BSB 126 Marketing Plan final assessment PDF

Preview

Summary

This assignment is the final piece of assessment for the BSB 126 Marketing subject. ...

Description

BSB 126 MARKETING PLAN

NAME:

Ella Thiele

STUDENT NUMBER: 10264043

TOTAL WORD COUNT: 1811

I. SITUATION ANALYSIS MILO is an Australian brand of chocolate malt powder, produced by Swiss food and beverage giant Nestlé and created by Nestlé engineer Thomas Mayne in 1934 in Sydney. [ CITATION Nes16 \l 3081 ]. MILO market themselves as a drink packed with essential nutrients for growing kids and the active community. [ CITATION Sta14 \l 3081 ] MILO’s brand aspiration is to provide crucial daily vitamins and minerals for children and those with active lifestyles, clearly marketing themselves as a health drink, with their website stating, ‘MILO is a wholesome source of essential nutrients for active kids that need a nutritional boost.’ [ CITATION Nes182 \l 3081 ]. With availability in over 40 countries [ CITATION Sta14 \l 3081 ], it is clear that MILO has a strong cultural presence across the globe (refer to figure 1). With estimated annual profits of $110.1m in Australia and New Zealand alone [ CITATION Owl18 \l 3081 ], MILO is seeing success in many countries, not just Australia. Using the same formula for the past 84 years [ CITATION Sta141 \l 3081 ], MILO’s product consistency and familiarity from generation to generation is a factor in the brand’s iconic Australian nature. However, this could be one of the reasons behind their recent criticism. MILO has recently come under fire for marketing themselves as a ‘health drink’; promoting the drink’s various vitamins and minerals whist failing to show the product’s high sugar content, consequently negatively impacting brand image (refer to figure 1). With other various chocolate ‘health drinks’ on the market similar to MILO, (refer to figure 2), each having low/reduced sugar options, MILO is at risk of losing profits to their competing brands. With the hundreds of new fad diets and trends emerging in the food and beverage market sector, customers are becoming more health conscious and aware of what they are consuming. As times change, so too does the health, food and beverage market, and products must adapt to suit customer needs if they want to stay relevant. With the no sugar beverage market predicted to have a compound annual growth rate of 10.16% between 2017 and 2021 [ CITATION Res17 \l 3081 ] and an estimated worth of $22 billion by 2020 [ CITATION Int18 \l 3081 ], the no added sugar MILO alternative could is well positioned to be very successful. The global health drink market is also exploding, predicted

to have a strong compound annual growth rate of 7.80% during 2017-2022 [ CITATION Res18 \l 3081 ]. The increasing sales of the beverage Coke no sugar and newfound health drink giant Kombucha, therefore pave the way for the potential success of a new no sugar added drink.

II. MARKETING GOAL To achieve brand expansion and growth through the successful product development of a no sugar added Milo, aiming to create $500,000 in revenue in 1 year.

III. MARKETING STRATEGY Target customers The campaign will target the psychographic segment, those living a healthy lifestyle that is aware of the importance of nutrition. Those interested in a no sugar alternative are clearly health conscious and differ from the average customer focus. There are several different demographic segments that include age, gender and income, and examples of psychographics include lifestyle, self-concept and self-values [ CITATION Gre15 \l 3081 ].

MILO’s focus will be on the traditional decision maker during the weekly shop. As 91% of Australian women who live with their partner and at least one child does the grocery shopping [ CITATION FMC15 \l 3081 ], MILO’s target audience is health conscious mothers as the dominant purchasing decision maker. By knowing the behaviours and decision-making process of these various segments, MILO can tailor existing methods of advertisement and promotion to specifically target existing segments of MILO consumers.

The reason behind the purchasing decision for the no sugar added MILO will be driven by health-aware customers wanting better alternatives as they are more conscious about what they are buying and consuming. The no sugar added MILO will be priced the same as existing original MILO to take price out of the buying decision. When faced with two equally priced products, the purchasing decision then shifts to factors such as taste, health and content. The positioning map below will refer to several competing brands and analyse their cost and sugar content.

