marketing plan report maketing plan of the new product milo sữa hạt of nestlé into vietnam market in 2022

MINISTRY OF FINANCE

UNIVERSITY OF FINANCE – MARKETING FACULTY OF MARKETING

 

MARKETING PLAN REPORT

“MILO SỮA HẠT” OF NESTLÉ INTO VIETNAM MARKET

IN 2022

Phạm Minh Khôi – 2021008280 Nguyễn Đức Mạnh – 2021008292 Đặng Nguyễn Như Ngọc – 2021008494

Mai Vũ Đông Nghi – 2021008298 Nguyễn Thị Hồng Thơm – 2021008557

HO CHI MINH CITY, 202

6.1 Implementation 34

6.2 Marketing Organization 34

CHAPTER 7: CONCLUSION 35

REFERENCE 36

Milo milk was first invented by Australian inventor Thomas Mayne in 1934, after which Nestlé acquired the formula for mass production and distribution worldwide Nestlé's Milo has been present and continuously growing in the Vietnam market for more than 17 years and is a prestigious brand, leading in quality and market share in the nutritional cocoa drink industry for children aged 6-12

As a subsidiary of Nestlé, Milo inherited much of Nestlé's vision: To be a leading, competitive, nutrition, health and wellness company delivering improved shareholder value by being a preferred corporate citizen, preferred employer, preferred supplier selling preferred products

Milo also works with its owner brand core value: Creating shared value, which Nestlé ties to all of the company's operations According to their commitment to Vietnam, Milo is also constantly creating playgrounds and programs for children, contributing to building a healthy and dynamic generation of young people, completely true to the core values that Nestlé has set

1.2 Executive summary

As consumers in Asia are including more dairy alternatives in their diet, Nestlé is launching plant-based versions of some of its most-loved brands in the region There is a new plant-based version of Milo, the world's leading chocolate malt beverage that is enjoyed in many Asian countries

It has launched in Asia, starting first in Malaysia, a country with generations of Milo fans going back 70 years to its launch there in 1950 It has appeared on shelves since April This new version replaces the milk in the original recipe with almond and soy, but the other two core ingredients malt and cocoa remain the same Each bottle offers 6.5 – –grams of protein and is also low in sugar, with a combination of vitamins and minerals to support effective energy release

In Vietnam, more and more people are shifting to more plant-based diets, so this will be a potential product to develop in this market Currently on the market, most dairy free milks are original flavor, developing vegan milk with cocoa flavor will provide Milo an opportunity for market growth Therefore, we came up with a marketing plan with the expectation of achieving 1.17% share of the Vietnam drink milk market through unit sales volume of 19.911 million liters in the first year At the same time, aim to maintain positive, strong growth each quarter (notwithstanding seasonal sales patterns)

Income: Stable, yet

must take care of the family

Income: Stable, high

affordability for products

Psychographic

Lifestyle: Mostly

prefer delicious drinks and are not aware of healthy products

Lifestyle: Start care

the “green” lifestyle and healthy products and ingredients, willing to try something new

Lifestyle: A healthy

life is a big concern, searching more for healthy products, open to try

Lifestyle: Take serious

care about health, not willing to try something new

Behavioral

Benefits sought:

refreshments, looking for a new milk taste, delicious, easy to drink, cheap price

Loyal status: low,

always looking for new things

Benefits sought:

refreshments, looking for a new milk - new taste, good for health, trendy and have a reasonable price

Loyal status: low to

medium, often try new things

Benefits sought:

refreshments, looking for a new milk, good for health, reasonable price

Loyal status:

medium, may consider new things

Benefits sought:

refreshments, prioritize products' quality over price that are good for health

Loyal status: medium

to high, based on their habits and experiences

2.1.2 Market Needs

Milo is providing the community with a wide range of beverages made from cocoa The company seeks to fulfill the following benefits that are important to its customers:

• Rich nutritional values: Customers buy a drink to benefit its vitamins,

minerals, and energy, especially those seeking plant-based ingredients For “Milo sữa hạt”, it’s lower in fat and sugar, therefore, it is great for people with lactose intolerance or those seeking a dairy free alternative

• Delicious taste: One purchasing a beverage wishes for a good taste of the

drink in order to drink it on a daily basis

• Inexpensive price: Buyers cannot afford a daily beverage with a large

amount of money, which could cause them to be less loyal to a brand

• Attractive packaging: An eye-catching design makes the customers,

especially children, pay more attention to products produced by Milo

2.1.3 Market Trends

According to a recent survey by Global Data, more than 40% of consumers in Asia are transitioning to a plant-based diet, with 11% choosing vegetarian and vegan foods At the same time, the demand for plant-based milk alternatives is also increasing, due to the delicious taste and great nutritional benefits that those goods offer

