Table of ContentsI. Introduction.........................................................................................................................................2

II. Product................................................................................................................................................3

III. Place of Distribution........................................................................................................................7

IV. Pricing..............................................................................................................................................9

V. Promotional.......................................................................................................................................13

VI. People, Process and Physical Evidence..........................................................................................17

VII. Recommendations and Conclusion................................................................................................19

VIII. Reference......................................................................................................................................21

1

I. IntroductionNestle is the largest consumer packaged goods company in the world, founded and

headquartered in Vevey, Switzerland. Nestlé originated in a 1905 merger of the Anglo-Swiss

Milk Company, which was established in 1866 by brothers George Page and Charles Page, and

the Farine Lactée Henri Nestlé Company.

Nestlé is the world's leading nutrition, health and wellness company. Nestlé’s mission is "Good

Food, Good Life" to provide the best food to consumers with the best tasting, most nutritious

choices in a wide range of food and eating occasions, from morning to night.

Nearly a hundred years after it first started operations in the country, Nestlé Vietnam Inc. Today

is a robust and stable organization, proud of its role in bringing the best food and beverage

throughout the stages of the Vietnamese consumers' lives.

Chuckie is a milk beverage with chocolate, produced by Nestle. Chuckie is added to hot or cold

milk to give it a malted chocolate flavor and extra texture. When combined with cold milk, it

retains the gritty texture of its raw state. Chuckie can be stirred into steamed milk or hot water to

create something similar to hot chocolate. Sugar can be added to the Chuckie beverage, but many

people enjoy it without the addition of sweeteners, appreciating it for its subtle chocolate flavor.

There are two kinds of Chuckie are Chuckie chocolate milk and Chuckie ice-cream.

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II. ProductNestle is a famous group of companies. It is well known for its rendered services in food sector.

Nestle has more than 70 consumer products in Vietnam. Good nutrition is essential from the very

beginning. That's why Nestle strives to provide the best for everyone. Nestle covers nearly every

field of nutrition: infant formula, milk products, chocolate and confectionery, instant coffee, ice-

cream, culinary products, frozen ready-made meals, mineral water etc.

Nestle identify the appropriate location including city and country, rural and urban. Nestle can

collect customer’s information through survey (traditional survey or online survey). Nestle want

to introduce and broadcast company brand popular in Vietnam. So Chuckie concentrate

introduce in many big city which have larger population, good opportunities (high standard,

good mass media and other digital communication, good traffic condition, etc.) to selling

Chuckie such as Ha Noi, Ho Chi Minh, Da Nang, etc.

Nestle can collect information about age, income, location, etc. Then measure about demography

and customer mentality. About segmentation by demography, Nestles know the age of most

consumers of Chukie is from 4 to 12 year old. Focus on the demand of Chuckie target market,

Nestle research and develop the advantage of Chuckie and provide good chocolate milk for

customers. Nestle can apply FAB schedule to identify feature, advantage and benefits of

Chuckie.

Product Feature Advantage Benefit

Chuckie (include

Chuckie chocolate

milk and Chuckie ice

– cream).

High grade

chocolate

flavor.

Variable

volume.

Provide

nutrient ( Calci

– N, etc) and

energy with

Stronger

chocolate

flavor.

More volume

choices.

More nutrient

and energy.

Longer daily

flavor.

More

convenient,

easier to

customers.

Calci-N is

needed to

strengthen

children

3

RENI

standard.

bones.

Vitamin A, D,

energy help

children have

good health.

Nestlé has recognized the special nutritional requirements which start from infants and covers

the range to all age groups. Nestle produce a new product which suitable for all children and teen

is Chuckie. Chuckie put loads of Calci-N is a proprietary - branded active ingredient that helps

kids bones absorb more calcium to help consumers stronger, especially children grow taller.

They add specific nutrients to Chuckie milk and encourage children to consume nutritious

products with different kind and size.

For small children, Nestle offers smaller sizes and portion able packs. Chuckie is packed with

110mL, 250mL and 1L and there are many different kinds of chocolate drink such as Choco

Swirl Ice Cream Cup 100mL, Choco Swirl Ice Lolly 70mL or Wacky Dio Ice Lolly 75 mL.

