How Multinational Corporations Make A Killing by Marketing Tobacco, Baby Formula, Unsafe Pharmaceuticals, and Pesticides To The Third World
Culture is made up of all the diverse elements that have been created by social interaction and human commerce over the centuries. Culture is not only the systems of education, religion, entertainment and information that exist within societies, it is also "every aspect of our lives...the vehicles we use, the food we eat, the clothes we wear, the health care we receive, and the work we do." (Lowe, p 142). The products we consume help shape our cultures, and it is in this way that marketing and advertising become cultural carriers.
"To create the economic impact of selling goods, advertising operates psychologically, changing attitudes, images, cognitions, feelings, and ultimately, preferences and values. In the mass, across various people and across time, it has not only psychological, but also sociological and cultural effects." (Pollay and Gallagher, p 359).
One of the most obvious channels by which cultural imperialism functions is through advertising and marketing. MNC's (multinational corporations), whose operations transcend national borders but are mostly owned and controlled by stockholders and investors from the rich, industrialized, so-called "Western" nations, spend $200 billion a year to advertise their products around the world. (Bagdikian, p 85). This does not only involve selling products in developed nations such as the U.S., Europe, and Japan, but also NICS's (newly-industrialized countries) such as those in Southeast Asia and the Middle East, and LDC's (less-developed countries), aka the "third world," in Asia, Africa, and Latin America.
As multinational corporations have extended their business operations throughout the world, they have had to become cultural imperialists out of economic necessity. As global corporate competition has become more and more heated, companies can no longer afford to allow NIC's and less developed countries to function simply as areas to be exploited for the extraction of raw materials and the manufacturing of goods destined for consumption in the rich, industrialized world. NIC's and LDC's have been targeted as additional markets for these same goods. "The third world, for all its grinding poverty, is an increasingly profitable market for imported goods." (Bagdikian, p 85). It's ironic - MNC's have greatly expanded their finished product marketing efforts in LDC's where so many of the developed world's products are themselves now assembled.
In order to sell products, a corporation needs markets. Where these markets do not previously exist, as they do in the industrialized nations where multinationals are headquartered, they must be made to exist. The easiest method is to rely on sophisticated advertising and marketing techniques fine-tuned by the experience of a century of industrial capitalism. Immediate new markets are created by selling to the wealthy elites of less developed nations, but these same countries' poorer majorities are also targeted. Essentially, this is what MNC's are doing and have done around the world for the past few decades. They are assisted in their efforts by Western-owned ad agencies whose operations have also become increasingly global in scope.
A series of mergers by Western-owned ad agencies in the late 1980's created several truly global advertising firms. The world's biggest ad agency is now the UK's Saatchi and Saatchi, which merged with New York's Ted Bates Worldwide in 1986. It had U.S. billings of $2.5 billion and world billings of $6 billion in 1991. The next year, three other major agencies merged - Doyle Dane Bernbach Group, BBDO International, and Needham Harper Worldwide. In 1985, these agencies had U.S. billings of $3.7 billion and $5 billion in world billings. (Hachten, p 104). After buying American agencies J. Walter Thompson and Oligivy & Mather, Britain's WPP Group PLC had $2.4 billion in worldwide billings for 1989. (De Mooij and Keegan, p 352).
Creating demand for Western products is made easier by attempts to transplant Western culture to other national settings through media imperialism.
"Television availability is convenient for MNC's transferring modern consumer goods from markets where TV is the major means of promotion. MNC's purchase old American films and TV series...these are then rented to LDC television networks with MNC advertisements inserted." (Hill and Boya, p 258.)
In areas where TV sets are not widely available, MNC's rely on non-traditional advertising methods to popularize Western products.
"Mobile movies are set up in suburban areas outside major LDC cities or in well-populated rural areas. Audiences of many hundreds gather to watch John Wayne, Jerry Lewis, Marx Brothers or Kung Fu films. Between films, advertisements, often 10 to 15 minutes long, demonstrate how to use toothpastes or washing powders and what benefits are derived from them." (Hill and Boya, p 258.)
