Nestle Case Study
Nestle Case Study

1. Identify Problems and Opportunities * The problem that Nestle is facing in this case is high mortality rate of infant deaths. * They are being accused of giving formula to third world countries resulting in high death rates. * They were using faulty machinery which contaminated the formula * They did not market the formula to the consumers correctly. 2. Situation Analysis * In this case, Nestle under the General No Go’s they fell under Political. * Babies were fallen ill by the formula and it was traced back to Nestle. * Political they were facing Boycotts of the infant formula in third world countries that would reduce their revenue. * Cultural they did not advertise to the consumer properly in the third world countries resulting in improper use of their product. 3. Strategic Marketing Issue * Product: Gerber, Pet Foods, Frozen Meals, Water, Coffee, Candy etc… * Price: The price of the can $17-30 Dollars * Distribution: Nestle use a joint venture * Selecting a Target Market: They target markets of family that are middle class, but they also target consumers who can’t afford formula. * Phase of life cycle: They are in the declining stage in third world countries, but they are in the mature stage. 4. SWOT Analysis
Strengths
* High market share
* Size and financial power
* Strong brand portfolio
* wide range of products
* Ability to customize global products & brands to local preferences
* Operational efficiency
* Strong R&D
* Geographically diverse of the major food and beverage companies
* Noor the SOOOOR KA BILLAH
Weaknesses
* Limited presence in organic foods market
* Unwillingness to divest weaker brands
* Lack in retail presence
* Didn't promote fully their new product LC1
Opportunities
* Integration of new acquisitions in growth markets (i.e., RKF in Russia, Henniez)
* Growth in international & emerging markets
* Transition to a "nutrition and well-being" company
* Continuous growth in the US coffee market
* Ethical business activities and support in community
* Fair Trade agreements for cocoa and other products produced in third world countries.
Threats
* Private label growth
* Allegations of unethical business activities
* Increased competition in bottled water from niche brands
* FDA regulations

5. Alternative Courses of Action * They need to develop a better plan on how they are going to advertise their products in third world countries. * Do tutorials to teach mother how to use the product * Have factories run monthly inspections * Nestle needs to compensate family that lost babies 6. Recommendations * Compensate * Take product off the shelf * Apologize to the public * Find solutions to fix the product