Teens like lots of affordable enjoyment, with big portions and a succession of tastes and textures,

particularly when they are buying the products themselves. They also favor ready-to-drink

beverages, and here they can offer them a choice of refreshing milk-based drinks. With the

various types of size, Nestle are providing a large number of choices for customers. Chukie has

various kind of product, so that it can creates many option for customers and expand the market

of Nestle.

Unique selling preposition (USP) is strong competitive advantage for Chuckie. Customers choice

the Nestle Chuckie usually base on the benefit of the product bring for them. Products benefit

can be easy to use, saving time, cheaper than other same kind of products, etc. Nutrition, Health

and Wellness is Nestle’s strategic direction. Comparing with another chocolate milk in Viet Nam

likes Vinamilk, Dutch Lady, Ovantime, Nestle Chuckie is a choco-flavored milk drink that is

guaranteed to be a nutritious and yummy baon buddy for kids, Chuckie is only chocolate milk

provide Calci-N in Vietnam milk market. Chuckie is packed with 278g of calcium, such that 2

packs of Chuckie answers 100% of your child's daily calcium requirements. Not to mention that

4

Nestle put loads of Calci-N is a proprietary - branded active ingredient that helps kids bones

absorb more calcium to help them grow taller. Calci-N has been shown to increase bone density,

thereby helping to build stronger bones. It is also good to know that drinking 2 packs of Chuckie

serves up your child's calcium requirements for the whole day. That's in line with the RENI

standard, which measures dietary standards in nutrients and not foods or diets.1

Chuckie provides energy (calories). These calories come from the different ingredients of

Chuckie, mainly malt extract, skimmed milk, palm oil and sugar, more chocolate flavor. On its

own, Chuckie powder is nutritionally balanced, providing the right ratio of protein,

carbohydrates and fats. The basic classes of nutrients in food are: carbohydrate, fats, protein,

vitamins, minerals and water! A mug of Chuckie of drink contains these nutrients.

Protein is one of the macronutrients (along with carbohydrate and fats) that is important to build

and repair body tissue. It is essential for healthy growth and development. The protein needs (per

Kg of the body weight) is highest when growth is rapid, such as during infancy, childhood and

adolescence. Protein is found in meat, fish, poultry, dairy products, beans, peas and lentils.

Drinking Chuckie help children have protein easier than eating more food. Fats are found in

animal and dairy products, as well as vegetables oils and margarines. Fats are essential

component of body cells that are important for the absorption of fat soluble vitamins. As fat

contain higher calorie compared to carbohydrates and protein, excessive fat intake may also

contribute to overweight and obesity problems. And Chukie also provide fats. Carbohydrates

supply the main source of energy for the body. Carbohydrates can be in the form of complex and

simple carbohydrate. Simple carbohydrates are sugars that our body can easily and quickly use

for energy. Complex carbohydrates are chains of sugar units. For example, fiber and starches.

Starches are broken down during digestion into glucose before being absorbed into the body.

Fibers are not digested by our body, though it helps to regulate bowel function.

Vitamins are micronutrients essential to the human body and a lot of vitamin which children

need are also have in Chuckie. A deficiency of some vitamins can lead to diseases or metabolic

disorders. For example, lack of vitamin C can lead to scurvy; lack of vitamin D lead to rickets.

Calcium is an important mineral in childhood. Calcium is essential for proper development of

bones and teeth. During infancy, childhood and adolescence period, bone growth is the greatest.

1 http://www.nestle.com.ph/chuckie/static/dearmom_nutri.htm

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So, it is important to get adequate amount of calcium at these stages of growth. The B Vitamins

are needed for the release of energy from foods and some are important for red blood cell

formation. It is, therefore, important to consume adequate of B Vitamins.

