Nestle Milo Report (Pg. 9)- Marketing Strategy

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Acknowledgement

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 Marketing Management. 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 teacher Sir Gauhar Pirzada.

In this assignment, we examine that the re-launch of the marketing strategies for the international firm Nestle.

Thank you to all people who are involved in making our assignment a successful one and may all your help and effort be blessed.

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Contents

Objective of Re-Launching Milo ………..……… 5

Nestle in Pakistan ………..……… 6

Introduction to Milo ……….…………. 7

Milo of Crotona ……….………. 7

Marketing Research Process ……….…. 8

Segmentation & Target Market ………. 9

Geographic ……….………. 9 Demographic ……….………. 10 Psychographic ……….………... 10 Marketing Mix ……….………. 10 Product ……….……….. 10 Product item ……….………... 11 Product lifecycle ……….………….11

Product item depth ……….………. 11

Nestle Milo Breakfast Cereal ………11

Nestle Milo (Ready to Drink) ………12

Milo Tin ……….……… 12

Sugar Free Milo ……….……….. 12

Product Features ……….…………. 13

Right balance in Nutrition ……… 13

Natural Energy ……….………… 13

Antigen-E ……….……….... 13

Good for Children ……….……... 14

Product Combination ……….……..14 Product Branding ……….…………15 Product Packaging ……….………. 15 Eco-Efficient Packaging ……….. 15 Product Positioning ……….……… 15 Product Differentiation ……….….. 16

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Price ……….……….. 17 Pricing Strategy ……….………17 Pricing Tactics ……….………. 17 Quantity Discounts ……….……… 17 Functional Discounts ……….…… 18 Seasonal Discounts ……….……… 18

Factors Affecting Pricing ……….….. 18 Cost ……….……… 18 Product ……….……… 18 Promotion ……….……… 19 Place ……….……… 19 Competition ……….……… 19 Quality ……….……… 19 Place ……….………. 20 Head Office Units & Factories ……….. 20

Availability ……….………... 20

Product Transportation ……….……. 20

Distribution ……….………... 21

Channel Structure ……….…………. 21

Intensity of Distribution ……….….. 21

What we are doing? ……….…….… 22

Porter’s 5 Forces ……….………….. 22

Promotion ……….………... 24

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Television ……….………. 24

Outdoor Media ……….…………. 24

Internet ……….………. 24

Print Media ……….……….. 25

Future Effects of Advertising ………... 25

Promotional Activities ……….…… 26

Free 200ml Milo on purchase of 6 cans ……… 26

Buy 1 Kg Milo and get a free Milo cup ……… 26

Free 1 Milo sporty Tumbler on purchase of Milo 1 kg pack ……… 26

Public Relations ……….………….. 27

Push & Pull Strategies ……….……. 27

Ansoff Product-Market Expansion Grid ……….. 28

SWOT Analysis ……….……… 29

PEST Analysis ……….……….. 30

Expectations ……….………. 31

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Objective of Re-Launching Milo

Milo is not showing up with its marketing activities and marketing strategies in the market of Lahore. These days many people are unaware of what is Milo? There is a stagnant growth in sales of Milo showing less awareness about the product and low variety available to customers. Following are main objectives to re-launch Milo,

• Create awareness in the people about the product

• To differentiate Milo from other energy drinks through proper advertisement and promotion

• To use sales promotions and other pricing tactics to cater customers to enhance customer volume

• To provide wide variety to the customers that they use it in their daily life in many forms

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Nestle the world’s leading food manufacturer and the market leader. 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.

Nestle in Pakistan

Nestlé has been serving Pakistani consumers since 1988. Today we are fully integrated in Pakistani life, and are recognized as producers of safe, nutritious and tasty food, and leaders in developing and uplifting the communities in which we operate.

We at Nestlé Pakistan ensure that our products are made available to consumers wherever in the country they might be. Convenience is at the heart of the Nestlé philosophy, and our aim is to bring products to people's doorsteps.

The consumer's voice is key to Nestlé Pakistan's vision and working. Whether you live in the remotest village or the metropolis of Karachi, our consumer services team stands ready to listen to your concerns and provide answers about our products and guidance on matters of health and wellness.