Plant-based milk substitutes are considered suitable for the elderly, people with chronic diseases such as diabetes, high cholesterol or those following a vegan diet Besides, the increase in cases of milk allergy or lactose intolerance is also considered a significant factor to drive the growth in sales of this product category

In Vietnam, the intent of consuming plant-based milk is also increasing sharply On the report of a survey of Viracresearch in 2019, up to 66% of Vietnamese consumers want more products made entirely from natural materials.Alternatives to cow’s milk such as soy milk, almond milk, rice milk, oat milk, coconut milk, cashew milk, etc will become progressively attractive to consumers, with different needs depending on the region

2.1.4 Market Growth

Plant-based drinks, including milk and soy milk with rice, nuts, grains or seeds added, have become a new trend in Vietnam, according to the latest monitor report from market research firm Kantar Worldpanel The growth rate of alternative milk has been declining since 2013 But it is the only product line with the CAGR that has steadily increased from 2016 onward, when the consumer demand for dairy products increased following the comparative information on nutrient levels for animal milk lines It is forecast that in 2018-2022, the double growth rate of alternatives will reach 15%, the highest in traditional milks

Source: VIRAC, Euromonitor

Nestlé's R&D center in Singapore serves as the regional innovation hub for the development of plant-based dairy alternatives in Asia This new type of product has been tested in the Malaysian market since April 2021 Thus, it is possible for Milo to learn from experience and limit the risks when launching the products in the Vietnam market within the next year

2.2.2 Weaknesses

Milo has not yet mastered the domestic source to make nut milk

The cost of plant-based ingredients from nuts can be more expensive than cow's milk

2.2.3 Opportunities

According to a recent survey by GlobalData (2021), over 40% of consumers in the Asia region are shifting to more plant-based diets, with 11% opting for vegetarian and vegan food, and a third moving to a 'flexitarian' diet that is lighter on meat and dairy products Thus, the need for plant-based dairy alternatives that taste great and offer strong nutritionals is rising, as more families are following this trend

The plant-based milk market is unsaturated, with a lot of potential for Milo to enter

2.2.4 Threats

Vietnamese consumers, especially between the ages of 5 and 18, are used to the typical Milo flavor; they may not be familiar with the combination of cocoa and nut milk Moreover, many customers still assume that plant-based milk is not as delicious and nutritious as cow's milk

On the market, there are many products made from nut milk with different flavors from many famous brands such as Vinamilk, TH True Milk, Vinasoy This could be a big challenge for “Milo sữa hạt” product when entering this new market.

Besides, the market size of domestic plant-based milk is still rising, but only accounts for a small proportion (12% in 2018 by Viracresearch ).

production needs, leading to dependence on imported raw materials

The Covid-19 outbreak may put pressure on the process of launching this new product

Moreover, the nut milk market really started to kick off when Vinamilk and TH True MILK invested and launched diversified plant-based products in 2018

9

TH true NUT product line from TH true MILK was the pioneer in the nut milk market with fresh milk flavor combined with heart-healthy macadamia nuts and date palm fruit that brings natural sweetness Shortly afterwards, the trinity of Vinamilk’s soymilk products combined with walnuts, almonds and red beans has also drawn consumers’ attention for its delicious, easy- -drink, but nutritious from these nuts to

In addition, with long-term participation in the market, Vinamilk and TH true MILK have gained certain competitive advantages, preventing competitors from entering the industry Given the availability of raw materials, dairy products from these two brands offer a more competitive price than Milo (12500 VND - TH Nut MILK 180ml and 6500 VND - Vinamilk 180 ml) Moreover, with the diverse milk flavors and designs, it will also be a big challenge for “Milo sữa hạt” product when entering the Vietnam market.

2.4 Product Offering

Product’s name: “Milo sữa hạt” - Milo dairy free almond

Product offering: MILO Dairy Free is made with plant ingredients and does not

contain animal derived ingredients Therefore, this variant is an alternative beverage for those who are lactose intolerant or who are seeking for plant-based or dairy-free options of their favourite MILO beverages

The meaning of dairy-free and plant-based:

• Plant-based: Made with plant ingredients and do not contain animal derived

ingredients Plant-based products in general can be a good source of vitamins, minerals, dietary fiber, and in addition healthy fats

• Dairy-free: Do not contain dairy products such as milk, cheese, yogurt, butter

and cream

Some of nutrients providing in product:

• Good Source of Plant-based Protein: Packed with 6.5g of plant-based protein,

per serving (225ml) from almond and soy, equivalent to protein in 1 egg

• Low in fat: Meets Healthier Choice Logo (HCL) criteria It is lower in fat and

sugar than HCL-free products in the same product category

• MILO Nourishing Energy: Packed with essential nutrients including B

Vitamins that help release energy from the foods you eat

• An Intolerant Lactose Alternative: Great for those who are lactose intolerant or

who are looking for a dairy-free alternative

2.5 Key to success

There are some keys that the company needs to consider to succeed in the Vietnam market There are three main points:

