Marketing Report Nestle Milo

MKT260
Acknowledgement
Assalamualaikum WBT,
Alhamdulillah, we are very grateful to the Almighty God, who have bestowed us
the will to complete our assignment about “Nestle Milo” which is connected to our
scheme Introduction to Marketing, MKT260. Here, we would like to take this opportunity
to express our highest gratitude and compliment to the people who are involved directly
or indirectly in this assignment especially our beloved Miss Najihah bt Abd Rahim which
is our MKT260 lecturer..
In this assignment, we examine that the important of the marketing strategies for
the international firm like Nestle. Among the BBC global top 30 brands, we have analysis
of how a product’s sales are driven by brand name, weighted for market leadership,
stability and ability to cross national borders. The consumers are not aware of their
origins. Beside, the product’s prices usually reflect its proper value in the eyes of the
consumer. It’s always not a good idea that the strategy of offering lower prices is to
penetrate the advantaged economies and to pay the costs for the unknown quality of
their goods.
Thank you to all people who are involved in making our assignment a successful
one and may all your help and effort are blessed.
Thank you
(Muhammad Salihin Jaafar) ( Anisha bt Ramli )
( Nur Adilah bt Md Zain ) (Nurul Zamieza bt Ahmad)
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Executive summary
The main aim of international marketing is to provide solid foundations that are
useful for explanation, prediction and control of the international business activities. We
are not an expert in nestle but we have analysis the firm’s global marketing strategy in
the field of their brand awareness, products and system design, product positioning,
advertising, packaging, distribution and customer service. We have notice that the firm
utilized generic marketing strategy such as low cost leader in business, differentiated

good and services satisfy the needs of customers through a sustainable competitive
advantage. International marketing refer to using common products, price, promotions
and distribution program on a world basis.
My secondary data is the most of important for our research and I contributed in
the area such as group or segment those types of potential customers that are most
likely to benefit from their product line.
That is why we effectively utilized the periodical articles which can be a great
source of product, marketing and industry information. (Periodicals refer to magazines,
journals and newspapers. Although we are living in an electronic age, there is still much
information that can only be or best be found in print resources or books at library.
Nestle management level is a decentralized as possible, within the framework
compulsory by fundamental policy and strategy decisions requiring increasing flexibility
and operational efficiencies, as well as the group-wide need for alignment and people
development, may also set limits to decentralization.
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Introduction
Nestle SA , the world’s leading food manufacturer and the market leader in both
coffee and mineral water, produces a wind range of products including prepared dishes
and cooking aids, milk-based products, cereals, instant coffee, pharmaceuticals and
baby foods. Nestle SA is a publicly owned company, with subsidiaries across the world.
It website addresses in 104 countries. It is also the world largest food and beverage
company with $71 billion in annual sales and almost 230,000 employees around the
world. It markets some 8000 brands that include instant coffee.
Remarkably, its products are sold in every country in the world, including in North
Korea.
Nestle coat of arms, the bird’s nest, which refers to his name, has become a
symbol for the products being a safe care for their consumer product safety and quality.
Research and development based innovation capacity and strong brands are priority for
Nestle.

Objective of Nestle
“ Nestle business objective is to manufacture and market its products in a way
that creates value that can be sustained over the long term for shareholders, employees,
consumers, business partners and national economies in which Nestlé operates”.
The aim of the creating values for the company include with improve business condition
for the firm. To obtain more reliable and high qualify source of raw materials, improved
government functioning and regulatory, employed skill and loyal workforce and superior
quality products which successfully complete.
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Nestle Corporate Philosophy
• Be the leading multinational company in food, nutrition and wellness.
• Produce and sell world-class products of the highest consistent quality, reliability
and convenience based on business excellence principles throughout our
operations.
• 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 and
People 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 business
practices and taking into account the need to preserve natural resources and
save energy.
• Guarantee that all products manufactured, imported and distributed by Nestlé
Malaysia are certified HALAL by authorised Islamic certification bodies.
• Deliver shareholder value through the achievement of sustainable and profitable
long-term growth.
Nestle Marketing strategy
The firm applied a progressive human resource and social policy; with a

