The marketing of infant formula in less developed countries

Presented byPRASHANT JAIN

International Business

What is infant formula?

Infant formula is an artificial substitute for human breast milk, intended for infant consumption. Today, most infant formulas are based on either cow milk or soy milk. Some formulas, for infants with special dietary needs, are highly modified and may contain neither cow milk nor soy.

Case facts• 1920 –infant food formula was developed.• 1950- after world war II the infant formula sales increased

rapidly.• 1974- Decline of sales infant food formula.

Multi national company got benefits from LDC by, • The lack of information or necessary skills to evaluate the

multitude of new products that are introduce by the MNC’s.

• There is no competitor in the market. • There is no comparative information in the countries.• Deficient institutional mechanism for inspection and regulation

for MNC’s product and service.

Producer of infant formula in world wide

• Ross laboratories• Mead Johnson • Nestle• Abbot

Business strategy

• USA birth rate Declined in 1960 so they penetrate the market of Canada and Europe.

• The MNC target those countries where Export market is easy .These are Puerto Rico, Jamaica, Bahamas etc.

In this way they enter to LDC markets

Reason behind the growth of sales of Infant formula in LDC.

(1) Social cultural changes in LDC : a) Influence due to urbanization. b) Need to mobility in employment. c) High disposable income of people. d) Breast is considered as a sex symbol. e)Restriction in work place.

2.Health professional doctors, nurses & clinic workers endorse the use of infant formula.

3. Promotional activities of infant formula manufactures.

a) Hospital & clinics receive free samples of infant milk bottles.

b) Distribution of “Vaccination Cards” which advertise infant formula and baby care booklets , which recommend bottle feeding.

Illegal practices of MNC’s in LDC to promote their infant formula

• They target illiterate or semi-illiterate women by using pictures.

• Manufactures are only describe about bottle feeding without mentioning breast feeding

• They recommend “ Mixed Feeding” where bottle feeding used as a supplement

• Breast feeding should be diminished to included solid food in to the baby’s diet after three months

• They uses free gift & samples in country’s like Ibadan,Nigeria etc.

• Supply feeding bottles to poor women.• Promotion through medical profession.• Half or lack of information to mother.

Breastfeeding is linked to a lower risk of these health problems

• Stomach viruses• Diarrhoea• Respiratory infections• Atopic dermatitis• Asthma• Obesity• Diabetes• Childhood leukemia• Sudden infant death syndrome or SIDS• Necrotizing enter colitis, a disease that affects

the gastrointestinal tract in pre-term infants

How does manufacturer address the issue after controversy?

• International council of infant food industries(ICIFI) instruct member to adopt a code of marketing ethics.

• Provide product information & labeling about the product.

• Elimination of hospital promotion.• Adoption of own code of ethics by the MNC’s (like-Abbott)

Contamination of infant formula

Main three firms has tested positive for melamine contamination.

These three main firms are responsible for 90% of infant formula in the US,

• Abbott Laboratories • Nestle• Mead JohnsonThis contamination leads to illnesses and kidney

failure.

Summaries of total process how does the game starts by the MNC’s to exploit LDC’s market

• Nestle, Mead Johnson, Abbott laboratories provide to free milk to maternity hospitals in the third world.

• Ensuring that babies are routinely bottle fed when new borns are given bottles they are less able to suckle well.

This makes breast feeding failure likely.

The baby is then dependent of artificial milk

When the mother & baby leave the hospital the milk is no longer free.

Once home, parents are forced to buy more milk because the milk is so expensive the baby is not fed enough.Which is 50% of family’s food cost.

• This leads to malnutrition

• The water used to mix the formula is often contaminated.

• Every 30 seconds a baby dies from unsafe bottle feeding in the third world.

• Every day some 3000 to 4000 babies die.

• 1.5 million babies die every year unsafe bottle feeding

• But companies are know that unless they get babies on the bottle, they don’t do business.