(TIỂU LUẬN) topic marketing strategy analysis of nestlé milo

Bộ Tài Chính
Trường Đại học Tài chính – Marketing
Khoa Marketing

End of Marketing Principles course essay
(Term 2 of 2020 - 2021)

Topic:

Marketing Strategy analysis
of Nestlé Milo
Instructor: Master’s Nguyen Thi Minh Ngoc

Contributors:

Name

Student Code

Trương Quốc King

2021008461

Nguyễn Hoài Nam

2021008483

Huỳnh Trọng Nghĩa

2021009395

Đặng Quốc Pha

2021009905

Class: CLC_20DMA09


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

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Index:
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

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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

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Chapter 1: Introduce
1.1 Introducing about Nestlé S.A

“Nestlé S.A or Société des Produits Nestlé S.A is a Swiss multinational food
and drink processing conglomerate corporation headquartered in Vevey, Vaud,

Switzerland. It is the largest food company in the world, measured by revenue and
other metrics, since 2014. It ranked No. 64 on the Fortune Global 500 in 2017 and
No. 33 in the 2016 edition of the Forbes Global 2000 list 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 of the idea
of producing a nutritious powder for infants. With his knowledge and expertise in the
field of pharmacology along with another partner is Jean Balthasar Schnetzler - a
food scientist with an extremely practical mind. In 1867, Henri and Jean invented a
nutritious infant formula and experimented directly with Jean Balthasar Schnetzler's
son when he was born.
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And also in 1867, Nestlé had known a baby was born 1 month premature and
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 all mothers who were
unable to breastfeed their babies. Since then, Nestle has shaped its brand in the world
in general and in Europe in particular.
Growing to this day, Nestle has more than 400 factories in 85 countries around
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 associated with childhood memories of many
generations.

1.2 The history of Neslé Milo
MILO was first introduced in 1934 by chemical engineer Thomas Mayne of
Smithtown, New South Wales, in the Royal Sydney Easter Show. The name MILO
is named after a sports legend from Cortona, Italy with extraordinary health who has
won consecutive championships in 6 international Olympics.

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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 and has
been with the Vietnamese family for more than 100 years. In 1998, Nestle established
the first company in Dong Nai and started to build a factory. Up to now, Nestlé is
operating 6 factories, 2 production lines and nearly 2300 employees nationwide. With
a total investment of more than 600 million USD, Nestlé not only shows commitment

to the company's long-term development in Vietnam, but also the desire to improve
the quality of life and contribute 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 of
nutritional and health food for customers. Nestle has one mission: “to be the world's
leading health and nutrition company”. With the criterion of “Good Food, Good Life”
giving users the best choice in a variety of foods and beverages from morning to
night. The aim is to improve the quality of life and contribute 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 global
experience and 20 years of attachment, understanding the nutritional needs of

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

1.4 Message

This is the message Milo wants to convey for many years, with the desire that
the young Vietnamese generation to have health training and toughness. Besides
training Vietnamese children will learn lessons about determination to overcome all
challenges, nurturing passion and building teamwork 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 to
participate in sports with a long-term energy source to help children learn valuable
life values to become their own true champions.

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Chapter 2: Marketing Environment
When starting a business in a market, the company is dependent on the market
environment. The environment of markets can bring a lot of advantages or challenges
for a company. In Marketing, analysing a marketing environment is a very important
step to help the company make a decision 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
800-1000mg/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
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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 such
population 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 dairy
products belongs to a small part of the urban population. On the other hand, the ability
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 increasingly need 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 has become a daily routine.
Especially, creating trust in prestige and quality, Milo has made loyal customers use
their products, because one of the points in the concept 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

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strict requirements when it is best stored between 4-6 degrees Celsius. If high or
lower, it will break down the structure of milk, causing changes in substances into
harmful elements that greatly affect the health of users. Besides, VietNam is a
developing country, it's becoming more and more urbanized. There are a lot of places
to build factories, with abundant human resources. 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 "Hịn Ngọc Viễn Đơng" in 1912.
Therefore, it is not exaggerated to say that this group has almost grasped the economic
situation of Vietnam right from the early days of industrialization in order to take the
right steps into the Vietnamese market.

