Introduce
Introducing about Nestlé S.A
Nestlé S.A, a Swiss multinational food and beverage conglomerate based in Vevey, Vaud, is the world's largest food company by revenue, a position it has held since 2014 In 2017, it was ranked No 64 on the Fortune Global 500 list.
No 33 in the 2016 edition of the Forbes Global 2000 list of largest public companies.”
Henri Nestlé, the founder of Nestlé, was born on August 10, 1814, in Frankfurt am Main, Germany, as the 11th of 14 children in a wealthy bourgeois family The Nestlé family has roots in western Swabia, Germany, where "Nestlé" translates to "bird's nest," which is reflected in the company's logo featuring a small bird's nest that has been a symbol of the brand for over 140 years.
In 1860, Switzerland faced a high child mortality rate of 15-20%, prompting pharmacist Henri Nestlé to create a nutritious infant powder Collaborating with food scientist Jean Balthasar Schnetzler, they developed an innovative infant formula in 1867, testing it directly on Schnetzler's newborn son.
In 1867, Nestlé discovered a premature baby who couldn't be breastfed and introduced him to his ready-to-drink cereal Remarkably, the baby recovered within days, leading to widespread news across Europe among mothers unable to breastfeed This pivotal moment established Nestlé's brand presence globally, particularly in Europe.
Nestlé, a global leader in the food and beverage industry, operates over 400 factories across 85 countries, offering an extensive product range that includes baby food, healthy options, bottled water, breakfast cereals, coffee, tea, confectionery, dairy, ice cream, frozen meals, pet food, and snacks Notable sub-brands such as KitKat, Oreo, Nescafé, Maggi, and Milo, the latter being a nostalgic cocoa and barley drink from Australia, highlight Nestlé's commitment to quality and innovation, resonating with generations of consumers.
1.2 The history of Neslé Milo
MILO, a popular nutritional drink, was launched in 1934 by Thomas Mayne, a chemical engineer from Smithtown, New South Wales, during the Royal Sydney Easter Show The product's name pays tribute to a legendary athlete from Cortona, Italy, known for his remarkable health and success in winning six consecutive championships at international Olympic events.
Amidst the global economic recession, Australia and other nations faced significant challenges, prompting Nestlé to innovate a nutritious energy drink for children, rich in essential vitamins and minerals while remaining affordable Utilizing local ingredients like barley, cocoa, and dried milk, Nestlé partnered with Mayne to create and distribute Nestlé Milo worldwide In Asia, particularly in Indonesia, Malaysia, and Singapore, Milo has become immensely popular, boasting a 90% market share in Malaysia This success is attributed to its initial role as a nutritional supplement, establishing Milo as a beloved drink for both the young and old.
Nestlé has been a part of Vietnam since 1912, starting with its first office in Saigon and celebrating over a century of presence in the country In 1998, the company established its first factory in Dong Nai, and today operates six factories with two production lines, employing nearly 2,300 people nationwide With an investment exceeding $600 million, Nestlé demonstrates its commitment to long-term development in Vietnam while striving to enhance the quality of life and promote a healthier future for Vietnamese families.
Nestlé aims to be a leader in nutritional and health food, driven by its mission to become the world's foremost health and nutrition company Guided by the principle of "Good Food, Good Life," Nestlé offers a diverse range of food and beverage options to enhance daily living The company's commitment is to improve the quality of life and promote a healthier future for generations of Vietnamese families.
For 80 years, Nestlé Milo has been a trusted source of nutrition and energy for children in over 40 countries worldwide With two decades of dedicated understanding of children's nutritional needs, Milo continues to support healthy growth and active lifestyles.
Vietnamese children, Nestlé Milo aims to develop quality as the foundation for future success
Milo aims to inspire the young Vietnamese generation to prioritize health and resilience through sports By engaging in physical training, children not only enhance their fitness but also learn valuable lessons in determination, passion, and teamwork Ultimately, these experiences highlight the numerous benefits that sports offer for personal development and well-being.
