Midterm assignment consumer behavior

90% market share in Malaysia not the frequently reported 90% worldwide share of Milo consumption, and Malaysians were said to be the world's top Milo drinkers.. Milo is highly well-known

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES

- INFORMATION TECHNOLOGY FACULTY OF BUSINESS ADMINISTRATION

HCMC, 11/2022

Table of content Pages List of Abbreviations

List of Figures and Tables

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1.1.FMCG Sector in Vietnam 00.000.0 1

1.2 Company Background 00.00.00 2

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1.3.2 History of formation and development of Milo .- 2

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QLD Strengths oo 10

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2.3 Motivations 13

2.4 Factors Affecting Consumer Behalor s-csecseessrssrszrs 15 QAL QUALILY oe 15

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Chapter 3: Conclusion and Recommendafions 5s cscsecseeses 18 K9.) 0 0 18

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List of Abbreviations

TVCs Television Commercial

List of Figures and Tables Figures

Figure 1.1 Milo’s Logo Tables

Table 1.1 Milk Powder Table 1.2 Instant Drink Table 1.3 Youth

Chapter 1: Introduction

1.1 FMCG sector in Vietnam

In the second quarter of 2022, domestic GDP increased strongly with more than 7.72% growth over the same period last year, which is the highest number compared to Q2s in the past 10 years In addition, the CPI also surpassed the 2% mark and touched the 3% mark This is an extremely positive signal for the economy in the context of volatile gasoline prices due to the impact of the Russia-Ukraine war along with global inflation In fact, in June and July, Vietnam's gasoline price increased to a record high of over 32,000 VND/liter of A95 gasoline For people in the four major cities, gas prices are only a secondary concern Another concern

is that when oil and gas prices rise, the cost of food has also increased sharply (Peter Christou,

2022)

Most FMCG categories are at a high level in recent years and remain in the range of 7%, affecting both consumers and brands This makes consumers consider more about the price thus there is a decrease in purchasing power of FMCG items After benefiting greatly during the Covid-19 period in general and the 4th wave in particular, the dairy and canned food industry faced a decrease in purchase volume in Q2 2022, when the state's new normal has become familiar And almost all FMCG industries in Q2 are continuing to grow to depend mainly on the increase in the average selling price of products In rural areas, the dairy and home care sectors shined brightly, boosting FMCG activity, while other sectors stagnated In the four major cities, the increase in average payment price is the main driving force for the growth of the FMCG industry in rural areas

Despite some difficult times under the impact of the COVID-19 pandemic, beverage consumption is recovering extremely strongly in Q2/2022 and especially with much higher spending levels than before the point before COVID Which juice, ready-to-drink tea, and energy drinks are the products with the best business results in the past 3 years As of the second quarter of 2022, in 4 major cities, online shopping channels and small stores recorded consumption growth rates of 24% and 21%, respectively, while supermarkets and large stores

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grew negative 3% In contrast, in rural areas, supermarkets and large stores recorded a phenomenal growth of 49% This is a signal for businesses in the food and beverage industry

to pay attention to capture consumer "insight" quickly to launch suitable products

The Kantar report also shows that up to 51% of households buy branded rice and 18% buy branded meat, showing an opportunity for fresh food producers to turn to brands to bring value

back to their customers

1.2, Company Background

A popular beverage all over the world is made from a chocolate and malt powder called Milo that is combined with hot, cold, or milk Thomas Mayne created Milo in 1934 in Sydney, Australia, and it is now produced by Nestle It is advertised and offered for sale in numerous nations worldwide Milo is most frequently offered as a powder in a green tin that frequently features images of different sporting events It is also available as a premixed beverage in some countries and has now been transformed into a snack bar and breakfast cereal In certain nations, its flavor and makeup are different Industrial chemist and inventor Thomas Mayne from Australia created Milo in 1934 and unveiled it at the Sydney Royal Easter Show At the factory in Smithtown, close to Kempsey on the North Coast of New South Wales, Milo production commenced Milo of Croton, a famous ancient athlete known for his legendary strength, served as the inspiration for the name The packaging is green and features images

of individuals participating in different sports on the tin in Australia and most other nations