management style that is based on management commitment and people involvement.
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Moreover, the firm had responsible corporate citizen, fulfilling obligation to government,
shareholders, customers, communities and consumers. Protest the environment by
being committed to environmentally sound business practices and taking into account
the need to preserve natural resource and save energy. For example, guarantee that all
products manufactured, imported and distributed by Nestle Malaysia are certified HALAL
by authorized Islamic certification bodies. Perhaps, the firm delivered shareholder value
through the achievement of sustainable and profitable long-term growth. It’s a wide area
research the branding. Branding strategy is corporate. Part of the branding strategy is
the brand plan for each product. This is an integrated strategy. The brands of Nestle are
a key strength but the executive levels are very aware today that brands alone are not
enough to win.
From its beginning, Nestle developed its business internationally and became
aware of the fact that food products have to be closely linked to local eating and social
habit. That is why Nestle form the very start has always shown respect for diverse
cultures and traditions. Nestle activities to integrate itself as much as possible into the
cultures and traditions where it is present, adding also to the local environment its own
set of values. Therefore, Nestle embrace cultural and social diversity and does not
discriminate on the basis of origin, nationality, religion, race, gender or age.
Furthermore, Nestle believes that is activities can only be of long term benefit to the
company if they are the same time beneficial to the local community. Precisely, the
environment is changing very rapidly and in particular customers are looking for answer
to their concerns.
To our opinion, global thinking and strategies can best be expressed through
local action and commitment as showed as Nestle Malaysia. And of course, Nestle
applied “think globally act locally” as well as thinking out of the box idea in their product
and distribution with the help of strategic global marketing.
Nestle Malaysia

Nestlé began in Malaysia in 1912 as the Anglo-Swiss Condensed Milk Company
in Penang and later, growth and expansion made a move to Kuala Lumpur necessary in
1939. Since 1962, with its first factory in Petaling Jaya, Nestlé Malaysia now
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manufactures its products in 8 factories and operates from its head office in Petaling
Jaya, and 6 sales offices nationwide.
Introduction to Milo
Milo is a milk beverage with chocolate and malt, produced by Nestlé and
originating from Australia. It was developed by Thomas Mayne in 1934. Milo is also
manufactured in other countries, including Singapore, Malaysia, China, Thailand,
Indonesia, Philippines, Vietnam, New Zealand, Hong Kong, India, Japan, Jamaica,
Trinidad & Tobago, Chile, Colombia, Peru, Nigeria, Kenya, Ghana, Papua New Guinea,
South Africa, Sri Lanka, Syria and Taiwan. The name derives from the famous Greek
athlete Milo of Crotona, after his legendary strength.

Milo is added to hot or cold milk to give it a malted chocolate flavor and extra
texture. When combined with cold milk, it retains the gritty texture of its raw state. Milo
can be stirred into steamed milk or hot water to create something similar to hot chocolate
or cocoa. Sugar can be added to the Milo beverage, but many people enjoy it without the
addition of sweeteners, appreciating it for its subtle chocolate flavor. Another possible
use is making a normal cup of cold Milo and microwaving it for approximately 40–60
seconds. This gives the Milo drink a biscuit cover on top. Another popular use is to
sprinkle it on ice cream, especially vanilla ice cream. Milo can also be sprinkled on
breakfast cereals. Milo is often the favored beverage for the Tim Tam Slam.
Also very popular is the "Magic Milo" which involves adding Milo to a small
amount of milk with sugar and whipping it to increase the amount of air in the milk,
thereby doubling it in size. Then one adds small amounts of hot water and milk in layers
stirring each new layer vigorously to maintain its lightness. A final layer of whipped
cream topped with extra Milo or chocolate sprinkles. This is more of a 'warm' beverage

rather than a 'hot' one and is a more popular version of hot Milo for children.
Milo manufactured outside Australia is customized for local methods of
preparation. In Ghana, Malaysia, the Philippines, Singapore and Indonesia, it is mixed
with hot or cold water instead of milk, with the instructions "Add milk and sugar if
desired."
Other countries the packaging is green and has people playing sports on the tin.
There is an organization called "Milo Cricket" which operates in most areas by
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volunteers, children participating are given small packets of Milo to eat or drink. The
commercials and taglines are "Go and go and go with Milo" and a popular commercial is
4 generations of women on a skipping rope singing "and my mum gave me Milo to go
and go and go" and the line "I need my Milo Today", because it has a low glycemic
index. The packaging of Milo tins in Singapore are also green and also have people
playing sports on the tins.
Milo is very popular in Malaysia, where the brand name is synonymous with
chocolate flavored drinks: Milo has a 90% market share in Malaysia (not the often
quoted 90% worldwide share of Milo consumption)
[4]
, and Malaysians were said to be the
world’s largest consumers of Milo.
[5]
This is because Milo was once used as a nutrient
supplement when it was first introduced in the country, and has thus gained a reputation
as a 'must have' drink for the old and the younger generations. Milo manufactured in
Malaysia is made to dissolve well in hot water to produce a smooth hot chocolate drink,
or with ice added for a cold drink. Milo in Malaysia is served in kopitiams and mamak
stalls offering versions such as "Milo Dinosaur" (a cup of Milo with an extra spoonful of
powdered undisclosed Milo added to it), "Milo Godzilla" (a cup of Milo with ice cream
and/or topped with whipped cream) and "Neslo" (combined with Nescafe powdered