• Target Customers: any product should be launched because of customer need -

the success or failure of any product is largely dependent on whether people use it or not Choosing the right target customers is an advantage for upcoming products

• Competition: Businesses need to pay attention to their competitors for similar

products at both their price points and their target customers Get to know other businesses and identify gaps in their products that you can fill

• Finance: The financial resources of enterprises for their products need to be

calculated properly It is necessary to have provisions for financial resources to avoid risks

Currently, the source of raw materials for the production of nut milk is limited This is also an important issue that Nestlé needs to resolve, finding ways to develop local sources of raw materials to cut costs of importing and transporting input materials because Vietnam's raw nut milk industry is still young and are on the way of standardizing to improve the quality of the orchard as well as the seed quality According to a research by VIRAC in July 2020, the input of plant-based milk materials such as macadamia nuts, walnuts, etc has not yet met the domestic quantity, almost having to import 100% of foreign materials For example, the input supply of TH True Milk, macadamia farms have been grown in the Central Highlands for more than 10 years, the planting area has reached nearly 2,500 hectares and is considered to be of good quality However, it is still not able to meet the demand for input materials for domestic production Vinamilk's new nut milk line, with ingredients mainly from walnuts, almonds and red beans, must also be imported mainly from US farms

3.2 Objectives

We estimate the Targeted Volume Sold based on the formulation provided by BrandsVietNam Besides, the data are collected from multiple reports and be calculated thoroughly to be as exact as possible since there are not many recent reports due to Covid-

19 outbreaks

• Estimated Sales based on expected target market share

Market Size (Volume) x Targeted Market Share % = Targeted Volume

<=> 1702,4 million liters x [7% x 12% x (1+18%) ] = 19,9115 million liters2

Targeted Volume x Price = Gross Sales Value

19,9115 million liters x 15 000/0,225 = 1.327.433.333.000 VND

• About Estimating the Market Size (Volume)

The Vietnam Dairy Association stated that despite the impact of the epidemic, milk production in 2020 would still grow well In which: liquid milk production is estimated at

1.702,4 million liters, up 1% compared to 2019 Powdered milk production is estimated

at 131.6 thousand tons, up 9.1% over the same period

• About Estimating the Targeted Market Share

* Nestlé’s Market Share in liquid milk

VietNam’s liquid milk Market share in 2019

According to Euromonitor, Nestlé’s liquid milk market share is kept at a stable level, around 7% in 2019

* Almond milk Market share in liquid milk

(Source: VIRAC)

Arcording to VIRAC in 2018, the domestic almond milk market accounted for 12% of the liquid milk market structure, with a compound annual growth rate CAGR of 18%, the highest among liquid milk lines With the CAGR of 18%, we estimated that the

domestic nut milk market accounted for 12% x (1+18%) 2 in 2020

We have set aggressive but achievable objectives for the first year of market entry

• First - year Objectives: We are aiming for a 1,17% share of the Vietnam

liquid milk market through Targeted Volume of 19,9115 million liters

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• Second - year Objectives:

equivalent to 18% growth per year.

• Achieve a steady increase in market penetration

• Maintain positive, strong growth each quarter (notwithstanding seasonal sales patterns)

• Maintain a significant research and development budget (as a percentage relative to sales) to spur future product developments

Lifestyle: Start paying attention to the

“green” lifestyle and healthy products, be willing to try something new, care more about nutrition ingredients

Lifestyle: A healthy life is a big

concern, searching more for healthy products, open to try

Behavioral

Benefits sought: refreshments, looking for

a new milk - new taste, good for health, trendy and have a reasonable price

Loyal status: low to medium, often try

new things

Benefits sought: refreshments, looking for a new milk, good for health, reasonable price

Loyal status: medium, may consider new things

Market research company, Nielsen- US, said: 66% of Vietnamese consumers want more products made entirely from natural ingredients; 79% actively change the appropriate diet to prevent health-related problems Plant-based milk is considered the optimal product for the above trend 98% of Vietnamese believe that the nutrition from nuts helps maintain health, beauty and life energy every day

They are “fashionable” customers who are well-informed, caring about their health and most of them are not afraid to use new products Modern people require liquid milk that not only benefits your beauty but also your health Plant-based milk, cereals with plant origin meet this demand and "this is the trend of green consumption, the trend of the future" As a result, they are actively changing their consuming habits to avoid health problems, towards a green lifestyle that repels cancers, heart diseases and animal milk allergies