Nestle will make more affordable products for families with incomes less than 4 million per

month in Vietnam. This is not simple. Heynike She said: "We are well-prepared for all product

strategy. First it required to have good research system, paying special attention to nutritional

problems. Research Center located in our Lausanne (Switzerland) plays a key role in this,

combined with 27 other research centers worldwide”.2

Nestle is a global company, they can spend more financial for the project of spread Chuckie in

Asia market. Chuckie’s packaging is the most direct and largest communication vehicle that the

organization had with the most impressions they can deliver. And on the packaging, the firm’s

communicate wellness benefits in our beverage business. But it’s not just there, also in

confectionery, and condiments, nutrition communication through to the new and existing

consumers. The packaging materials continue to be the main source of concern, mainly in

plastics, but also to a lesser extent across metals and paper and broad. Chuckie tries to spread its

image as wide as possible to create a strong identity. Attention is not only paid to the product

design but also other direct and indirect means to approach the customers. Nestle’ uniform and

delivery vehicle or delivery trucks of Nestle would be designed with Nestle’s identity such as

logo, color and so on. Furthermore, the vehicles which use to delivery Chuckie can have image

of Chuckie cow to attract consumer likes children.

2 http://www.nestle.com.vn

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III. Place of Distribution Selection of place is also a very pivotal step in the success of the organization. Place relates to

decisions about the storing and transporting of products, and also about selecting the products

channel of distribution. These decisions are critical to the success of an organization. Effective

inventory management drives down costs and enhances product quality. The place must be right

where the customer wants to be, it must be easy assessable and approachable to the customer.

Nestle makes it sure that its product is available at every corner of the country regardless of rural

or urban areas. Nestle’s main focus is to make the product within the access of every consumer

so that the consumer should have no difficulty in getting the product. It also helps Nestle to

compete with the competitors more effectively as by this it can make the product available to

maximums number of target customers.

Nestle Chuckie’s distribution mix

Nestle Vietnam have 3 factories and 2 sales offices nationwide. Nestle Vietnam are using two

type of channel intermediaries to market its product which is Chuckie. The two types of channel

are by using retailer and wholesaler. It is convenience for Nestle Vietnam since both channel

have a lot of advantages in high frequency of ordering, shorter time for shipment and have high

number of customers.

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After opening the manufacturer in use at Dong Nai, Hung Yen industrial zone in 2005 and 2007.

(www.vnexpress.net), Nestle has distributed products directly to retail stores and supermarkets.

Each stores and supermarkets have their own warehouse for Nestle product storing. Those

warehouse can help Nestle Vietnam to decrease warehouse fee and transportation cost.

Nestle has developed distribution channels which ensure the availability of Chuckie to buy

wherever and whenever the consumer wishes to purchase it. Sales of confectionery depend

heavily on its availability, with market research showing that well over 60 of all

purchases are made on impulse. Consequently, Nestle tries to supply as many outlets as

possible ‐ both wholesaler and retailer channels.

About product transportation, the methods have been developed to ensure that vehicles,

containers and so on are used in the most efficient way. Working with contractors and co-

operating with other producers allows the free vehicle capacity of one company to be matched

with the available loads of another. Combining road and rail transport also helps to optimize

distribution and reduce vehicle journeys. Computerized milk-collection systems have reduced

driving distances by as much as 10%. Improving transportation and distribution of products from

factories and distribution centers to customers and consumers leads to environmental benefits

and cost reductions. It results in less noise, less fuel consumption, less congestion, fewer

emissions and less waste. Therefore, specific Nestle guidelines highlight opportunities and best

practices related to managing transport resources.

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IV. PricingNestle Chuckie’s pricing decision is influenced by both internal and external factors.

Internal factors:

Marketing objective: the company has recently set product quality leadership, which means it

differentiates quality with other competitors, as its marketing objective. Chuckie occur after kind

of chocolate milk such as vinamilk, duch lady, ovantime so Chuckie try to make the different

quality and keep the price is not high.

Marketing mix strategy: other marketing mix element including product design, distribution and

promotion will be coordinated with pricing strategy to emphasize total value concept.

External factors:

Inflation: Vietnam has encountered a significantly increased inflation rate.

Customers’ perceptions of price and value: in food and beverage industry, especially in healthy

dairy product market as Yakult, customers usually care about the quality rather than prices.

Pricing for Chuckie milk begins with analyzing consumer needs and value perceptions, and the

price is set to match consumers’ perceived value. For instance, in recent, as the living standard is

increasingly improved, there is a sharp rise in heath for children (after the event milk has

melanin). Thus, there will be a large number of customers who are willing to pay a reasonably

high or medium price for such a delicious healthy product as Nestle Chuckie. Thanks to this

value-based pricing approach, the company can decide the best price at which customer demand

could be increased most.

