DUTCH LADY MILK INDUSTRIES BERHAD

DUTCH LADY MILK
INDUSTRIES
BERHAD

Goodness for Life

KER JIE MING

COMPANY BACKGROUND

PRICING STRATEGY
Intro
WHY THE STRATEGY IS

CONSIDER AS “SMART”

SUGGEST COMPANY TO FOLLOW THE
DUTCH LADY PRICING STRATEGY

WHY THE CURRENT PRATICE
COMPANY FAILED

COMPANY
BACKGROUND

In 1963, Pacific Milk Industries (Malaya) Sdn Bhd (now Dutch Lady in
Malaysia) was established to produce sweetened condensed milk at
its existing factory in Petaling Jaya. Generations in Malaysia grew
up with Dutch Lady. For many years, the company of Dutch Lady Milk
Industries Berhad (Dutch Lady Malaysia) has been committed to
providing quality dairy nutrition products for the nation. Dutch Lady
Milk Industries Berhad established its position as a sweetened
condensed milk manufacturer for the first time in the 1960s at its
factory in Petaling Jaya. More than 50 years have passed and they
are still operating in the same production plant in Petaling Jaya, but
they have expanded the range of quality and delicious dairy
products. Dutch Lady products, which include Dutch Lady Purefarm
UHT milk, Friso Gold and formulated milk powder for children Dutch
Lady Nutriplan with 5X DHA, have been distributed to Peninsular and
East Malaysia.

In 1975, in order to avoid confusion in the trade and marketplace
surrounding the name of the Company and its main product “Dutch
Baby Sweetened Condensed Milk”, the company’s name was changed
from Pacific Milk Industries to Dutch Baby Industries (Malaya)
Berhad. With a workforce of about 600 employees, Dutch Lady
Malaysia makes it their mission is to help Malaysians improve their
lives and keep people healthy with trusted dairy milk nutrition.

In 2000, the company changed its name from Dutch Baby Milk
Industries (Malaya) Berhad to Dutch Lady Milk Industries Berhad, to
be in line with its main brand Dutch Lady with a new
commitment “Goodness for Life”, “To Gain Knowledge” and “To Gain
Experience”. Owned by the Dutch parent company Royal Friesland
Campina, they have been seeking innovation to further strengthen
their position as a leading dairy company.

Dutch Lady Malaysia's products have been approved by the Halal Hub
Division of the Department of Islamic Development, Malaysia (JAKIM)
and related recognized Foreign Halal Certification Bodies and
Authorities. They manufacturing processes reflect an understanding
that Halal food and beverages are important to every Muslim
consumer. Dutch Lady Malaysia is deeply committed to upholding
these standards of Halal and to maintain the confidence of customer
in all item that leaves the Dutch Lady Malaysia plant. As a
manufacturer of Halal dairy products, our production facilities are
subject to regular routine, comprehensive site visits by JAKIM
enforcement officers. Every local Dutch Lady product bears the
official JAKIM Halal logo. The imported Dutch Lady products have
passed the Halal certification of the halal certification agency of the
country of origin recognized by JAKIM.

PRICING
STRATEGIC

Price is the most important for achieving
organizational goals. According to Kurtz and Boone
(2012), pricing strategy deals with the procedures of
setting profitable and justifiable prices. Pricing
objectives is used to guide companies to set product
pricing. Pricing is important so it must consider some
factors and the objectives of products or brands. The
marketing manager will determine the pricing
objective before determine the actual price, because
this is a guide for develop and managing marketing
strategies. Dutch Lady used volume objective as their
pricing objective. The main objective of Dutch Lady is
to maximize their sales and obtain high target return in
their business since they are the market leader.

Dutch Lady implement 4 pricing strategic to set up the
product price. The 4 pricing strategic as below:

1. Cost-based pricing
2. Market-penetration pricing
3. Product mix pricing strategies
4. Price-adjustment strategies

1. Cost-based pricing
Dutch Lady Milk Industries Berhad is using cost-
plus pricing to set price. The Dutch lady will
increase a certain percentage of profits based on
the costs incurred and sell the fair price to market
intermediaries. In addition, market intermediaries
are making a profit in between the cost bought
from Dutch Lady and the highest price can be
charged to the last consumer which is controlled by
Malaysia government. Besides, Dutch Lady is using
cost-based pricing because the milk price is
volatile,

2. Market-penetration pricing
Recently, the Dutch Lady launched a new product
which is the Dutch Lady UHT Coconut
Milk (6x200ml). Compared with other
favourite milk, it sets a lower price to
attract customer to buy and try their
new product.

3. Product mix pricing strategies
Dutch lady also uses a product line pricing strategy
because it has multiple products in one line, and
different products should have different fair prices.
Next, Dutch Lady also used product bundle pricing
to pack several bottles of milk in a package.

4. Price-adjustment strategies
Market intermediaries are using psychological
pricing when selling Dutch Lady products, such as
odd pricing. This type of pricing policy is based on
the belief that certain price or odd number just
under round numbers to make goods more
attractive than other to buyers. Next, Dutch Lady
also used promotional pricing strategies to sell
their products. Dutch Lady will provide market
intermediaries with lower normal price stock to sell
their products at promotional prices for a certain
period of time to attract more new customers,
retain existing customers and increase sales in the
short term.

RM8.99

WHY THE STRATEGY IS CONSIDER AS
“SMART”?

The price is affordable for everyone 1

The price is equivalent with the ingredient

2 that use for produce milk.

The quality of milk is better than other brand 3

of milk industry.

Indirectly influence customer mind

4 (psychological-odd ending pricing strategy)

Improve customer royalty 5

SUGGEST A COMPANY TO
FOLLOW DUTCH LADY PRICING

STRATEGY

HALEEB MILK
COMPANY

WHY THE CURRENT PRATICE
COMPANY FAILED

Haleeb Milk Company failed is 1
because it set the price base on the
costs, not the customers’
perceptions of value. This will lead
the company loss their sales and
profit as the same time.

Haleeb Milk Company also hold
prices at the same level for too

2 long. Usually, the success company
will do some promotion at certain
period of time to attract more new
customers.

Dutch Lady Milk Industry is one of the
largest milk industry in the world. Dutch
Lady also as one of the most popular
brands in country.

One of the key to success is to set the
right price to the customer. In order to gain
the higher profit, manager also should be
consider the product’s value to the
customer (VTC) which is the maximum
amount that the buyer, when fully
informed, would pay. If manager setting a
wrong product price (only aim the profit) it
will lead the company failure in long run.

In conclusion, as we can see the
Dutch Lady was implemented a good
pricing strategy in setting their product
price which is value-based pricing,
penetration strategy, product mix pricing
strategy and price adjustment strategy
(odd ending pricing strategic).

SCAN THE QR CODE BELOW FOR
THE ORAL PRESENTATION :

THANK YOU

Dutch Lady Milk Industry is one of the
largest milk industry in the world. Dutch
Lady also as one of the most popular
brands in country.

One of the key success is to set the
right price to the customer. In order to gain
the higher profit, manager also should be
consider the product’s value to the
customer (VTC) which is the maximum
amount that the buyer, when fully
informed, would pay. If manager setting a
wrong product price (only aim the profit) it
will lead the company failure in long run.

In conclusion, as we can see, the
Dutch Lady was implemented a good
pricing strategy in setting their product
price which is using the cost-based pricing,
penetration strategy, product mix pricing
strategy, price format strategy and
promotional strategy.

SCAN THE QR CODE BELOW FOR
THE ORAL PRESENTATION :

THANK YOU