Reputation scandals and lawsuits related to violation of ethical and social standards significantly affect the income of companies. Proof of this statement is the famous case with the activities of Nestle in the countries of the Third World. International organizations and local communities have accused Nestle of aggressive and dishonest advertising as well as a violation of social standards. The purpose of this paper is to answer several questions regarding the change in Nestlé’s ethical model through the prism of marketing management.
Company’s Possible Responsibilities in the Framework of Nestle Situation
Nestle’s found itself in a very complicated situation, which, as the study shows, leaves a negative reputation mark even today. In a similar case, any other company could take two of the following marketing management strategies that are designed for the current situation and the solution of future potential reputation issues. A procedure that is designed to resolve the present problem involves the recall of all products shipped to Third World countries. Sony did the same when a person suffered from the explosion of one of the elements, namely the battery, of their new smartphone model due to errors in the design of the component (Dunn).
Implementation of the second strategy implies a change in the design of the instruction that would allow localized information to be placed on cans and packages with a formula (“Retailers: Product Safety and Your Responsibilities”). Manufacturers, importers, and retailers should also be legally responsible for disseminating information, which would ensure several stages of product safety (“Retailers: Product Safety and Your Responsibilities”). For example, the United States Consumer Product Safety Commission adheres to a similar system instruction.
Bad Reputation Avoiding and Product Marketing
During the study of cases such as the situation with Nestle, one wonders how the company could kill two birds with one stone. There is a hypothetical marketing solution to this challenging question. The company’s central office may open subsidiaries in the native country or the countries of the Third World and rebrand a specific product, which in this case is infant formula. Consequently, the charges would not concern Nestle, and the production and sale of formulas continued. The choice of a subsidiary model rather than partnerships with other international corporations is due to the fact that the effectiveness and sustainability of a joint venture largely depend on reputation parameters (Deephouse et al. 13). Many companies are looking for partners with a similar level of market and consumer reputation.
Corporate Monitoring as Legal Protection Measure for Nestle
The logical question arises of how, after such a long and complex corporate litigation, Nestle and other corporations can protect themselves in the legal field. Due to the fact that this topic affects many business processes, one can assume that the most acceptable marketing solution would be the implementation of monitoring. It is important to note that monitoring should not be performed by internal or private service, but by an international organization. One such organization is the International Association of Independent Corporate Monitors (“Welcome to the International Association of Independent Corporate Monitors (IAICM)”). It is a group of competent and erudite monitoring specialists whose skills will help provide legal protection for companies.
Ethics and Social Responsibility Analysis
It is necessary to analyze whether the actions that Nestle took to market the infant formula are ethical and socially responsible. It is essential to consider such factors as the high cost of the product, the lack of informative instructions, intense and often dishonest advertising, and incorrect sale and sampling processes. Taking “Ethical and Socially Responsible Decisions” as an evaluation criterion, it can be stated that Nestlé’s marketing policies in Third World countries are not socially responsible. One of Nestle’s ethical principles is “respect for others” (“Ethical business”). Consequently, it can be concluded that Nestlé’s actions do not pass an ethical review.
Competent Response to New Accusations and Claims
The essence of the new allegations relates to such dangerous topics as HIV infection. This can significantly damage the reputation of not only Nestle but the entire baby food market. Nestle should take progressive measures to solve this problem. Despite the socio-economic situation in many Third World countries, many citizens have access to the Internet and social media services. Nestle can start a promotion and awareness campaign through local and international influencers to inform consumers (Booth and Matic, 184). TV and radio still occupy a considerable share of the media market in these countries; therefore, appropriate informative advertising should be developed for this field.
This work answers five questions regarding Nestle’s marketing in Third World Countries and the ensuing litigation with international organizations that caused the corporation to change its model of social policy. This scandal was caused by frequent illnesses and disorders among infants caused by a combination of factors such as aggressive advertising, high cost of products, and incorrect interpretation of instructions for use. In addition to personal opinions, evidence was provided from trusted sources related to marketing management. Such testing greatly contributes to the development of marketing thinking among future specialists in this field.
Booth, Norman, and Julie Ann Matic. “Mapping and leveraging influencers in social media to shape corporate brand perceptions.” Corporate Communications: An International Journal, vol. 16, no. 3, 2011, pp. 184-191.
Deephouse, David, et al. Global Aspects of Reputation and Strategic Management. Emerald Group Publishing, 2019.
Dunn, Matthew. “Man suing Sony for after claims his Xperia smartphone exploded leaving him with third degree burns”. News, 2017. Web.
“Ethical business.” Nestle, 2020. Web.
“Retailers: Product Safety and Your Responsibilities”. United States CONSUMER PRODUCT SAFETY COMMISSION, n.d. Web.
“Welcome to the International Association of Independent Corporate Monitors (IAICM).” IAICM, 2020. Web.