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Introduction to Milo

Milo is a milk beverage with chocolate 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, after his legendary strength.

Milo of Crotona was one of the greatest athletes of antiquity, winning the wrestling title

in the ancient Greek Olympiad six times.

It was said that he built his great strength by carrying a newborn calf on his back each day. As the calf grew larger, so did Milo's Strength. After many days of this, Milo was able to carry a full grown bull on his shoulders -- and thus progressive resistance exercise was born.

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Marketing Research Process:

Definition of problem: Milo was not very active in

marketing activities and no promotions were seen since many years. Unawareness of people about Milo and stagnant growth were the major problems.

Research Plan: Two types of research techniques (direct

and indirect) were used in form of questionnaire,

interviews, Wikipedia, nestle website, etc. to conduct this research. Many personal were contacted how to complete the research and develop a plan.

Information Collection: The data was collected first-handedly. All the questionnaires

were collected by ourselves and we ourselves conducted interviews with shop keepers, customers and organization’s employees.

Analysis of Information: from all sources of information gathered following analysis was

concluded;

• Most of the people got to know about Milo through advertisement and they think that it is economical

• They don’t want any new flavors added in Milo. They said Milo is available only on big stores and Super Markets.

Most of the people watches music channels and got to cafes for outing. They said that television is the most effective way for advertising

Present Findings: findings are presented to our teacher of Marketing Management, Sir

Gauhar Pirzada.

Make Decision: All the P’s of Marketing were changed according to the analysis of data.

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Segmentation and Target Market

Following are the segmentation bases for Milo;

1. Geographic Segmentation:

Regions: Commonly people prefer to drink Milo throughout the year. But Milo can segment the market on the basis of season. The consumption of cold Milo goes down during the rainy season as people prefer to have hot Milo. In hotter regions the consumption pattern doesn’t change much. But as we are only targeting Lahore so we are taking it as one region with two seasons.

2. Demographic Segmentation:

Age: Milo can easily target various age groups. The most important of these groups are

children’s, youth and old people. For children it can introduce Milo with additional nutritional contents such as vitamins and minerals.

For older people it already has clinical nutrition. It just needs to get its product known among these people.

Gender: It will be very beneficial to target women as they usually shop for their

family. If they are convinced that the Milo will be good for their families, they will defiantly purchase it.

Income and occupation: People will buy Milo when they have enough monetary

resources. Nestle should target people in the higher income groups. People with blue collar jobs can be targeted by telling them that the Milo will help them in their daily routine.

3. Psychographic segmentation

Social class and life style: People belonging to the higher social classes tend to spend

more on luxuries as compared to people in the lower classes. Such people can be easily targeted as they are very health conscious.

Personality: People who are outdoorsy and are involved in sports can also be targeted

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The Marketing Mix

The following consideration included in our marketing analysis of the Nestle.

• Product • Place • Promotion • Price

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 in Pakistan since many years.

Product life cycle

There are four stages in PLC. These stages are • Introduction

• Growth • Maturity • decline

Milo was launched in Pakistan in late 1980. At that time Milo shows remarkable growth. But now talking about present status our research about the product and data which we collected from the organization shows that Milo is at maturity stage.

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There is no remarkable growth in the sales of Milo. Now we are working to convert this maturity stage to growth stage. And we will do this with heavy investment in the field of promotion. This will defiantly have positive effect on promotion of our 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.

1. Nestle Milo Breakfast Cereal:

Boost your fiber intake with one of the MILO Wholegrain cereals and get a head start to the day. Choose from the original MILO Cereal or MILO Duo Cereal with milky vanilla curls for added Calcium and Magnesium for strong bones and teeth.

2. Nestle Milo (Ready to Drink):

It contains 200 ml of liquid Milo. Following are the ingredients;

Energy 150 Kcal

Fat 4G

Protein 4.4G

Carbohydrates 24G

This gives you instant energy. In Pakistan Milo is most successful in this shape. 3. Milo Tin:

This product is launched in Pakistan in recent times. It contains 235 ml of liquid Milo. It contains important minerals and vitamins. This product is imported from Malaysia. Different people have different likes and dislikes, also the different nations have different tastes. This product was designed for people of Malaysia according to their taste.