coffee). It gained popularity in Singapore soon after.
Milo in Hong Kong Differentiation between Milo 1940’s Milo tin
Product Life Cycle
At Nestlé, they apply a product life cycle approach involving their partners from farm to
consumer in order to minimize the environmental impact of their products and activities.
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Their aim at all stages of the cycle is to use natural resources efficiently, to favor the use
of sustainable-managed renewable resources and to target zero waste. In this way, they
intend for their brands to stand for environmental sustainability.
Nestlé's initiatives aim to improve the environmental performance of the products along
their entire life cycle. These include sourcing sustainable raw materials, reducing energy
consumption and minimizing air emissions by moving to different fuel types. Nestlé
invests an average of CHF 40 million a year to reduce its air emissions. Another
significant step in the value chain is transport. Nestlé has initiated a pilot with Schenker,
an international logistics company, to evaluate the effect of different types of transport,
distances driven and fuel type used. Through internal research and development at
Nestlé there have also been significant advances in the environmental impact of
refrigerants and packaging. Without compromising product quality there was a reduction
of 392 000 tones of packaging material between 1991 and 2008.
Product Line width
Nestle Malaysia product consist of 6 main aspect which is beverage, milk, prepared
food, ice cream, cereals and chocolates. There are varieties of each product lines for
each type of products. They also will upgrade their product lines through the changing of
the lifestyle form time to time.
Product Mix Width
Beverage Milk Prepared
Food
Ice Cream Cereals Chocolates
Milo Nespray Maggi Drumstick Honey Star Kit Kat

Nescafe Neslac Buitoni Trophy Koko Crunch Smarties
Canned Drink Mat Kool Cookie Crisp Milky Bar
UHT Nestle Crunch
The Marketing Mix of Nestle Marketing
The following consideration included in our marketing analysis of the Nestle.
• Product
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• Place
• Promotion
• Price
1. Product
Product item
Nestlé seeks to earn consumers’ confidence and preference and to follow and
anticipate consumer trends, creating and responding to demand for its products.
Therefore Nestlé is driven by an acute sense of performance, adhering to and favoring
the rules of free competition within a clear legal framework. We choose Milo since it is a
brilliant example of where as the superior quality, patented technology and basically
selling directly to consumers and this whole business is growing rapidly. Milo has been
around for decades, and it is one of Malaysian favorite chocolate malt drink to
everyone. Malaysia also is the world’s largest consumers of Milo.
Product item depth
Milo is a very well known product and Milo also has variety of product items under the
same brand which is Milo. These are the type of Milo that Nestle have been produce.
• The original Milo
The original Milo contain nutritional icon on
each pack reinforces the nutritional properties that
consumer can get from every cup of nutritious and
great-tasting Milo.
• Milo Fuze

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Milo Fuze comes in three variants and is the easy tasty way to enjoy nutritious
Milo with Actigen-E and other nutritious ingredients. It is vary by 3 types which is cereals
for hunger pangs, 3in1 for consumer convenience and better taste, and last one is high
calcium for stronger bones.
• Pack Extra Nutrition with Milo
A healthier choice in new design UHT pack. Milo UHT packs,
the ready-to-drink format of Malaysia’s best-known nutritious
chocolate malt beverage is nutritious and healthier in a new
attractive design. It contains all the nutritional benefits of Milo such
as ACTIGEN-E and PROTOMALT in a convenient pack.
• Milo Wafer bar
Milo Wafer bar made with layers of crispy wafer and
sprinkled with Milo kibbles on top. It contains ACTIGEN-E and it has
3.6% of our daily energy needs (based on 2000 Kcal). It will also
tantalize children senses.
Product nutrition
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Nestlé Milo is not just any chocolate malt drink. In growing with Malaysia, Nestlé
Milo stands firm in its commitment to provide every child the nourishment and energy
needed every day. Over the years, the nutrient content has been improved to meet
evolving demands. The current formulation of ACTIGEN-E, in combination with
PROTOMALT, is well-placed to fuel the action packed days of today’s children.
There are 3 main components in each Milo product which is;
• Natural Goodness ~ of malt, skimmed milk, and cocoa.
• ACTIGEN-E ~ a combination of 8 vitamins and 4 minerals which helps in the
optimal release of energy.
• PROTOMALT ~ a malt extract with a mixture of different Carbohydrates that

