Marketing Case Study on Nestle
Case Study on Nestle
Nestlé’s baby formula products affect the lives of innocent infants nationally and globally in a negative manner because of the organization’s poor communicative methods. This wealthy company has failed to thoroughly convey messages and instructions for their products as they branched out to non-speaking countries. This is just one of many communicative failures Nestle has committed, and it is the reason why this company has experienced infamous boycotts that are worthy of research and recognition.
In the following case study paper, we will comprehensively explain various topics dealing with Nestlé’s baby formula products including the following:
- The history and past reputation of its products that were distributed to developing countries.
- Marketing strategies and why they were unsuccessful.
- The demographics and statistics of its consumers and sales.
- The current state of the company today.
History and Past Reputation of Nestle Baby Formula Products
This company dates back to 1867, when a Swedish merchant, chemist and inventor named Henri Nestle founded it. The Swedish-based company was the first to produce and market infant formulas to mothers who were either unable to breast-feed and/or to lighten their burdens of motherhood. Like many inventors in historical text, Henri Nestle named his company after his own last name to personify the commercial business. His main goals were to create secure and safe products that would provide nourishment for little ones born to a family environment. He strived to be recognized for producing traditional baby formula, both milk and soy-based, that would be the central element in Nestle’s corporate identity (Berkich, 2003).
Nestle’s first commercially sold product was condensed milk, which was produced in Europe. Since that time, Nestle has become an oligopoly; producing other types of items that consumers may use. Aside from baby formulas, their products include the number one bottled water known as Nestle Perrier, and are the leader in instant coffee, and many of the popular candy out there today (Mantell, 2003). In addition, it is the manufacturer of cosmetics such as L’Oreal, eye care and nutritional supplements. Nestle’s contribution to this industry has made him the world’s favorite brand in over 489 factories worldwide. However, he has lost sight of providing consumers with high-quality nutritious foods for infants, especially as he began to seek success in international countries (Brabeck, 2003). Therefore, his quality image and reputation is no longer just that; rather it has become intricate according to different consumers.
Like many large companies, Nestle had a vision of expanding and emerging outside of the United States. Perhaps, there was a specific reason that he branched out to countries like China, India, Russia, and Latin America. In these countries, it is culturally accepted that women are homemakers and child bearers. Therefore, women tend to stay home and care for their many children. Maybe this led Nestle to believe that they would spend large sums of money towards baby formulas because not all women are physically capable to breast-feeding, especially after having several children. In addition, mothers sought easier and quicker methods to nourish their children. Nestlé’s business tactics would have succeeded in these countries if he had clearly communicated effectively through his products.
Marketing Strategies and Why They Were Unsuccessful
Nestle is the largest food producer in the world and controls about forty percent of the global baby formula market. Interestingly enough, the baby formula market is a multibillion-dollar enterprise whose products are intended to insure the proper nurturing of precious infants, and helps lighten the burdens of motherhood. However, Nestle has created more problems for both infants and mothers by failing to successfully utilize the various media forms throughout its campaign; thus, creating poverty and disaster in third world countries.
As the leading vendor of baby formula, both milk and soy-based, its annual profits exceed over $100 billion dollars. One of its main marketing strategies was the idea of expanding and branching out to emerging markets in foreign countries. However, in doing this, it failed to recognize the language barriers, economy as well as environmental hazards in each individual country. Their strategies geared towards the U.S. were successful and led to very high sales. One the other hand, the same effort was not placed forth towards their marketing campaign in third world countries. Nestle performed a poor job in marketing towards its targeted audience in these countries because they did not place equal effort as they did for the U.S. market. Nestle did several things during their campaign in third world nations.