Here is a SWOT analysis on Milo:
Strengths
- Only chocolate energy drink
- Unique selling point
- Big sales in other countries
- Part of Nestle (reputation) funds available for relaunch
- IT is available in different sizes/formats
- Value for money
- Promotion/advertising done in other countries
Weaknesses
- Promotion hasn’t been done in UK
- Not widely available
- Not enough diversity in flavour
- Packaging (design of tin + labelling)
Opportunities
- Relaunch in the UK
- Summer coming up (people doing more activities)
- Increased media available (mobiles/internet)
- Increased fitness industry
- Increase awareness of health and fitness
- Can use U.S.P
- Sponsorship (through sporting events)
Threats
- Competitors (hot chocolate, energy drinks)
- Well known successful brands as competitors
- Competitors could use aggressive marketing tactics cut prices/increase promotion
- Competitors bring out similar products
- Competitors have diversity in packaging (bottles, pouches, cans, etc)
I am going to produce a PEST analysis to find out what external influences may be affecting the product (Milo) and to what extent to which customers decide to buy them. The purpose of the PEST analysis is to analyse the organisation (Nestle Milo) operates and to identify how it may influence marketing decisions. A PEST analysis analyses the external environment in which an organisation operates and identifies how it should influence marketing decisions.
The initials P.E.S.T stand for:
Political
Economical
Strengths
Threats
Political Factors
The actions of governments can have major effects on business and markets, including creating or reducing demand for particular products and services.
Economical Factors
Consumer spending may be controlled by a range of economic factors such as income levels, inflation, taxes, unemployment, exchange rates and mortgage rates.
Social Factors
Social trends are important because they have a direct influence on the demand for particular types of product.
Technological Factors
Development in technology gives rise to new products and market opportunities, e.g. the rapid growing use of computerised reservations systems.
Here are the advantages and disadvantages of using a PEST analysis:
Advantages
- Outlines government law on businesses
- Can be compared to previous PEST analysis therefore changes in the market may possibly be anticipated
- It indicates whether business has improved or not
Disadvantages
- May be erroneous
- Expensive (takes time to produce)
- Problems in the PEST analysis cannot be rectified as they are all external issues
Here is a PEST analysis on Milo:
Political
- Stay within the law (being aware of legislation health and safety, advertising standards, consumer protection, trades description
- Restriction on imports
- Government back ‘Milo’ as an energy drink
Economical
- Exchange rates (what are they here/abroad, If your buying from another country and the rates differs, it changes the price you end up paying)
- Taxes (if they go up so will the costs for consumers)
- Recession (people have less disposable income – would they buy Milo?)
- Inflation (prices go up for the company and for the consumer)
Social
- Society more aware of healthy lifestyle/rise in fitness industry
- More focus on leisure time
- More disposable (can afford to buy luxury goods) income
- Fashion (could Milo be the next fashionable drink)
Technological
- Advanced in technology change product/packaging/flavours
- Advance in science (add to Milo formula more energy/healthier)
- Advances in production technology (more efficient + better quality/ less staff required = cheaper for Nestle = cheaper for customers)
- Improved media/communication internet/mobiles etc.
In addition to the PEST analysis, I am aware of Green issues. These are areas or holes that have been neglected until recently. Businesses have become more aware of these areas because of the impact they have caused
Green issues
- Pollution issues
- Bad PR
- Recycling (recyclable packaging)
This involves caring for the environment. If businesses are polluting the environment with their products or services consumers will stop their transactions with the business. Here are two examples of companies that care or have some concern for the environment:
- The National trust, which seeks to protect and enhance our national heritage
- The Woodland Trust, which sets out to preserve green spaces and Woodlands, which engages heavily in tree-planting activities
In addition to the PEST analysis and SWOT analysis I’m going to produce a Competitor Audit. A competitive Audit identifies points of difference between an organisation and its competitors, as well as areas of competitive advantage. The purpose of this process is to look at the strengths and weaknesses of other products (including Milo) and to try to integrate them into my new strategy for Milo (products and other elements of their marketing mix – product, price, place, distribution and promotion).
Here are the advantages and disadvantages of using a Competitor Audit:
Advantages
- Produces an overview of what is happening in your market
- Allows easy comparison between each competitor and your business
- Presents areas that need development (e.g. Milo needing advertising in the UK to improve sales)
Disadvantages
- Expensive (method would take time as each are of the marketing mix will have to be thoroughly researched)
- In accurate information
- Information may be bias
Here is the Competitor Audit for Milo and two other competitors:
To conclude all three process (SWOT, PEST and Competitive Audit) have affected my strategy and marketing decisions. The SWOT analysis has help me to acknowledge and comprehend my weaknesses, which will be a benefit because now I know my weaknesses all I need now is search for a way to eliminate them. The PEST analysis has drawn my awareness to the external forces that may have an influence on the product (Milo). Therefore, when making marketing decisions the factors found will be taking into consideration. The competitive Audit has showed me where Milo’s competitors are (what level they are on) which is also a benefit because I can see what I’m up against, what I have to do to get ahead and whether I’m disadvantaged in anyway. This is very important in the competitive environment because as a competitor, you cannot allow rivals to gain advantages in any form or way.
