Coping with Boycotts: An Analysis and Framework

By Al Shebil, Saleh; Rasheed, Abdul A. et al. | Journal of Management and Organization, May 2011 | Go to article overview

Coping with Boycotts: An Analysis and Framework


Al Shebil, Saleh, Rasheed, Abdul A., Al-Shammari, Hussam, Journal of Management and Organization


ABSTRACT

In recent years, consumer boycotts are increasingly being used by various activist groups to punish targeted countries. This paper develops an analytic framework to help managers formulate strategies to cope with country-of-origin-related consumer boycotts. Based on the two dimensions of brand- country association and boycott intensity, we propose four possible strategies. We discuss spillover effects wherein certain firms become unintended victims of boycotts due to misperceptions about their nationality. Also discussed are economic opportunities that boycotts present to potential new entrants.

Keywords: boycotts, consumer animosity, spillover effects

INTRODUCTION

In Quito, Ecuador, a torched Ronald McDonald statue becomes the latest victim of rage over the US invasion of Iraq. All over the world, iconic American companies and brands - Gap, Starbucks, and Levi's, to name just a few - are feeling the heat as they become the objects of anti-US, anti-war boycotts, and protests. In southwestern France, protestors staged a 'die-in' at a supermarket, where they daubed their clothes with red paint to represent blood and laid down next to a Coca-Cola display. Ten restaurants in Hamburg, Germany, are banning Coke, Marlboro, bourbon, and other American goods. In South India, activist groups are calling for boycotts of American tobacco, beverages, and cosmetics. Such moves are being echoed all over the world. (Business Week Online, 2003; Lindemann, 2003)

The above quote illustrates the pervasive nature of boycotts in today's world. By some estimates, 42% of the Fortune 50 companies and 54% of the top 50 brands were facing calls for boycotts (John & Klein, 2003). Leading companies such as Wal-Mart, Intel, Microsoft, Disney, and Procter & Gamble have been the targets of boycott attempts in recent years. In some cases, they have been targeted by various interest groups to protest specific acts of commission or omission by these companies. For example, while the complaint against Microsoftis abuse of monopoly power, Monsanto has been targeted for production of genetically modified organisms.

An increasing number of boycotts in today's world seem to be entirely unrelated to the actions or policies of an individual company. Instead they are related to 'country of origin' effects. That is, a firm and its products are boycotted because of its country of origin (COO). In such cases, a company like McDonald may be targeted not because of any specific actions on their part, but because they are an American company. Or Chinese consumers may decide to boycott French products because of the French support for the Tibetan cause. Even in the United States, in the wake of the Iraq war, there were boycotts of French wine, not because they have any complaints against the French wine producers, but to punish France in general for their unwillingness to support US military action in Iraq.

When a boycott directly targets a specific company because of its real or perceived acts of commission or omission, the literature suggests a number of mitigation strategies (Lee, Motion, & Conroy, 2009; Yuksel & Mryteza, 2009). However, extant literature provides limited guidance on strategies to prevent or alleviate brand or product avoidance when such avoidance is based on nationality rather than the actions of an individual firm (Ahluwalia, Burnkrant, & Unnava, 2000). After all, a firm cannot change its nationality every time a group of boycotters target it. So what can a firm do to cope with consumer boycotts?

In this paper, we present a framework that we have developed that offers some guidelines to firms to help them cope with boycotts. The framework is based on two dimensions: the brand-country association and the intensity of the boycott. The first is a characteristic of the product while the second is a characteristic of the boycott. These two characteristics, considered in conjunction, yields a typology of four strategies that we present in this paper. …

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