MKT 234 FUNDAMENTALS OF MARKETING

PREAPARED FOR:

MADAM RUSNAH BINTI ISMAIL

PREPARED BY:

MATRIC
NAME GROUB
NUMBER
1. MUHAMMAD DANISH FAKHRULLAH
BIN IRWAN 2020935273 HM1102Aa

2. RANIA BINTI ZULKIFLI 2020369581 HM1102Aa

3. NUR AINNI BINTI BERAHIM 2020955699 HM1102Aa

4. AIMI RIDANI BINTI ROZIAN 2020956753 HM1102Ab

5. NUR FARAHIN BINTI FADZIL 2020955305 HM1102Ab

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TABLE OF CONTENT:

CONTENT PAGE

Acknowledgement 3

Executif summery 4

Introduction/ background Nestle Milo 5-6

Body of report:
1. Segmentation
2. Product
3. Place 8-16
4. Promotion
5. Pricing

Conclusion and recommendation 15

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ACKNOWLEDGEMENT:

First of all, we would like to express our deepest appreciation to all those who involved
whether directly or indirectly and have been a part in completing our Fundamental of
Marketing’s (MKT243) report and also our product (Nestle Milo) from its inception. This
writing report on our project has been one of the significant academic challenges we have
faced and without the support, guidance and patience of the people who were involved, this
task would not have been completed. It is to them I owe my deepest gratitude.

Furthermore, we would like to thank to the crucial role who had guided us in making our
fashion week run smoothly and in completing this report too, the person we meant was our
MKT243’s Lecturer Madam Hajah Rusnah Binti Ismail. Her wisdom, knowledge and
commitment to the highest standards inspired and motived us. Without his insight, support
and energy, this group project wouldn’t have started and neither would have reached
fruitfulness.Then, we would like to thanks all our friends and families who had helped and
shared their ideas to our group projects. All such sharing and guidance is very meaningful for
all of us.

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EXECUTIF SUMMARY:

Milo is well recognizing in Malaysian household with packaging in green that comes in
images of people playing with various sports on the tin. As of May 2015, this form is no
longer manufactured. Milo is very popular and it is often associates with chocolate drink
flavored. Milo Vans were always seen in primary school where school pupils would queue up
to collect their cups of Milo with drinking coupons.

The report was include is for Our main focus containing the 4P’s, this stands for: Price,
Product, Promotion and Place. On top of that, we will be further discussing in the extended
marketing mix that consist of: People, Process and Physical Environment. This is to have
further understanding on Nestle Milo future position in Malaysian.

Due to strong competition market with Nestle Milo, the purpose of this report is to aim to
strengthen the product life cycle and to maintain the profit of the product. Not only that, we
intend to broaden Milo market segmentation and to produce a quality of strategic options. In
order to boost Milo sales, we will be focusing on the publicity and promotion as to create
brand awareness among consumes. Not only that, we will be introducing our product
warranty to consumer. With such marketing planning, consumer can look forward for better
product and services from us.

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INTRODUCTION/ BACKROUND NESTLE MILO:

Nestle began in Malaysia is at 1912. The first nestle office was built at Penang and known as
Anglo-Swiss Condensed Milk Company and later, growth and expansion made a move to
Kuala Lumpur necessary in 1939. Nestlé’s Malaysia head officer is now located at
Damansara, Petaling Jaya, Selangor that has 6 sales officer and more than 5000 workers
nationwide. Nestle also has over 300 brand halal and it manufactured its own product in 8
factories.

Milo particularly has been the Malaysian most favo urite health and energy chocolate
malt drink. Malaysia has become the world's highest Milo consumer with a total of 90% since
1950. The largest Milo factory is in Chembong, Negeri Sembilan. Milo is a milk beverage
with chocolate and malt, produced by nestle and originally from Australia. It was developed
by Thomas mayne in 1934. Milo is also manufactured in other countries, including Oceania,
South America, Southeast and East Asia, as well as Southern, East, and West Africa.

Milo is added to hot or cold milk to give it a malted chocolate flavor and extra texture.
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 additional 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. Another popular used is to sprinkle It on ice cream, especially vanilla ice cream.
It will make a delicious combination.

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). And Malaysia were said to be the wor ld largest
consumers of milo. 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

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old and younger generations. Many generation of people lo ve to drink milo no matter how
old are the.

Toddler also love to drink milo. 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. In
Malaysia, milo have another versions such as “milo dinosaur” which is a cup of milo with an
extra spoonful of powdered undisclosed milo added to it, “Milo Godzilla” which is a cup of
milo with ice cream or whipped cream and “Neslo” which is milo combined with Nescafe
powdered coffee. It gained popularity in Singapore soon after.