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Competitor’s Product

Vinamilk

Vinamilk is the dominant brand in Vietnam that sells products made from milk. Even though

Vietnam has joined WTO leading to floods of imported goods, Vinamilk still maintain their

market leader position and even increase the market share. Its strategic plan is to improve supply

chain management, potentially the quality of raw material sources via direct investment, and use

it as a vital competitive tool to control price. For instance, they also have the wide and

effective distribution channel including 183 distributors and 94,000 retailers in Vietnam.

Now, it has introduced a very effective advertising campaign. The regular advertisements were

been broadcasted on TV which were very cute, funny and attractive, especially to children. It

included the “cows” which are funny and healthy. The slogan of “100% fresh milk” is easy to

remember by the harmony song “100%”.

Dutch Lady

The international corporation: Dutch Firm Friesland Foods has placed its manufacturers in

Vietnam and introduce their product under brand name: Dutch Lady. The company use “mother

and children” to build image for its brand. Most of the TV ads emphasize the importance of

mothers’ role in their kids’ life and how kids appreciate the love and care from their mothers.

Overall, Dutch Lady always tries to increase their market share by spending a lot of money on

advertising.

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If Nestle Chuckie occur in Vietnam market with same price of Nestle Milo. There is a table of

comparing price of Chuckie, Vinamilk and Dutch Lady.

Brand name Product Quantity Volume per

quantity

Price

Dutch Lady Dutch Lady

Chocolate

4 180 ml 25,500 VND

Nestle Chuckie 4 180 ml 25,000 VND

Vinamilk Vinamilk

Chocolate

4 180 ml 24,500 VND

As you can seen from the table, with the same quantity and volume per quantity, the price of

Chuckie are of different level about 500 VND. With the different level of price is not larger,

customer will compare the quality of products. Nestle put loads of Calci-N is a proprietary -

branded active ingredient that helps kids bones absorb more calcium to help them grow taller.

Calci-N has been shown to increase bone density, thereby helping to build stronger bones.

Besides, that's in line with the RENI standard, which measures dietary standards in nutrients and

not foods or diets.

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When Nestle Chuckie has decided the product price, they will choose a good pricing strategy that

will give them direction of price movements over the Product Life Cycle. Nestle Chuckie are

aware about higher price. If they set higher price, they have to produce a good quality of

Chuckie. Besides that, the competitors also will influence the pricing strategy.

For example, if Nestle Chuckie introduces a new product that same with competitors, the price

will be restricted and close to the price of competitors. Unless, Nestle Chuckie can differentiate

and convince consumers, they can set the higher price for the product.

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V. PromotionalPromotion mix is the communication mix, which deals with the personal and impersonal

persuasive communication about the product or service of the manufacturer. Personal

communication is the face to face meeting between the sales force of the company and the

clientele. Impersonal communications include advertising, sales promotion and public relations.

Nestle sets its promotional budget on annually basis. Nestlé is well aware of the importance of

the effectiveness of the promotional program. It designs its promotional program using all the

available promotional tools.

Promotional strategy is a plan of optimal use of the elements of promotions that is used by Nestle

to promote Chuckie. The main function of Nestle promotional strategy is to convince target

customers that their goods and services offered provide a differential advantage over the

competition. A differential advantage is a set of unique features of a company and its product

that are perceived by the target market as significant and superior to the competition. Such

features can include high product quality, low prices, excellent service or a feature not offered by

other competitor. As example, Chuckie convinced their customer that children will be more

energetic and taller if they consume Chuckie.

Nestle Chuckie also should know how to combine all of products and services with the

company's message. We need to develop and constantly improve the product design, signs and

labels. Nestle carries their promotional effort trough traditional mass media such as television,

radio, newspaper and etc. With the increasing fragmentation of traditional mass media choices,

Nestle also sending their advertisements to consumer in many new and innovative ways, such as

with interactive video technology located in departmental stores and supermarkets and through

Internet Web.

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Beside the promotion or communication above, Nestle are also using other form of advertising

such as non-media communication or advertising. Some of the ways that Nestle have done are by

participating exhibitions, sponsorship activities, public relations and sales promotion such as

giving freebies with good, or reduced price offers on Milo product. Those are the tools that used

by Nestle to persuade customer and build customer relationship with their product.