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4. Sugar Free Milo:

Milo is re-launched with an effort to cater more customers and become a necessary part of shopping list for every person. Many people these days are suffering from Diabetes. This product will serve them with the need of Natural energy. Most of the people suffering from this disease are aged people so zero sugar with full of energy will appeal them to bury Milo.

Product Features:

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.

• 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.

This shows that Milo gives us balance nutrition’s, which keep us healthy and active.

Natural 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

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units. For example, fiber, starches. Starches are broken down during digestion into glucose before being absorbed into the body.

So Milo gives us real original and natural energy. Not this type of artificial energy which energy drinks gives and which is for a small time. Milo is a drink having natural ingredients for natural energy.

Antigen-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.

Good for children

Calcium is an important mineral in childhood. Calcium is essential for proper development 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 at these stages of growth.

Product combination:

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 rough 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

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popular use is to sprinkle it on ice cream, especially vanilla ice cream. Milo can also be sprinkled on breakfast cereals. 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.

Product branding

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.

Milo is known by its name and its color scheme. Every customer is well aware of the product. People associates Green color with Milo.

The brand is quite strong to differentiate it from others and give value to its customers.

Product Packaging

The packaging materials continue to be the main source of concern, mainly in plastics, but also to a lesser extent across metals and small packs.

Product packaging will be the same as it is now. The Green color has an association with Milo recognition. There will be a slight change of images, slogans, etc on the package. The packaging will include such information and slogans that will create awareness in people about Milo and will try to change the perception from just flavored Milk to a real source of Natural Energy.

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The display images on the new packaging will show local heroes, sports persons and celebrities. Like Umar Akmal.

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.

Product Positioning:

Milo is associated with children and Sports. The position from the day first was done through sports and children. A strong image and position has been achieved in customer’s minds so the positioning strategy for re-launching will be the same.

Product Differentiation

Product differentiation is a process in which the company makes its product different from its competitors and tries to make sure that customers can identify their products easily.

Improve the packaging

Nestle Milo have improve the packaging by replacing the old one with adding the interesting picture. The new packaging contains more information about Milo and tries to change the perception about the product. Besides, Milo also has adding more colorful color beside of their green color which is main color. This improvement can attract children to drink Milo.

Add more items.

Besides produce Milo for beverages, Nestle Milo also have create new product item such as Milo cereal break fast. This product item is suitable for children and also adult. By

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doing this, consumer will have a lot of choices to buy Milo product. Other products such as Milo chocolate bars are also going to introduce to customers.

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Price

The firm has several options for addressing the price. Domestically Nestlé’s Milo manufactured finished products to replace imports which will defiantly cut down the cost.

Price strategy:

Price strategy is a basic, long-term pricing framework, which establishes the initial price for a product and the intended direction for price movements over the product life cycle. It consists of 3 type of pricing strategy which is Price skimming, Penetration pricing and

Status quo pricing.

We are currently practicing penetration pricing to market Milo which is a way where Nestle charges a relatively low price for a product (Milo) initially as a way to reach the mass market.

Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume, rather than to make profit in the short term.

• It can result in fast adoption. This can achieve high market penetration rates quickly.

• It can create goodwill among the early adopters segment. This can create more trade through word of mouth.

Marketers have 2 choices whether to use profit oriented profit maximization or satisfactory pricing.

The demand for Milo is fixed and it is gradually increasing at a certain rate. The cost for producing Milo and the profit earned on each of the products is set. The profit that is to be earned on Milo products and the market share that company will get is set.

The profit on Milo Ready to Drink is Rs. 5.

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Pricing tactics are those techniques which help in attracting customers towards competitive pricing and towards the product itself.

 Quantity discount

Milo is going to have quantity discounts on some certain events and when is required. Most of these discounts will be for fixed period of times. We are giving 3% discount on every purchase of a Carton.

Functional discounts

When distribution channel intermediaries, such as wholesaler and retailer, perform a service or function for the manufacturer, they must be compensated. This compensation, typically a percentage discount from the base price, is called a functional discount or trade discount. Functional discounts vary greatly from channel to channel, depending on the tasks performed by intermediaries.

