Milo was produced by Nestle Company. In 1934, it was
initially developed by Thomas Mayne, in Sydney, Australia. He named the drink MILO after the Greek mythical character Milo, who was known
for his strength. He launched Milo at the Sydney Royal Easter Show and
start the production in Smithtown. Milo has sponsored in the Olympic Games in 1936. Milo
is a well-known brand and it is marketed in many countries. MILO is the Malt Chocolate energy drink, which
identifies with energy and good health. Milo also uses sport as a metaphor for
life. The packaging of Milo products are commonly in green.
There are several reasons
why we chose Milo for our survey. We wondered why Milo could be so successful,
even though there are numbers of competitors. And Milo is a well-known
brand, and we thought people could
complete the survey forms easily. By doing the survey, we would get to know the
reasons why people choose Milo.
Milo is monopolistic
competition. Monopolistic competition is one type of imperfect competition. It
has a large numbers of sellers, because of easy entry and exit. It is fairly elastic demanded. Many firms
sell differentiated product and there are many close substitutes, such as Vico
and Ovaltine. They differentiated by the packaging and branding. Every firm
determines its own pricing policy, because they are the price makers.
After we researched on
Milo, we know why it became so successful, because it
made with consumers’ needs, as Milo contains high calcium, protein, six
essential vitamins, minerals, iron and ACTIGEN-E.
The taste of Milo has slightly changes in some countries, because Milo is produced
according to the taste of the people in particular areas. However, Milo
production has no longer produced in India, due to the numbers of beverage
companies and the competition was so intensive in India. The competitors of Milo are the other companies that
selling chocolate drinks and offer a same range of pricing as Milo, such as Ovaltine and Vico.
In conducting this survey, there was limitation. The
response rate was low. At the time of doing this survey, we had 20 survey forms
to survey people in campus, including teachers and students. Some of them were
just simply tick the answers, which has been messed up our data collection.
Methodology :
This assignment was conducted in 1 month . The
survey questions were printed out at the 1st week . Then check the question that created suits for the assignment or not
by asking opinion from Mr Iqbal ( economic lecturer ) . The analysis was done after the survey
started at 2nd week . All of the work were analyzed according the
data collected from peoples. The 3rd week and 4th week are the week that
arrange and discuss how to do the assignment according what the requirements of
the assignment. Finally it was done!
< we explain our question to make sure they provide the correct information to them and let them provide their opinion towards Milo >
Finding and analysis
After conducted the survey ,the finding for each factor are age , price of product itself , level of income ,availability of substitutes and habits . Most of the people are students that support Milo. This is because their habits or their lifestyle are different with the other stages of age .Most of the student likes chocolate drinks because more than 40% of them feels it are very convenient.
But ,the price of products itself will affect
the number of demand. Student and the
others that over 25 years old will choose not to buy Milo if their price
increase till RM 25. This indicates the higher the price of its product , the
lower the demand , the more elastic the product.80% of consumers will stop
purchasing Milo if the price are increased.
Other than that , level of income of consumer
is also one of the determinant of demand and elastic curve. 80%Students does not have any income .So , some of the student might consider to buy or no because
they think whether is necessity goods or no.
Availability of substitutes is also a
factor that cause the demand curve shift and determinant of elasticity.
According to finding , 90% of them are
not willing to purchase Milo anymore if the price of substitution falls. This
is because they can achieve the same level of satisfaction by paying the lower
price.
According to the research, the higher the price of Milo , the lower the
demand of Milo . When there is lower demand of Milo , means consumers are
sensitive towards the price change ;the lower income of a consumer , the lower demand , it shows consumer are
sensitive toward their decisions;If the price of substitute falls , a lot of people will choose to change
their loyalty toward the cheaper price goods, because they can get the same satisfaction
by paying lower price.After arrange and analysis of data ,we found that Milo is
actually elastic to consumers.
Graph 1 . Age vs
demand : There are higher demand for people in age 15-21 compare to the others.
( age factor )
Chart 1: People
like Milo because it is convenient
Graph 2: the graph above shows that the reaction of consumers after promotion of Milo
Chart
3 : It shows the price falls of substitution of Milo will decrease the demand
of Milo
Conclusion
According to the
research, the higher the price of Milo ,
the lower the demand of Milo . When there is lower demand of Milo , means
consumers are sensitive towards the price change ;the lower income of a
consumer , the lower demand , it shows
consumer are sensitive toward their decisions;If the price of substitute falls , a lot of people will choose to change
their loyalty toward the cheaper price goods, because they can get the same
satisfaction by paying lower price.After arrange and analysis of data ,we found
that Milo is actually elastic to consumers. Since the market competition is
monopolistic competition. It got a lot of firms. It produced similar products
with the other firms but differ by brands. It is a price maker, Milo is elastic
to consumers. Consumers are sensitive toward the price change of Milo. Milo
should deduct their price and create different type of product , different
taste of Milo .This might attract not only the chocolate drinks lovers but also
other taste’s consumers .Other than that
, they should do more attracting
advertising. Add more value to it such as vitamin , carbohydrate to let
consumer achieve higher satisfaction. To generate higher profit , the price of Milo should not be increase because there are a lot of substitution existed in
current market.
Questionnaire
(1)Is Milo an elastic product or in elastic product?
Elastic product. Because there are many other substitutions, such as Vico , Ovatine and other chocolate drinks.
(2)What type of market competition is Milo in ? What are the characteristics?
Milo is monopolistic competition. It is one type of imperfect competition. It has a large numbers of sellers, because of easy entry and exit. It is fairly elastic demanded. Many firms sell differentiated product and there are many close substitutes. They differentiated by the packaging and branding. Every firm determines its own pricing policy.
(3)Are the consumers sensitive toward the price change for Milo?
Yes, the consumers are sensitive towards the price change.The higher the price of Milo, the lower the demand of Milo.If the price of Milo increases, consumers choose to change their loyalty toward the cheaper price goods, because they can get the same satisfaction by paying lower price.
(4)How does Milo become so successful?
Milo became so successful, because it made with consumers’ needs. Milo contains high calcium, protein, six essential vitamins, minerals, iron and ACTIGEN-E, which provide a human 's daily nutrition.Also, Milo is produced according to the taste of the people in particular areas, that's why The taste of Milo has slightly changes in some countries.
(5)Is Milo operated successfully in every country ?
No. Milo production has no longer produced in India, due to the numbers of beverage companies and the competition was so intensive in India.
Reference
i)Welcome to Delta Office Solutions
Shop.deltaoffice.com.au (2013) Welcome to Delta Office Solutions. [online] Available at: http://shop.deltaoffice.com.au/ [Accessed: 1 May 2013]
ii)MILO
Milo.com.au (2013) MILO. [online] Available at: http://www.milo.com.au/ [Accessed: 2 May 2013]
iii)Supplies and demand
Dandmondoffice.com.au (2013) Supplies and demand. [online] Available at: http://dandmondoffice.com.au/ [Accessed: 2 May 2013]
iv)Economics Principles, Problems and policies
R.Mcconnell, C. and L. Brue, S. (2013) Economics Principles, Problems and policies. 19th ed. United states: Mc Graw Hill, p. 111-123
