Case Study Of Nestle: The Infant Formula Controversy

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Register to read the introduction… . No use of infant pictures on labels . No point-of-sale advertising

No financial or material inducements

to promote products

. . . Labels and educational materials clearly stating the hazards
Limitation of supplies to those requested in writing and fulfilling genuine needs for breast milk substitutes A statement of the superiority of breast feeding on all labels/materials

No samples to physicians except in three specific situations: a new product, a new product formulation, or a new graduate physician; limited to one or two cans of product

THE ISSUES
Many issues are raised by this incident and the ongoing swirl of

culturalchange.Howcan a companydeal witha worldwide boycott of its products? Why did the United States decide not to support the WHO code? Who is correct, WHO or Nestle? A more important issue concerns the responsibility of an MNC marketing in developing nations. Setting aside the issues for a moment, consider the notion that, whether intentional or not, Nestle's marketing activities have had an impact on the behavior of many people. In other words, Nestle is a cultural change agent. When it or any other company successfully introduces new ideas into a culture, the culture changes and those changes can be functional or dysfunctional to established patterns of behavior. The key issue is, What responsibility does the MNC have to the culture when, as a result of its marketing activities, it causes change in that culture? Finally,how might Nestle now participate in the battle against the spread of HIV and AIDS in developing
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The pamphlet was a reprint of an earlier one entitled "Bottled Babies," published by a similar British group. Both alleged that false advertising had prompted mothers in LDCs to use infant fonnula instead of breast feeding, and consequently caused the deaths of thousands of children. However, the original pamphlet had not mentioned Nestle or any of the other companies by name, and thus did not raise the issue of libel. Three of the charges, which Nestle subsequently withdrew, related to allegations made in the pamphlet about Nestle's promotional methods in LDCs. The fourth charge, which led to a judgment against thirteen members of the group in June 1976, focused on the defamatory title ''Nestle Kills Babies." In his decision, the judge stated that the cause behind the injuries and deaths was not Nestle's products; rather, it was the unhygienic way they were prepared by end-users. Although Nestle won its case, the finn's victory was diluted by (I) having to pay one third of the court costs and (2) being told by the judge to change its marketing methods to prevent further misuse of its products. The defendants were ordered to pay $120 each in damages to Nestle and two thirds of court costs. Suggestions Companies selling consumable products (foods, beverages, phannaceuticals) to LDCs have long recognized the need to adapt their promotional techniques to their consumers who are, by and large, poor and illiterate. In recent years, one particular group of food producers-those firms making infant formula and other milk products-has come under severe attack by various religious, consumer and governmental organizations. Criticism focuses on two issues: (I) that companies allegedly use false advertising to induce mothers to

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