Case 1 Nestle: The Infant Formula Controversy
Nestle, among other companies that market infant formulas, has been the focus of attack from different groups. The source of this controversy sprang from the number of deaths of babies from Third World countries that are alleged to have been the result of aggressive advertising of the Nestle infant formula. Nestle stands by its position that it has been responsible in its product marketing stressing, among other things, that (1) it has never advocated bottle feeding instead of breast feeding and (2) that the infant formula has a vital role in proper infant nutrition as a supplement. Nevertheless, Nestle adopted measures to address ...view middle of the document...
As much as possible, they will try to dissuade their customers in using the infant milk formula.
On the other hand, Nestle of course is a business and wants profit. There are conflicting interests by the management between sales and concern for consumers.
Economic Factors Implication on Nestle
1) Economic situation of the Third World countries:
a) The money value is low
b) Low level of income
c) A large portion of people are still below the poverty line
d) High unemployment rate
2) Nestlé didn’t consider the economic condition impacting the pattern, behavior, and needs of consumer when the company marketed infant formula in the developing country. They sold the formula in the developing countries as they did in the US and other more developed nations. The cost of the formulas was a problem for some Third World families. For example, in 1974, in Nigeria, the cost of feeding a 3 month old infant was approximately 30% of the minimum urban wage and by the time the infant is 6 months, the cost would have risen to 47%. This was what led some mothers to dilute the mixture up to 3 times what it ought to be.
Nestlé faced a lot of scrutiny and even had boycotts to deal with because of their marketing approach in less developed nations.
● There is a large decrease on breast feeding because it is “the fashionable-thing-to-do” and because people are putting it to them with their aggressive marketing tactics
● In 1974, there is an increase access to radio and television; Large intensive advertising and promotion of infant formula; Radio jingles extol to the wonders of the “white man’s powder that will makes babies grow and glow; “milk nurses” visit nursing mothers in the hospital and their homes and provide samples of formula.
● Many parents dilute the formula to stretch their supply. Some even believe the bottle itself has nutrient qualities and merely fill it with water, resulting to extreme malnutrition; For a four month-old baby, one can formula should have lasted just under 3 days; the mother said one lasted 2 weeks to feed both children
● Public activism is also increasing
Implication on Nestle
● Discouraged breast feeding practices among third world mothers and have led to the misuse of products have cause Nestle to be boycotted and scrutinized
● Better intelligent gathering requires
- Nestle is the pioneer in the milk infant formula dating back as early as 1867.
-Being the industry leader, Nestle is assumed to have the highest funding in terms of research and development, as possess significant advantage over its such competitors in terms of technology access, licensing and patents
- The current technology on infant formula can be described as a maturing technology yet continuous development is taking place.
- Associated/Dependent technologies include researchers derived from the medical field.
- The infant formula product’s rate of obsolescence is...