Marketing mix
-
Nestle Milo
1
The report will contain in depth analytical and descriptive information of 7’P marketing mix
and PESTLE analysis of Nestle Milo organization in Singapore. To discuss all the essential
information the report will contain all the elements in two sections. The first section will
present information on the marketing mix strategic approaches and practices based on 7’P
model and another section will discuss about PESTLE analysis of Nestle Milo Company in
Singapore.
Marketing mix strategic approaches and practices based on 7’Ps model:
This section provide information of marketing mix of the Nestle Milo in Singapore based 7’P
model that is Product, Price, Place, Promotion, Physical presence, provision of services and
process. Nestle Milo is very popular in youth that based on concept of made with nutritious
goodness of malt, milk, cocoa and mixture of several essential vitamins and minerals that
help to gain energy further.
Product: Nestle developed this product in 1934 locally and further developed new formula in
2006 which awarded MILO for contribution in the area of health. In 2007 the Nestle expand
this business with concept of more malt, more milk that supported to gain energy with more
natural goodness of malt and milk. The chocolate as ingredient enhance the overall taste. It
also helps to create, generate and maintain more market for Nestle Milo.
Product packaging and Branding: In product development category the Nestle Milo focuses
on following areas: a) continuously innovation and research and development to enhance the
product’s quality which further enhance the product effectiveness, b) Product availabilities in
different sizes that provide larger options to the consumers to get products. The brand name
different packing create positive image through quality assurance and value for the money
2
commitments. Nestle Milo also focus eco efficient packaging methodologies which create
differentiation.
Product Nutrition: Nestle Milo continue focus on concept and innovation that Milo is not
only chocolate malt drink it has three main components: a) Natural ingredients that involves
milk, cocoa and malt, b) Source of energy that include 8 vitamins and 4 materials, C)
PROTOMALT: mixture of different carbohydrates that help to gain energy and nutrients in
body. These are basic approach using by the Nestle Milo to create, maintain and sustain their
market in the competitive business environment.
Price: The concept of ethnocentric pricing strategy help to design and develop similar price
for per units in each geographical location which has greater impact on buying behaviour of
consumers. Nestle Milo also used polycentric pricing policy in independent distributors’
scenario in local market. Nestle Milo is using penetration pricing strategy to market Milo
where the organization initiated with low price to target mass market. A part from this the
Nestle Milo focus on concept of different other pricing techniques based on Quantity
discount, cash discount, functional discount, seasonal benefits and offer, direct and indirect
promotional offers and benefits, geographical pricing strategies that involves free on board
pricing pattern, Zone pricing methods, single and flexible pricing and other customised
pricing techniques the Nestle Milo is using.
Place: Nestle Milo define and design very strategic approaches and practices for to storing
and transforming of their products and establish organised and structured distribution and
product channel. Concept and practices of effective inventory management enhance the
overall performance and save the cost for the Nestle Milo. Effective and efficient
geographical based manufacture units enhance the productivity of the distribution network
3
and the concept is cost effective in terms of distribute the products in target market. Through
different departments and expansion in different location with concept of establish factories
and manufacture units save the time and cost for the company and provide effective and
efficient distribution system. For product distribution to end users the Nestle Milo is using
two channel retailers and wholesalers. These channels provide other support function to the
company that involves transaction function, logistic function and facilitating function that
improve the overall frequency of order processing in shorter time.
Promotion: Support and sponsor number of life events to promote Nestle Milo which as
following: in 1984 organised Milo Olympic display, 1980 organised Milo Van, 1978
sponsored for Milo football training centre, again participated in 1970 Milo Van and many
other events organized by the Nestle. To promote its Nestle Milo the Nestle associate Milo
with health and energy. Due to continue support to live events and product innovation in
2006 Nestle Milo awarded with healthier concept and endorsement by Singapore’s health
promotion board. The organization also support to local team to participate in national and
international games which created positive image in Singapore. Social media account in the
name of Milo also helps to create awareness, collect information and customer’s experiences
for better outcomes. In conclude, the above points justified that the Nestle Milo mainly focus
on health and energy factors along with taste which is one of the big promotional factor for
the Milo.
Physical presence: The Company distributes its product to different wholesalers and retailers
like Giant, Tesco, KK supermarket etc
4
People: The Company is creating internal shared understanding system that creates specific
images such as quality value and concern. The company is focusing on building strong
customer relationship with its people.
Process: Nestle Milo used different strategy to develop and design the product in terms of
product development, product promotion, pricing strategies, placing the products in effective
and efficient manner, develop strong distribution network, provide physical presence and
target people. The entire marketing mix strategies based on certain concept and it involves
range o steps to design and develop each parameter. These steps are part of process.
