Nestlé Alimentana S.A. - Infant Formula

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Situation Analysis

The case is based in the late 70’s of the past century, when after the baby boom and the appearance of third world countries (Less Developed Countries – LDC’s) mothers in general were unable to feed their children with all the needed nutrients that a normal child must have, this is basically why the infant formula was created.

The infant formula was created by companies in the pharmaceutical industry and Nestlé. Nestlé easily got a high market share in the industry. The general health problems in the aftermath cause a great impact on babies. The number of sick babies increased all the time after the Second World War, because there weren’t the needed minimum required measures of neatness for babies, like
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Nestlé’s subsidiary created a marketing strategy that was unwelcomed by the US population. The INFACT held that the employees of Nestlé were like enforcing mothers to use the infant formula no matter what. With several strategies like nurses selling the product or people giving free samples at home, etc. The company makes its marketing decisions in its base operation center in Vevey, Switzerland. The marketing coordination for Nestlé S.A., in 1978 had to manage the situation with the US subsidiary; although each country can have their own marketing strategy, the decision is made in Vevey, so all the marketing strategy has to be managed as one, and a decision always affected the US image; and in 1978 Nestlé was facing a lot of conflicts. It is important to mention that “scientific” studies showed that the infant formula was killing babies and making them sicker, the Nestlé’s answer to this situation was that if mothers do not comply with the instructions and health instances (like sterilized nipples and vases) needed for the preparation and feeding of the infant formula, babies will get sick.
Major Issue

The complexity of this situation resides on the positioning of the product in the market. If the infant formula it is not well addressed and explained can get into a lot of confusion. The principal factor of discussion was that formula

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