Nestlé Milo plays a vital role in children's development by providing daily energy and promoting participation in physical activities and sports for better health For over a decade, it has supported the "Hội Khỏe Phù Đổng" football tournament, fostering sportsmanship since 2007 Additionally, since 2016, Nestlé Milo has partnered with the Ministry of Education & Training and the General Department of Sports to launch the "Năng động Việt Nam" program, aiming to cultivate a dynamic and healthy generation in Vietnam.
Nestlé Milo is a leading brand dedicated to promoting children's involvement in sports, offering a sustained energy source that empowers them to develop essential life skills and become true champions.
Vision and Mision
Nestlé aims to be a leader in nutritional and health food, driven by its mission to be the world's premier health and nutrition company With the guiding principle of "Good Food, Good Life," Nestlé offers a diverse range of foods and beverages to enhance the daily lives of consumers The company is dedicated to improving quality of life and fostering a healthier future for generations of Vietnamese families.
For 80 years, Nestlé Milo has consistently delivered essential nutrition and energy to children across over 40 countries With two decades of dedicated experience, Milo has a deep understanding of children's nutritional needs worldwide.
Vietnamese children, Nestlé Milo aims to develop quality as the foundation for future success.
Message
Milo aims to inspire the young Vietnamese generation to prioritize health training and resilience Through sports, Vietnamese children will learn essential lessons about determination, overcoming challenges, nurturing passion, and fostering teamwork, all while promoting a healthy lifestyle These values are the core benefits that sports provide.
Nestlé Milo plays a vital role in children's development by providing daily energy and promoting participation in physical activities and sports for better health For over a decade, it has been a steadfast supporter of the "Hội Khỏe Phù Đổng" football tournament since 2007 In collaboration with the Ministry of Education & Training and the General Department of Sports since 2016, Nestlé Milo has launched the "Năng động Việt Nam" initiative, aimed at fostering a dynamic and healthy generation in Vietnam.
Nestlé Milo is a leading brand dedicated to inspiring children to engage in sports, providing a sustainable energy source that helps them develop essential life skills and become true champions.
Marketing Environment
Macro – environment
As of December 31, 2020, Vietnam's population is approximately 97.8 million, making it one of the top 15 most populous countries globally, with about 25.2% of its population under 15 years old The country boasts a youthful demographic, with an average of 4,234 children born daily, presenting significant opportunities for child nutrition products Rapid urbanization and shifts in population distribution are notable, alongside a structural transformation in the economy, where the agricultural sector's contribution is decreasing while industry and services are on the rise Currently, over 50% of the population is employed in agriculture, indicating potential for economic diversification and growth, further supported by rising incomes.
2000 USD/person/year in 2019 In today's life, the needs of people are extremely diverse and rich, this is a great opportunity for dairy businesses to conquer Vietnamese people
Children aged 6 to 15 often reject nutritious foods like shrimp, crab, and fish, leading to calcium and nutrient deficiencies Research indicates that children aged 4 to 10 require 450-500 mg of calcium daily, while those aged 11 to 18 need 800-1000 mg This highlights the significant demand for calcium-fortified milk, with an average child needing at least 12 cans per day Nestle Milo, with its unique chocolate barley flavor, stands out from traditional cow's milk brands by appealing to the sensitive taste buds of this age group Consequently, Vietnam presents a promising market for Nestle Milo.
In Vietnamese culture, breast milk is considered the best nutrition for infants, making it challenging to introduce alternative products for children aged 1 to 3 years Consequently, Nestlé Milo targets older children, positioning itself as a healthy supplement for mothers seeking alternatives to sugary soft drinks Given the smaller stature of Vietnamese children compared to their international peers, addressing their nutritional needs, particularly for Calcium, is crucial for their holistic development.
In Vietnam, the consumption of sweets, canned goods, and dairy products is primarily limited to a small segment of the urban population, while access to dairy remains challenging for those with below-average living standards However, as the economy grows and information becomes more accessible, there is an increasing demand for products that meet physical needs, such as milk, juice, and coffee For many, these products have become a daily staple Notably, brands like Milo have built a strong reputation for quality and trust, fostering customer loyalty among Vietnamese consumers who tend to stick to products they perceive as secure and reliable.