Figure 3: Positioning map MILO and competing brands based on sugar content and price HIGHER SUGAR CONTENT

LOW PRICE

HIGH PRICE

LOWER SUGAR CONTENT

Information obtained from Woolworths online store [ CITATION Woo181 \l 3081 ] Drink name Ovaltine Energy drink Nestle MILO choc malt Sustagen Dutch chocolate

IV. MARKETING TACTICS

PRODUCT

Total sugar content /200ml of milk 19.9 grams 19.3 grams 19.1 grams

Cost per 100g $1.75 $1.40 $1.88

With the introduction of a no sugar added, Splenda based MILO, the product would be a more nutritious alternative to the one currently in stores. MILO’s current brand identity is ensuring kids get their daily dosage of nutrients, achieved through the advertising of the multitude of vitamins and minerals contained in the powder. Although the sugar in the drink also comes from the milk, milk powder and malted barley, by opting to swap the additional sugar for Splenda or a similar no sugar alternative, it would reduce the total amount of sugar by 6 grams. [ CITATION Ree18 \l 3081 ].

By introducing a new no sugar added MILO whilst still keeping the original well-established market leader in production, this ensures any existing loyal customers aren’t lost and also provides an alternative to attract new/potential customers.

To differentiate between the original MILO and the new no sugar added MILO, the no sugar added MILO will come in tins that are white rather than original green to create a clean, fresh, healthy feel. The logo and branding would still remain green and brown to keep the iconic MILO familiarity, but with the whitewashing of the tins, an easily identifiable product difference would be created when paired with strategic positioning on the store shelves.

PRICE The 5C’s of pricing are critical components used to create successful pricing strategies. They are competition, costs, company objectives, customers and channel members [ CITATION Gre151 \l 3081 ]. Competitor based pricing will be used for the new no added sugar MILO, keeping the price the same as the traditional MILO. This is to ensure that the new product sales can be measured in direct sales comparison. Since MILO’s primary target market is young, active children, it would be counter-intuitive to charge more for a healthier product. Additionally, current MILO prices are reasonable in comparison to the competing brands, therefore by keeping the new MILO equally priced, it rules out any chance of the new product failing due to financial comparison.

PLACE (DISTRIBUTION) Owned by Nestlé, MILO’s distribution channels and supply chains are centralised to each region. Figure 4 shows the method of distribution for Nestlé [ CITATION Dea16 \l 3081 ],

parent company of MILO. The new product will take advantage of existing distribution networks with only small changes to the printing run for the new white cans. Starting with smaller sizes ranging from 20ml through to 200ml, minimal changes are required to existing manufacturing setups.

Cost effective changes will be made to the new printing labels of the smaller sizes to save extra costs in paper changes. In addition, the plan is to run small separate batches of the no sugar MILO to those existing orders of MILO retailers within a 10-kilometre radius of the school promotion. This is to ensure that during and after the promotion a ready supply of the new product is available.

PROMOTION $50,000 will be used for a MILO hosted youth cricket clinic at a chosen local primary school. The promotion will provide a number of free samples of the new no sugar added MILO, a product soon to hit supermarket shelves. As a way to entice participation and ensure interest, 3 cricket stars would be running the clinic. Leveraging the existing strength of MILO and their participation in local cricket sporting communities, known as MILO in2 cricket, multiple IMC tools will be utilised, including promotional marketing to announce the event, public relation activities with the schools and a number of advertising spots on local radio.

Given MILO’s brand identity of encouraging children to live active, healthy lives, by offering promotional samples of the MILO no sugar added in an active and participatory environment like a cricket clinic, we will be tapping into our loyal target market of sporty young children and parents. By utilising MILO’s 25+ year partnership with Cricket Australia [ CITATION Nes183 \l 3081 ] to promote the new no sugar added MILO, it provides a ready source of feasibly current MILO customers to trial the new no sugar MILO.

The chance to host the 3-hour long cricket clinic would be offered to primary schools Brisbane wide. Run as a month-long competition for children to bring their empty MILO tins to their school, after the month, the primary school with the most MILO tins would win the opportunity to host a MILO in2cricket clinic. This would create attention and hype around the competition and new product and additionally boost sales of MILO.

BUDGET Total budget is $50,000.00. The 3 cricket stars hosting the clinic are paid by MILO directly through contract so appearance fees are minimal. $20,000 would be used for the contents of 700 kits to ensure every child receives promotional equipment such as bats, balls, gloves, helmets, wickets, and merchandise including a MILO in2 cricket t-shirt and hat.

A further $20,000 would be reserved for 2 radio advertising time slots leading up to announcing the winner. The approximate cost to create and run an advertisement in an Australian capital city is $10,000 [ CITATION Rad18 \l 3081 ] therefore, one ad would focus on the promotion of the event and the other would focus on the promotion of the no sugar added MILO. $5000 would be allocated for the costs of the samples of the no sugar added MILO, of which 2 pouches would be present in every child’s take-home. The remaining $5,000 would be used for local banners and advertising at the winning school, as well as behind the scenes costs such as supervision, kit production and additional materials.