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BODY OF REPORT:

Segmentation

Definition of market segmentation can be referred as aggregating of prospective buyers into

groups or segments that have common needs and will respond similarly to a marketing action.
Market segmentation enables businesses to target different categories of consumers who
perceive the full value of certain products and services differently from one another.

Market segmentation discusses the need to understand competitors as well as customers

through competitor analysis. Besides, market segmentation also demonstrates the need for
balancing customer and competitor orientations in becoming a truly market-centered
organization.

The target market of nestle organization strive to think locally and globally in order
to manufacturing Milo product. Their consumers rage age between 6 to 12 years old and
individual approach to give them energy before doing anything in their every daily life was
selected as their target market

There are 3 based of segmentation in Milo.

1. Demographic segmentation

Demographic segmentation is segmenting markets according to age, gender, income and

family life.

• Age - Milo can easily target various age groups. The most important of these groups
are children and old people. This marketing plan will focus on Children age’s 6-12years who
live an active lifestyle. Adult also love to drink milo because milo is an energy drink that give
them a lot of energy.

• Gender - Male and Female It will be very beneficial to target women as they usually
shop for their family, especially for those have younger kids and mostly their kids are active
in school so, their mother will give them an energy drink like Milo.

• Income - Income segmentation is a long-standing practice and it does not predict the
best consumers for daily consume product such as MILO

• Family life - Life cycle and family size play an important role in market segmentation
as families with younger kids will want to buy MILO for daily consume, especially
convenience pack the ready-to-drink format. Some of the family use milo as their breakfast
on daily life to give them energy.

2. Psychographic segmentation

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Psychographics is part of a segmentation group to capture the drive behind a potential
customer’s behavior and is including their personality and lifestyle

3. Behavioral segmentation

Behavioral segmentation refers to a process in marketing which divides customers into

segments depending on their behavior patterns when interacting with a particular business or
website. In Milo, benefit is one of the behavioral segmentation.

There are a lot of benefit that milo have. Milo is an energy drink that contains vitamin
which is protomalt, malt extract from barley and vitamin B (B2,B3,B6,B12). milo also
contain calcium that strengthen our bones.

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PRODUCT

Nestle encompasses cultural and social diversity and does not discriminate on the basis of
origin, nationality, religion, race, gender, or age. In addition, Nestle believes that such
activities can only benefit long-term companies if they are at the same time beneficial to the
local community. Among the popular nestle products is milo. This is because this product is
always desired by its users. Not only adults who love this product but also children love this
product. Milo has always been the demand of every customer to meet the tastes of consumers.
Milo is mixed into hot or cold milk to give a chocolate flavor and malt extract. When
combined with cold milk, it retains a rough texture from its raw state. Sugar can be added to
Milo drinks, but many people enjoy it without the addition of sweeteners. This is because
consumers appreciate it because of its delicate chocolate flavor. Milo can also be sprinkled
with breakfast cereals.

Milo is very popular in Malaysia, where the brand is synonymous with chocolate flavored
drinks. Milo has the largest market share in Malaysia and Malaysians are said to be the
largest in the world of Milo users. This is because Milo was once used as a nutrient
supplement when it was first introduced in the country, and thus has gained a reputation as a
'must have' drink for the old and young generations.

. The original Milo contains a pack of nutritional icons that reinforce the nutritional value
that users can get from each nutritious and delicious Milo cup. While milo fuze is available in
three variants and is an easy and delicious way to enjoy nutritious Milo with Actigen-E and
other nutritious ingredients. It differs from 3 types namely grains for hunger, 3in1 for ease of
consumer and better taste, and the latter is high calcium for stronger bones. Milo supplies
energy and calories. These calories come from different Milo ingredients, especially malt
extract, skim milk, palm oil and sugar. Nestle companies should take care of product safety
and improve the quality of their products as it helps to increase company revenue and also
increase employee productivity.

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Original milo

Milo Fuze

Milo nuggets

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PLACE

Nestle Milo can define very well strategic approaches and practices for storing and
transforming their products, with establish organized and structured distribution and product
channel. The 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 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 functio n, logistic
function and facilitating function that improve the overall frequency of order processing in
shorter time

Also 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. Effective inventory management drives down costs and enhances product
quality. Choosing the right distribution channel example should we sell through middleman
firms or should we sell directly to the end-user. Direct energy cost pressures have eased in
recent months. The major distribution channel include with geographically consideration with
the manufacturing place situated. It’s very cost effective way for the firm’s expenses in
distribution its products to targeted market.