Vietnam's humid tropical monsoon climate poses significant challenges for milk preservation, making it essential for companies like Nestlé Milo to maintain product quality Given that milk is a health product, proper storage is crucial; using paper boxes is preferred over canisters to prevent rapid deterioration in hot weather Optimal milk storage requires strict temperature control between 4-6 degrees Celsius, as deviations can alter its structure and create harmful substances Additionally, as Vietnam continues to urbanize and develop, it offers numerous opportunities for factory construction and a rich labor pool, making it an attractive destination for investment.
Vietnam's political stability attracts numerous foreign enterprises, including Nestlé Milo, to invest and develop in the country The Vietnamese government implements supportive policies for businesses, in addition to imposing taxes on imported goods and products Notably, Policy Decision 3399/QD-BCT plays a significant role in fostering a favorable business environment.
The 2010 approval of the dairy processing industry plan for 2020, with a vision extending to 2025, has opened up numerous opportunities for reducing raw material costs and fostering development potential However, companies also face significant threats from competitors, as suppliers can easily transition into direct competition.
Nestlé established its first office in Vietnam, known as "Hòn Ngọc Viễn Đông," in 1912, showcasing its early understanding of the country's economic landscape This strategic move highlights how the company has navigated Vietnam's industrialization from the outset, allowing it to effectively enter and thrive in the Vietnamese market.
Between 2002 and 2019, Vietnam experienced a significant economic transformation, with GDP per capita rising 2.7 times to exceed USD 2,700, allowing over 45 million people to rise above the poverty line The poverty rate plummeted from over 70% to below 6%, reflecting this rapid economic growth Consequently, increased purchasing power has enhanced access to health and personal services A market report by Euromonitor, as noted by the Center for Industry and Trade Information, projected that in 2020, Vietnam's consumption of milk and dairy products would reach 1.76 million tons, highlighting the rising demand for consumer goods.
Vietnam's milk and dairy product sales are projected to grow at an annual rate of 7-8% from 2021 to 2025, reaching an estimated total value of approximately 93.8 trillion dong by 2025 This consistent increase in milk consumption highlights the potential of the dairy market in Vietnam The country's integration and globalization have facilitated the entry of numerous new dairy companies, notably marked by a significant event in 2014 when milk prices decreased by 5-10%, transforming the Vietnamese dairy landscape.
As a nation undergoing industrialization and modernization, the establishment of industrial parks and the integration of advanced production lines are essential for enhancing production capacity and boosting enterprise competitiveness Recently, Milo has been making significant technological strides, including an investment of approximately 37 million USD.
Nestlé Milo is produced at the Bong Sen factory in Hung Yen, which is one of six Nestlé factories in Vietnam Established on May 18, 2017, the factory represents a significant investment of 1,600 billion VND (approximately 70 million USD) and spans an area of 10 hectares, specifically designed to develop the MILO nutritional drink product line to meet domestic demand This substantial investment aims to modernize production, enhance product quality, and diversify dairy offerings, presenting both challenges and opportunities The factory features advanced production lines that operate in automatic and semi-automatic modes, ensuring compliance with food safety, hygiene, and environmental protection standards Nestlé Vietnam emphasizes its commitment to sustainability by utilizing the latest eco-friendly technologies in its operations.
Micro – envỉronment
Nestlé S.A is globally recognized as the most famous brand in the food and beverage sector, known for its high-quality products Ranked 69th on the Fortune Global 500 list in 2018, Nestlé has achieved significant global recognition With the backing of its parent company, Nestlé Milo has expanded its presence in key markets such as China, India, Malaysia, and Singapore, focusing on substantial revenue growth.
Nestlé Milo, along with many foreign companies in Vietnam, benefits from the support of global corporations, enabling it to capture a significant market share With a team of experienced professionals overseeing production and sales, Milo ensures its products reach consumers effectively In the food industry, customer trust is paramount, and Nestlé Milo prioritizes quality, consistently earning nearly 5-star ratings on market forums Additionally, their marketing team has been recognized with two consecutive APAC Effie Awards, highlighting Nestlé Milo's successful communication and marketing strategies in the Asia Pacific region.
