“Milo”, a brand of chocolate/malt powder beverage of Nestle, which is once known in the past as number one brand in customers’ mind in Thailand. But nowadays Milo is not that well perceived as before but another leader, Ovaltine, had triumph the position and become market leader in the segment. With the nature of Nestle that utilize generic marketing strategy such as cost leadership in business, the company is currently struggling hard time finding the competitive advantage for Milo, when it comes to face to face with its main rival, Ovaltine.
The main objective of this marketing plan is to provide useful of marketing strategies, explanation and sales forecast to make Milo become the market leader in Thailand. Models and concepts such as Ansoff’s Model, SWOT Analysis and Porter’s Five Forces Analysis are implemented to help us analyze external factors. Our group uses both primarily data from field survey and secondary data from a research firm, AC Nielsen Thailand, to help us gaining more insight and customers’ deeper perception toward the brand.
Nestle’s Milo had entered Thailand market for decade and then become the second leader in chocolate/malt related products market. The brand from Nestle, in the past, was consisted of many business units from UHT chocolate milk, chocolate/malt powder beverage, chocolate ice-cream, chocolate bar and chocolate cereal. However, some product lines started to shown not enough positive sign in term of sales volume.
Nestle Thailand, the company which core competency is the economy of scales model, then decided to outsourced the chocolate UHT, and ice-cream category to F&N Diaries (a major manufacturer of sweetened condensed milk from Malaysia), the chocolate bar to DKSH Group, Diethelm (market expansion service company). Nestle’s Milo now markets only the chocolate/malt powder beverage and chocolate serial. This marketing plan will focus only the powder beverage business unit due to the major contribution of Milo brand comes from beverage category.
Geographic Segmentation: Regions: Although people prefer to drink Milo throughout the year. But season can be used as criteria for Nestle to segment the market. Our finding show that number of sales volume rose significantly in summer and winter, but not in rainy season. Cities: Cities take bigger responsible in Milo’s sales volume proportion compared to rural areas and villages as a result from different factors such income and education level.
However, as the company focuses on economies of scales and mass Marketing Management: MILO Marketing Plan 2 ommunication, it should focus on making Milo available in every place that has people with purchasing power and demand.Demographic Segmentation: ? Age: Currently, most portion of Milo’s target markets derive from children and old people. These tow group contribute most part of the Milo’s sales. However, Nestle shouldn’t neglect other segments such as young adult and working people. Newly emerged trends such health conscious affect their consumption behavior, which perfectly fit for Milo. ? Gender: In the past, Nestle tried to communicate Milo’s image as sporty and energize by using “young boy” endorsement to represent the concept.
This encourages both kids and their parents to the perception that Milo is a nutritional beverage that contains multivitamin, calcium and Protein, combining with the image of healthy product but delicious. Last but not least, Thai consumers, mostly Generation X and Millennial Generation cohorts, have memorable story about Milo taste when they were students. Thai people with age 15 – 35 years usually have a good experience about Milo’s campaign called “Milo on the Tour School Bus”.
The campaign that implemented for more than 15 years, giving out sample to Thai students from junior to junior high around the country. 0% confirms the outstanding taste of Milo and still recalls the brand, Milo until today. Weakness: Thai consumers have valuable memory about Milo unique taste, perceive that it was not as delicious as they expected when they purchased Milo and made it at home. This had let to the negative effect to the brand. Meanwhile, the high competition between Ovaltine, the rivalry brand, and Milo has been intense for years. As Milo was not the first mover in the market, Ovaltine could gain consumer first attention to become the first brand that pop up in their mind when they think of chocolate beverage.
Furthermore, Milo had less product variety in flavor compare to Ovaltine. For example, Ovaltine 5 Grains beverage which Milo still has no product to directly compete with Ovaltine’s product. Marketing Management: MILO Marketing Plan 5 Opportunities: The emerge of the health conscious trend in Thailand was the huge opportunity for Milo as mentioned earlier that people perceive chocolate malt beverage as healthy product. Simultaneously, the rise of sport celebrity in Thailand will greatly benefit Milo brand because Milo positioned itself as the product for sporty outgoing person.
This coming sport event, FIFA’s World Cup 2010, also another great opportunity for Milo as the brand is associated itself with sport. Threats: Thai political instability effects level of consumption and negative growth in GDP. People feared to go out and spent less. There are only two key players in this market which are Milo and Ovaltine; therefore it is quite interesting for new entrants to enter to the market. Not only within the chocolate malt beverage category but also the indirect competition from substitute products such as Coffee or tea that may capture some proportion of consumer’s share of wallet.