Unlocking Milos Value: A Unique Proposition

You are to choose one product/brand from the list below, research the industry and construct a basic marketing plan for how you would grow your chosen product/brand and reach your stated marketing goal.  This is an individual assignment, and therefore you should neither collaborate nor collude with anyone else including other students – past, present or future.   

For a long time now, Milo has been known to be one of the world’s premier chocolate beverages with high nutritional value. However, currently, the company has received scrutiny over sugar content in its packaging. This means that the brand requires a valid marketing plan to keep the already growing brand relevant (Aaker & McLoughlin, 2010; Nestle.com, 2010). One of the most prominent company’s goals is to provide, nutrition, health, and wellness. Additionally, the company seeks to sustain financial performance and finally attain the trust of all the stakeholders. Initially, the actual the product was manufactured in 1930 to compliment children’s diet as a response to the fact that they were not receiving one that was balanced. The Australian based brand makes not only realise an annual sale of 2 million cans but also records 480 cups around the globe (Nestle.com, 2014).

According to the information attained from the SWOT and CDTEST analysis, Milo is losing its popularity among its clients. This means that many areas need to be improved for the product to stand on its feet once more. Market mix marketing strategy with respect to the model will be sought in this paper, namely; product, price, place, and promotion among others. One of the greatest strengths evidenced by the company attributes Milo as a global product that sells in over 40 countries (Oxford Business Group, 2008). Moreover, the product is characterized with different sizes, types, and shapes an aspect that helps the brand meet the needs of the company’s customers (Ayub, Razzaq, Aslam, & Iftekhar, 2013). Among the downsides, however, Milo not only has had one form of packaging since time immemorial but also the very flavour that has existed from the beginning. For instance, the tin’s labelling and design are still the same; monotonous can be tedious. Nevertheless, Milo has an edge over the other companies offering the same product through enhancing health awareness coupled with the aspect of an energy drink. Additionally, the company hosts corporate social responsibilities (CSR) activities by sponsoring different sporting exercises, which makes it appear to stand for the excellent health it advocates. 

On the other hand, the company faces massive competition from similar companies that offer the same products, such as Boost, Mozart and Vico, Bournvita and viva. These products happen to be more diverse in their packaging (Ford & Håkansson, 2013). The brand has three pricing policies that cut across the globe: polycentric, geocentric and ethnocentric. Most Nestle products are priced paying regard to the middle and high-income social classes while at the same time keeping an eye on the manufacturing, labour, and raw material cost. One of the company’s pricing strategies is pricing discrimination to maximise the value of consumer demand. Milo is a multinational brand, and since it has already penetrated the market until of late it has not faced much competition in regards to pricing or engaged in price wars, this is why there is the need for a workable marketing plan (Hollensen, 2009; Thomas, 2007).

Marketing Goal

For the past three years, a notable stagnation in regards to sales has been noted within Nestle Group in general. In 2014, sales were at 91.71%, in 2015 it reduced to 88.79%, in 2016 a decline that has not yet been recorded was recorded at 89.47% and in 2017 a very slight improvement was noted 89.79%. The above report calls for attention, and the numbers need to return to their initial position, which makes this study as relevant as never before. This will be done by improving the product and packaging, as well as enhancing awareness of the product through advertisement as well as proper promotion.

The stagnation of sales is enough evidence that the product is losing its popularity. The marketing goal is to increase awareness. This will entail making Milo stand out from the crowd and capturing a new niche through proper promotion and advertisement,  and finally to offer clients more variation of products for their day to day use.   

It is essential to have a clear understanding of the needs and requirements of the consumer before making any significant move regarding products (Mintu-Wimsatt & Winston, 2013). Milo size extends up to 6 billion with a niche of around 5.04 billion which adds up to 84%. Children between the age of 3 and 13 also known as future champions or Generation Y are Milo’s target market, and the strategy is, however, to capture this group and at the same time diversify from the above. Most of these consumers are financially dependent on their parents and typically belong to the upper class and upper middle class. Through its annual sporting activities, it will be in a position to attract the youth creating popularity among this niche. This group is highly engaged in an active lifestyle which includes sports, studying and competition, it requires at least 20g a day to keep their bodies busy, strong and healthy. These outdoor activities lovers purchase the product majorly from school cafes, sidebars, colleges, and alleys and tend to spend most of their pocket money on sports, fast foods, movies, clothing and music.

