2nd Semester, AY 2022-2023

COURSE CODE: COURSE TITLE

ACTIVITY No. 3

NESTLE: THE INFANT FORMULA CONTROVERSY

I. Main Problem
▪ What should Nestle do to gain the trust of its target consumers and to clear its
reputation in the market again after the irresponsible marketing stunt which put
infants at the risk of malnutrition and diseases?
II. Secondary Problem
▪ What are the solutions and initiatives that Nestle should do so that such
misinformation or confusion that lead to improper preparation of milk formula won’t
happen again?
III. Objective/s
▪ To improve the company’s image and reputation.

▪ To educate its consumers about proper preparation and safety.

▪ To have a strong network of loyal customers

▪ To be the market leader in the industry and to enjoy a fair share of the market
IV. SWOT Analysis
▪ Strengths
- A market leader in the industry
- Nestle offers a diverse range of popular brands that are recognized worldwide
- Strong financial performance
- Has a strong global presence in emerging markets
- Has a strong brand recognition
 - Has a wide distribution network

▪ Weaknesses
- Dependence on few key markets
- Bad publicity/ involved in controversies
- Dependence on few key products
- Lot of incidences in product recalls
▪ Opportunities
- Sustainable packaging
- Use of E-commerce
- Opportunities into untapped and emerging markets
- Health and wellness trends
▪ Threats
- Intense competition
- Regulation Challenges
- Disruption of supply chain
- Environmental concern
- Threat of new entrants
V. Alternative Courses of Action 1
▪ Nestle could educate consumers by doing demonstrations on proper product
preparation and attachment of proper labels, and warning indications.
▪ Pros
- Mothers would be more knowledgeable about the product, its features,
and proper preparation of it.
▪ Cons
- Could lead to additional costs which would be shouldered by consumers.
Alternative Courses of Action 2
▪ Nestle should conduct research and gain firsthand knowledge regarding the
literacy rate and knowledge regarding its product among the people it has
 targeted its products to, so that the company could efficiently tackle its
marketing and advertisement in accordance with the studied factors.
▪ Pros
- Nestle would be able to come up with marketing strategies that would
not cause misinterpretation or confusion among consumers as these
strategies are well suited to the literacy rate of the targets.

▪ Cons
- Such research could be time consuming and costly.
Alternative Courses of Action 3
▪ Nestle could perform initiatives to give people from third world countries an
access to clean and safe drinking water (ex. deepwell, water filtration system)
▪ Pros
- Consumers will have access to clean and safe drinking water which could
be used in the preparation of baby formula and would improve the
overall condition of the community.
▪ Cons
- Putting up deepwells and installations of water filtration systems could
cost the company a lot of money which wouldn't come back any sooner.
VI. Decision Criteria

5 (Excellent) 4 (Very Good) 3 (Acceptable) 2 (Less than Acceptable) 1 (Unacceptable)

Decision Criteria ACA 1 ACA 2 ACA 3

Costs 4 3 2

Risk 5 4 4

Ease and speed of

5 3 3
implementation

Brand Image 4 3 5
 TOTAL 18 13 14

VII. Recommendation
▪ Among the alternative solutions mentioned above, it is recommended to the
top management to consider putting up a detailed demontrations on proper
product preparation and attachment of proper labels, and warning indications
so that parents and consumers would be informed and knowledgeable. These

steps may seem simple and easy but it could lead to positive results and
feedback.

VIII. Conclusion
▪ A single word could have different meanings. False advertising and marketing
approaches especially in foods and beverages could lead to fatal and disastrous
events. Food and beverage companies like Nestle should maintain a good
reputation to stay at the forefront of the game. Educating your consumers
could help them to make informed decisions and purchases and communicate
their rights and concerns.