The allocation of $50,000 is a viable amount to expect a return, in this case, promoting new product growth and awareness of the new drink onto the market. For comparison, Health drink brand Remedy Kombucha stated that in their first year, the cost of their drink creation was $50,000 [ CITATION Wat18 \l 3081 ]. This included beverage production, advertising, wages etc. Whilst Remedy Kombucha was a smaller brand at the time, it provides a useful guide as to a realistic budget of $50,000 for an initial product launch.

The attention and word of mouth generated from the advertising and the event combined with the sampling of the product will create strong interest and awareness in purchasing the no sugar added MILO in the future, providing a realistic chance at achieving the $500,000 in revenue in the first year of product creation.

V. REFERENCES

Deakin Business School. (2016, May 16). How do products reach us? Distribution channels and its significance! . Retrieved from Deakin Business School : https://mpk732t12016clusterb.wordpress.com/2016/05/16/how-do-products-reach-usdistribution-channels-and-its-significance/ FMCG. (2015, May 8). Women chief grocery buyers . Retrieved from FMCG: https://insidefmcg.com.au/2015/05/08/women-chief-grocery-buyers/ Grewal, D., Levy, M., Mathews, S. H., & Bucic, T. (2015). The Five C's of pricing. In D. Grewal, M. Levy, S. H. Mathews, & T. Bucic, Marketing (p. 342). Sydney: McGraw-Hill Education. Grewal, D., Levy, M., Mathews, S., Harrigan, P., & Bucic, T. (2015). The segmentation, targeting and positioning process. In D. Grewal, M. Levy, S. Mathews, P. Harrigan, & T. Bucic, Marketing (pp. 168-169). Sydney: McGraw- Hill Education. Han, E. (2018, March 1). Nestle wipes '4.5' health star rating off flagship Milo product. Retrieved from Sydney Morning Herald : https://www.smh.com.au/healthcare/nestle-wipes-4-5health-star-rating-off-flagship-milo-product-20180301-p4z295.html Han, E. (2018, March 1). Nestle wipes '4.5' health star rating off flagship Milo product . Retrieved from Sydney Morning Herald : https://www.smh.com.au/healthcare/nestle-wipes-4-5health-star-rating-off-flagship-milo-product-20180301-p4z295.html Intili, D. (2018, September 11). Noshu: Taking a healthy bite into the billion dollar sugar-free market. Retrieved from SBS: https://www.sbs.com.au/news/small-businesssecrets/article/2018/09/11/noshu-taking-healthy-bite-billion-dollar-sugar-free-market Metherell, L. (2018, March 1). Nestle removes Milo's 4.5 Health Star Rating in response to criticism from public health groups . Retrieved from ABC News: http://www.abc.net.au/news/201803-01/milos-4.5-health-star-rating-stripped-away-by-nestle/9496890 NapoleonCat. (2017, May 19). https://napoleoncat.com/blog/en/instagram-users-in-australia/. Retrieved from NapoleonCat: Instagram user demographics in Australia – May 2017 Nestlé. (2016, N/A N/A). About MILO. Retrieved from MILO: https://www.milo.com.au/miloproducts/milo-powders-liquids/milo Nestle. (2018, 2018 2018). Home > Involvement in Community > MILO & Cricket MILO & Cricket. Retrieved from Nestle: https://www.nestle.com.au/creating-shared-value/involvement-incommunity/milo-programs Nestlé. (2018, N/A N/A). MILO. Retrieved from Nestlé: https://www.nestle.tt/brands/allbrands/milo Nestlé MILO. (2018, N/A N/A). IMPORTANCE OF KIDS HEALTH- Overview . Retrieved from MILO: https://www.milo.com.au/importance-kids-health#overview Owler. (2018, N/A N/A). Milo Australia & New Zealand's Competitors, Revenue, Number of Employees, Funding and Acquisitions. Retrieved from Owler: https://www.owler.com/company/miloaustralianewzealand