In Australia, there was also a variant with a larger malt content that was marketed in a brown- colored tin and was typically only offered in the 375g size The tagline for Milo's ads is "Go and go and go with Milo” In a recent advertisement in Australia with this phrase, four generations of women are shown skipping and singing the line, "And my mama gave me Milo

to go and go and go." I need my Milo Today is another tag that is employed Milo cans in Malaysia and Singapore are packaged in green color and include images of athletes, earning the cans the endearing nickname "Tak Kiu," which is Hokkien Chinese for "kickball." Milo is synonymous with soccer (football) in Colombia, and generations have sung the refrain "Milo

te da energia, la meta la pones tu" ("Milo gives you the energy, you set the goal") Milo has a

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90% market share in Malaysia (not the frequently reported 90% worldwide share of Milo consumption), and Malaysians were said to be the world's top Milo drinkers Milo is highly well-known in Malaysia and Singapore, where the brand name is synonymous with chocolate- flavored drinks This is because Milo, which was initially distributed throughout the nation as

a nutrient supplement, has earned a reputation as a beverage that both the older and younger generations must have Malaysian milo is designed to dissolve easily in hot water to make a silky hot chocolate beverage or with ice added to make a cold beverage In these two nations,

"Milo Vans" was frequently associated with sporting events wherein elementary school students lined up to receive their cups of Milo drinks using coupons (Faiz, n.d.)

1.3 Brand and Product Overview

1.3.1 Milo Brand Overview

Nestlé's Milo Milk has been present and continuously developed in the Vietnamese market for more than 17 years and is a prestigious brand, leading in quality and market share in the nutritional cocoa beverage category for children from 6 -12 years old Nestle's Milo Milk Barley Drink is the perfect combination of the uniquely delicious taste of cocoa and the rich natural source of protein and nutrients from milk, whole wheat germ, and vitamins and

minerals

Nestlé's Milo milk should be used every day, especially in the morning when your child enters school because it contains Activ-GOTM Go beyond - researched and developed by Nestlé Switzerland - providing Sustainable energy for children's learning and movement activities 1.3.2 History of formation and development of Milo

The MILO® brand is named after a legendary athlete from Croton, a small town in ancient Greece, in the 6th century BC Legend has it that he was called a "strength god" when he could lift a bull on his shoulder and go everywhere This power legend has won the Olympics 6 times, as well as won a series of prestigious titles at different competitions big and small at

that time

The life and career of this legend inspired Nestlé Australia food scientist, Mr Thomas Mayne

In the context of many children being malnourished due to the effects of the global economic crisis, in 1934, Thomas Mayne researched and developed a nutritional drink powder with a unique cocoa flavor - barley unique, helping to supplement energy, vitamins, and minerals necessary for children's comprehensive development

With more than 24 factories, and widely sold in more than 40 countries, today, the name

MILO® has become the favorite nutritional drink of millions of children around the world,

including Vietnam With a unique cocoa-barley flavor, MILO® is the choice for a balanced, nutritious morning, suitable for energizing even during sports or class breaks MILO® is committed to sustainable development by using natural ingredients, cooperating with reputable suppliers, and constantly controlling the production process with strict standards to ensure optimal nutrition and the same taste in each of its products to the user

Figure 1.1 Milo’s Logo

In 1994, Milo first appeared in Vietnam with its first product, Milo milk powder After 4 years

of operation, Nestlé officially inaugurated the MILO flour factory in Dong Nai to meet the growing needs and tastes of Vietnamese consumers In 2003 Milo sponsored and organized health and wellness associations in Vietnam In 2005 Milo officially launched advanced powdered milk products with superior formula 3 in 1 In 2006 Milo launched the first liquid milk product in the Vietnam market and the factory was in Dong Nai In 2010, Milo launched

a package of soy milk to provide energy in the morning for young people From 2010 up to