Most of these consumers are known to prefer this product due to its nutritional facts, credibility, packaging, and taste. As a result, this niche expects to acquire psychological and physical wellness as well as hope for becoming better future champions. Milo, Ovaltine, Sustagen, Chocquick, and Rich-O are all products preferred by these group, but Milo surpasses them all for more reasons than just one; more advertisements, reputable endorsers, pocket friendly to kids, rich in calcium and has a chocolatey taste, supports humanitarian causes, advocates for a competitive lifestyle and is highly nutritious. 

Marketing Strategy

Among the most remarkable qualities that Milo holds is that it is refreshing nourishment, both psychologically and physiologically, it delivers both health and good taste. It provides energy for the healthy development of children. Milo is rich in 6 vital minerals and vitamins. One glass of milk has more value than a human brain can perceive, it is high in G1, high in protein and nutrient-rich, calcium to be precise (Nestle.com, 2014). Despite there being a wide range of other food products in Australia as well as all other parts of the globe, not all foods provide the crucial minerals and vitamins, making Milo more relevant over the years. It is rich in maltose and starch with a taste and crunch that is loved by children; these are a requirement for the proper functioning of muscles, brain, and development of the nervous system.

Although the price of Milo might prove to be quite costly at times, it is worthwhile. As earlier on mentioned it not only has a chocolate taste that makes it kids’ favourite but also has immense nutritional value, it has also been known as a world leader in nutrition, wellness, and health. Milo is living up to its objectives; it is trusted by its stakeholders and has turned out to be the reference for its performance in its industry (Nestle.com, 2012). Milo believes in consistently delivering on their promises and being in good behaviour, and that is how it manages to garner trust from its consumers. These objectives and goals are encrypted within the basic slogan that winds up Milo’s corporate ambition, “good food, good life”. 

Product

Milo is a powdered chocolate drink that extracted from malted barley that usually is combined with other ingredients that help provide the energy needed for active bodies. It is available in three sizes and only comes in chocolate flavour; the two variants available are milo and Milo 3 in 1 (Nestle.com, 2014). Milo has, however, taken a different and outstanding move by taking mothers back to school as a marketing strategy. Mothers are asked to slip into school uniforms and go through the day to day activities of their children with the aim of having these mothers have a taste of their own medicine. This a brilliant campaign brand, however, how workable this is and for how long it may be useful is still a mystery. Parents get to feel how tiring it gets to be a child and there is the need for an excellent healthy breakfast (Hoyland, Dye, & Lawton, 2009; Wu, 2011). However, the question on the amount of sugar content within the product still raises eyebrows. Milo needs to spread its wings and not only cater to the needs of the young ones but also their parents as well as special population groups, diabetes patients and the elderly (Wu, 2011).  The sugar content ought to be reduced to have the two above groups covered. It is worth noting that Milo’s niche is a group of youngsters whose teeth are yet to get active and too much sugar may have their teeth grow in unhealthy forms. Low sugar products will attract a wide range of consumers leading to a significant increase in sales.

Value Proposition

Price

The 5c’s of marketing create a clear blueprint and guidelines for making proper decisions as well as developing workable marketing strategies; company, customers, competitors, collaborators and climate (Nestle.com, 2012). Milo’s major consumer at the moment is the Y generation which is what this strategy seeks to address. The aim is to diversify the product’s consumption from this niche to an older and diseased population to have them feel like part of the group as opposed to viewing the beverage as a children’s’ product only (foodandwaterwatch, 2011). It would be impossible to mention marketing plan and leave out the word competition, and competition makes the world go round but can also be lethal as to bring down a multi-billion company; this is a challenge faced by Milo just like any other service and product providers. Milo and Ovaltine are about the same price, Milo surpasses chocquick by 28% and Rich-O by 11%, giving the other brands an edge over the product in question. Competition is recorded from various companies producing similar brands: Horlicks, bournvita, Viva, Nesquik and caffeineforme (Nestle. Com, 2007).