Since the early 1980s, the giant Western advertising agencies have taken renewed interest in standardizing advertising messages across national and cultural boundaries. "Notwithstanding great economic disparities among nations, certain segments of the population are becoming much more homogeneous across countries." (Rau, p 313). Also known as the global marketing approach, and "first articulated by Harvard marketing professor Ted Levitt" (Eger, p 5), this trend can be traced partially to the continued expansion of multinationals' global business operations. MNC's favor advertising standardization mainly because they want to cut costs. (Kirpalani, Laroche and Darmon, p329).
One obvious result of such standardization has been labeled "linguistic imperialism," or the spread of English and other Western languages to the detriment of indigenous languages.
"The proliferation of languages and dialects in most LDC's - 80 percent of which are multilingual - results in print media using commercial languages like English, French or Spanish or a lingua franca (combination dialect) to maximize their audience." (Hill and Boya, p 251).
It is easy to see this development as a natural one, necessary for any communications to occur in nations with multi-lingual populations. But this ignores its harmful effects. "Without question, much of the wondrous diversity of the world's many cultures and languages is being lost forever." (Hachten, p 88).
Another problem that standardization of cross-cultural marketing creates is the disruption of pre-existing value systems within target societies. "Due to cultural preferences, widespread consumer differences about products persist as do attitudes toward food, beauty, work, play, love, and politics." (Hachten, p 105). The most serious criticism of overly standardized advertising by MNC's is that it is based on Western cultural values that encourage consumption, materialism, self-indulgence, and hedonism. (Pollay and Gallagher, p 370). The Consumer Association of Penang, Malaysia described its concerns this way:
"A worrying trend is the growing influence of negative aspects of Western fashion and culture on the people in the Third World countries, including Malaysia. The (global) advertising industry has created the 'Consumer Culture' which has in fact become our 'National Culture.' Within this cultural system people measure their worth by the size of their house, the make of their car, and the possession of the latest household equipment, clothes, and gadgets." (Frith, p 4).
Critics have also charged that other negative values inherent in Western advertising strengthen negative cultural traditions which already exist in other less developed nations, such as sexism. "The notion that women are indeed stereotyped in advertisements has been given ample empirical support in both the United States and Britain. Recent studies show similar patterns in Australia and Mexico (Gilly, 1988)." (Lysonski and Pollay, p 318). Levels of sexist stereotyping in U.S. advertising are particularly troubling because U.S. ad agencies dominate the newly merged global ad agencies. A 1989 study comparing male/female role portrayals in U.S. and Swedish magazine advertisements found that "U.S. advertisers presented 81.5 percent of the females in a decorative role while Swedish advertisers depicted of 30.7 percent of the females in such a role." (Wiles and Tjernlund, p 264).
"Since many cosmetics MNC's use American brand names overseas (Helena Rubinstein, Max Factor, Revlon, for example), it is likely that MNC's are looking to influence LDC consumers towards American standards of beauty. Given the worldwide distribution of many U.S. movies and TV series, American cosmetics and beauty standards receive significant global exposure." (Hill and Boya, p 260).
In many cases, global marketing has gone beyond simple attempts to transplant Western culture to other national settings and thus create demand for Western products. Multinationals have used consumer product advertising in the third world to sell products to already poverty-stricken populations that neither need nor can afford them. Even worse, some of the MNC's most involved in international marketing seem to focus their third world marketing efforts on the selling of goods that are actually harmful to human health. The sale of many of these products are already restricted to various degrees in Western nations.
Flagrant offenders in this category include the tobacco, baby formula, pharmaceutical, pesticide and chemical industries. This is cultural imperialism at its deadliest.
As the health risks of tobacco use have become known in advanced industrial nations, the world's giant cigarette manufacturers have increasingly targeted consumers in developing nations. Global tobacco use has jumped 75 percent in the past twenty years, although it has been steadily declining in the United States and Western Europe. (Lowe, p 139). And although tobacco use has long been widespread in some developing regions, such as Southeast Asia, smoking has traditionally been a habit confined to adult men. National tobacco monopolies that did little or no advertising controlled the markets in most developing nations. "This was a case where monopolies were a good thing...they tended to be sluggish, inefficient, uninterested in aggressive promotions" (Sesser, p 85). Change would come in the late 1980s.
