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Essay: Nestle Malaysia: 8 Factories, 6 Offices and Expanding Grocery/Online Reach

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  • Published: 1 April 2019*
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Nestle Malaysia currently have 8 factories, 6 sales offices and 1 National Distribution Centre (Nestle Malaysia, n.d.). Nestle Malaysia use indirect distribution where intermediaries are involved to distribute the Honey Star products. The channel intermediaries can be categorized into wholesaler and retailer. Manufacturer will produce the products to wholesaler or retailer and sell it to customers. [Appendix]. The Honey Star products are distributed through wholesaler and retailer such as Tesco, Giants, Aeon etc. According to Mendiola, (n.d.), the indirect distribution method that use by Nestle Malaysia able to obtain competitive advantage as it requires lower startup cost and able to increase customer base through interaction.

Nestle Honey Star products can be easily obtained by customer through grocery retail stores, and online stores. According to Abdul Ghani Wahab (2016), grocery retail stores such as Tesco, Aeon, Giant etc. are mostly located at urban areas for middle and high income consumer. These retailers are located nationwide in Malaysia through chain store strategy. There are 56 Tesco stores, 31 Aeon stores and 131 Giant hypermarkets in Malaysia. Thus, consumers should be able to obtain Honey star products in one of the retail stores easily. Other than physical stores, consumer can also buy Nestle Honey Star through online stores such as 11street, Lazada, Tesco groceries online and Dear Nestle online. These online platforms bring convenience towards the customer. Customers are able to shop for any products and deliver within a short period of time (Loew, 2016). In the year of 2014, Tesco had taken the opportunity to expand their business through e-commerce by providing online stores where customer can buy products and deliver to their doorsteps.  The coverage of delivery has reached half of the nationwide population; thus this indicates customers are able to easily obtain products throughout Malaysia via online shopping (Toh, 2017). Besides that, Nestle Malaysia had participated in the e-commerce online stores such as Dear Nestle in the year of 2016. Nestle Malaysia also partnered with other online services, Lazada and 11street so customers are able to purchase products throughout these online platforms (Nestle Malaysia, 2016) Therefore, Nestle Honey Star products are easily reachable in any physical grocery stores or online stores which create convenience and superior values towards customers. Customers will perceive the values when they are satisfied as the products that are easily accessible.


Promotion strategy is an action that motivates and communicates with the customers to influence their purchasing decisions (Masterson & Pickton, 2010). Nestle Malaysia use various promotion methods to promote Honey Star products in order to attract customers’ attentions. Promotion methods of advertising and sales promotions have used by the company. Nestle Honey Star product’s advertisement plays an important role in influencing the consumer buying decision on that product. The concept of using mascot of an astronaut has advantage on children’s markets. According to Macklin (1994), using visual advertising retrieval cue such as mascot, colors and visuals are able to enhance children’s memories in recognizing the brand. Based on the research done by Beirão,, Lencastre & Dionísio (n.d.), mascot with anthropomorphic character is more appealing towards children as they may find it interesting and funny  [Appendix]. Thus, Honey Star product has a mascot of an astronaut bear, known as Captain Star and the visual of the advertisement includes computer graphic which can easily influence the children’s desire to obtain the products. Besides that, the advertisement also targets on parents by showing nutritional content in Honey Star such as whole grains, mineral and vitamins. This information may influence the parents’ decision to purchase it.

Nestle Honey star also use sales promotions as a tool to encourage customer purchase the product and enhance relationships. Honey Star products are normally promoted using consumer promotion methods to achieve sales promotion objectives. These methods include premium, contests and games. Premium promotion is offering free gifts or at low price in return for purchasing the product. Nestle Honey star offer in –or on package of free gifts such as toys and container that can be easily seen by the customer [Appendix]. Nestle Honey star has also organized contests and games which can be participated by the customers who purchase the product and win some rewards. Contest of winning a piece of gold by purchasing breakfast cereal that was held by Nestle, online games and mini games on the packaging are strategies used by Nestle to engage with customers [Appendix]. These activities are able to communicate, engage with customer, build brand awareness and retain customer loyalty (Hill, n.d.).

Marketing Strategy Recommendations

Product recommendation

Nestle Honey Stars can produce more flavours of cereals such as vanilla, chocolate or strawberry flavour rather than just coated with honey. Currently in Malaysia, only honey flavours are available throughout the nationwide, hence it would be better if Nestle decided to expand their product line depth by adding more varieties and choices for the customer.

Other than that, Nestle Honey Stars’ packaging can be improved by using the resealable or Ziploc bag. Resealable packaging provide more convenient experience and able to extend the shelf life by preventing the cereal from going stale. The theme of the packaging can change according to holidays or special events such as national day, Christmas or Halloween in order to attract customers’ attention.

Price recommendation

Place recommendation

Nestle Honey stars can distribute their product to smaller cities and rural places through small grocery shops. This will expand the market of Honey Star as more people would purchase and recognize the brand. Other than that, Nestle Honey Stars can place cereal vending machines in university campus, offices or shopping malls. Cereal vending machines would be convenient for the people who have hectic lifestyle. People could enjoy their breakfast cereal anywhere at their workplace or school.

Promotion recommendation

Nestle Honey stars should promote their product through samples promotion. Free sample of the product is given to the customer through salespersons in the large grocery stores. Consumers are able to have a taste on the product before purchasing it. This strategy is useful to attract new consumers and able to collect information by conducting survey to qualify for the free samples.  

Besides that, Nestle Honey Stars should also provide superior value to the existing customer by using loyalty card promotion. This promotion method is a kind of system similar to stamp and redeem system where customers are rewarded once they fulfil certain requirements. For example, customers that have purchased certain amount of that products will be rewarded with discount or extra items. This strategy will motivate the current customer to continue buying their products.

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