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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 semiautomatic 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
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system and a heat and energy recovery system, with no emissions harmful to the soil.
With modern technology and techniques, the new factory not only ensures the
production of the best quality products, but also minimizes environmental 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 entering
Vietnam have the support of the world's largest corporation, so it is not difficult for
Milo to dominate a large market with the same network. They have a team of
seasoned 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 top priority, so all
the products from Nestlé Milo always focus on quality, they always achieve a high
rating of almost 5 stars on the market forums. Next is their Marketing team with two
years receiving the APAC Effie Awards - a prestigious award in the field of
communication and marketing in the Asia Pacific region, and this 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

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most of all, the biggest weakness is Nestlé Milo needs to improve the quality of their
products in the near future. Milo had made the mistake of mixing milk to make a
chocolate barley drink containing up to 50% sugar. This is extremely dangerous to
the health of users, especially young people - the future of an entire country.
Especially, the number of people with diabetes is increasing, so Milo 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 its brands

have lost a lot of their trust in customers, it has left many bad images in the 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 of excessive use of water and
forced child labor in developing countries, Nestle has 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

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shopping experience more comfortable and pleasant. While Nestle has online stores
in a few countries, expanding its online offerings into more areas 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, which can
affect Nestle's business. In addition, increasing commodity prices force the company
to increase product prices. It will lead to a decrease in sales as consumers 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 of Agriculture
and Rural Development to distribute more than 28 million disease resistant seedlings
with high yield for farmers. Increase over 30% of people's income without affecting
the ecosystem and environment. In addition, Thanh Dat company provides product
preservation services for Nestlé Milo. They are Supplier providing transport services
and quality reputation are many leading companies choose as DHL, YAMAHA,
VNPT, Ariston, etc.

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2.2.3 Marketing Intermediaries
In the micro environment, marketing intermediaries play the primary role of
selling and distributing the company's products. The more the company's marketing

intermediaries 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 a period 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 as
customers that have the ability to meet their needs. The customer is the core
element of the micro environment. Because all marketing activities are customercentric 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

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Vietnamese generations. Moreover, Vietnamese people have a personality about
buying consumer goods that is: "Vietnamese people use Vietnamese goods". Or, TH

true milk is famous for its clean and pasteurized milk, which has won many
customers's trust in this milk brand. It can be said that their products are substitutes
of Nestle Milo.
Nestlé Milo is a company that mainly supplies milk from barley, so Nesté
Milo has a very strong competitor, Ovaltine. Both of which carry the same cocoa
flavor, although different in taste, but are also difficult choices for consumers.
Although Nestlé Milo still holds the largest percentage of this market, Ovaltine is
also considered a danger with aggressive marketing campaigns that hit the customers'
mind.

2.2.6 Public
Nestlé Milo is a global leader in food and beverages with an extensive
production and sales network. They have more than 100 years of experience in the
world market, so it is trusted and highly appreciated by the financial, media, public,
local and social organizations. And especially the company's social marketing
campaigns are widely supported by the public because even though it is a
multinational company, it is these campaigns that have helped Nestlé Milo have a
strong foothold in the hearts of the Vietnamese people. The company employs
capable and passionate people who respect the company's values, give them fair
opportunities for growth and advancement, and protect their privacy. Therefore,
employees in the company have had a comfortable, dynamic working environment
and promote all their potential abilities. So, Milo has been taking advantage of its
advantages to go further in the Vietnamese and international markets.
Let's take a look at the outstanding events that Milo has done during more than
25 years of working with Vietnam:
1. Through the final round of the School Football Festival, Nestle Milo
continues to accompany the school football project in the 2014-2015
school year as well as in the coming years.

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2. NESTLÉ Milo accompanies school sports and through the School Festival
Basketball Tournament, the Ho Chi Minh City Student Basketball
Tournament and the MILO walking festival program, the company has
equipped 120 new sets of basketball poles at primary schools , creating
more playgrounds for students to practice.
3. From 1994 to 2019, Nestlé MILO invested nearly 5,500 billion VND to
research, develop and manufacture products in Vietnam.
4. Most recently, Milo joined hands with Vietnam to fight against covid. On
May 16, 2020, Milo gave more than 2 million milk bottle to children across
the country with the message: add lasting energy to children return to
school as soon as they return to school after the COVID-19, Nestlé MILO
has donated more than 2,500 cases of MILO barley milk to school canteens
nationwide which worth more than 1 billion VND with the desire to share
difficulties and energize these business units. And there are still many other
activities by Nestlé Milo.

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Chapter 3: S-T-P Strategy
In the age of the Internet, a lot of companies realize that they can not attract
all the customers or satisfy all their needs in the market. Although the technology is
developed forcefully which helps the company reach their customers easily, they can
not use one way to solve all the problems of their customers. For this reason, all the
companies have changed their strategy from market segmentation to identifying
market segments. Switch tactics from “close approach - one target” to “far approach
- multiple targets''. Instead of marketing dispersion, they focus on peoples caring
about their products.