The U.S. tobacco industry received unprecedented help from the Reagan and Bush Administrations in forcing a series of Asian governments to allow the import and advertising of U.S.-manufactured cigarettes. Under threat of massive U.S. trade retaliation (made possible by Section 301 of the 1974 Trade Act, which gives the
President the power to unilaterally impose tariffs on another country's goods), Japan and Taiwan were forced to open their doors to U.S. tobacco in 1986, South Korea in 1988, and Thailand in 1989. (Sesser, p 85). Since then, tobacco sales have skyrocketed. Sophisticated ad campaigns have reached out to new markets by targeting Southeast Asian teenagers and women.
"According to a Gallup poll cited in a 1990 General Accounting Office (GAO) report, after Korean import restrictions were removed in 1988, smoking rates among male Korean teenagers rose from 18.4 percent in 1988 to 29.8 percent in 1989. Over the same period, the rate among female teenagers rose from 1.6 percent to 8.7 percent." (Multinational Monitor editorial, 1992).
In 1985, American companies exported 18 billion cigarettes to the Pacific Rim; by last year, that figure had risen to 87 billion, or 12 percent of the total U.S. output. In Philip Morris' 1992 annual report, the company stated that over the last year, "In Japan, our volume increased by 5 percent...to account for nearly 12 percent of this large market...Our combined unit sales in Hong Kong, Korea, Singapore, the Philippines, Malaysia, and Thailand increased by nearly 20 percent." (Sesser, p 79).
The national tobacco monopolies in these countries responded to competition from the U.S. tobacco industry by developing aggressive marketing campaigns of their own. "Since the Korean market was opened, the Korean monopoly has developed and marketed brands intended for women, known as Lilac, Jade, and Rose." (Multinational Monitor editorial, 1992).
Of these four Southeast Asian countries, only Thailand refused to drop its ad ban against U.S. tobacco advertising, although it agreed to allow U.S. tobacco imports. (Weissman, 1991, p 7). Nevertheless, U.S. tobacco companies still advertise in Thailand, using a new form of global marketing called awareness advertising. "Awareness advertising is the practice of multinational firms buying paid advertising space in a market where the product is either not allowed to be commercially imported for sale or not locally (advertised)." (Rau, p 314).
In Malaysia, the government's ban on tobacco advertising has similarly prevailed despite heavy pressure from the Bush Administration to back down. Malaysia has thus become one of the primary developing nation testing grounds for awareness advertising by the tobacco multinationals.
"The tobacco companies sponsor televised events and use other businesses as fronts to promote their deadly product. Marlboro sponsors the "Marlboro World of Sports." Camel runs a clothing line. The British company Rothmans promotes its Peter Stuyvesant brand with billboards that picture images of the Statue of Liberty, American football players and cheerleaders and use a slogan connecting the brand name Stuyvesant to the magic word "America." Salem runs a music store, Salem Power Station, and a travel company, Salem World, which jointly took out full page advertisements in Malaysian newspapers in the summer of 1993 to promote a contest which had a trip to London to see a U2 concert as its grand prize." (Weissman, 1993, p 7).
Health advocates in many countries are outraged by this form of tobacco marketing.
"The use of images that evoke 'America' is particularly insidious, contends Karen Lewis, manager of tobacco policy resources at the Washington, D.C.-based Advocacy Institute's Smoking Control Advocacy Resource Center, since it preys on poor people's longing for the political freedom and economic advancement popularly associated with the U.S." (Weissman, 1993, p 8).
Tobacco MNC's are also aggressively expanding their marketing operations in Eastern Europe (Weissman, 1992), China (Lewis, p 6), and Latin America. In 1992, a Brazilian tobacco trade group named the Brazilian Cigarette Industry Association, composed of Philip Morris, British American Tobacco, and a handful of smaller companies, successfully lobbied the Brazilian government to overturn ad restriction regulations that would have required warning labels to cover 20% of all tobacco print advertising and banned tobacco product television ads between 6 a.m. and 9 p.m. (Sugarman, p 4).
Philip Morris has rejected proposals from health advocates that it place warning labels on all cigarettes it sells worldwide, even in countries lacking regulations which require such warnings. This is a poignant refutation of the tobacco industry's familiar argument that smoking is a matter of individual choice made by consumers willing to bear the risks. As critics have pointed out, "in third world countries, where there is no information, there is no informed consent. People buy (Philip Morris) products and they just don't know the health risks." (Lowe, p 139).
