What should a company do when its business is boycotted through no fault of its own? What can a business do to avoid a boycott that has nothing to do with its products, services or actions?
These are questions of increasing urgency. A growing class of boycotts has very little to do with the actions or policies of an individual company. Instead they are related to the company's country of origin. In such cases, a company like McDonald's Corp. may see its restaurants targeted not because it did anything to anger consumers, but because it is a U.S. company. Or American consumers may decide to boycott French wine not because they have any complaints against French wine producers, but to punish France in general for the French government's unwillingness to support U.S. military action in Iraq.
In the case of actions targeted at a company, a business generally has the options of ignoring them, fighting back or complying with the demands of the boycotters. But when the reason for a boycott is the company's nationality, it would seem that nothing could be done. After all, it is neither easy nor desirable to change the nationality of a company to shield it from a boycott attempt.
Damage Control
- The Issue: How can a business protect itself from a boycott that is based not on the company's actions or policies, but rather on its country of origin?
- The Threat: Boycotts are becoming a more prominent part of the business landscape with political and religious tensions at a high pitch around the world.
- The Strategies: Businesses can pursue a number of strategies to avoid or cope with a boycott, from emphasizing their connections to the local community, to countering misinformation with advertising and public-relations campaigns, to simply adopting a low profile. Each company's strategy should be based on how closely its brand is associated with its home country and on the intensity of the boycott.
So what is a firm to do?
This article presents a framework we have developed that offers some suggestions to companies to help them deal with such boycotts. The framework is based on two dimensions: the visibility of the brand and the intensity of the boycott.
PERCEPTION IS EVERYTHING
Let's first consider brand visibility—which we define as the extent to which a brand is associated with a country in the minds of its customers around the world. The more visible the brand, the more likely it is to be targeted by boycotters.
Visibility is very much in the eyes of the beholder. For instance, there may be cases when a brand is very popular but customers in a given country don't strongly associate it with the country of its origin. The opposite can also happen, when a product is associated with a country in the public mind but, in fact, the company is from a different country.
These perceptions of national origin may also vary from one country to another. That is, a product that is viewed as very American in one country may not be associated with the U.S. in another country.
When North Atlantic Treaty Organization warplanes bombed the Chinese Embassy in Belgrade in 1999, the alliance insisted it had hit the wrong target, but many people in China were outraged nonetheless. In a couple of cities, rioters attacked KFC outlets. But Pizza Hut outlets, owned by the same U.S. parent company, escaped unscathed. (Both brands are owned by Yum Brands Inc., then known as Tricon Global Restaurants Inc.) So KFC had high visibility as an American brand, but Pizza Hut had low brand visibility in this sense.
Similar examples abound in the U.S. As anti-French sentiment grew in the U.S. around the start of the Iraq war, some French restaurants and businesses in the U.S. experienced declining sales. But in many cases Americans may have boycotted brands owned by companies in the U.S. and elsewhere because of the misperception that they were French-owned. For instance, a poll conducted in April 2003 by Fleishman-Hillard International Communications and Wirthlin Worldwide, now part of Harris Interactive Inc., found that the American-owned brands Grey Poupon and Yoplait seemed French to many of the respondents. Similarly, French's mustard appeared to many respondents as French, but is actually British.
The second dimension of our framework is boycott intensity. Intensity can be measured in terms of size, duration and aggressiveness. Size refers to how many people are boycotting the brand or product. Duration refers to how long the boycott is likely to continue. And aggressiveness takes into account whether, in addition to boycotting products, violent acts are conducted against the outlets or offices of the company being boycotted.
It is often difficult to determine where a company stands in regard to brand visibility and boycott intensity. But it is an important judgment to make, because it is the foundation of an effective strategy for avoiding or coping with a boycott.
BLENDING IN
When a high-visibility brand faces a high-intensity boycott, we suggest a blend-in strategy. This approach essentially emphasizes the local character of the company and plays down its global identity. There are a variety of means available to a company to create a local face. Among these are public-relations and advertising campaigns, sponsorship of sporting events and teams, and charitable activities.
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Mr. AlShebil is a Ph.D. candidate in marketing at the University of Texas at Arlington. He will be joining King Fahd University of Petroleum and Minerals, in Saudi Arabia, upon graduation. Dr. Rasheed is a professor of strategic management and international business at the University of Texas at Arlington. Dr. Al-Shammari is an associate professor of strategic management and international business at Indiana University of Pennsylvania. They can be reached at smrfeedback@mit.edu.
