VISION AND MISION

The vision for the Dutch Lady Milk Industries Berhad is “To further strengthen our
position as the leading dairy company, driving growth”. In line with Dutch Lady Milk
Industries Berhad mission of “Helping Malaysians move forward in life with trusted
dairy nutrition”, Dutch Lady Milk Industries Berhad aim to continue developing products
that contribute to a healthy society. The year saw the Dutch Lady involved in the biggest
and most in-depth nutritional study in the region, organised by their parent company

Corporate/Core Values

Dutch Lady core values are used to derive the company principles and to
transcendcompany size and its growth rate. Following are the core values of
Dutch Lady which isselling high quality natural and healthy dairy products to satisfy
customers. Secondly is, buildteam member excellence and happiness to create a work
environment where team memberscan grow and succeed to their highest potential.
Lastly is, committed to integrity, timelinessand transparency in communicating with
valuable suppliers to remain as a market leader, bycreating new, unique and innovative
dairy products.

SWOT ANALYSIS
STRENGTHS OF DUTCH LADY
- Large market presence and strong reputation.

Based on our research, we found that Dutch Lady Milk Industries Berhad ("Dutch
Lady Malaysia") is market share leader in the quality branded dairy business in Malaysia
which holding 40% of national milk market share. It was the first milk company in
Malaysia to be listed on Bursa Malaysiaand one of the largest milk companies in the
world. The Company's dairy products have a strong consumer loyalty and are represented
by strong brands such as Dutch Lady, Frisolac, Friso, Completa, Omela and Joy.
- Wide range of quality dairy products and fruit juices.

Dutch Lady Malaysia is leading in milk categories such as UHT milk, Sterilised milk
and Growing-Up Milk. Dutch Lady Malaysia is also the largest purchaser of local fresh
milk from the Veterinary Services Department.It emphasizes taste, health, convenience
and reliability.The product range consists of consumer milk, milk in powder and
concentrated form, dairy drinks, yoghurts, desserts, cream, coffee creamers, baby and
infant food, cheese, butter and ingredients.
- Excellent sales staff with strong knowledge of existing products.

Dutch Lady Malaysia provides a working environment which full with fairness,
respect and comfortable to their employees. It was being number 1 employer in dairy
industries Malaysia. It also provides paramount training and development to their
employees to sustainable success. Dutch Lady Malaysia always ensures that their
employees are continuously equipped with the necessary skills and knowledge in the
fields of human resources, marketing, sales, finance and operations.

WEAKNESSES OF DUTCH LADY

- Lack of product awareness.

Due to Dutch Lady is the first producing UHT fresh milk in Malaysia, they lack of
awareness and experience in field of UTH milk. They don’t have more information for
them to refer or consult. Since they are the first company to launch out the UTH milk,
Malaysian still don’t have the knowledge about UHT milk. So they need to do more
advertisement to develop product understanding or send trained staff to direct explain to
customer and lead to increase the cost and price of sell.

- Financial statement decreases compare with last year.

Based on the annual report of Dutch Lady, we found that Dutch Lady have low ratio of
net profit income. The higher profit margin indicates a more profitable company that has
better control over its cost compare with competitor. For every RM1 in sales, Dutch Lady
only generated RM0.14 of net profit in year 2013. Besides, Dutch Lady also show lower
quick ratio. Quick ratio shows that how many times the most liquid current asset can cover
the current liabilities. This ratio shows the Dutch Lady had RM 1.0079 of current asset for
RM 1 in every current liability and its current liability covered 1.0079 times over only in
year 2013.

- Price of Dutch Lady

The price of Dutch Lady compares with other competitor such as Nestle, Marigold, and
Farm Fresh is quite high. Based on research, the price of Dutch Lady fresh milk is RM 7.49
but Farm Fresh’s fresh milk is only RM 6.90 and Marigold is only RM 5.29. Because of in
Malaysia, most of families are middle income and they will prefer the cheaper product.
Due to the profit of Dutch Lady will decrease.

-No direct market experience

Dutch Lady has only sold in hypermarket, grocery store, supermarket, and also
convenience shop. Therefore Dutch Lady no have direct market experience since Dutch
Lady no supply to end-user abroad. Direct market can improve relationship between
consumer and supplier and also can get more information direct form consumers while
improve the product quality or satisfy customers need and want. Dutch Lady also doesn’t
have feedback section in the website so that Dutch Lady cannot get feedback from
consumer at least Dutch Lady sends trained staff to promote the product and get the
feedback and this will due to increase the cost.