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now, Milo has not stopped, actively adding minerals to old products, but also launched a lot

of new products, in addition, many more milo milk factories were built to meet the needs of customers meet the growing needs of consumers

Milo plastic jar powder (400g)

NANG LUQNG BEN Bi

Milo powder pack 3 in | (22g)

NANG LUOQNG BEN BI

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promotion are carried out globally, in numerous countries Finally, the value of money represents the price of the products Their products not only are high quality but also have a reasonable price that is appropriate for everyone to use it Furthermore, the brand also offers

cash discounts, seasonal interests, and other offers occasionally to attract customers

2.1.2 Weaknesses

Despite having a lot of strengths, Milo also has weaknesses that need to be improved There are five weaknesses they need to consider improving more in the future They are product

design, flavors, R&D, financial backing, and brand (Aditya Shastri, 2022) Firstly, Milo’s

product design is considered to be outdated The design of the tin box and labeling is old- fashioned and has never been improved Secondly, Milo’s flavors are not varied There is not much diversity in product flavors, just available in one flavor which is chocolate Thirdly, they have low investment in research and development Though the company is continuously looking into developing and enhancing its products, it is still lacking innovation and the speed

of improvement is quite slow That is very a big point Milo needs to consider Fourthly, although having a quite large market share in the market, Nestle is not investing enough in Milo That causes it to fall behind its competitors Finally their brand is weak and damaged Because of multiple drawbacks and problems, they are losing the trust of their customers As aresult, Milo’s competitors have an advantage as customers are switching from Milo to other popular brands

2.1.3 Opportunities

In the growing path of Milo, there are many opportunities coming to them to help them strongly develop These are five main opportunities Milo is having including health awareness, technology, the fitness industry, eco-friendly products, and sponsorships (Aditya Shastri, 2022) The first opportunity of Milo is health awareness In the present days, people are more concerned about their health, especially after the covid pandemic and a large number

of diseases that have occurred in recent years As an energy drink, Milo can help with people’s health and awareness about that Milo’s second opportunity 1s technology No one can deny

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the advantages of technological development It plays an essential role in helping brands advertise, promote products and connect with customers digitally Furthermore, brands can develop and improve their customer service through social media platforms Thirdly, the growing fitness industry is the point that will help Milo grow up in the future Based on this, Milo can target customers and promote its products in such a way that it encourages people to drink their energy drinks to stay fit and healthy The next opportunity Milo has is eco-friendly products In the present situation, when people care a lot about the environment and recycle products, the eco-efficient packaging of Milo will help its attract lots of customers and define

it as an environmentally conscious business This will increase their credibility in customers’ minds Finally, sponsorship is one of the most important opportunities for Milo With this marketing strategy, Milo can increase brand awareness by sponsoring different sporting events across the globe

2.1.4 Threats

Besides a lot of opportunities Milo has, there are some threats they need to face in its growth path There are three main threats including their competitors, the latest trends, and tactics by competitors (Aditya Shastri, 2022) Firstly, Milo’s competitors are an important threat to them With the increase in the number of competitors in the market in recent times such as Ovaltine,

Boost, Mozart, etc., this will be a challenge for Milo to expand its market share and become

the number one in customers’ minds Secondly, the latest trends in design packaging will be another threat to Milo Other competitors of Milo constantly change their brand and products with time and according to consumers’ needs while Milo has less diversity in packaging and designing of their products like bottles, cans, and pouches The final threat discussed in this essay is tactics by competitors Other brands could use aggressive marketing tactics such as cutting prices and increasing promotions to attract more customers and sell their products, affecting Milo’s sales and customer loyalty

2.2 Target Customers

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