HKB, Metro and Al-Fatah are primary retailers and whole sellers for Milo so they are granted with such discounts many times. If any retailer purchases more than 50 cartons per order they are given 4% discount and any whole seller sells more than 100 cartons per order they are given 6% discount.

Seasonal discount

Seasonal discount is a price reduction for buying merchandise out of the season. It shifts the storage function to the purchaser. Seasonal discounts also enable manufacturers to maintain a steady production schedule year-around.

Milo Ready to Drink has a life of 3 Months. If any buyer (retailer, whole seller) buys that product which is in its last month a seasonal discount will be given depending upon the purchase amount.

Factor Affecting the Pricing

Cost

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To produce one product, we need a good raw material. For Nestle Milo, we need get raw material such as cocoa from the cocoa supplier. If the supplier increases the cocoa price, it also will affect the price of Milo because the Milo’s cost of production will also increase. In Pakistan we need to import cocoa. If government increases the duty on imports of such products the price will go up. Also the suppliers for basic ingredients like Milk and cocoa can increase price resulting in high price for Milo.

Promotion

To make Milo more well-known all over Pakistan, we need to make a lot of promotion and using different way such as advertising, through television, internet, newspaper and so much more. These promotion activities will cost a lot and sometimes, Milo need to pay high for the individual who involves in this promotion activity. And to cover the money that they have spent, they will increase the price of Milo’s product.

Place

To set up price for Milo’s product, they also will determine the geographical factor. For example in North West Pakistan, Milo’s sell Rs 23.00 but in Punjab, they sell it at Rs22. This is because the transportation cost to North West Pakistan is very high.

Competition

The competitors will start to offer a discount or they will offer bargain price. Because of competition, the price will be change. In case of Milo in Pakistan there is no direct competitor for Milo in this market. So this factor will not affect the price so much.

Quality

To make Milo more variety and more interesting to buy, they will make something that can increase their product quality. To increase product quality we will certainly have to invest more in Milo. That is why quality factor can affect the price of Milo.

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Place:

Place relates to decisions about the storing and transporting of products, and also about selecting the products channel of distribution. These decisions are critical to the success of an organization.

Head Office Unit & Factories:

The head office of Milo is located in Lahore. Following is the address; Nestlé Consumer Services

308 Upper Malls P. O. Box 874 Lahore, Pakistan

Phone: (042) 111-Nestle (637853)

The production factory is in Sheikhopura.

Availability

Our product is available at all A class stores e.g. Al-Fateh, HKB. Milo is also available at whole sellers like metro cash n carry.

We also have distributors who are distributing Milo to all B and C class stores.

In our re launching we are working on the availability of Milo at cafes and gaming zones. With our efforts now Milo is available at NEO MATRIX the largest chain of gaming zone in Lahore.

Product transportation:

Nestle has developed a huge network of product transportation through out the country which will definitely have a positive impact on the availability of our product. Vehicles are in good position. A large number of transportation vehicles are available to transport the product almost through out the country.

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Distribution:

There are two types of distribution (direct, indirect). We are using indirect distribution as well as direct distribution. In direct distribution we are directly giving our product to whole sellers and retailers and in indirect distribution we are giving our products to distributors who distribute it further.

Potpourri also keeps Milo at their spot. In whole sale Metro Cash ‘n Carry is our whole seller. Nestle is also distributing Milo at different bakeries e.g. Good Luck, Shezan, etc.

Channel structure

We are using both retailer and whole seller channels.

Intensity of Distribution:

How vigorously you distribute your product is the intensity of distribution. We had three choices;

• Intensive distribution (to distribute every where) • Selective distribution (limited number of sales outlets) • Exclusive distribution (one outlet per area)

In this re-launching we have adopted Intensive distribution. We are distributing Milo at big stores and bakeries and also giving it to our distributors.

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What we are doing…

We are building our own shops and outlets where only Milo products are sold. Milo is putting the vending machine in a place that always full of people such as shopping mall, airport, hospital, school and any other place. Colleges, Cafes & Universities and domestic and international tournaments are also kept in mind. We are co-sponsoring Faisal Bank T20 domestic cricket tournament and many other events in Pakistan.