OPPORTUNITIES OF DUTCH LADY

- Lack of substitution for milk powder.
Milk powder plays a crucial role in our daily life. It is a source of vitamins and
minerals such as magnesium, calcium, zinc, potassium and phosphorus. For the babies
among between the ages of four to six months and two years, they need these nutrients
from milk powder which is liquid form food. There are no more choices of liquid form
food for parent to choose for their baby. So, milk powder will be the only choice and no
more substitution for parent.
- Tremendous potential customers in market.
 Not only baby need to drink milk powder, pregnant females and senior citizens, even
adult male also need to get nutrients from milk. Undeniably, everyone can get a lot of
nutrient from milk for their teeth and bone health. Public awareness of dairy products can
help to attract new customers group and develop different type of dairy products based on
customer ages and need.
- Expansion business to other countries.
Since Dutch Lady Malaysia is the largest dairy company in Malaysia, it was reach
market saturation in Malaysia. Dutch Lady Malaysia should target to expand their
business to other countries in order to become market share leader. Dutch Lady Malaysia
must show good product image to the public in order to get more market acceptance from
the local people. This will help Dutch Lady Malaysia in their expansion business to other
countries.

THREATS OF DUTCH LADY

- Increasing cost of raw materials.
Dutch Lady Malaysia Managing Director, Rahul Colaco said that the price of raw
materials of its product has risen between 25% and 30% in the last year due to increased
demand from China. New Zealand, one of the world’s main producers of milk products
worsen the situation which will make the prices of formulated powder for children and
family milk beverage to slightly increase by 5%.
- Price of transportation increase.
Lately, Malaysia government has cut the subsidies for the RON95 petrol and diesel
by 20 Sen per litre from October 2, 2014. The retail price of RON97 petrol is RM 2.30
per litre and the price for diesel is RM 2.20 per litre. The increase of this subject causes
the price of transportation to increase because transportation needs fuel to operate.
- Implementation of Goodsand Services Tax (GST)
The GST will be effective on 1 April 2015 next year. GST is a consumption tax that
is imposed on goods and services at every stage of the supply chain, which typically
begins at the manufacturing stage and ends at the consumer stage. The GST first applies
to the manufacturer which is Dutch Lady Milk Industries Bhd at 6%. This Causes Dutch
Lady to face more problems due to the increasing cost in raw material.
- Unexpected Problems.
Recently, there has been an issue about Cadbury Dairy Milk which contains Porcine
DNA. This crisis causes consumers in Malaysia to be scared of buying product from
Cadbury Dairy Milk because the majority of Malaysian citizens are mostly Muslims. The
issue about porcine DNA founded in Cadbury Dairy Milk Chocolate made the consumer
in Malaysia to be aware of every dairy milk product in Malaysia. The awareness of the
consumers also affects the sales of Dutch Lady because the consumer doubts that Dutch
Lady’s product might contain porcine DNA too.

2.4 Marketing Mix (4Ps)

Product
Dutch Lady have different products such as Low Fat Yoghurt, UHT milk, sterilized milk,
pasteurized milk, creamers, joy juice, and also growing up milk. Dutch Lady Products are
dairy consumer products as they are destined for the use consumers with dairy nutrition
needs. Moreover, several product of Dutch Lady are consider as convenience products
that consumer want to purchase frequently, immediately and with minimal effort.

Price
Dutch Lady used volume pricing strategy as their pricing objective. Dutch Lady main
objective is to maximize their sales and get a high target return in their business since
they are the market leader. In addition, Dutch Lady also applied cost-plus pricing which
set price that cover cost with target profit. Dutch Lady also used psychological pricing
like odd pricing such as Dutch Lady Pure Farm Full Cream Milk 450ml sold as RM 4.99.
This type of pricing strategy are based on the belief that certain price or odd number just
under round numbers to make goods more appealing than others to buyers.

Place
Place strategy is known as distribution strategy. Dutch Lady distributes their products
using Retailing channel. Dutch Lady distributes products through supermarkets,
hypermarkets, and convenience stores. These retailers usually sell variety of goods,
available of high volume goods, low cost and convenience. The examples are Cold
Storage, Tesco, Giant, 7-Eleven and99 Speed mart.

Promotion
Dutch Lady promotes their products in a set of different promotional activities that has
the goal of customers to purchase. Dutch Lady sells their product with promotional prices
to encourage purchases and boost the company's sales. They can attract more customers
since they get more benefits from the product they purchased. Another method is by
engaging in sponsorship activities by sponsoring the athletes that are attending Olympic
and this could increase the awareness towards Dutch Lady Milk brand.