Macro environment analysis
5
Pestle analysis
The pestle analysis for Nestle Milo is to find out the external influences that affect the
product and PEST analysis will analyze the organization that will operate and influence
marketing decisions.
Before identifying the Pestle analysis, there is a need to define company, demographic
factors.
In Nestle, the internal employees have direct impact on product quality, dependability and
overall productivity.
1. Company: Nestle is a leading food manufacturer and market leader in coffee and
mineral products as well as baby foods. The company aims to manufacture and
market its products in a special way that creates high value to sustain for a long term.
Milo is a milk beverage produced by Nestle from Australia and is also manufactured
in other countries.
2. Economic factors: In Singapore, Nestle had adjusted to food related issues in different
places and is really price sensitive. The spending of consumer could be controlled
with the range of economic factors such as the level of income, inflation, rates, taxes,
level of unemployment, and other rates.
3. Demographic factors are one of the important changing factors that impact the
operations of the company and also the lifestyle of the company gets impacted. People
are leading to healthier life and the demand of food as well as beverages will not fulfil
one’s requirement so Nestle will not affect much in nutrition.
4. Political analysis: Milo strongly follows and focuses on law that involve legislation
related with health and safety, promotions and advertising standard, customers
protection and Trades description. Nestle Milo signed a memorandum of agreement
6
with Singapore Sports council for youth sports development which created
competitive advantage and government support. In Singapore country has restriction
on imports.
5. Social factors: Social trends are very important as they have a direct influence on
demand of particular product. In Singapore most of societies concern about healthy
lifestyle, interest in fitness and disposable products. People ready to spend on fashion
products. Nestle Milo could one of the fashionable drink for Singapore society.
6. Technological factors: With latest and high technology Nestle Milo able to design and
develop competitive packaging and range of flavour for consumers. With high amount
of expenditure on research and development the Nestle Milo provides Milo formula
with more energy and healthy drink. Introduce more effective internet, mobile and
other effective tools for promotion.
Micro environmental analysis
1. Competitors: Beverages industry is not very easy and there require high amount of
capital to enter the beverages industry. It is affected by many factors such as
economies of scale, channels of distribution and customer loyalty. The fact is that
there are many players in the industry the big players have broad product lines. Nestle
is not a wise decision unless new competitor paid to the strategy and it is the market
leader in the industry. There are many substitutes available that reduce demands for
the company and there is a tendency to deal with broad range of products. Nestle is
not offering all kinds of foods as well as beverages. The direct competitions faced by
Nestle Singapore are related with their product such as Milo.
7
Direct competitors: The direct competitors are Cadbury Schweppes ltd, Cocoa processing
company, Allied Cocoa products,
Indirect competitors: The indirect competitors are Chocolim, Milo which are not cocoa
products by Nestle. They have to compete with different products which are not cocoa
products and the target market is children, teenagers but not categorized as elders.
Suppliers: There is a medium power of suppliers and it increases the power of supplier and
the bargaining power of supplier depends heavily on the strength of the company’s brand.
Supplier code establishes non-negotiable standards that conduct business with time and the
major barrier to entry for the growth stage is to learn or to experience. Suppliers provide
resources such as labour, material to produce goods as well as services. It adds high value and
deal in quality as well as quantity of materials.
Customers: Food and beverages is a very competitive industry and they attempt to deal with
increase of dominance. Its own attractiveness to attract new comers develops the growing
opportunity and they can also gain benefits in the competition. Since Nestle Milo is dealing in
with the target group of children and young people and not with elders, the consumption is
driven by higher growth in food and beverages industry and the power of buyer of buyer is
not high.
Intermediaries: In case of Nestle Milo, the intermediaries will be the physical distribution
and service agencies. The one who is supplying raw materials for the production of Milo to
Nestle Milo is known as intermediaries.
8
References
Euromonitor.com. (2014). Market Research for Singapore. Euro monitor journal.
Edu.my. (2005). Industry analysis. Nestle internal records. Competing brands and position.
Foodandwaterwatch.org. (2011). Nestle research. Popularly positioned products and
affordable and nutritious.
Hollensen, S. (2009). Global marketing. A decision oriented approach. Fifth edition.
Nestle.es. (2012). Annual report 2012. Good food good life. Nutrition is the quality of life.
No. 2.
Nestle.com. (2010). Nestle. Annual report 2010. Good food good life.
Nestle.com. (2014). Nestle good food good life. Nestle reports progress on communities.
Sedb.com. (2006). Unleash your vision. In this land of opportunity. We change to remain
constant.
Thomas, H. (2007). An analysis of the environment and competitive dynamics of
management education. Journal of management development. Vol. 26, No. 1, pp. 09-21.
Wu, T. (2011). Global marketing. Academia.edu.
9