3.1 Segmentation
The company needs to understand their customers' needs. Researching the
market helps businesses which divide the market into many small segments. And
then, they choose one segment to focus on. Nestlé Milo have divided their market by
demographic, specifically about the age. They divide Vietnamese market in 5
segments: 0 - 6; 6 - 14; 14 - 18; 18 - 25; >25 years old. Every single segment has
their own feature.
Geographic
Region: North, Midle,
South
. Urban and City
Country: Vietnam
Under 6

Demographic
Gender: Boys and Girls
Income: No income, depend
on family
Occupation: Student
Family-life cycle: Babies,
preschool - age children

Psycographic
Personal attributes: Active,
Hyperactive, Sensitive.
Motives: Can’t make
decision, depend on their
parents
Lifestyle: Affected by their

families, active andghty

Social Class: Low - class,
Mid - class, Working - class,
Upper - class
Region: North, Midle,
South

From 6 to
14

Gender: Both Boys and Girls

. Urban and City

Income: No income, depend
on family

Country: Vietnam

Occupation: Student
Family-life cycle:
Adolescents
Social Class: Low - class,
Mid - class, Working - class,
Upper - class

Behavioristic
Usage Rate: Light
Benefit Expectation:

Appearance
User status: Non - users,
potential users, first-time users
Price Sensitivity: Don't
sensitive to price

Personal attributes:
Confident, Active

Usage Rate: Medium to
Heavy

Motives: Attracted by
appearance , colorful

Benefit Expectation: Flavor
and Appearance

Lifestyle: Like explore,
learning, hang out

User status: Non-users, exuser, potential users, first-time
users, regular user
Price Sensitivity: Don't
sensitve to price

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Region: North, Midle,

South
. Urban and City
From 14 to
18

Country: Vietnam

Gender: Both Boys and Girls
Income: No income, depend
on family
Occupation: Student
Family-life cycle: Teenager,
not married

Personal attributes:
Confident, Active, Reckless

Usage Rate: Light and
Medium

Motives: Attracted by
appearance , colorful and
flavor

Benefit Expectation: Flavor
and Appearance

Lifestyle: Like explore,
learning, hang out

Social Class: Low - class,
Mid - class, Working - class,
Upper - class

User status: Ex-user, regular
user
Price Sensitivity: Less
sensitive to price

Region: North, Midle,
South

Gender: Both Males and
Females

Personal attributes:
Independent, Active, Explore

Usage Rate: Light and
Medium

. Urban and City

Income: Low income

Country: Vietnam

Occupation: College student

Motives: Care about quality,

brand and price

Benefit Expectation: Flavor,
Price, Brand

Lifestyle: Like explore, easy
change

User status: Ex-user, Regular
user

From 18 to
25

Family-life cycle: Adults,
Single or Newly married
couples young (no children)

Price Sensitivity: Less
sensitive to price

Social Class: Low - class,
Mid - class, Working - class,
Upper - class
Region: North, Midle,
South

Gender: Both Males and
Females

Personal attributes: Loyalty
Careful, Independent

. Urban and City

Income: High Income

Country: Vietnam

Occupation: Both white collar and blue - collar
workers

Motives: Care about quality,
brand and price

Over 25

Lifestyle: Take care the
family and health

Usage Rate: Light
Benefit Expectation: Flavor;
Price; Brand, Nutrition
User status: Ex-user
Price Sensitivity: Very price
sensitive

Family-life cycle: Have
married and have a children
Social Class: Low - class,

Mid - class, Working - class,
Upper - class

3.2 Targeting
After analyzing and segmenting their market, businesses will choose a suitable
segment and based on that determine the targeting market to implement their
marketing plans.
Nestle Milo is a famous barley milk brand that has used a differentiated
marketing strategy. Strong focus on the second segment of children from 6 to 14 years
old. In this age range, the digestive system of children is extremely weak but the
amount of nutrients to meet the development needs is extremely high along with the
great attention from mothers, so they are extremely focused in children's daily food
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choices. For children from 6 to 14 years old, milk is an indispensable complementary
food for children because this is an extremely important developmental age that
affects the child's future development both physically and mentally. This is also an
extremely active age, it is difficult for daily meals to meet energy consumption needs.
Therefore drinks to help children replenish energy quickly is an essential issue. The
users of the product are the children, but the one who decides whether to buy or not
is the parents. Dairy products today are becoming more diverse in terms of products
as well as prices. There are many parents who can provide enough milk for their
children while the family's income is only low or moderate. So Milo targets customers
in all areas (urban, rural). This is an extremely potential age of the dairy industry.

3.3 Positioning
Positioning is the business' use of marketing activities to build the image of
products and brands that have a special position in the perception of customers, which
helps create the greatest competitive advantage in the target market.