The risks, of course, are millions of preventable deaths by smoking-related diseases. Using China as the prime example, Richard Peto, a professor of medical statistics and epidemiology at Oxford and an expert on cigarette-induced mortality, gives some horrifying figures.
"The Chinese smoked 500 billion cigarettes in 1978 and 1,700 billion last year (1992)...There are about 420 million people under the age of twenty now living in China. On present smoking patterns, about forty percent will be smokers, or 170 million. The American evidence suggests that if people start smoking and keep going wholeheartedly, something like half will be killed by cigarettes. I don't know what that figure will be like in China, but even if it's thirty percent you're looking at 50 million deaths of people who are now kids." (Sesser, p 80).
Dr. James Mason, who was Assistant Secretary for Health in the Department of Health and Human Services under George Bush but was not allowed to influence cigarette-export policy, put it this way in a 1993 interview.
"Our country has been known for its humanitarian and health-related projects worldwide. This is a hundred and eighty degrees opposite. We're talking about millions of lives - and that totally outweighs and overwhelms what we've accomplished in the humanitarian field. It's outrageous for the United States to allow this misery and suffering to occur." (Sesser, p 79).
In the 1970s, the world health community identified a significant factor that had caused declining breastfeeding rates in developing nations and a simultaneous rapid increase in infant mortality rates. This factor was the sale of baby formula breastmilk substitutes by a handful of MNC's targeting hospitals and new mothers, primarily in the third world. "Large companies like Nestle and American Home Products were aggressively marketing these products which resulted in the deaths of about one million babies a year from something called 'bottle baby disease'." (Lamy, p 16) The problem with marketing baby formula in developing nations was that:
"For bottle feeding to be safe, there must be clean water, fuel, and facilities to boil the water and sterilize the equipment, adequate income to be able to afford the milk powder and a level of literacy that allows for the mixing, sterilizing instructions to be carefully followed." (Sokol, p 9).
Because these conditions are often non-existent in the third world, "the risk of death for infants who do not breastfeed is 10 to 15 times greater in the first 3 to 4 months of life than for babies who are fed only breastmilk." (Sokol, p 9).
In 1981, the World Health Assembly adopted the final version of a World Health Organization/UNICEF-sponsored International Code of Marketing Breast-milk Substitutes. Following a seven year boycott against Nestle SA, the world's largest producer of substitute baby formula, in 1984 Nestle signed an agreement with boycott organizers pledging to abide by the provisions of this code. Other companies soon followed suit. The code provisions included a ban on any advertising which would idealize bottle feeding, a ban on advertising to the general public, and no promotions in hospitals or to health care workers. Activists thought the battle was over.
However, in 1991, the IBFAN (International Baby Food Action Network) released a detailed report titled "Breaking The Rules 1991," which proved that for the MNC's of this industry, profits still matter more than babies' lives. The IBFAN report documented hundreds of continued code violations by more than eighty global corporations, including Nestle. (Sokol, p 9).
The current worst offenders are Swiss-owned Nestle; Wyeth, a subsidiary of American Home Products; two German companies, Milupa and Hipp; and Meiji, a Japanese corporation. "In Karachi, Pakistan, giant billboards loom over streets and television stations broadcast advertisements beckoning consumers to buy Meiji's infant formulas. Maternity wards all over Asia are decorated with posters of beautiful 'Snow Brand' babies (Snow Brand is another Japanese formula manufacturer)." (Sokol, p 10).
The industry practice of providing hundreds of cartons of free infant formula to third world hospitals is perhaps its most potent marketing weapon, and continues unchecked. It encourages new mothers to begin bottlefeeding their infants immediately. "Hospitals receiving free supplies start babies on formula - at no cost to the hospital or to the mother - but when the mother leaves the hospital, she must buy the expensive formula." (Sokol, p 10). The baby formula MNC's have also attempted to circumvent Code provisions by marketing a product called "follow up" formula. These products are marketed as suitable for babies between the ages of three months and three years. "In North America and Europe, Nestle and its subsidiary Carnation advertise follow-up milks in parenting magazines. Most of the infant formula companies advertise them heavily in professional journals all over the world." (Sokol, p 10).