provides energy and nutrients the body needs.
Nutrition in Milo
Right balance in nutrition
Milo provides energy (calories). These calories come from the different
ingredients of Milo, mainly malt extract, skimmed milk, palm oil and sugar. If consumed
moderately, as part of a balanced diet, Milo provides the energy required for an active
lifestyle and will not be fattening. On its own, Milo powder is nutritionally balanced,
providing the right ratio of protein, carbohydrates and fats.
The 6 basic classes of nutrients in food are: carbohydrate, fats, protein, vitamins,
minerals and water! A mug of Milo of drink contains these nutrients.
Protein is one of the macronutrients (along with carbohydrate and fats) that is
important to build and repair body tissue. It is essential for healthy growth and
development. The protein needs (per Kg of the body weight) is highest when growth is
rapid, such as during infancy, childhood and adolescence.
Sources: Protein is found in meat, fish, poultry, dairy products, beans, peas and lentils.
Fats are essential component of body cells that are important for the absorption
of fat soluble vitamins. As fat contain higher calorie compared to carbohydrates and
protein, excessive fat intake may also contribute to overweight and obesity problems.
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Sources: Fats are found in animal and dairy products, as well as vegetables oils and
margarines.
Energy
Carbohydrates supply the main source of energy for the body. Carbohydrates
can be in the form of complex and simple carbohydrate. Simple carbohydrates are
sugars that our body can easily and quickly use for energy. Complex carbohydrates are
chains of sugar units. For example, fiber and starches. Starches are broken down during
digestion into glucose before being absorbed into the body. Fibers are not digested by
our body, though it helps to regulate bowel function.
Sources: sugars, starch (e.g. grains, potatoes) and fiber (e.g. fruits, vegetables).

What is BMR? Basal metabolic rate (BMR) is the energy used to carry out
necessary body activities such as breathing, regulating body temperature, and
maintaining a heart beat.
Energy balance is the key to weight management. It has to do with energy intake
and energy output. Energy intake is the number of calories we gain from food. Energy
output is the number of calories you use for BMR and activities. Imbalance of energy will
result in weight gain and weight loss.
Atigen-E(vitamin and mineral)
Here are two main groups of nutrients: macro-nutrients and micro-nutrients.
Macro-nutrients are those that are needed in large quantities (tens or hundreds of
grams) every day. These are carbohydrates, protein and fats. Micronutrients are those
needed in small quantities (micrograms or milligrams). These are vitamins and minerals.
Vitamins are micronutrients essential to the human body. A deficiency of some
vitamins can lead to diseases or metabolic disorders. For example, lack of vitamin C can
lead to scurvy; lack of vitamin D lead to rickets.
Calcium is an important mineral in childhood. Calcium is essential for proper
development of bones and teeth. During infancy, childhood and adolescence period,
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bone growth is the greatest. So, it is important to get adequate amount of calcium at
these stages of growth.
Sources: dairy milk products, soy-based foods, dark green leafy vegetables, sardines
and anchovies with bones, beans, and calcium fortified products e.g. breakfast cereals,
breads and juices.
The B Vitamins are needed for the release of energy from foods and some are
important for red blood cell formation. It is, therefore, important to consume adequate of
B Vitamins.
Sources: B Vitamins are found in a variety of animal, vegetable and grain products.
Protomalt
PROTOMALT is proprietary to Milo powder which is a quality malt extract that

provide a mixture of different types of carbohydrates that provide energy and nutrients
the body needs.
General information
The great choc malty taste of Milo is made from the natural goodness of malt,
milk, and cocoa.
Did you know that besides reading the nutritional information on pack, another
good source of information to learn about the product ingredients/ contents would be
from the ingredient list. It informs us what the product is made from. Ingredients are
listed in descending order by weight. Based on the ingredient listing on Milo packaging,
the most ingredients in Milo is malt extract as it is the first ingredient listed on pack.
Product branding
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Branding is the collection of attributes that the consumer has come to expect
from a product, which will strongly influence their buying patterns. Branding can be
achieved using a company name - it can be applied generically or, as in the case of Milo,
on an individual basis. The brand name promises the consumer particular benefits, such
as quality and value for money, with these expectations being built up over many years.
A brand name is often considered by a company to be its most important intangible
asset. In a market where repeat purchases are the key to profitability, a brand name
becomes paramount to a product's success.
A catchy name and distinctive packaging are vital ingredients in any brand
image, but the true essence of a brand identity lays in the consumer's mind i.e. the
perceptions of the product. A company must be constantly aware of these perceptions
and try to preserve and build on them through advertising and other promotions.
Branding enables marketers to build extra value into products and to differentiate them
from their competitors.
Product Packaging
The Milo Nestlé’s packaging is the most direct and largest communication vehicle
that the organization had with the most impressions they can deliver. And on the

