1. NESTLE’: THE INFANT FORMULA
CONTROVERSY
Michelle Alese
JANUARY 17, 2017
INTERNATIONAL MARKETING
Dr. Fruzzetti
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1. Situational Analysis
Regardless of a consumer’s county or location, it can be assumed that they are quite
familiar with the Nestle’ brand. Over the years, Nestle’ has successfully established themselves
as a household brand throughout the globe. As one of the world’s largest food-processing
companies, Nestle’ has achieved sales of over $100 billion. As a global brand, Nestle’ sells an
array of everyday products, including cereals, beverages, chilled and frozen foods, and baby
food.
However, throughout the years, Nestle’ received a significant amount of negative
backlash, in regards to their baby formula. In fact, numerous negative allegations against Nestle’
eventually lead to an international boycott. The detrimental effects on Nestle’ pertaining to the
boycott lasted for 20 years, beginning with a charge that Nestle’ was directly or indirectly
involved with infant deaths in third world countries. The serious allegation was initially made by
Pan American Health Organizations, in regards to selling infant formula, which resulted in the
tragic death of countless third world infants.
Despite that there were several additional companies that sold infant formula to
consumers in third world countries, Nestle’ dealt with a tremendous portion of damaging
backlash and attention. In 1974, a 28-page article was published, exposing the idea that Nestle’
hard-sold their powdered milk formulas to consumers who weren’t aware of the potential risks
that they could incur, as a result of the product. Due to the fact that mothers in third world
countries did not possess the knowledge to use the product properly, improper use of the formula
caused irreversible damage to the health of their infants. The Third World Working group
eventually published the 28-page report in a pamphlet titled “Nestle’ Kills Babies,” with the
intent to expose the unethical actions of the Nestle’ brand.
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Strengths
As a result of being a household brand for countless years, Nestle’ possesses a strong,
established brand presence. Nestle’ certainly stands out from competing brands in the food-
processing industry, due to fierce brand recognition amongst consumers of various
demographics. In addition, Nestle’ offers a diverse range of products, in order to meet the
various wants and needs of brand-loyal consumers. As a global brand, Nestle’ is worth roughly
several billions of dollars in brand value and revenue.
When the WHO code was implemented (World Health Organization), Nestle’ agreed to
abide by their policies and expectations. In amidst of the international boycott, Nestle’ made
several adaptations, pertaining to their marketing strategies of powdered formula. The adaptions
occurred on a region-by-region basis. Nestle’ also fully agreed to strive to maintain a
constructive dialogue with health professionals located in all of the countries that the products
served. Nestle’ expressed that they always strive to encourage natural breastfeeding as the
healthiest, best, and most nutritious option for feeding infants. However, they encourage the use
of formula as a supplement, for mothers who are unable to breastfeed their babies. All in all,
Nestle’ embraced the changes that needed to be made, in order to safely market their products to
mothers.
Weaknesses
Although Nestle’ does possess strengths, they also contain several weaknesses that have
negatively impacted the reputation of their brand. As a result of the boycott, Nestle’ had incurred
financial loss, pertaining to the sales of their baby formula products. The international boycott
also led to a diminished target market of consumers. Due to the negative effects of the formula
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products on infants, consumers now question the ethicality of the Nestle’ brand and they are
more skeptical, in regards to consuming the products.
Despite the fact that Nestle’ openly expressed their willingness to accept the rules and
limitations of WHO, Nestle’ is still plagued by numerous, poor accusations. For example, a
group had claimed that Nestle’ continued to distribute free samples of powdered formula as a
promotional tactic, in order to undermine the importance of natural breastfeeding. Even though
Nestle’ claimed that the accusation was entirely false, it was believed that Nestle’ continuously
violated WHO codes. Within a short period of time, Nestle’ received several addition
accusations that accused Nestle’ of ignoring codes and acting unethically. The accusations that
were made certainly acted as a weakness for the company, due to the fact that the credibly and
reputation of the Nestle’ brand had been further tarnished.
In addition, Nestle’ also lacks a great deal of control at the point of product purchase and
consumption. Even though Nestle’ may strive to thoroughly spread awareness of the dangers of
improper product utilization, they are not able to actually control the ways in which the formulas
are utilized and consumed. Regardless of warning labels, many mothers in third world countries
lack the proper knowledge and resources, in order to ensure the proper use of the product.
Therefore, whether or not the product is safety prepared or consumed is out of Nestle’s control.
