Term Paper on "Nestle's Marketing and Social Responsibility"

Term Paper 5 pages (1813 words) Sources: 15

[EXCERPT] . . . .

company's marketing and social responsibility. While this study will not deal exclusively with one sector of the company, it will deal very extensively with the bottled water sector of the Nestle Corporation, Nestle Waters SA. The bottled water sector provides an excellent view of the double-edged sword that the bottled water product provides for the marketing and social responsibility issues for Nestle. At its worst, Nestle is an ecological disaster, robbing local communities of precious drinking water supplies for profit. At best, it is portrayed as a warrior in the battle to provide clean drinking water to the world. In its official press releases and documents and in scholarly journal articles written with Nestle Waters SA grant money, the company is battling to put the best spin on its bottled water sector, as well as other parts of the company as well.

Nestle India signed a recent memorandum of understanding with the National Diabetes, Obesity and Cholesterol Foundation (N-DOC) to develop nutrition initiatives that help to manage diabetes. The above cooperation on increasing consumers' awareness and knowledge of their diets will see Nestle work with N-DOC to evaluate and understand the impact of local diets and changing lifestyles on the increasing incidence of the disease in India. According to Gary Tickle, Regional Business Head of Nestle Nutrition, South Asia "The Nestle Nutrition Institute promotes science for better nutrition and N- DOC conducts culturally specific, basic and applied research in the areas of diabetes, obesity, and cholesterol disorders with the help of physicians and scientists. We see this as the beginning of a strong partnership ("Nestle India," 2010)." This partnership is worth its weight in gold in terms of creating the image of Nestle as the perfect global citizen.

Nestle Waters is the U.S. nation's largest water bottle with a third of the market share.

It has the reputation though of caring only about profits and not about the amount of water it is pulling out of the ground to put into bottled water. The exploratory testing of the waters of the Wacissa River by Nestle Waters North America (the country's largest bottled water company) has raised concerns in the surrounding community, prompting a company spokesman to speak with the Journal about the project. Nestle representatives claim that they understand the residents' concerns, but claim that they if they're given the green light to pump water in Jefferson, they would not do anything that would have an adverse effect on that water system. Nestle representatives said that according to the research they've done the Wacissa River pumps 250 gallons of water per day. They say they would only be taking less than one percent of its total volume. The Suwanee River Water Management District says water bottling plants under their watch are allowed to take 2.9 million gallons of water per day. Right now they oversee three plants that are only taking about 705-thousand gallons per day. This means that each individual plant is taking much less than what they're permitted to take (Ader, 2010). This is a theory that the Nestle company has to pound on in the public consciousness.

The above issue and its controversy are reflected in the scholarly literature as well. In fact, the idea of selling local water was not Nestles to begin with, but occurred in the autumn of 1998 to an enterprising St. Petersburg, FL city council member who originated the idea. The city owned a parcel of land which included Weeki Wachee Springs

for $150,000. Since that time, the springs had been leased and developed into a park. Now, the city would be selling the water that flowed in this park. At issue is the ability of the city of St. Petersburg to sell water from the public domain to a private company. For some two thousand years, water has been common property and exclusively in the public domain and many in the body politic are not comfortable with the "market" determining who will get this scarce resource. The city sold and marketed "Magic Mermaid Water" and made tremendous profits as the bottled water business took off during the 1990s (Samek, 2004, 569-570).

The key case law that Nestle has to deal with is the State of Michigan Supreme Court case of Michigan Citizens for Water Conservation v. Nestle Waters North America Inc. Bollman. Justice Robert Young wrote the write the state Supreme Court's majority opinion in 2007. The underlying issue involved whether Nestle could operate a bottled water plant in Western Michigan, pumping from the watershed and potentially reducing water levels in rivers, wetlands and other sources. In the case, several individuals and a group called Michigan Citizens for Water Conservation challenged the plant under the Michigan Environmental Protection Act, which allows "any person" to sue to protect the state's natural resources from "pollution, impairment or destruction." In this case, it meant that the residents could sue over how Nestle's actions might affect certain bodies of water that the plaintiffs actually visited or used. But they couldn't sue over other wetlands, because they didn't show that they came in contact with those areas. It may mean that residents from across the state can't sue over the mess. But it doesn't mean that nearby residents can't take to the courts, and some already have. Young's campaign spokesman, Tom Shields, said in response to this ad that "allowing anyone to sue for any reason" leads to "frivolous lawsuits" that "would be a disaster for Michigan Nestle Waters case, believe that if the citizen suit provision in the statute is to be narrowed, it should be done by the Legislature, not the court. Young's campaign spokesman, Tom Shields, said in response to this ad that "allowing anyone to sue for any reason" leads to "frivolous lawsuits" that "would be a disaster for Michigan business development and jobs." Others, such as one of the dissenting justices in the Nestle Waters case, believe that if the citizen suit provision in the statute is to be narrowed, it should be done by the Legislature, not the court ("Fact-Checking," 2010).

Other state efforts could also throw a wrench in Nestle's efforts to market its profitable bottled water line. The state of Maine has been engaged in efforts to tax bottled water. Nestle has six of the top 10 brands and more than $2.2 billion in bottled water sales. This makes it the largest bottled-water company in the United States. It is at the center of a water war on several fronts. As the owner of Poland Spring, Nestle has with six of the top 10 brands and more than $2.2 billion in bottled-water sales. This is the largest bottled-water company in the U.S., and it's at the center of a water war on several fronts. As owner of Poland Spring, which uses 500 million gallons of Maine water a year, Nestle could owe $96 million in tax each year in Maine if such proposals are ever passed (Thottam, 2005). Unfortunately, this would throw a major curve ball to Nestle's efforts to not only market the profitable water line, but could also soil its image as a responsible corporate citizen that it has so carefully cultivated since the 1990s. A reactionary public voting with its pocketbooks against Nestle Waters SA's products is not what it wants and it will be interesting to see how the company will work out this issue. So far, it has been able to intrude on territory that was exclusively that of local municipalities. The municipalities sought out the free market to bring them revenues. In a time of severe economic recession, it is certain that they not only can not give up the income. In addition, they can not afford to lose large corporations such as Nestle Waters SA that are willing to build bottling plants in their local areas. These plants would theoretically provide much needed jobs for these local areas and it is hard to imagine any cash strapped municipality giving this up quickly or without thought. Every cent and dollar is precious in this economy, and Nestle Waters SA is certainly banking on this fact to give it the clout to deal with recalcitrant local and state officials who they feel are gouging their market unfairly. The question is simply how freely they will wield this clout or if they will wield against these officials.

To recap, the author has presented an updated assessment of the company's marketing and social responsibility. While this study has not dealt exclusively with one sector of the company, it has dealt very extensively with the bottled water sector of the Nestle Corporation, Nestle Waters SA. The bottled water sector provides an excellent view of the double-edged sword that the bottled water product provides for the marketing and social responsibility issues for Nestle. At its worst, Nestle is an ecological disaster, robbing local communities of precious drinking water supplies for profit. At best, it is portrayed as a warrior in the battle to provide clean… READ MORE

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