Advertising is defined as any paid form of product information that is delivered to potential

customers in a non-personal way (such as through newspapers, magazines, television, radio,

billboards, or the Internet). The communication is not just about advertising only, and the

communication often creates a creative slogan in order to make sure consumer will remember

Nestle Chuckie.

Advertising is an effective promotion tool to reach masses of geographically dispersed buyers

with a message repeated many times. Obviously, with such a new product as Chuckie,

information advertising which inform customer of huge healthy benefits of the product and its

available services is the most appropriate objective. However, since cost for such communication

is expensive, the most effective advertising methods must be chosen for the best result.

Nestle needs to tell for customers know that Chuckie message towards. The message that

companies need to make clear the issues identified as Chuckie are directed to one, the emphasis

of the message is, why customers are interested in messages, and why they believe this message.

Nestle’s advertising must constantly change to its excellent and consistent with each product.

The average person takes more than half a second to decide whether or not notice of an

advertising company. So we have to pick the most appealing and let people see or hear it.

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Usually when watching an advertisement, it was just surfing to see if anything interesting points,

the first being the headline or the first image, then to the pictures and notes in more detail before

coming to the logos and labels effect, then the advertisement content. Consequently, Nestle need

to create an advertisement only gives an idea.

The company has decided to apply objective-task method which develops the promotion budget

by setting specific objectives, determining necessary tasks to achieve these objectives and

calculating the total of all tasks cost equal to budget. Chuckie define target audient is children,

teen and parents.

Nestle have their own website which is www.nestle.com and there are more than 100 countries

are registered under this website. Nestle also have their own website for each country, Nestle

Vietnam website is www.nestle.com.vn. Uniquely, Nestle also have their own website for each

product that they sell (e.g. www.nestle.com.ph/chuckie/) which is estimated around 30,000

products worldwide. It is established so that consumer can easily find information about their

particular product and also as a medium for consumer to leave their suggestion in order for

Nestle to improve their product. The Internet has brought many special benefits for marketing

and one of the advantages that are low cost and can get feedback from customers immediately.

With new product likes Chuckie, customers often search for product information online before

they buy, potential customers often find other people's comments about the company or product

before buying.

In order to gain brand awareness of 85% target customers, based on media habits of target

customers and types and costs of messages, Nestle Chuckie will use following media vehicles

including TV ads magazines and internet.

TV ads are the most popular media type that our target customers including young women

and families are exposed. Because of good mass-market coverage, cost per exposure is low.

It is the most appropriate to appeal to the senses. Nestle can advertise Chuckie at the wide

popular channel such as VTV1, VTV3, HTV7, HTV9, DVTV, etc. Scheduled 2 times per

day within the first month.

Beside with good pass-along readership and high-quality production, newspaper or magazines

has also high geographic and demographic selectively, specifically for its two separate target

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customers such as parents and teen. Tiep thi & Gia dinh magazine is one of the best-selling

magazines, with circulation of 110,000 and targeting housewives. Besides that Hoa Hoc Tro is

the magazine which teenager buy more. In first two quarters, printed advertisement will be

appeared in the first week of each week.

Internet is considered as one of the least expensive media types as well as having interactive

capabilities. According to www.alexa.com, vnexpress.com is at the top 3 sites in Vietnam, with

a wide audience base attracted. Furthermore, You tube, blogs, Face book and other social sites

is also the website which people use more now. Besides, Nestle Chuckie can hold survey

customers via the Internet. Survey online faster than conventional surveys, all data can be

collected for several days. Use e-mail can reach thousands of people quickly and inexpensively.

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VI. People, Process and Physical Evidence.

People are the most important element of any service or experience. Remember, people buy from

people that they like, so the attitude, skills and appearance of all staff need to be first class. Here

is way in which people add value to an experience, as part of the marketing mix.

Nestle customer services teams support many products, services and experiences. The

disposition and attitude of such people is vitally important to a company. The way in which a

complaint is handled can mean the difference between retaining or losing a customer, or

improving or ruining a company's reputation. Today, customer service can be face-to-face, over

the telephone or using the Internet. People tend to buy from people that they like, and so

effective customer service is vital. Customer services can add value by offering customers

technical support and expertise and advice.