packaging, the firm’s communicate wellness benefits in our beverage business. But it’s
not just there, also in confectionery, and condiments, nutrition communication through to
the new and existing consumers. The packaging materials continue to be the main
source of concern, mainly in plastics, but also to a lesser extent across metals and paper
and broad.
Eco-efficient packaging
Packaging is essential for food safety. It also helps to avoid wastage before and
after purchase by maintaining freshness for the consumer. Nestle strategy is based on
optimizing materials, developing eco-efficient packaging, and providing meaningful
information to consumers on recycling and disposal.

A key initiative in 2008 was their collaboration on PIQET, an important new
packaging eco-design tool adopted by Nestlé. Design and technology innovations go
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hand in hand in order to reduce environmental impacts without compromising consumer
needs.
Nestlé is firmly committed to finding packaging solutions that contribute to a better
environment. The company supports an integrated approach that favors source
reduction, reuse, recycling and energy recovery. Wherever possible they use recyclable
packaging materials. For example, for Easter 2009, Nestlé UK replaced non-recyclable
plastic with recyclable cardboard packaging in most of the 25 million Easter eggs it
makes. Nestlé UK managed to use 30% less packaging overall, saving a huge 700
tones of packaging materials
Packaging Source Reduction
In 1991 Nestlé initiated a continuous review and assessment of packaging source
reduction opportunities. As a result, packaging material savings from 1991 to 2008
amounted to 392 000 tones and CHF 683 million on a worldwide basis. We have
reduced the volume of packaging material used per liter of bottled water by 20% over the
last 5 years. This represents a saving of 44 000 tones of packaging material in 2008

alone.
Packaging Waste Recovery
Nestlé Malaysia has established national waste recovery schemes for the
collection, separation and recovery of used packaging. Nestlé has participated actively in
setting up and managing these schemes. Nestlé use recycled material whenever it
makes sense and it is legally permitted.
Information in Milo Packaging
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Product Differentiation
Improve the packaging
Nestle Milo have improve the packaging by replacing the old one with adding the
interesting picture. Before this, Milo packaging only have their brand name, but
nowadays Milo have been through the transformation by using faces of national athletes
to attract more customers. Besides, Milo also has adding more colorful color beside of
their green color which is their main color. This improvement can attract children to drink
Milo. By doing this transformation Milo will be more up to date and can build loyal
customer and as well as to be more different than their competitor such as Oligo Coco
which are using the same green color for their packaging.
Milo product enhancement
Milo has realized and able to fulfill customer needs, so that they produce 3 in 1
Milo from the normal powder Milo. This is for the customers that do not have enough
time or in rush because they only need a short time to make it. This is because 3 in 1
Milo already has added creamer and sugar for consumer convenience. Even kids also
can do it by themselves because it already complete and they do not have to add
anything.
Add more ingredients
To differentiate Milo from other product they have produce a healthy Milo by

adding cereal in Milo Fuze. This Milo is very suitable for consumer that concern about
healthy and on diet because cereal can avoid people from feeling hungry and contain
fiber that good for digestion. Milo also contains a lot of nutrition which does not
contained in the other competitor’s product such as Oligo Coco. Oligo Coco is just a
normal chocolate malt drink and they do not have nutrition such as Milo.
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Add more items.
Besides produce Milo for beverages, Nestle Milo also have create new product
item such as Milo ice cream, Milo wafer and Milo energy bar. This product item is
suitable for children and also adult. By doing this, consumer will have a lot of choices to
buy Milo product and as well as positioning Milo as an established brand with a lot of
choices than the competitors such as Oligo Coco and Ovaltine.
Product recommendation
For product recommendation, Milo can make their product more variety by
adding new flavor. In our opinion, Milo should add some vanilla flavor in order to make
their product line more variable.
Other than that, Milo also can specify their target market based in their age and
lifecycle. For example, they can produce their product according to their customer age.
Milo for a diabetic patient, or people in high cholesterol, is also sort of our idea because
nowadays, there’s a lot of people who were suffering the diseases. So that, Milo will be
part of the compulsory product that will include in their shopping list.
2. Place
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