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Case Study: The Tainted Sanlu Baby Milk Powder Incident

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China starts probe into baby powder milk contamination as more cases reported (2008-09-12)

Two babies with kidney stones receive medical treatment at a military hospital in Lanzhou, capital of northwest China's Gansu Province

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China reports 432 infants with kidney stones, production of Sanlu halted; Stores in China pull contaminated milk powder off shelves (2008-09-12);

Parents of the babies with kidney stones tell the reporter about their kids' drinking state at a military hospital in Lanzhou, capital of northwest China's Gansu Province, Sept. 11, 2008. So far this year, Gansu Provincial Health Department has seen 59 kidney stone cases in infants, and at least one baby died as a result of kidney stones. Most of them live in rural areas of the province. There were no such cases in 2006 or 2007. (Xinhua Photo)

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Official: Dairy was aware of tainted milk powderArticle from:

The Virginian Pilot Article date:

September 14, 2008By Joe McDonald The Associated Press

China's health minister blamed a dairy Saturday for the delay in warning the public about tainted milk powder linked to kidney stones in infants and at least one death as authorities increased the number of known sick babies to 432.

The incident has been an setback for China's product safety system, which was overhauled in an attempt to restore consumer confidence after a string of recalls and warnings around the world over tainted toothpaste, faulty tires and other Chinese-made goods.

Officials complained they were not alerted to the milk problem until Monday even though the product's maker, Sanlu Group Co., ...

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3rd Ld-Writethru: Tainted milk powder sickens 1,253 babies in China Article from:

Xinhua News Agency Article date:

September 15, 2008

BEIJING, Sept. 15 (Xinhua) – The number of Chinese infants stricken with kidney stones caused by

contaminated milk powder soared to 1,253 with two dead as of 8 a.m. on Monday, the Ministry of Health said here on Monday.

According to the ministry, most of the cases occurred in Hebei, Jiangsu and Gansu provinces. The two deaths were both in the northwest Gansu Province.

The tainted milk powder was produced by the Sanlu Group, the country's diary giant in the northern Hebei Province. The powder was found to contain melamine, a chemical raw material believed to cause the condition.

Among the babies, 53 were in critical ...

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12 more arrested in China's tainted milk scandal Article from:

AP Online Article date:

September 18, 2008 Author:

ANITA CHANG More than a 1,000 parents anxious over tainted milk powder on

Thursday rushed their infants to hospitals for health checks as the government announced that a fourth baby had died in the spreading scandal.

Meanwhile, regulators in Hong Kong ordered the recall of milk products from a Chinese dairy after finding the banned industrial chemical melamine in eight of 30 sample products tested.

Police in Hebei province said they had arrested 12 more people Thursday, bringing the total to 18. Shi Guizhong, spokesman for the provincial police, said six allegedly sold melamine, while the other 12 were milk suppliers accused of adding the chemical to milk.

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Chinese parents crowd hospitals, fear tainted milk Article from:

AP Online Article date:

September 18, 2008 Author:

ANITA CHANG

Thousands of parents anxious over tainted baby milk powder rushed their infants to hospitals for health checks on Thursday as the government said that a fourth child had died in the scandal that has engulfed one-fifth of the nation's formula makers.

Twenty percent of Chinese companies that produce milk powder have been found with products tainted by the banned industrial chemical melamine, including the two biggest dairies. More than 6,000 babies have been sickened by the tainted formula.

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Sources of 39 infant-killing milk powder types identified: Localpolice Article from:

Xinhua News Agency Article date:

April 29, 2004

HEFEI, April 28 (Xinhua) -- The sources of 39 types of inferior milk powder, including 48 brands, have been found, local police in east China's Anhui province said Wednesday.

Chen Xiaoping, deputy director of the provincial public security department, said that as of April 28, the Anhui police have destroyed three workshops producing substandard milk powder and investigated three major dealers of the milk powder.

The police have filed 34 cases and captured 39 suspects, Chen said. The local police have dispatched 16 teams to Heilongjiang, Zhejiang,

Shandong, Shaanxi, Jiangsu, Fujian and Henan provinces and Beijing…

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A Joke: 一个中国人幸福的一天

早晨起床，掀开黑心绵作的被子 , 用致癌牙膏刷完牙，喝杯过了期的碘超标还掺了三聚氰胺的牛奶，吃根柴油炸的洗衣粉油条，外加一个苏丹红咸蛋，在票贩子手里买张车票，准时赶到地下烟厂上班，九点三十分偷偷用山寨手机看股票从 6124.04点跌到 1240.46点，中午在餐馆点一盘用地沟油炒的避孕药喂的黄膳，再加一碟敌敌畏喷过的白菜，盛两碗陈化粮煮的毒米饭；晚上蒸一盘病的瘦肉精养大的死猪肉做的腊肉，沾上点毛发勾兑的毒酱油，夹两片大粪水浸泡的臭豆腐，还有用福尔马林泡过的凉拌海蜇皮，抓两个添加了漂白粉和吊白块的大馒头，还喝上两杯富含甲醇的白酒。最后，又钻进黑心棉被窝里蒙头大睡。唉……这日子过的真是那个爽 !这就是一个中国人幸福的一天。

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Please identify the problems/issues in this case that are relevant to marketing.

Analyze the case and apply concepts and theories of marketing to discuss the problems/issues you identified.

This is a very good topic for your term project if you have not decided on the topic you will do!

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Marketing Problems:

For example: Celebrity Endorsement

Balance theory:

the scandal of the brand consumer’ negative attitude toward the brand consumer’s negative attitude toward the celebrity

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Marketing Problems:

For example: Social responsibility of the company; The effectiveness of public relations in a crisis;Product recall

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B2B Problems: Supply Chain Management; Total Quality Management; Outsourcing ; Purchasing…

The link including the milk powder production, cow raising, raw milk collection and dairy processing

Outsourcing to dairy farmers and milk dealers – they added melamine to the milk so that the diluted milk could still meet standards

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B2B Problems: Supply Chain Management; Total Quality Management; Outsourcing ; Purchasing

The link including the milk powder production, cow raising, raw milk collection and dairy processing

Purchasing, Quality control

Dairy farmers Milk dealers Diary Producer (Sanlu) Supermarket Consumers

Cow raising Raw milk collection Delivery, storage

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B2B Problems: Supply Chain Management; Total Quality Management; Outsourcing ; Purchasing

You can choose to investigate the problems from Sanlu (one company) perspective;

You can investigate the whole diary industry (Sanlu, Mengniu, Yili, Nestle; local brands & international brands);

You can collect information from various sources; talk with diary distributors, diary producers, milk dealers, even consumers…