These low content Milo products will be packaged in medium 300g and small sachets. The first batch produced is to be supplied evenly globally as free samples after which bigger cans will be generated depending on the clients’ feedback (Thomas, 2007). The first thousand clients who purchase 600g cans will get it at half the price and 300g for free, this will keep the product flowing in the market that even after the promotion is over all the potential target consumers will have fallen in love with it and will not be in a position to say no a refreshing cup of Milo in the morning.

Distribution

Milo has managed to come up with defined approaches and practices for the storage and transformation of their products to establish a well-organised distribution channel. At the moment, the only two distribution channels used are wholesalers and retailers, the two provide logistic function, transaction function and facilitating function.  Manufacture units require being geographically efficient for the enhancement of the distribution network as well as productivity. Cost-effectiveness is yet another factor that should be paid regard to for the product to penetrate the target market efficiently. There is a need to be diversified within various locations and increase manufacture units to save the company time and money consumed during distribution. 

Promotion

Since the 1980s, Milo has been known to sponsor countless sporting activities, Singapore Health Promotion board awarded Milo in 2006 for its continued support in live events and product innovation. Since Milo’s primary focus is health and energy, any other promotional activity should remain within the constraints therein. One of the best ways to engage the potential target group from all around the globe is organised global sports championship and have the elderly and diseased participate (Kirk-Sanchez & McGough, 2014; Khan et al., 2012). The sporting activities include dancing, tennis, badminton, tai chi, Wii bowling, golf, croquet, biking, cross-country skiing, and curling. As such an approximate budget of Aud $ 50,000 would help achieve this objective. This is a perfect way of creating due awareness to this group of people who know not much about social media which turns out to be the most effective marketing platform of recent. The above strategy will hopefully work towards retaining the already existing group of consumers as well as capture a whole different niche. 

References

Aaker, D. A., & McLoughlin, D. (2010). Strategic market management: global perspectives. New York: John Wiley & Sons.

Ayub, A., Razzaq, A., Aslam, M. S., & Iftekhar, H. (2013). A conceptual framework on evaluating SWOT analysis as the mediator in strategic marketing planning through marketing intelligence. European Journal of Business and Social Sciences, 2(1), 91-98.

Foodandwaterwatch.org. (2011). Nestle research. Popularly positioned products and affordable and nutritious. Retrieved from https://www.foodandwaterwatch.org/files/nestl%C3%A9-list-popularly-positioned-products 

Ford, D., & Håkansson, H. (2013). Competition in business networks. Industrial Marketing Management, 42(7), 1017-1024.

Hollensen, S. (2009). Global marketing. A decision-oriented approach, fifth edition. Upper Saddle River: Prentice Hall.

Hoyland, A., Dye, L., & Lawton, C. L. (2009). A systematic review of the effect of breakfast on the cognitive performance of children and adolescents. Nutrition Research Reviews, 22(2), 220-243.

Khan, K. M., Thompson, A. M., Blair, S. N., Sallis, J. F., Powell, K. E., Bull, F. C., & Bauman, A. E. (2012). Sport and exercise as contributors to the health of nations. The Lancet, 380(9836), 59-64.

Kirk-Sanchez, N. J., & McGough, E. L. (2014). Physical exercise and cognitive performance in the elderly: current perspectives. Clinical Interventions in Aging, 9, 51.

Mintu-Wimsatt, A. T., & Winston, W. (2013). Environmental marketing: strategies, practice, theory, and research. New York: Routledge.

Nestle.com. (2010). Nestle. Annual report 2010. Good food good life. Retrieved from https://www.nestle.com/asset-library/documents/library/documents/annual_reports/2010-annual-report-en.pdf 

Nestle.com. (2012). Annual report 2012. Good food good life. Nutrition is the quality of life. No. 2. Retrieved from https://www.nestle.com/asset-library/documents/library/documents/annual_reports/2012-annual-report-en.pdf

Nestle.com. (2014). Nestle good food good life. Nestle reports progress on communities. Retrieved from https://www.nestle.com/asset-library/documents/library/documents/annual_reports/2014-annual-report-en.pdf 

Oxford Business Group. (2008). The Report: Malaysia 2008. London: Oxford Business Group.

Thomas, H. (2007). An analysis of the environment and competitive dynamics of management education. Journal of Management Development, 26(1), 9-21.

Wu, C. W. (2011). Global marketing strategy modeling of high tech products. Journal of Business Research, 64(11), 1229-1233.lderly.