Opportunities
Interestingly enough, poor environmental factors in third world countries have presented
Nestle’ with the opportunity to further expand and regain market share overseas. In 2001, it was
concluded that breastfeeding caused approximately 3.8 million children to be contracted with
HIV. In affluent countries, mothers were strongly advised to bottle-feed their children, in order
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to avoid the contraction of this horrific virus. In contrast to the fact that bottle-feeding was
originally recognized as potentially dangerous, mothers are now being told that bottle-feeding
was actually the safer alternative. Since a vast majority of mothers are unsure of whether or not
they carry HIV, they are more inclined to bottle-feed, as a safety precaution.
Therefore, this discovery presents Nestle’ with the opportunity to continue to sell their
formula in third world countries. Overall, there is a greater opportunity for formula consumption
because breastfeeding mothers with HIV fear that they will risk the health of their infants.
Threats
The correlation between the HIV virus and breastfeeding may also act as a threat to
Nestle’. For instance, if bottle-feeding becomes largely associated with having HIV, many
mothers may decline bottle-feeding, in order to avoid stigmatization. If bottle-feeding is
stigmatized with the HIV virus, formula consumption will be at risk of further declining.
An additional risk that Nestle’ is presented with, is the international ban of their formula.
The international ban poses as a detrimental risk, due to the fact that Nestle’ must strategize, in
order to emerge as a successful brand, despite the tremendous boycott on their products. As a
result of the significant backlash of Nestle’s previous marketing strategies pertaining to formula,
mass media advertising of infant formula has continued to be phased out, altogether. Therefore,
Nestle’ must strive to adjust their marketing strategies in a way that will effectively bring
awareness to the product, while simultaneously abiding by multiple rules and guidelines. In an
ever-changing cultural society, Nestle’ is at risk of failing to properly abide by ethics, rules and
codes in regards to their baby formula products.
2. Defining the Problem
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As a multinational corporation, Nestle’ failed to take into consideration, the effects that their
marketing strategies could potentially have on consumers in third world countries. At this point
in time, Nestle’s poorly planned marketing strategies have received massive backlash, including
global boycotts of their products, in addition to serious accusations against the unethical actions
of their brand. The boycott certainly tarnished Nestle’s reputation pertaining to their formula
products, advertising messages, and their overall, disregard for the importance of human life in
underdeveloped countries. Throughout Nestle’s numerous attempts to gain market share and
advertise their products abroad, their tactics lead to accusations that they killed babies in third
world countries.
As a result of these mistakes, Nestle’ has a great deal of progress to make in the future, in
order to redeem the reputation and credibility of their brand. Today, Nestle’ is currently faced
with several essential decisions about the future progression and strategies of their brand. For
instance, Nestle’ must decide whether or not it will be beneficial to them to continue to market
their infant formulas in third world countries. If Nestle’ decides to continue doing business
overseas, the success of their brand will require new marketing tactics that accurately depict the
product, without violating any WHO codes.
3. Causes
There was certainly an abundance of causes that lead to Nestle’s current obstacles. A main
cause of Nestle’s problems was the inappropriate marketing strategies that they used to target
women in underdeveloped countries. Nestle’ initially implemented intensive advertising and
promotional tactics such as radio jingles, in order to market their product. The key messages in
their advertisements were falsely misleading by stating that, “White man’s powder will make
babies grow and glow.” This statement was incredibly misleading because in actuality, infants
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who consumed Nestle’ formula were unhealthy, underweight, and severely malnourished. The
advertisements also failed to spread awareness of product warnings and potential risks.
Therefore, women in third world countries were uneducated about the risks and they did not
know how to properly use the product.
An additional marketing tactic that lead to the international boycott, was the fact that Nestle’
distributed free samples of their formulas to women at hospitals, which depicted bottle feeding as
the new “trend.” Nestle’s marketing tactics in third world countries caused consumers to believe
that Nestle’ used their advertisements to discourage women from breastfeeding. Due to the fact
that Nestle’ is a multinational corporation, their powdered formulas had an undeniable impact on
the culture and lifestyle habits of third world country consumers. Despite Nestle’s large influence
on culture in developing countries, they failed to fully embrace their ethical responsibilities.
Nestle’ also did not take the proper precautions, when marketing a potentially hazardous product
to uninformed consumers.
4. Alternative Solutions
1) There are three potential solutions that may be implemented, in order to successfully
resolve the problem that Nestle’ has been presented with. The first potential solution involves the
idea of developing Nestle’ factories within third world country regions, in which formula
products will be produced, packaged and distributed in a way that is suitable for pregnant women
and mothers with newborn infants.