Process is an element of service that sees the customer experiencing Nestle's offering. It’s best

viewed as something that your customer participates in at different points in time. For example,

Nestle can hold an meeting to introduce Chuckie in a park on Sunday. After introduce the benefit

of Chuckie, the visitor can try to drink Chuckie, children can play many games in the park and

receive gift with logo and image of Chuckie cow. This is a process to introduce a new product

Chuckie for customers and find out more customers.

At each stage of the process, markets:

Deliver value through all elements of the marketing mix. Process, physical evidence

and people enhance services.

Feedback can be taken and the mix can be altered.

17

Customers are retained, and other serves or products are extended and marked to

them.

The process itself can be tailored to the needs of different individuals, experiencing a

similar service at the same time.

Physical evidence is the material part of a service. There are no physical attributes to a service,

so a consumer tends to rely on material cues. There are many examples of physical evidence,

such as packaging, Internet, web pages, credit cards. Nestle can market by type of promotional

bonus gift or discount when customers buy products. Company may use the procedure as special

promotions every day, receive the gift cards, savings clubs, gifts, travel tickets, bonus and special

offers are in Nestle's logo and Chuckie image.

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VII. Recommendations and ConclusionFor product recommendation, Chuckie can make their product more variety by adding new

flavor. In our opinion, Chuckie should add some vanilla flavor in order to make their product line

more variable. Furthermore, Chuckie should extend their target market. They can produce

powder Chuckie such as 3 in 1 Chuckie from the normal powder Chuckie. This is for the

customers that do not have enough time or in rush because they only need a short time to make

it. This is because 3 in 1 Chukie already has added creamer and sugar for consumer convenience.

Even kids also can do it by themselves because it already complete and they do not have to add

anything.

For the place that I recommend, Chuckie can build their own shop in a mall or any other strategic

place whereby the shop only sell Chuckie’s product. Besides, they also can sell miscellaneous

item such as a unique mug with Chuckie’s logo, a key chain, a school bag complete with the

stationary for children, or a backpack for the sporty person. Other than that, Chuckie’s can put

their vending machine in a place that always full of people such as shopping mall, airport,

hospital, school and any other place.

To make Chuckie being well-known all over the country, they should make a lot of promotions

which is dissimilar with the promotions that they have done before. Chuckie can wider their

promotion by making a contest or a lucky draw. They just need to put a lucky number behind the

packaging and the end of the month, the will pick a lucky number and the lucky customer can

redeem their price at the nearest Chuckie’s branch. Besides that, Chuckie can make a different

packaging style. They should combine all their products in one pack that include mini pack of

Chuckie milk, Chuckie ice-cream and new kinds of Chuckie such as Chuckie powder. By doing

this style of packaging, Chuckie can promote all their delicious product to the customer so that

they are able to try all the product that produced by Chuckie. If they interested with one or all the

product, for sure they will but it again and again. This will increase the profit.

For the price, Chuckie should make a good pricing strategy. If they want to put a high price for

the particular product, they have to make sure that the quality and the quantity are suitable

enough with the price. Other than that, they also can do the packages which contain the chosen

product in one pack and they will set the price for the pack in a moderate value. This is also

known as eco pack. This pack is affordable whereas not only the high income persons who are

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willing to buy it but people from low income are also able to buy. By doing so, consumers can

make a good perception for the company who are concern with the society. Generally we can

conclude that Chuckie are not bias and are suitable for all level of person.

In conclusion, Nestle also is a product for everyone which suitable for all income level since the

price that set by the company is affordable and perhaps, cheap. It is very competitive since the

price is high in quality and most of the consumer does not thinking too much about the price.

The marketing channels that have been used by Nestle to distributed Chuckie are also one of the

key successes of the product. The efficiency and high frequency in distributing Chuckie

nationwide has been a convenience for consumer since they can buy it easily at any market, store

and any convenience shop.

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VIII. Reference

Nestle Viet Nam [Online]. Chuckie [cited 19th May 2012]. <

http://www.nestle.com.vn/Chuckie.htm>.

Nestle Viet Nam [Online]. Dear mom Nutri [cited 15th May2012]. <

http://www.nestle.com.ph/chuckie/static/dearmom_nutri.htm >.

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