Despite its strengths, Nestlé Milo faces significant challenges, including retail price fluctuations and gaps in its organizational structure The most pressing issue is the need to enhance product quality, particularly after the misstep of creating a chocolate barley drink with up to 50% sugar This high sugar content poses health risks, especially to youth, amidst rising diabetes rates Therefore, it is crucial for Milo to address these weaknesses promptly to safeguard public health and secure its market position.
Nestlé S.A and its brand Milo have faced significant criticism, resulting in a loss of customer trust and a tarnished reputation The company's image suffered greatly in 2014 when over 37,000 tons of Maggi noodles were destroyed in India due to lead contamination, alongside scandals involving excessive water usage and forced child labor in developing countries These incidents have discredited Nestlé's products both globally and in specific markets.
Recent research indicates that modern consumers prefer products with clear and accurate labeling, with 62% opting for items free from harmful ingredients There is a growing awareness regarding the origins and preparation of food, particularly among younger shoppers who prioritize sustainability in their purchasing decisions In light of past labeling scandals involving Nestle Milo, it is crucial for the company to enhance its production processes and ensure transparency in nutritional information By doing so, Nestle Milo can rebuild consumer trust and foster brand loyalty.
In the fast-paced 4.0 era, convenience is paramount, positioning Nestle Milo favorably in the FMCG market, especially with its appealing pre-packed cool milk products aimed at children The significant consumption trends in Vietnam present a substantial opportunity for Milo to enhance its e-commerce presence Currently, few FMCG brands provide online shopping options, making this a strategic advantage for Nestle By expanding its online services into more regions, the company can significantly improve the shopping experience and drive growth.
The dairy market in Asia and Southeast Asia resembles a competitive "cake," attracting numerous competitors each year With the rapid growth of media and increasing consumer demands, Milo must ensure flawless execution in its strategies, leaving no room for even the smallest mistakes.
Government regulations significantly impact Nestlé's operations, while rising commodity prices compel the company to raise product prices This price increase may result in decreased sales, as consumers may opt for more affordable alternatives from competing brands.
Nestlé S.A emphasizes its reliance on over 5 million farmers in rural areas for raw materials, aiming to transform these regions into sustainable places for future generations To uphold product quality, Nestlé Milo mandates its Service Providers adhere to strict business practices, which include integrity, sustainability, labor standards, health and safety, and environmental responsibility This commitment has fostered a network of reliable suppliers, ensuring consistent quality in their products.
Nestlé, in collaboration with the Ministry of Agriculture and Rural Development, has successfully distributed over 28 million disease-resistant seedlings that enhance farmers' yields by more than 30%, all while preserving the ecosystem Additionally, Thanh Dat Company offers product preservation services for Nestlé Milo and is recognized for its transport services, earning the trust of leading companies such as DHL, YAMAHA, VNPT, and Ariston.
Marketing intermediaries are crucial in the micro environment, as they facilitate the selling and distribution of a company's products An increased number of marketing intermediaries enhances the reach of products to consumers, ultimately boosting sales and market presence.
+ Shopping mall: Aeon Mall, Big C, Coopmart + Convenience stores: GS25, Circle K, Family Mart + Large and small household grocery stores
Thanks to the reseller, Milo's products have great coverage After a period of exposure to milo's products Customers will form thoughts “Milo is an essential product”
When launching a business, it is essential to identify the target market, which consists of customers capable of fulfilling their needs Customers are the central focus of the micro environment, as all marketing efforts are designed around them, prioritizing customer satisfaction.
+ Consumer markets: Households, students and children, … + Business markets: Businesses doing services such as schools, …
+ Reseller markets: Supermarket chains such as Big C, Coopmart, Eon, convenience stores, …
+ Government markets: Volunteer organizations belonging to the government, charitable organization
In the competitive Vietnamese dairy market, Nestle Milo encounters significant challenges from industry leaders Vinamilk and TH True Milk, both of which offer a diverse range of products and enjoy strong consumer trust These companies leverage advanced technology and have a substantial impact on the preferences of Vietnamese consumers Vinamilk, in particular, is a prominent player in the dairy sector, known for its extensive product offerings and established reputation.