Porter’s 5 Forces:

Bargaining power of Suppliers is quite high because the main supply for Milo is of milk

sugar, and cocoa. Milk and sugar suppliers have a wide range of companies willing to purchase supplies from them so they have a high bargaining power.

Bargaining power of buyers is quite low in case of Milo because the rate is fixed and is

very economical.

Threat of new entrants is low because many companies in the industry of energy drinks

have been set up. So any new entrant will affect less of other companies (exceptions excluded) because they have more concern how to survive in such a competitive market.

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Threat of substitutes is high because customers have a huge list of substitutes in this

market (Red bull, Speed, String, etc.).Many energy drinks are very successful in the market and provide a very strong competition.

Industrial Rivalry becomes high if there is a great competition in the market. A huge

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Promotion

The main function of Nestle Milo promotional strategy is to convince target customers that their goods and services offered provide a differential advantage over the competition. Milo is convincing their customer that children will be more energetic, sports man will be more powerful, and students will be more active if they consume Milo. They also effectively communicate this differential advantage through advertising featuring

Pakistan’s top national cricket players like Shoaib akhter. Afiridi and Umer akmal.

Advertising

Television

Milo is heavily advertising on T.V. channels. According to the research mostly people prefer to watch Music and Movies channels. Our main advertising channels will be MTV, Star Movies, cartoon network, GEO and ARY. Many other channels will be captured later.

Outdoor media

Milo sponsors almost all type of sport event and Nestle also collaborate with Ministry of Sports and Youth in order to organize national and international sport event. They normally open a booth in every event they sponsored and giving out free Milo drinks. It is really effective since it can instill relationship between product and consumers.

We are targeting Cricket and Football first and then Hockey and other sports.

Internet

Nestle have their own website which is www.nestle.com more than 100 countries are registered under this website. Nestle also have their own website for each product that they sell (e.g. www.milo.com.my) which is estimated around 30,000 products worldwide. It is established so that consumer can easily find information about their

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particular product and also as a medium for consumer to leave their suggestion in order for Milo to improve their product.

Printed Media

Printed media includes newspapers, magazines as well as posters. We are promoting Milo in children’s magazine since they are the main target market for the product. The advertising should support public figures such as Umer Akmal in order to attract sportsmen and children who involves in sports. Posters are usually distributed to all wholesaler and retailers who are selling Milo which can help people to recognize the places that do sell Milo. We are using different cartoon characters to attract the children’s.

There are many other media which we are following for the promotional activities. Main media are following;

• Billboards • Streamers

• Facebook/twitter Advertisement

Future Effects of advertising

If Milo does heavy advertisement in Pakistan they will boost their sales which are shown in fig.

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Promotional Activities:

We are also giving miscellaneous item such as a unique mug with Milo’s logo, a key chain, a school bag complete with the stationary for children. The pictures below show some example on how Milo is promoting their products to the customer.

Free 200ml Milo on purchase of 6 cans:

If the customer buys 6 cans of Milo, they will get 1 free small pack of Milo and this promotion valid for some period.

Buy 1kg Milo and get a free cup:

This is the second activity of Milo to promote their product. If the customers buy 1 KG pack of Milo, they will get 1 Milo Cup. This kind of promotion will attract all the kids and even the adult to buy it.

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This promotion will attract sporty person to buy it. This is because the tumbler is easy to carry everywhere and it is very fit to sporty person that have to move a lot.

Public relations

We Milo giving financial help to orphan children’s through EIDHI organization. We are giving one rupee on the sale of every Milo to EIDHI organization.

Push and pull strategy

We are using pull strategy. High spending on advertising and consumer promotion to build up consumer demand for a product.

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Ansoff Product/ Market Expansion Grid:

Milo is going for two

strategies; • Market Penetration • Product Development Market Penetration:

Milo is going to capture more customers in the current market targeted. Milo is going to expand its market in terms of Market Share and Number of Customers. Milo is creating awareness in Pakistani market especially Lahore and Milo is capturing more customers than going into new market.

Product Development:

Milo is coming with new products in the same market, Milo tin (production in Pakistan not imports), Milo chocolates, etc. for the people of Lahore. So Milo is developing its product range and enlarging the product item depth in the same market.