Due to the fact that contaminated water poses as a significant threat to the health and well-
being of newborn babies, Nestle’ will package pre-maid formulas that are safe to consume and
bacteria-free. The pre-bottled, pre-maid formulas will be available to women at local hospitals in
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third world countries, as well as convenience stores and shops. The factories will be strategically
built in a diverse range of regions, in order to avoid expensive shipments and to increase the
accessibility of the product to consumers. The factories will also be developed with the intent to
provide jobs to local residents. However, this option may not work out 100%, because mothers
still may misuse the bottled formulas by not rationalizing the serving sizes properly. Women in
third world countries may also struggle to afford the price of the bottled formulas.
2) A second potential solution may be for Nestle’ to partner with WHO, in order to form
support groups and educational facilities for new mothers, as well as for mothers-to-be. The
facilities will be strategically placed in the vicinity of various villages and communities
throughout third world countries.
The facilities will be designed in order to provide women with the opportunity to join
support groups. Educational opportunities will also be available at the facilities, in order to
inform women about the importance of proper product usage, pertaining to Nestle’ powdered
formulas. Nurses and educators will be available to the women on a volunteer-basis, in which
they will demonstrate and clearly explain how to prepare and use the formulas. This alternative
may not be entirely effective, due to the fact that the facilities may receive an insufficient amount
of funding and volunteers.
3) For the third possible solution, Nestle’ will partner with a nonprofit organization called
The Water Project, in order to assist with developing clean water wells in third world countries.
The main objective of The Water Project is to establish international-based teams, in addition to
providing expertise, training, and financial support for water project construction.
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Due to the fact that preparation of formula with insanitary water is the main cause of infant
malnutrition and death, Nestle’ will strive to embrace and contribute time, participation and
financial support to this organization. In addition, with every Nestle’ baby food purchase in the
United States, a percentage of the money will automatically be donated towards funding The
Water Project. Nestle’ will also promote their partnership with The Water Project across various
social media platforms, in which consumers will also have the ability to donate money to the
organization online. All in all, an increase in promotion, contribution, and financial support will
allow for an increased quantity of clean water wells. This alternative may not work 100% if the
organization receives an insufficient quantity of financial contributions or volunteers.
5. Decision
The third alternative will act as the final decision, in which Nestle’ will partner with The
Water Project, in order to assist with building clean water wells in underdeveloped countries. By
building clean water wells, women will have increased access to clean water, when preparing
Nestle’ powdered formulas. The development of clean water wells will increase the likelihood of
proper formula preparation, in addition to improving the safety and well-being of numerous
infants. Charitable donations from Nestle’ baby product purchases will also provide financial
assistance to The Water Project, in order to fund the development of clean water wells.
6. The Action Plan
In order to achieve this solution, Nestle’ will take the initiative of contacting The Water
Project, with the intent to form a partnership. Once a partnership is formed, Nestle’ will strive to
promote the partnership, throughout various media outlets. The promotions will inform Nestle’
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consumers of the goals and objectives of the organization, in addition to encouraging online
donations.
In addition, Nestle’ will start a campaign. With each Nestle’ baby product purchase, a
percentage of the purchase will automatically be donated to The Water Project. If the campaign
is successful, Nestle’ will expand the automatic donations to additional categories of Nestle’
products, as well. The donations will allow members and volunteers of The Water Project to
travel overseas to third world countries, where they will have the opportunity to build water
wells throughout various regions and villages.
Throughout the organization’s travels, social media will be heavily utilized, in order to
further promote the importance of bringing clean water to underdeveloped countries. For
instance, Nestle’ and The Water Project will work together extensively, in order to post video
clips of organization members building the water wells. Informative articles, video content and
visual images will also be published, such as images of third world country villages. In addition,
translated interviews will also be posted, consisting of mothers and families who live in third
world countries. Nestle’ will sponsor the videos, in addition to sharing them across several
digital platforms. The content will be strategically crafted, in order to bring awareness to the
cause, in addition to crafting a message that will resonate with Nestle’ consumers on a
meaningful, emotional level.
All in all, due to the fact that unsafe preparation of the formula was originally a significant
problem for Nestle’, Nestle’ will take action towards bringing clean water to their third world
country consumers. Therefore, Nestle’ will continue to sell their powdered formulas overseas,
while simultaneously taking the initiative towards improving the lives of countless mothers and
infants from across the globe.
