian Bukit Raja,

41050 Klang, SelangorTel : 03-33447850Fax : 03-33436171

Lot 14, Jalan Delima 1/1

Subang Hi-Tech Industrial Park,

Batu Tiga40000 Shah Alam, Selangor

Tel : 03-56297000

Fax : 03-56297154

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

Penang BranchNestlé Products Sdn BhdTingkat 12, Wisma TNB

No 30, Jalan Anson,

10400 Pulau PinangTel : 04-2381700Fax : 04-2381898

Kuantan BranchNestlé Products Sdn Bhd

No 23, Jalan Gambut 2P.O Box 162,

25720 Kuantan,PahangTel : 09-5118600Fax : 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 OfficeNestlé Products Sdn Bhdc/o Harrisons Trading (S) Sdn Bhd2nd Floor, 20 Jalan Tiga

90000 Sandakan, SabahTel : 089-223201

Tawau Area Sales Office

Nestlé Products Sdn Bhd

4th Floor, Man Tong Shing BuildingTB 20,

Jalan Dunlop, Tawau, Sabah

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 BranchNestlé Products Sdn BhdMenara MAA, Level 7Jalan Ban Hock / Central Timur,

93100 Kuching, SarawakTel : 082-235918

Fax : 082-417066Sibu Area Sales OfficeNestlé Products Sdn BhdLot 480, Jalan Then Kung Suk, Upper Lanang,

P.O Box 1319

96008 Sibu, SarawakTel : 084-214672 / 213064Fax : 084-214727

Jalan Perusahaan Utam

Kawasan Perindustrian Chembong

71300 Rembau, Negeri Sembilan

40700 Shah Alam, SelangorTel : 03-55195333

40700 Shah Alam, SelangorTel : 03-55195333

Fax : 03-55102028Nestlé Foods (Malaysia) Sdn BhdKuching

Lot 844, Block 7Muara Tebas Land District

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

Nihon Canpack (Malaysia) Sdn Bhd

Plot 47, Lorong Bemban Bemban Industrial

[Formerly known as Nestlé Cold Storage(Malaysia) Sdn Bhd] Kuching

Lot 915, Block 7Muara Tebas Land DistrictDemak Laut Undustrial Park,P.O Box 710

93714 Kuching, SarawakTel : 082-439439

Fax : 082-439097

Product positioning

Having decided its corporate objectives and strategy, Nestlé can set marketingobjectives for each of its product, in this case an individual product which is Milo Theprimary objective for Milo is to maintain its position as the Malaysia’s number one sellingchocolate malt drink brand In order to achieve this, Nestlé has to develop a marketingstrategy that will take into account all the elements of the marketing mix This will involveindividual strategies for pricing, product development, promotion and distribution

Since Nestle Milo is an established brand name, these strategies must be flexibleand relevant to each new generation of consumers, but at the same time, great caremust be taken not to damage the perceptions of the product built up over decades ofmarketing

Channel function

Nestle Malaysia have 8 factories and 6 sales offices nationwide Nestle Malaysiaare using two type of channel intermediaries to market its product which is Milo The twotypes of channel are by using retailer and merchant/wholesaler It is convenience forNestle Malaysia since both channel have a lot of advantages in high frequency ofordering, shorter time for shipment and have high number of customers

These channel also have their own function such as transactional function

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

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

Channel

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, asoftware 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 thedevelopment of dual temperature vehicles enabling consolidation of deliveries ofproducts such as ice cream and confectionery

Optimizing Networks

Working with contractors and co-operating with other producers allows the freevehicle 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 vehiclejourneys Computerized milk-collection systems have reduced driving distances by asmuch as 10%

Pilot with Schenker

Nestlé initiated a pilot with Schenker, one of the leading international integratedlogistics 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 thattransport generated on average some 15 kg of CO2 emissions per ton of productdelivered This represents about 10% of CO2 generated during the manufacturingprocess and is equivalent to emissions released by a standard passenger car travellingfor 100 kilometers Improving transportation and distribution of products from factoriesand distribution centers to customers and consumers leads to environmental benefitsand cost reductions It results in less noise, less fuel consumption, less congestion,fewer emissions and less waste Therefore, specific Nestlé guidelines highlightopportunities 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