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PROMOTION

1. TYPES OF PROMOTION APPLY:

This product Focus on persuading the target audience group that their products offer
featuresand utilities that are outperforming the competition. These may include highquality,
low cost, excellent service or simply a feature that other competitors do nothave. For the
promotion, Nestle Milo had Connect with some famous fast food restaurant like KFC,
Lotteria, McDonald’sto have combo products. Other than that, Milo's sales promotion
activities have been strongly developed through massmedia such as television, radio,
newspapers, banners, posters, videos atsupermarkets, etc. Besides, Milo also uses other forms
of promotion methods suchas participating in product fairs, sponsoring several programs, PR,
free giveawayswhen buying products or discounts, etc. These are useful tools that Nestle used
topersuade and build relationships with customers .

PUBLIC RELATIONS OF NESTLE MILO

MILO is best known for its sponsorship for sporting event many countries ,expecially
between elementary and junior high school language that MILO use the tagline that
“ TENAGA UNTUK MELANGKAH JAUH” or “ BERTENAGA SETIAP HARI “ .

SALES PROMOTION

Some pictures will show that sales Nestle MILO promotion that how MILO’S show their
product to customer

Buy Milo 1 Kg free 1 Juara Cup Buy 400g free 80g Milo

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APPEAL AND EXECUTIF OF MASSAGE THAT MILO APPLY

Tagline that NESTLE MILO use is “STAY ACTIVE AND FOCUSED WITH MILO”. The
video has garnered over 1 million views on YouTube alone. YouGov BrandIndex data shows
that Milo's classic ads have captured Malaysians' attentioN

In Malaysian tagline NESTLE MILO IS “TENAGA UNTUK MELANGKAH JAUH “

PROMOTION ACTIVITIES

defined as any paid form of product information that is delivery to potential customer in a
non-personal way (such as through newspaper ,magazines ,television ,radio , billboards or the
internet ) example that I will at page down

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PRICING

This firm has several options for addressing the price. Domestically Nestlé’s Milo
manufactured finished products may be force to switch to offshore sourcing of certain
component to keep costs and prices competitive. Another factor is a through audit of the
distribution structure in the target markets. An extension or ethnocentric pricing policy
describe that the per-unit price of an item to be the same no matter where in the
world the buyer is situated.

Factors affecting pricing decisions Milo is considered as a product of monopolistic

competition market because there are many competitors of Milo in the market. Some of the
competitors include Vico, Ovaltine, Horlicks, Dutch Lady and Nutrilite. Secondly,
monopolistic competition market has free market entry and exit. This means that new
competitors can enter the market easily and Milo may be easily force out of the market by its
competitors. Monopolistic competition also needs a lot of money to spend on advertising to
convince customers to buy their products. In fact, Milo sells all its products throughout the
world and higher popularity compared to other chocolate drinks.

Cost plays an important role in setting international prices. Milo also adopted the Promotional
Pricing strategy. Selling products is challenging when shelves are coated with similar quality
products, and customers are bombarded with advertising messages. Promotional prices help
differentiate Milo products from their competitors and leverage the attention of potent ial
customers long enough to buy Milo products. Promotional prices involve lowering product
prices, distributing coupons or special offers, such as buy-one-get-one- free offers. For
example, Milo offers promotional prices for its products in the weekly cata log to create
excitement and attract consumers to buy these milo products.

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

PRICING TACTICS

Quantity discount. When buyers get a lower price for buying in multiple units or above
specified dollaramount, they are receiving a quantity discount.

Cash discounts. Cash discount is a price reduction offered to a consumer, or a marketing

intermediary inreturn for prompt payment of a bill. This is to avoid bad deb.

Zone pricing. A marketing manager who wants to equalize total costs among buyers
within largegeographic areas, but not necessarily all of the seller’s market area which will
maymodify the base price with a zone pricing tactic. The price will be divided into
segmentsor charges based on the zone that given.

Single price tactic. A price tactic that offers all goods and services at the same price ( or
perhaps two orthree prices).

Flexible pricing. A price tactic in which different customers pay different pric es for
essentially the samemerchandise bought in equal quantities.

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CONCLUSION AND RECOMMENDATION:

In conclusion, marketing strategies include Concentrated or single-segment marketing

strategy,niche marketing, differentiated marketing and mass marketing or full market
coverage marketingmix strategy. Evaluation and analysis should bedone before the final
implementation of the marketing mix strategies.I would recommend that amarketing strategy
to be adopted by the marketer should be one that gives maximum profit to thefirm and at the
same time offers maximum value to the consumer.

The 4Ps of marketing is a model for enhancing the components of your "marketing mix" –
the way in which take a new product or service to market. It helps to define marketing
options in terms of price, product, promotion, and place so that offering meets a specific
customer need or demand.

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