In particular, the group of Gen Z cares a lot about antibiotics as well as growth hormone in cow's milk, safety issues, green life and humanitarianism While the group of Gen Y is seeking for an effective way to nurture the body from the inside, the nutritious ingredients such as protein, vitamins, fiber, and antioxidants contained in the products when having signs of age and health problems

marketing strategy to focus on groups of gen Z and gen Y for the “Milo sữa hạt”

3.4 Positioning

The “Milo sữa hạt” is made with nutritious almond and tasty soybeans but still maintain the original flavour of Milo The product is low in fat while providing a good source of plant-based protein The “Milo sữa hạt” is ideal for those who are lactose intolerant and those who are embarking on a plant-based diet

The “Milo sữa hạt” will not only provide the feelings of peace in mind but also nourish the body with ingredients which are rich in nutrition and protein Ensuring your everyday positive attitude when having known that you are on the right track for pursuing such a healthy lifestyle

*Positioning map

- Compared to other competitors, Milo s“ ữa hạt” is the richest in protein as one bottle contains 2,8-gram protein per100 ml, nearly three times more than that in TH True Milk (1,1-gram protein per 100 ml) (TH True Milk, n, d) –

3.5 Marketing strategy PRODUCT:

Brand name: The MILO brand is named after a legendary athlete from Croton, a

small town in ancient Greece, in the 6th century BC (Milo website) Today, it is Milo that is the world’s leading chocolate malt beverage that can be prepared with hot or cold milk or water

Slogan: The slogan of “Milo sữa hạt” illustrates the spirit of nurturing the body from the inside

Packaging: Using plastic bottle packaging with less than about 40% other normal

plastic bottles, towards the company's sustainable development goals

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the paper packaging To move into the product growth phase, we continue to research and expand the depth of the product mix, launch and upgrade multiple versions for the campaigns Product packaging will be designed to suit each occasion/ event

In quarter 1, we mainly focus on packaging design to serve at Tet holiday In quarter 2 and 3, we expanded the depth of product mix and packaging version to give our customers more choices

In quarter 4, we continue to make more eye-catching versions of the product's depth for annual special occasions in this quarter

As all stated above and due to the Consumer marketing channels, we have adopted an

Intensive distribution strategy and maintained a non-stop growing network with their

distributor partners

Consumer marketing channels

PROMOTION: Push strategies

We push our products to retail channels through the use of various forms of POSM (Point of Sales Materials), but sometimes change their concepts to make them new and interesting, contributing to increasing brand awareness as well as supporting resources for distribution channels

• Poster: appear on LED screens at mini to big supermarkets

• Booth + test: give sampling at booths, also make mini games to exchange gifts • Divider: well-designed and suitable size to appear on the shelves at mini to big

(Van Hanh Mall, Vincom, Aeon, Saigon Centre…)

Otherwise, we support a 10% commission for large retailers and distributors Display shelf support for dealers: Apply the program to give away shelves for the first display order

Conditional commission percentage on excess revenue and tiered commission plan

Pull strategies: Advertising

We work with newspapers to support our press conference We run TVC on digital platforms, collaborate with programs, groups, fanpages, influencers and hold related online campaigns to promote the product

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We maintain contact with customers by contacting via email We will send notifications for product launches, holidays and anniversaries, and send codes and QR codes for discount vouchers

3.6 Marketing research

We will have our products tested with focus groups of target customers, including those who are not interested in plant-based milk and those who have already had needs and habits of using plant-based milk By which, we will get feedback from customers on product quality (nutrition, taste), packaging and design, and then make the improvements We will continue to extend the product testing by a wide variety of users to measure and analyze customer attitudes towards competing milk brands and products Brand awareness research will help us determine the effectiveness and efficiency of our messages and media Finally, we will gauge the market response

CHAPTER 4 ACTION PLAN :

CATEGORY

(1.000 VND)

Packaging: New packaging

for 2 packs of 6 bottles (Tet

Price Market penetration pricing strategy: 83% of the price for the first 15 million bottles Product bundle pricing strategy: 4,000 off for 6 bottles 38.250.000

Place

- Sign distribution/ commission contract with retailers/ distributors - Prepare enough products to distribute to Loyal retailers/ distributors of Milo, Nestlé (CVS, Supermarkets, etc) focus on 5 big cities - Officially sell products on e-commerce channels (Shopee, Tiki, Lazada)

- Expand retail partners in 5 big cities and nearby provinces (from traditional to modern channels) - Continue to sell products on e-commerce

- Distribute “Milo Sữa hạt” Tet version at major supermarkets and on e-commerce

x

PUSH

• Use of various forms of POSM: Poster, booth + test, divider, gondola end, island display, dangler

• Support a 10% commission for large retailers and distributors

• Display shelf support for dealers: Apply the program to give away shelves for the first display order

• Conditional commission percentage on excess revenue and tiered commission plan

1.000.000