Vietnamese consumers exhibit a strong preference for local products, often expressing the sentiment, "Vietnamese people use Vietnamese goods." A prime example of this is TH True Milk, renowned for its clean and pasteurized milk that has garnered significant trust among customers This brand is increasingly viewed as a viable alternative to Nestlé Milo, reflecting the growing confidence in domestic offerings.
Nestlé Milo, a leading supplier of barley milk, faces stiff competition from Ovaltine, which offers a similar cocoa flavor but distinct taste Despite Nestlé Milo's dominant market share, Ovaltine poses a significant threat with its aggressive marketing strategies that effectively engage consumers.
S - T P Strategy –
Segmentation
To effectively cater to their target audience, businesses must first understand their customers' needs, which can be achieved through market research This process involves dividing the market into smaller segments, allowing companies to focus on a specific demographic A prime example of this strategy is Nestlé Milo, which has segmented the Vietnamese market by age, categorizing consumers into five distinct groups: 0-6 years old, 6-14 years old, 14-18 years old, 18-25 years old, and above 25 years old, each with unique characteristics that inform tailored marketing approaches.
Income: No income, depend on family
Family-life cycle: Babies, preschool - age children
Social Class: Low class, - Mid - class, Working class, - Upper - clas s
Motives: Can’t make decision, depend on their parents
Lifestyle: Affected by their families, active andghty
User status: Non users, - potential users, first-time users
Price Sensitivity: Don't sensitive to price
Gender: Both Boys and Girls
Income: No income, depend on family
Social Class: Low class, - Mid - class, Working class, - Upper - class
Motives: Attracted by appearance , colorful
Lifestyle: Like explore, learning, hang out
Benefit Expectation: Flavor and Appearance
User status: Non-users, ex - user, potential users, first-time users, regular user
Price Sensitivity: Don't sensitve to price
Gender: Both Boys and Girls
Income: No income, depend on family
Family-life cycle: Teenager, not married
Social Class: Low class, - Mid - class, Working class, - Upper - class
Motives: Attracted by appearance , colorful and flavor
Lifestyle: Like explore, learning, hang out
Benefit Expectation: Flavor and Appearance
User status: Ex-user, regular user
Price Sensitivity: Less sensitive to price
Single or Newly married couples young (no children)
Social Class: Low class, - Mid - class, Working class, - Upper - class
Motives: Care about quality, brand and price
Lifestyle: Like explore, easy change
User status: Ex-user, Regular user
Price Sensitivity: Less sensitive to price
Occupation: Both white - collar and blue collar - workers
Family-life cycle: Have married and have a children
Social Class: Low class, - Mid - class, Working class, - Upper - class
Motives: Care about quality, brand and price
Lifestyle: Take care the family and health
Price Sensitivity: Very price sensitive
Targeting
After analyzing and segmenting their market, businesses will choose a suitable segment and based on that determine the targeting market to implement their marketing plans.
Nestle Milo is a well-known barley milk brand that employs a differentiated marketing strategy, primarily targeting children aged 6 to 14 years old During this critical developmental stage, children's digestive systems are still maturing, yet their nutrient requirements are high, prompting mothers to be particularly attentive to their dietary choices Milk serves as an essential complementary food for children in this age group, supporting their physical and mental growth, especially as they lead active lifestyles that often exceed their daily energy intake While children are the primary consumers of Milo, parents ultimately make the purchasing decisions, and with the growing diversity of dairy products available at various price points, Milo effectively reaches customers across urban and rural areas This demographic represents a significant opportunity for the dairy industry.
Positioning
Positioning refers to the strategic marketing activities employed by a business to shape the perception of its products and brands in the minds of customers, ultimately establishing a unique identity that fosters a significant competitive advantage in the target market.
Nestlé Milo has successfully positioned itself as a nutritious energy source for children under the slogan “Năng động Việt Nam,” effectively addressing competition from brands like Vinamilk and TH true milk By fostering children's participation in sports and competitions, Milo resonates with parents' desires for their children's development, building trust in the brand Distinctively, Milo's products are made from barley and other unique ingredients, setting them apart from the cow's milk-based offerings of competitors This innovative approach not only differentiates Milo in the market but also provides consumers with a unique experience.