Nestlé Milo has positioned its brand as a product that provides nutrition and
energy for children with the message “Năng động Việt Nam”. Faced with the fierce
competition of substitute products such as Vinamilk milk and TH true milk, Milo
made the right move, when they created a very different communication channel by
encouraging children to participate in the competition and participate in sports
activities. During the developmental period, giving children sports activities is
extremely necessary. Milo has hit the psychology of parents, this helps the product to
be trusted by parents. Besides, Nestlé Milo has products that are different from other
brands in terms of ingredients. Most of Nestle Milo's products are extracted from
barley and some other foods, completely different from TH true milk, Vinamilk and
most other milks on the market which are produced from cow's milk farms. With the
use of different ingredients compared to other brands in the same industry, cow's
milk, this seems to be an advantage that helps Milo make a difference when using
products to bring a new experience to consumers.

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Chapter 4: Marketing Mix
4.1 Product
Since its inception, Nestle Milo has tried to build its product as a convenience
product. They have continuously improved from product packaging to new product
lines, to meet the best for user needs.

4.1.1 Product Mix
About product lines: Nestle Milo focuses on expanding the with of its product
lines.

Milo's product lines currently include: Powders, Drinks, Cereals, Snack. These
products are divided into separate lines based on the main ingredients that make it up

to meet the increasing and diverse requirements of customers. Products have many
different functions and quantities, and at the same time, depending on certain
functions, prices also fluctuate, in order to meet the shopping needs of many different
objects.

4.1.2 Individual Product
The market is a fierce place, in order to have a foothold in the market,
businesses must have their own colors and characteristics. From there, they can
create a highlight in the mind of the customer. And so is Nestlé Milo, they also have
their differences.
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4.1.2.1 Quality
The biggest factor affecting the success or failure of a product is the quality
it delivers. Milo has mainly barley ingredients, so it possesses substances such as
Protein, Iron, Vitamin C and Vitamin B1. In addition, as the information on the
packaging is provided, Milo milk also contains other minerals such as Mg,
dicalcium phosphate, iron pyrophosphate, biotin, calcium pantothenate, vitamins
B2, B3, B6, B12, etc. Full of nutrients and minerals. Most prominently, in 2006,
Nestle Milo developed its formula. In the new formula, Nestle Milo introduces it
containing ACTIGEN E and PROTOMALT which proves that Milo wants to assert
itself as a nutritionally rich food supplementation necessary energy for children.
Thus, it can be affirmed that Milo is a very nutritious drink for our body. This has
helped consumers feel more secure in using the product.

4.1.2.2 Features
The core value of Milo products is the addition of Calcium, Vitamins and
minerals to provide energy for children's long days of play and learning. Thanks to
barley extract, vitamins and minerals, Milo milk is considered an essential food to

help release energy in the body. At the same time, strengthen the function of the
skeletal system, actively support the intellectual activities of the child and increase
the child's ability to concentrate better in learning.

4.1.2.3 Style and Design
The model of the Milo milk
products line is quite different from
other dairy product lines. The product
is designed with green color, with a
very eye-catching design to create the
feeling that the product is made from
natural ingredients, the information is shown in a full and clear way to help consumers
to evaluate and select. In addition, with the image of childs and barleys on its
products, Nestle Milo secretly affirms that its products have ingredients from barley

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as an energy supplement, helping children to stay healthy, active and playful.
Moreover, the design of the product varies depending on the function and ingredients,
for example: Milo milk is packaged in paper boxes for convenience in immediate use;
Milo can is designed to be stored in tight places, such as in a briefcase, to create the
most favorable conditions for consumers.

4.1.2.4 Branding
The slogan "Good Food, Good Life" of the parent company has followed the
brand since its inception and is still the slogan used by the company as a core
message. The tagline is both characteristic of the food industry and conveys a
message of commitment to consumers. It is a Nestlé Milo commitment that every
day, everywhere, consumers will be provided with healthy food and beverage options

that enhance quality of life. They don’t need to use fancy words, but the slogan brings
good messages, contributing to making the brand familiar and memorable in the
hearts of customers.

4.1.2.5 Packaging
Packaging for the product is also
focused in the design stage, so that it is
easy to buy and suitable for the
characteristics of the product. In all Milo
products, they always use one concept
and one main color. The right color not
only helps to impress the buyer but also
does not lose the beauty of the product. Milo also pays great attention to the design
of the product's packaging so that it is both convenient for each consumer case and
also protects the environment. Therefore, most product packaging is made from
degradable carton paper or tin alloy cans that are both not oxidized and corroded and
can be used for recycling. For box form, Milo is divided into batches, one each batch
is four boxes and placed in a carton with 48 boxes of 12 packs. With such designs, it
helps a lot to protect the product, facilitate movement and storage. For powder

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