The global pharmaceutical companies have long been charged with business practices harmful to developing nations by marketing "useless or even dangerous drugs to people who are sick because they (don't) have enough to eat, no clean water or appropriate housing." (Knaus, p 33). British pharmaceutical corporation Organon markets a drug called Durabolin in the U.K., recommending it be prescribed for osteoporosis in post-menopausal women and aplastic anemia.
"In Pakistan, however, Durabolin is (prescribed) for loss of weight, poor weight gain, and malnutrition in children. Malnutrition and poor weight gain are due to poverty. What is needed is food and not Durabolin, which may produce precocious puberty." (Balasubramaniam, p 25).
Ciba-Geigy is the third largest manufacturer of prescription drugs in the world. It produces Butazolidin and used to make Tenderil, both "non-steroidal anti-inflammatory drugs once widely used for the treatment of arthritis and rheumatism. Their side effects include agranulocytosis, a potentially fatal blood disorder. In 1983, Ciba-Geigy issued an internal memo saying that the drugs had caused the deaths of 1,030 people and seriously injured 4,481 others." (Knaus, p 30).
The company did not withdraw Tanderil from the worldwide market until public pressure forced their hand in 1985. Ciba-Geigy continued selling Butazolidin, supposedly recommending that its use be restricted, but actually employing a double standard in marketing appeals to third world vs. Western doctors and consumers. "In Switzerland, Ciba-Geigy recommends a short one-week therapy with...Butazolidin. This indication of time is non-existent in Mexico." (Knaus, p 31).
International chemical companies have a depressing record of marketing pesticides to the third world that have been previously banned for use in advanced industrial nations. In 1991, Ciba-Geigy was forced to re-purchase over 100,000 gallons of insecticide containing DDT that it had sold to Tanzania, in violation of its own internal company policy prohibiting the sale of banned products to the third world. (Knaus, p 32). In 1993, the British multinational ICA Agrochemicals paid for full page ads that ran in Malaysian newspapers promoting its herbicide paraquat as necessary for a "greener Malaysia." The ad was headlined "Paraquat and nature working in perfect harmony," and went on to claim, "It's a fact. Paraquat is environmentally friendly...ground water, rivers, streams and lakes are not affected" by the chemical. In reality:
"Paraquat has been described by the World Health Organization as one of the world's most deadly chemicals...it is banned in Sweden, Finland, and the Netherlands and restricted for use in Norway, Indonesia, the Philippines, Japan and Turkey...(however), it is one of the biggest selling pesticides internationally and is widely used on plantations throughout the third world. Workers spraying paraquat suffer from vision and skin disorders and experience nausea. Workers' fingernails and toenails fall out as a result of contact with paraquat." (Gozan, p 4).
Ironically, despite Western bans on such pesticides, the harmful effects of their continued sale to the third world boomerang back onto Western consumers when foods grown abroad re-enter advanced industrial nations for sale.
What, if anything, can be done about global advertising and marketing that function as agents of cultural imperialism?
Multinational corporations now have almost unlimited power to expand their marketing operations around the world. Marketing regulations and restrictions that exist in rich, industrial nations can be circumvented by companies with business operations in third world nations that lack such regulatory structures. Under the Reagan and Bush Administrations, the U.S. government demonstrated its willingness to go to bat for even the most flagrant example of a domestic industry seeking to impose its harmful products on peoples of other countries - the tobacco industry. Such efforts have slowed under the Clinton Administration, but the damage has already been done in regions like the Pacific Rim.
One way to bring about change would be for MNC's to voluntarily stop exploiting third world labor and resources, and thus contribute to true third world economic development that over time would help create living standards high enough to sustain mass consumption of a corporation's products. But this is unlikely to happen. Obviously, the power of multinational corporations will have to be checked by truly international regulatory forces. Unless we move towards a system of world government, possibly based on a strengthened United Nations, this is equally unlikely to happen.
A simultaneous program of sustainable, non-exploitative economic development for the third world, divorced from multinational profits, will also have to occur. This would allow homegrown media systems to emerge in the developing world that could serve as counterweights to the one-way flow of Western culture that now characterizes the global information system, of which global advertising and marketing is an indispensable part. Until such time as these developments come to pass, the world's diversity of cultures and value systems will continue to erode under the onslaught of modern day cultural imperialism.
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