Marketing Mix
Product
Since its launch, Nestle Milo has focused on establishing itself as a convenient product, consistently enhancing its packaging and expanding its product lines to better cater to consumer needs.
About product lines: Nestle Milo focuses on expanding the with of its product lines
Milo offers a diverse range of product lines, including Powders, Drinks, Cereals, and Snacks, tailored to meet the varied needs of customers Each product line is categorized based on its primary ingredients, providing options with different functions and quantities Additionally, prices vary according to specific product features, ensuring accessibility for a wide range of consumers.
In today's competitive market, businesses need to establish their unique identity to stand out and leave a lasting impression on customers Nestlé Milo exemplifies this approach by showcasing its distinctive qualities that differentiate it from competitors.
The success of a product largely hinges on its quality, and Milo stands out due to its barley-based ingredients rich in essential nutrients It provides Protein, Iron, Vitamin C, and Vitamin B1, along with additional minerals like Magnesium and various B vitamins Notably, in 2006, Nestlé revamped Milo's formula by incorporating ACTIGEN E and PROTOMALT, reinforcing its commitment to being a nutritionally dense food supplement that delivers necessary energy for children.
Thus, it can be affirmed that Milo is a very nutritious drink for our body This has helped consumers feel more secure in using the product
Milo products are enriched with Calcium, Vitamins, and minerals, providing essential energy for children's active play and learning The inclusion of barley extract enhances the nutritional profile, making Milo milk a vital source of energy that supports skeletal health and boosts cognitive function, ultimately improving concentration during studies.
The Milo milk product line stands out with its distinctive green packaging and eye-catching design, emphasizing natural ingredients Clear and comprehensive labeling enables consumers to make informed choices Featuring images of children and barley, Nestle Milo highlights its use of barley as an energy source, promoting health and active play for kids Additionally, the packaging varies by product type; for instance, Milo milk comes in convenient paper boxes for immediate use, while Milo cans are designed for easy storage in compact spaces like briefcases, ensuring consumer convenience.
Nestlé Milo's enduring slogan, "Good Food, Good Life," encapsulates the brand's core commitment to providing consumers with healthy food and beverage options that enhance their quality of life This straightforward tagline resonates within the food industry, emphasizing the brand's dedication to customer well-being By conveying a meaningful message without unnecessary complexity, the slogan fosters familiarity and memorability, solidifying Nestlé Milo's presence in the hearts of its customers.
Milo prioritizes effective packaging design to enhance product appeal and ensure ease of purchase, consistently utilizing a unified concept and primary color across all products This strategic choice not only captivates consumers but also maintains the product's aesthetic The brand emphasizes environmentally friendly packaging, employing degradable carton paper and tin alloy cans that resist oxidation and corrosion, while being recyclable Milo's packaging structure includes batches of four boxes, with each carton containing 48 boxes of 12 packs, optimizing protection, transportation, and storage Additionally, powder products are housed in easily decomposable rectangular cartons, avoiding pollution associated with plastic, while individual tin cans are conveniently available in stores.
Each Milo product features detailed instructions on usage and preservation, ensuring customers have all the necessary information For additional inquiries, a contact number is provided on the packaging for customer support Additionally, Milo products are available for purchase through popular online platforms such as Tiki, Lazada, and Shopee The Milo homepage serves as a resource for shoppers, offering valuable insights on child-rearing, family care, and product knowledge through engaging stories.
Nestle Milo has successfully established its reputation in Vietnam, but is now experiencing market saturation The brand is focused on retaining loyal customers and enhancing its connection with them To address the evolving demands of consumers, Milo is dedicated to continuously improving product quality and diversifying its offerings.
Price
Milo milk 26.500VND/4 cartons of milk 180ml
Ovaltine milk 27.000VND/4 cartons of milk 180ml Vinamilk milk 29.500VND/4 cartons of milk 180ml
TH True Milk 33.000VND/4 cartons of milk 180ml
The Milo milk product line is aimed primarily at parents with children aged 6-
Milo targets parents of children aged 6 to 14 nationwide, catering to a wide range of income levels The brand employs competitive-based pricing, positioning itself as the leading energy and nutrition product in the market By analyzing its competitors, Milo ensures that it offers a fair price for its high-quality products.