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Micro Analysis:

S.W.O.T Analysis for Milo

We are going to produce a SWOT analysis to find out how effective Milo is operating and what internal factors may influence its success. A SWOT analysis analyses the internal factors that may influence the success of a business.

Here is a SWOT analysis on Milo:

Strengths

* Brand itself * Product Quality

* Focusing only on chocolate energy food drink *Unique selling point.

* Big sales in other countries.

* Part of Nestle (reputation) funds available for re-launch. * It is available in different sizes, shapes and type.

* Value for money * Widely available

* Strong association with children and sports

Weaknesses

* Not enough diversity in flavors * Not enough investment in Milo * Packaging (design of tin + labeling)

Opportunities

* Increased media available (Mobiles/internet) * Increased fitness industry

* Increase awareness of health and fitness * Sponsorship (through sporting events) * Increase more market share

Threats

* Competitors (hot chocolate, energy drinks) * Well known successful brands as competitors

* Competitors could use aggressive marketing tactics cut prices/increase promotion * Competitors bring out similar products

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Macro Analysis:

PEST Analysis

Here is a PEST analysis on Milo:

Political

* Stay within the law (being aware of legislation health and safety, advertising standards, consumer protection, trades description

* Restriction on imports

* Government back ‘Milo’ as energy drinks

Economical

* Exchange rates (what are they here/abroad, If you’re buying from another country and the rates differs, it changes the price you end up paying)

* Taxes (if they go up so will the costs for consumers)

* Recession (people have less disposable income – would they buy Milo?) * Inflation (prices go up for the company and for the consumer)

Social

* Society more aware of healthy lifestyle/rise in fitness industry * More focus on leisure time

* More disposable (can afford to buy luxury goods) income * Fashion (could Milo be the next fashionable drink)

Technological

* Advanced in technology change product/packaging/flavors * Advance in science (add to Milo formula more energy/healthier)

* Advances in production technology (more efficient + better quality/ less staff required = cheaper for Nestle = cheaper for customers)

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Expectations:

After a hard work and lot of research, some of the strategies were developed. A huge budget on specially advertisement and product promotion is spent to put Milo again in the growth stage. Following are some of the expectations to be seen in the future.

• Enhanced awareness about the product

• Most of the fitness oriented customers and sports persons will be attracted and focused to aware them with Milo’s importance and its features

People will be focused to aware them about Natural Energy rather than other energy drinks that help in short run but destroys the health in long run

• More strong brand image in the consumers mind

• Customer acceptance about the new products (chocolates, sugar free Milo) in the market

• Showing different combination to consume Milo will attract customers to use the product according to their likes

• More awareness about the product features in the customers that how Milo can serve them

• it is expected that people will have a strong confidence in Milo’s products that all of them are environment friendly and they are going to keep them fit from every perspective

• proper utilization of marketing tools Milo is differentiated from other products and customers are required not to confuse it with other energy drinks

• Working on cost leadership strategy Milo is going to cater customers in a way that Milo is not so costly, it is economic. Providing an economic price will definitely attract customers in Mass Volume. Since day first, Milo is striving to provide people a right price for the product.

• A number of discounts to its customers, retailers and whole sellers will require a lot of budget but it will return after a certain time a good return in shape of market share and number of attracted customers.

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• Many items like product, promotion and quality affect the price of the product and it will be managed to sustain the price by maintaining the costs of production and promotion

• Proper availability and effective transportation it will be made sure that the product will get more customers in the market of Lahore

Using Intensive Distribution Milo will be much available in the market and people will give a good return to meet our expenses on promotion

• Putting vending machines and going to different colleges, universities and schools will obviously create awareness about Milo and W.O.M. will be spread

• Using a heavy advertisement in television, print media and internet peoples’ minds will be stroke to check Milo at least one time surely. Finding Milo good to use people will become the consumers and will spread a good word of mouth about the product and brand helping the company to succeed and go ahead

• Different types of promotion like giving Milo with other bulk purchases, and some incentives like tumbler and cup will attract the customers

• All the activities in pricing, distribution and promotion will ultimately lead the company in the growth stage

(33)

Referenced:

Official website:

http://www.nestle.pk/brands/nestle-milo.aspx Wikipedia Search:

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