MKT 9764 INTERNET MARKETING & GLOBAL BUSINESS (Spring 2020)

Baruch College, Zicklin School of Business Department of

Marketing & International Business

Name:______Maria Li _______________

Case Study Assignment - Nestlé: The Infant Formula

Controversy

 How The Nestlé Baby Formula Cost Many Children's Lives

 Nestle Infant Formula U.S. Senate hearing 1978

Read the Nestle case study and watch the videos. Then provide answers to the
questions below:

1. What are the responsibilities of companies in this or similar situations?

I think one of the main companies’ responsibility in similar situations is to educate

people in the developing countries. Companies need to understand that selling to
different countries is about more than just profits, that huge responsibility comes with
those profits. Nestle learnt this the hard way. Mistakes in promotional strategy led to
malnutrition and death of many infants. That means that people who used the product
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 MKT 9764 INTERNET MARKETING & GLOBAL BUSINESS (Spring 2020)
Baruch College, Zicklin School of Business Department of
Marketing & International Business

didn’t understand the correct usage and purpose of the formula. Companies can’t just
assume that consumers have the general knowledge. Also, many of the users didn’t
have the right conditions to prepare the formula (ex. lack of clean water). Besides,
mothers became depended on this product without having enough money to re-
purchase it, therefore they were forced to dilute it with 2-3 times more water than
needed. All these actions were caused by the wrong Nestle strategy. When selling to
developing countries companies need to understand that people have very low income
therefore prices need to be adjusted to make products affordable for them.

2. What could Nestlé have done to have avoided the accusations

“killing Third World babies” and still market its product?

Nestle could’ve approached the promotion of this product differently. Instead of hard
selling Nestle could’ve started the educational program for women. That would’ve
showed women how to use the product, and that the correct usage was critical for the
babies’ health. That could’ve helped to avoid some of the deaths and accusations and
still market its product. Additionally, in the promotions Nestle could’ve focused on the
importance of breast feeding without encouraging mothers to give it up.

3. After Nestlé’s experience, how do you suggest it, or any other company, can
protect itself in the future?

I think every company needs to be extra cautious when selling products to Third World
countries, especially when it comes to essentials that people’s lives depend on.
Companies need to take into consideration possible “side effects” such as
misunderstanding of correct usage due to a low education as well as poor sanitation
and harsh living conditions. In these situations the responsibility to educate their
consumers falls on the selling company. Companies need to invest in the educational
programs before they start selling the products. They also have to avoid misleading
consumers about their product. A very important step in expanding to Third World
Countries is to conduct an extensive marketing research in order to learn more about
economic situation, healthcare, education, cultures, traditions, infrastructure and living
conditions.

4. What are your thoughts on the new report about Nestle’s marketing in the
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 MKT 9764 INTERNET MARKETING & GLOBAL BUSINESS (Spring 2020)
Baruch College, Zicklin School of Business Department of
Marketing & International Business

Philippines? Do you think they are unfair or should Nestle be held

accountable?
 Baby Formula in the Philippines: Investigating dubious marketing practices

My personal opinion that it is very scary to hear about such things still happening. I
think the international organizations such as UN should intervene in those matters and
change the situation. It seems like those baby formula companies just using people’s
low education and unawareness about healthcare to gain profits. Not only they are
breaking the laws they also conducting absolutely immoral actions in my opinion. I
would’ve thought that Nestle would learn after such horrible incidents in the 70s. I think
Nestle and other companies definitely need to be held accountable and face charges.