Nestle Milo implemented various pricing strategies to establish its presence in the Vietnamese market, initially adopting a Product Pricing Strategy centered on Market Penetration Pricing By introducing their products at competitive low prices while ensuring high quality, they effectively targeted the mass market Once they gained customer trust, they adjusted their prices to align with market standards.
Having established a presence in the Vietnamese market, the company has broadened its product offerings to diversify sources and apply a Product Mix Pricing Strategy Milo features four distinct product lines, each with varying price points.
Nestle Milo employs a Price-Adjustment Strategy that includes discounts for bulk purchases, allowing customers to benefit from significantly lower prices Additionally, the pricing varies by location, with suppliers offering tailored prices to meet regional market demands.
Nestle Milo employs a Price Change Strategy to adapt to market conditions, lowering prices during periods of low sales or heightened competition, while increasing prices in response to rising production costs or inflationary pressures.
Place
4.3.1 Distribution network and Channel behavior
With the goal of dominating the market so that the product can cover the target market along with building a product image Nestlé Milo focuses on indirect distribution channels:
Through indirect channels Nestlé has brought its products to consumers through intermediaries.
Nestlé Milo partners with major retail chains like Lotte, BigC, and Coop Mart to streamline storage, sorting, and distribution costs through their extensive networks Additionally, Milo collaborates with e-commerce platforms such as Tiki and Shopee, adapting to the technological advancements that have led to consumers buying less frequently but purchasing larger quantities each time.
The distribution policy focuses on utilizing wholesalers to deliver goods to rural and small areas lacking supermarket chains or convenience stores This approach significantly lowers transportation costs while ensuring that products reach consumers in every alley, street corner, and remote locations, including mountains, seas, and islands.
Manufacturers => Agent => Wholesalers => Retailers => Consumers
Through large dealers, then to wholesalers and then widely distributed to each retailer, this policy is an effective method to combat counterfeit and poor quality goods
Milo employs a comprehensive distribution strategy aimed at fulfilling the diverse purchasing needs of consumers by ensuring its products are available at numerous retail locations, primarily grocery stores This approach relies heavily on intermediaries, allowing for maximum convenience for customers seeking accessible points of sale By expanding the number of retail partners, Milo enhances its market presence, although this may result in a loss of control over product placement, display, service, and pricing Ultimately, this strategy significantly broadens the visibility of Nestlé Milo, ensuring that a wide audience becomes familiar with the brand and its offerings.
Nestle Milo prioritizes the selection of intermediary agents as its primary distribution channel, enforcing stringent requirements for these intermediaries Key expectations include comprehensive market coverage, minimal total distribution costs, effective channel control, and the ability to maintain channel flexibility.
Nestle Milo actively promotes its products by implementing various strategies to boost demand among intermediaries These strategies include offering advertising subsidies, providing costs for product samples on display, supporting functional departments and warehouse expenses, covering exhibition space fees, and assisting with fixed furniture costs in retail stores.
Promotion
By using both Push and Pull of Promotion strategy, Milo has proven in the right direction in the fierce media battle between milk brands
Nestlé Milo employs a Push strategy that focuses on various communication activities aimed at convincing distributors to purchase their products Once the products reach the distributors, the company continues its promotional efforts to drive sales Milo has introduced incentive programs, including discounts for agents, to encourage the movement of goods into warehouses and to support advertising displays within distribution channels This strategy is designed to enhance brand visibility and ensure that customers are informed about Nestlé Milo’s offerings.
A Pull strategy focuses on enhancing advertising efforts, public relations, promotions, and event organization to generate consumer interest and curiosity about products, contrasting with the Push strategy.
To use the Pull strategy, it is necessary to have an important stepping stone of the
The "push" strategy focuses on creating extensive distribution channels to effectively meet user demands This approach aims to encourage customers to actively seek out and engage with Milo products.
The "Năng động Việt Nam" campaign emphasizes the importance of encouraging mothers to involve their children in physical activities This initiative addresses the prevalent indifference towards balancing physical training with traditional educational values in Vietnam.