Radio Results . (2018, N/A N/A). Radio Advertising Costs. Retrieved from Radio Results : https://www.radioresults.com.au/radio-advertising-costs Reena. (2018, February 7). Nestlé stands its ground: 6% sugar content in Milo Read more at: https://marketingmagazine.com.my/nestle-stands-its-ground-6-sugar-content-in-milo/. Retrieved from Marketing Zeitgeist: https://marketingmagazine.com.my/nestle-stands-itsground-6-sugar-content-in-milo/ Research and Markets . (2017, March 31). Global Sugar-Free Food and Beverages Market Growth at CAGR of 10.16%, 2017-2021: Key Vendors are Hershey, Kellogg, Mars, Nestlé & Unilever. Retrieved from CISION PR Newswire: https://www.prnewswire.com/news-releases/globalsugar-free-food-and-beverages-market-growth-at-cagr-of-1016-2017-2021-key-vendors-arehershey-kellogg-mars-nestle--unilever-300432536.html Research and Markets. (2018, April 5). Global Health Beverage Market Report 2018 . Retrieved from CISION PR Newswire: https://www.prnewswire.com/news-releases/global-health-beveragemarket-report-2018-300624945.html Staff writers, news.com.au. (2014, April 15). 10 things you never knew about MILO . Retrieved from News.com.au: https://www.news.com.au/lifestyle/food/things-you-never-knew-aboutmilo/news-story/00f15276bdcb5ab5697b2e0edb8700ea SUSTAGEN. (2018, N/A N/A). SUSTAGEN® Diabetic. Retrieved from Sustagen: https://www.sustagen.com.au/products/detail/sustagen-diabetic Waters, C. (2018, May 20). How big business developed a thirst for kombucha . Retrieved from The Sydney Morning Herald: https://www.smh.com.au/business/small-business/how-bigbusiness-developed-a-thirst-for-kombucha-20180515-p4zfg9.html Woolworths. (2018, N/A N/A). Drinks and Powders. Retrieved from Woolworths : https://www.woolworths.com.au/shop/browse/drinks/flavoured-milk/drinks-powders Woolworths. (2018, N/A N/A). Ovaltine Sugar Free chocolate shake. Retrieved from Woolworths: https://www.woolworths.com.au/Shop/ProductDetails/785077/ovaltine-sugar-freechocolate-shake Writers, S. (2014, April 15). 10 things you never knew about MILO . Retrieved from News.com.au: https://www.news.com.au/lifestyle/food/things-you-never-knew-about-milo/newsstory/00f15276bdcb5ab5697b2e0edb8700ea Nestlé. (2018, N/A N/A). MILO®. Retrieved from Nestlé Milo : https://www.milo.com.au/miloproducts/milo-powders-liquids/milo

VI. APPENDICES Figure 1: CDSTEP analysis

Culture -MILO’s availability in 40 countries is

Demographics -MILO’s advertising is marketed to young,

indicative of its strong cultural presence.

active children from upper middle-class

-MILO is an icon in the Australian Food

families.

Industry and identifies itself as an integral

-Their key demographic: children and teens

part in a healthy lifestyle

between the ages of 3-13, to influence

Political -Regulations around food labelling known

parents purchasing MILO Social -Increase in negative exposure due to the

as a ‘health star’ system; MILO forced to

political fallout from the ‘health star’ rating

remove 4.5-star health rating due to high

fail. Opportunity to offer a no sugar added

sugar content [ CITATION Han181 \l 3081 ] Technology -Very minimal social media presence, small

alternative to the existing MILO range. Economics -Negative market voice can impact profits.

following on Facebook but no account on

- Estimated annual revenue of $110.1m in

Instagram or Twitter

Australia and New Zealand [ CITATION Owl18 \l 3081 ] -Leader in chocolate health drink production

Figure 2: SWOT analysis STRENGTHS

WEAKNESSES

-MILO is the market leader in chocolate

- MILO was forced to remove its 4.5 health

energy drink production with an estimated

star rating due to soaring obesity rates

annual revenue of $110.1m in Australia and

[ CITATION Han18 \l 3081 ]

New Zealand [ CITATION Owl18 \l 3081 ]

- In a regular serving of MILO powder, 46% of

- Excellent source of multiple vitamins and

is sugar [ CITATION Met18 \l 3081 ]

minerals, including calcium, iron, vitamins A, B1, B2 and C [ CITATION Nes18 \l 3081 ] - Still Australian made in Smithtown, NSW, where it was originally produced in 1934 [ CITATION Nes181 \l 3081 ] OPPORTUNITIES

THREATS

- Criticism for sugar content opens up new

- Many chocolate energy drink competitors,

market for sugar free/ sugar reduced

Sustagen, Ovaltine, Nesquik

alternatives

-Competitors have healthier options; ie

- Product development would attract new

Sustagen Diabetic [ CITATION SUS18 \l 3081 ]

interest from previously untargeted health

and Ovaltine Sugar Free [ CITATION Woo18 \l

conscious customers

3081 ]

Figure 4: Nestlé distribution channel...