Marketing & Management: Nestle's Milo in Malaysia

Running head: MARKETING & MANAGEMENT
Marketing & Management
Name of the Student
Name of the University
Author’s note

1MARKETING & MANAGEMENT
Executive summary
The purpose of the assignment is to understand the marketing dynamics of Nestle in Malaysia.
The products that has been selected is Milo, it is an iconic chocolate malt drink which is targeted
for the growing kids. Milo has been in the product portfolio of the company from a long time.
The product is particularly popular in the Asia, Africa and Oceania regions. The company
highlights several health benefits associated with the product and ensures great taste as well.
Milo is a product that is now in the maturity level and is on the verge of being on the decline. In
order to derive a new marketing plan for the product first a situational analysis of the internal and
external environment has been undertaken. PESTEL analysis and Porter’s five forces has been
used to understand the dynamics of the external business environment. On the other hand
McKinney 7s framework along with Porter’s value chain analysis is used to understand the
internal environment. Furthermore, a marketing plan has been drawn and an evaluation process
has been also discussed.

2MARKETING & MANAGEMENT
Contents
Introduction......................................................................................................................................3
Situational Analysis.........................................................................................................................5
External Analysis.........................................................................................................................5
Pestel Analysis.........................................................................................................................5
Porter’s five force Analysis.....................................................................................................7
Internal Analysis..........................................................................................................................9
McKinsey 7-S Framework...........................................................................................................9
Porter’s value chain analysis.................................................................................................10
Marketing Objectives.....................................................................................................................11
Marketing Strategies and Programmes..........................................................................................12
Concept of marking mix............................................................................................................12
Segmentation and targeting.......................................................................................................15
Positioning.................................................................................................................................16
Marketing Monitors and Controls.................................................................................................16
Conclusion and Recommendations................................................................................................17
Reference list.................................................................................................................................18

3MARKETING & MANAGEMENT
Introduction
The global company Nestle is the largest company in the sector of nutrition, food and
beverage industry. Originated in the year of 1905 as merger of Swiss Milk Company, growth of
the company has been noticed during the time of First World War and after it when Nestle
expanded its product range beyond the product range of food products especially formulated for
infants. Presently Nestle operates in the 86 countries across the world with its vast product range.
Nestle has its manufacturing units in nearly all countries in order to assure a large product
delivery network worldwide (Nestle.com 2018). The company’s significant growth has been able
to mark itself as “the most multinational of the multinationals”.
The product range of the company comprises more than 7500 brands under it. The
offered products of the company are categorized into several sections such as, cereals,
chocolates, baby foods, beverages, dairy products, confectionaries, ice cream, pet care, bottled
water and prepared food. In order to ensure smooth business process the company decentralized
the power over the local units. The company is organized into seven strategic business units
across the world. All of these units are responsible for taking strategic decision in the
management level including market entry strategies, acquisition strategy and so on. The regional
units of the company based on the geographical segmentation such as Europe, South East Asia,
North East Asia, etc (Nestle.com 2018). The regional business units of the company are
responsible for taking strategies based on the regional markets. Over 30 years, Nestle has been
satisfying its customers with a large range of product and its service.
However, 1% profit of the company goes to Research and Development department of
the company in order to ensure that the company retains its position within the industry. In

4MARKETING & MANAGEMENT
respect to that it is needless to mention that the food and nutrition industry in which the company
deals is highly competitive. Therefore Nestle continuously research in the market in order to
compete with the rival companies. Thus the objectives of the company is to retain its position in
the market, to extend its product range which are not yet explored by other rival companies and
marketing the newly developed or to be developed products. Even though the company is
considered to be the most reliable baby food brand, one of its product Milo, has been observed to
have been experiencing decline in the South East Asian countries (Nestle.com 2018). Hence the
report gives an overall analysis of the concerned product so that it can be positioned within the
market with an effective marketing strategy.

5MARKETING & MANAGEMENT
Situational Analysis
Any business organisation operates in two environments; the factors of the environment
impact the business operations in a significant way. The management of organisations analyzes
the business environment to take strategic decisions in order to make sure that the company is
striving towards the objectives. The factors of the internal business environment such as assets
and resources can be manipulated by the management of the company and can be used in the
times of opportunities or to overcome the threats. However, the factors of the external
environment are analyzed in order to understand the dynamics of the industry as well as
determine the opportunities and threats that are prevalent in the industry. The theories that is
going to be used in order to understand the external environment are PESTEL analysis as it will
provide a holistic understanding of the Malaysia market for the product that has been selected
(Yüksel 2012), on the other hand with the help of Porter’s Five force analysis the
competitiveness of the company will be determined in terms of the existing circumstances. The
internal analysis will be conducted with the help of McKinsey 7S Framework, this will help in
understanding the company and its position from the internal perspective and the Porter’s value
chain analysis will help in understanding the resource and capabilities of the company.
External Analysis
Pestel Analysis
This model will help in understanding the business environment of the Malaysian region.
Political: the political condition of the country is stable and the government has several rules and
regulations to maintain a healthy foreign relationship with other countries. The government has