Milo's advertising campaign, featuring the TV commercials "Nhà vô địch thực sự" and "Con cảm ơn mẹ," effectively utilized popular social media platforms like YouTube and Facebook, supported by numerous KOLs, resulting in a significant viral impact Following its launch, the campaign garnered 19 million views and engaged 3,057,757 children in sports activities as part of the "Năng động Việt Nam" initiative Notably, over 181,000 parents have committed to partnering with Nestlé Milo to foster a healthier and more active future for children in Vietnam.
Nestle Milo's promotions are prominently featured in large supermarkets, pedestrian streets, and amusement parks, allowing consumers to directly sample the product before making a purchase These promotions often include discounts and bundled offers, such as receiving a branded backpack with the purchase of a carton of Milo milk Additionally, customers can participate in programs that reward them for purchasing Milo, with prizes including a Milo Gold Box equivalent to a 24K SBJ gold piece and a Milo Confident Bicycle.
In 2019, the Olympic Running Day "Vì sức khỏe toàn dân," featuring celebrity participation and sponsored by Nestlé MILO, took place in District 1, Ho Chi Minh City Additionally, the long-running campaign "Năng động Việt Nam," initiated in 2016, has garnered significant attention from both parents and the Vietnamese media These initiatives serve not only as product launches but also as strategic activities aimed at enhancing public perception and safeguarding the company's image.
Nestle Milo actively sponsors various sports events for primary and junior high schools nationwide, such as the Bình Dương Provincial Student Sports Festival and the Đồng Nai Provincial Middle School Sports Festival In addition to hosting competitions, the company provides opportunities for both participants and spectators to sample Milo milk for free, promoting healthy nutrition and active lifestyles among students.
Recommendation
Milo has successfully utilized various popular marketing strategies on its journey to becoming a leading player in the FMCG sector To further enhance its growth in the Vietnamese market, our team suggests implementing innovative ideas that align with local consumer preferences and trends.
Nestlé Milo should maintain its collaboration with the Ministry of Education and Training and the General Administration of Sports and Physical Education in Vietnam This partnership has enabled Milo to sponsor numerous schools with exercise equipment and sports programs, while also supporting local initiatives for sports and health training Consequently, Nestlé Milo has successfully engaged a broader audience of students beyond its initial target group.
Amid the complex Covid-19 situation in Vietnam, there is a pressing concern shared by society and businesses alike Frontline workers, including doctors, police, and soldiers, require the unwavering support of the Vietnamese people Nestlé Milo has established its brand identity by resonating with consumers through motivational messaging To enhance its impact, Nestlé Milo should leverage its influence to support real-life initiatives, such as fundraising for vaccines and donating milk to those in quarantine, fostering a collective effort in the fight against the epidemic.
Nestlé Milo has taken significant steps towards environmental protection by enhancing the sustainability of its packaging The company made a pivotal change in May 2021 by adopting plastic straws for its products, marking a crucial development for both Milo and the broader food industry Their commitment to eco-friendliness is evident through social media campaigns, featuring slogans like "Green Milo for a green earth" and highlighting the long-term impact of single-use plastics Moving forward, it is essential for Milo's factory to implement advanced wastewater purification technologies and improve monitoring and maintenance systems to minimize the release of harmful substances into the environment.
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10 https://vi2.wiki/wiki/Nestlé
11 https://hrinsider.vietnamworks.com/nest le- milo truyen cam- - - hung - ve - the - he viet - - nam nang - - dong.html
12 https://vtv.vn/the - gioi/hang nestle-tai an - - - do - tieu - huy 27 000 - - -tan- my-maggi-20150618183928348.htm
13 https://www.nestle.com.vn/vi/csv/cong- dong/agricultureruraldevelopment
14 https://www.nestle.com.vn/vi/hoi-nestle/nestle- dong hanh chong- - - dich - covid - 19
15 https://www.nestlemilo.com.vn/taxonomy/term/12
16 https://vinid.net/blog/sua- milo-co tot - -khong uong- - sua milo co tac- - - - dung-gi/