Nestlé boycott
From Wikipedia, the free encyclopedia
The Nestlé boycott is a boycott launched on July 7, 1977, in the United States against the Swiss-based Nestlé corporation. It spread in the United States, and expanded into Europe in the early 1980s. It was prompted by concern about Nestle's "aggressive marketing" of breast milk substitutes (infant formula), particularly in less economically developed countries (LEDCs), which campaigners claim contributes to the unnecessary suffering and deaths of babies, largely among the poor.[1] Among the campaigners, Professor Derek Jelliffe and his wife Patrice, who contributed to establish the World Alliance for Breastfeeding Action (WABA), were particularly instrumental in helping to coordinate the boycott and giving it ample visibility worldwide.Groups such as the International Baby Food Action Network (IBFAN) and Save the Children claim that the promotion of infant formula over breastfeeding has led to health problems and deaths among infants in less economically developed countries.[2][3] There are four problems that can arise when poor mothers in developing countries switch to formula:Formula must normally be mixed with water, which is often contaminated in poor countries, leading to disease in vulnerable infants.[4] Because of the low literacy rates in developing nations, many mothers are not aware of the sanitation methods needed in the preparation of bottles. Even mothers able to read in their native tongue may be unable to read the language in which sterilization directions are written.Although some mothers can understand the sanitation standards required, they often do not have the means to perform them: fuel to boil water, electric (or other reliable) light to enable sterilisation at night. UNICEF estimates that a formula-fed child living in disease-ridden and unhygienic conditions is between six and 25 times more likely to die of diarrhea and four times more likely to die of pneumonia than a breastfed child.[5]Many poor mothers use less formula powder than is necessary, in order to make a container of formula last longer. As a result, some infants receive inadequate nutrition from weak solutions of formula.[6]Breast milk has many natural benefits lacking in formula. Nutrients and antibodies are passed to the baby while hormones are released into the mother's body.[7] Breastfed babies are protected, in varying degrees, from a number of illnesses, including diarrhea, bacterial meningitis, gastroenteritis, ear infection, and respiratory infection.[8][9][10] Breast milk contains the right amount of the nutrients essential for neuronal (brain and nerve) development.[11] The bond between baby and mother can be strengthened during breastfeeding.[9] Frequent and exclusive breastfeeding can also delay the return of fertility, which can help women in developing countries to space their births.[12] The World Health Organization recommends that, in the majority of cases, babies should be exclusively breast fed for the first six months.[13]Advocacy groups and charities have accused Nestlé of unethical methods of promoting infant formula over breast milk to poor mothers in developing countries.[14][15] For example, IBFAN claim that Nestlé distributes free formula samples to hospitals and maternity wards; after leaving the hospital, the formula is no longer free, but because the supplementation has interfered with lactation, the family must continue to buy the formula. IBFAN also allege that Nestlé uses "humanitarian aid" to create markets, does not label its products in a language appropriate to the countries where they are sold, and offers gifts and sponsorship to influence health workers to promote its products.[16] Nestlé denies these allegations.[17]Nestlé's marketing strategy was first written about in New Internationalist magazine in 1973 and in a booklet called The Baby Killer, published by the British NGO War On Want in 1974. Nestlé attempted to sue the publisher of a German-language translation (Third World Action Group) for libel. After a two-year trial, the court found in favour of Nestlé because they could not be held responsible for the infant deaths 'in terms of criminal law',[18] despite the fact that its aggressive marketing strategy had led to the deaths of thousands of babies who did not have access to clean water with which to mix the milk powder and, who needed the antibodies in their mother's milk as an essential part of their immune system. Because the defendants were only fined 300 Swiss Francs (just over US$400, adjusted for inflation[19]), and Judge Jürg Sollberger commented that Nestlé "must modify its publicity methods fundamentally", TIME magazine declared this a "moral victory" for the defendants.[20]The widespread publicity led to the launch of the boycott in Minneapolis, USA, by the Infant Formula Action Coalition (INFACT) and this boycott soon spread to Australia, Canada, New Zealand, and Europe. In May 1978, the US Senate held a public hearing into the promotion of breast milk substitutes in developing countries and joined calls for a Marketing Code. In 1979, WHO and UNICEF hosted an international meeting that called for the development of an international code of marketing, as well as action on other fronts to improve infant and early child feeding practices. The International Baby Food Action Network (IBFAN) was formed by six of the campaigning groups at this meeting.[15]In 1981, the 34th World Health Assembly (WHA) adopted Resolution WHA34.22 which includes the International Code of Marketing of Breast-milk Substitutes. The Code covers infant formula and other milk products, foods and beverages, when marketed or otherwise represented to be suitable as a partial or total replacement of breast milk. It bans the promotion of breast milk substitutes and gives health workers the responsibility for advising parents. It limits manufacturing companies to the provision of scientific and factual information to health workers and sets forth labeling requirements.[21]In 1984, boycott coordinators met with Nestlé, which agreed to implement the code, and the boycott was officially suspended. In 1988 IBFAN alleged that formula companies were flooding health facilities in the developing world with free and low-cost supplies, and the boycott was relaunched the following year.[4]In May 1999 a ruling against Nestlé was issued by the UK Advertising Standards Authority (ASA). Nestlé claimed in an anti-boycott advertisement that it markets infant formula “ethically and responsibly”. The ASA found that Nestlé could not support this nor other claims in the face of evidence provided by the campaigning group Baby Milk Action.[22]In November 2000 the European Parliament invited IBFAN, UNICEF, and Nestlé to present evidence to a Public Hearing before the Development and Cooperation Committee. Evidence was presented by the IBFAN group from Pakistan and UNICEF's legal officer commented on Nestlé's failure to bring its policies into line with the World Health Assembly Resolutions. Nestlé declined an invitation to attend, claiming scheduling conflicts, although it sent a representative of the auditing company it had commissioned to produce a report on its Pakistan operation.[23][24][25]The Nestlé boycott is currently[when?] coordinated by the International Nestlé Boycott Committee, the secretariat for which is the UK group Baby Milk Action.[26] Company practices are monitored by the International Baby Food Action Network (IBFAN), which consists of more than 200 groups in over 100 countries.In parallel with the boycott, campaigners work for implementation of the Code and Resolutions in legislation, and claim that 60 countries have now introduced laws implementing most or all of the provisions.[27]their shops and vending machines. In the United Kingdom, 73 student unions, 102 businesses, 30 faith groups, 20 health groups, 33 consumer groups, 18 local authorities, 12 trade unions, education groups, 31 MPs, and many celebrities support the Nestle boycott.[28][29]Nestlé claims that it is in full compliance with the International Code.[30] According to Nestle CEO Peter Brabeck-Letmathe, "we also carry out annual audits on WHO Code compliance with a sample of Nestlé companies, and we investigate any substantiated claims made by those who believe we have broken the Code.... If we find that the Code has been deliberately violated, we take disciplinary action."[31] The company maintains that many of the allegations are unsubstantiated, out of date, or use IBFAN's own non-standard interpretation of the Code.[17]In May 2011, the debate over Nestlé's unethical marketing of infant formula was relaunched in the Asia-Pacific region. Nineteen leading Laos-based international NGOs, including Save the Children, Oxfam, CARE International, Plan International and World Vision have launched a boycott of Nestlé and written an open letter to the company. Among other unethical practices, the NGOs criticized the lack of labelling in Laos and the provision of incentives to doctors and nurses to promote the use of infant formula.[32]An episode of the TV show The Mark Thomas Product produced by the British Channel Four in 1999 investigated the boycott and Nestlé's practices concerning baby milk. Mark Thomas attempted to find evidence for claims against Nestlé and to speak to heads of the company. In one portion of the show he "received a tin of baby milk from Mozambique. All instructions are in English. 33 languages and dialects are recognised in Mozambique. Portuguese is the official language. However, only about 30% of the population can speak it. English is usually the second language for people in Mozambique.[33]In 2001, comedian Robert Newman and actress Emma Thompson called for a boycott of the Perrier Comedy Award, because Perrier is owned by Nestlé.[34] An alternative competition called the Tap Water Awards was set up the following year.[35]In 2002, authors Germaine Greer and Jim Crace withdrew from the Hay Festival in protest over Nestlé's sponsorship thereof.[36]A 2007 article in The Guardian highlighted aggressive marketing practices by Nestlé in Bangladesh.[4]