Nestle Marketing Tactics - Marketing Essay Example
Nestle Marketing Tactics
Introduction to the Nestle Baby Formula Controversy:
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Nestle is a highly decentralized multinational company which has its presence in multiple countries. The company itself however is a Swiss-based company. In 1970’s however the company underwent a boycott for its products when it marketed baby formula products to the people of Africa.
The controversy surrounded round the facts that the formula milk was inferior in quality and did not provide immunologist characteristic that are existent in breast milk. There was another fact that contributed to the controversy which was that due to poverty in the African region the mothers tended to make a diluted form of the infant formula milk to make the milk carton last longer than the prescribed period. This resulted in the infants being starved and suffering from malnutrition. Meanwhile the mother’s stop producing the breast milk in the two month duration they were using the formula milk. As a result when they were unable to afford the formula milk and tried substituting it with breast milk, it was not available. This ended up in increasing the death toll for infants in the 1970’s.
Nestle was charged with providing insufficient information to the customers about the consequences of using infant formula and using unethical marketing tactics. This resulted in a 7 year ban on Nestle products and strongly affected the company’s headquarters in Switzerland. Since then the company has tried to be more effective in its corporate responsibility towards the society and has tried to provide products which are beneficial to the customers. It is now effective in researching its product’s imminent effects in the global business world.
Ethical implications of the Controversy:
The ethical implications for the controversy surrounding the Nestle marketing and selling of Infant Baby Formula included the following
Insufficient information relayed onto the customers for the use of infant formula and its affects on the breast milk production in mothers.
Misinformation concerning the daily dosage of infant formula required for the infant milk formula.
Unethical marketing practices where the customer was kept in the dark about the implication of using baby formula.
Lack of education provided to the consumers relating to the hygienic preparation method of the baby milk formula.
The Nestle boycott resulted in the company ascertaining the following two things:
The company is affected by socio-cultural factors all around the world and as a result much deeper consumer insight is required prior to marketing of products.
“If the company commits itself to acquiring sociopolitical competence, and instills that commitment in all ranks, it can become as dynamic and assertive in shaping its political environment as it is in shaping its financial and marketing environment.” (Pagan, 1986)
Application of Kant’s Philosophy to Nestlé’s Marketing Tactics:
The Kant’s Theory states that there are moral requirements which are established on a standard of rationality which is known as the ‘Categorical Imperative’. In this context being immoral is determined by not abiding by the categorical imperative. “This argument was based on his striking doctrine that a rational will must be regarded as autonomous, or free in the sense of being the author of the law that binds it. The fundamental principle of morality — the CI — is none other than this law of an autonomous will. Thus, at the heart of Kant’s moral philosophy is a conception of reason whose reach in practical affairs goes well beyond that of a Human ‘slave’ to the passions.” (2004, ‘Kant’s Moral Philosophy’)
Under Kant’s theory an act is considered morally correct and in relation with the comparative Imperative if the it is possible to logically and universally carry out the act and if the act is universally accepted by everyone. Another factor that ads to the determination of morality is that the act does not treat the people as means but as ends, this is in coordination with Rawl’s theory.
Nestlé’s marketing tactics were not morally incorrect as they did not relate to the comparative imperative. This is because the marketing strategy used the consumers as a means for increasing profits. Nestle was trying to increase the size of its target market by expanding to the urban and rural areas of Africa for increasing the productivity and revenue for its food products in the baby/infant category. Aside from this the marketing tactics used by Nestle are not possible to be universally applied and accepted by everyone. Nestle tended not to properly educate the consumers about the procedure regarding the dosage and the usage of the infant milk formula. This resulted in irregular practices being carried out by the consumer which resulted in diluted formula milk being given to the baby’s who suffered from malnutrition. This again is against the categorical imperative and therefore immoral in nature.
Application of Rawl’s Original Position Philosophy to Nestlé’s Marketing Tactics:
Rawls theory states that the justice as fairness and it is in favor of developing a society which is specifically existent to help the less fortunate. The theory is considered to be a liberal theory and mentions the Kant’s categorical imperative concerning treating the person only as an end and not as a means.
The original position is a key feature of the Rawls theory which is simply an idea that helps the discussion. In it members imagine themselves in a rule and government free environment and try to devise a government which is best suited to the situation. This helps is figuring out the best practices in context.
Even if Nestle existed under the veil in Rawl’s original position its acts and marketing tactics would be wrong as the company did not strive to conduct consumer research for the specific consumers in the African region. Under the best policies that would have been devised in the original position, under the veil of ignorance, the company would have devised the best way to educate the consumers about the product, they would have developed specific and focused marketing campaigns which highlighted the benefits of using formula milk as well as the consequences of substituting the breast milk with the formula milk. As this did not happen, Nestlé’s marketing tactics were not morally and ethically correct when using Rawls theory.
The Utilitarian Theories:
The rule utilitarian theory states that instead of focusing on the consequences of a certain act, the theory strives to determine the rightness of the act by investigating the best rule of conduct for the situation. However the problem with the rule utilitarian theory lies with the fact that it tends to focus on the consequences for a general rule rather than for the particular rule. Nestlé’s marketing tactics were morally correct based on the rule utilitarian theory as they did strive to focus on the best way to redeem their actions in the particular situation.
The act utilitarian theory focuses on the implication of a particular act and determining whether the act is ethically and morally right. The problems with the act utilitarian theory reside with the fact that it is too submissive and tends to justify everything as well as it is seems more perfect on paper than it actually is. The actions of the company were morally wrong as they were not focusing on the act pertaining to using the product and did not inform the consumers about the consequences of using the product.
Pagan Jr., Rafael D., (1986), The Nestle Boycott: Implications for Strategic Business Planning, Journal of Business Strategy, available at: http://web.ebscohost.com/bsi/pdf?vid=6&hid=112&sid=31121d6c-9967-4e6c-a1fd-e6189ec14a93%40sessionmgr107
Sethi, S. P., Etemad, H., (1986), Sociopolitical Forces: The Globalization of Conflict, Journal of Business Strategy, available at: http://web.ebscohost.com/bsi/pdf?vid=2&hid=118&sid=bf988cb7-0e75-4c6d-ae00-74e1d7d90021%40sessionmgr106
(2004), Kant’s Moral Philosophy, Standford Encyclopedia of Philosophy, available at: http://plato.stanford.edu/entries/kant-moral/
Mautner, T. (ed), Rule-Utilitarianism, The Penguin Dictionary of Philosophy, available at: http://utilitarianism.com/ruleutil.htm
Mautner, T. (ed), Act-Utilitarianism, The Penguin Dictionary of Philosophy, available at: http://utilitarianism.com/actutil.htm
Jedicke, P., (1996), Notes on John Rawls, available at: http://infotech.fanshawec.on.ca/faculty/jedicke/rawls.htm