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History of Boycott and recent cases on Arab region

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  1. 1. BOYCOTTING 1
  2. 2. CONCEPT OF BOYCOTT  Friedman (1985, p. 97) defines a consumer boycott as “an attempt by one or more parties to achieve certain objectives by urging individual consumers to refrain from making selected purchases in the marketplace.”  boycotts today are more typically focused on corporate practices rather than on broader sociopolitical goals such as civil rights. This shift in boycott focus reflects both the increased power of the modern transnational corporation and, paradoxically, the heightened vulnerability of corporate reputation and brand image, and it is consistent with recent findings that a firm’s CSR record affects consumer perceptions of the firm’s brands and products (Brown and Dacin 1997; Sen and Bhattacharya 2001).  Sen, Gürhan-Canli, and Morwitz (2001) conceptualize boycotts as social dilemmas, wherein a consumer chooses between the individual benefit of consumption and the wish of a collective to refrain from consumption so that all receive the shared benefits of a successful boycott. 2
  3. 3. CONCEPT OF BOYCOTT  Consistent with the articles by Sen, Gürhan-Canli, and Morwitz (2001) and John and Klein (2003), we view boycotting as a form of prosaical behavior by which “actions [are] intended to benefit one or more people other than oneself—behaviors such as helping, comforting, sharing, and cooperation” (Batson 1998, p. 282).  An explanation of helping that has received extensive empirical support over the past three decades is the arousal: cost–reward model (see Dovidio et al. 1991). According to this approach, when a potential helper encounters another person in distress, the helper interprets the seriousness of the situation and experiences arousal based on this interpretation. In response, the helper assesses the potential costs and benefits of helping. The higher the net benefit of helping (rewards minus costs), the more likely it is that help will be given.  Perceived egregiousness differed across consumers and predicted both boycott participation and a more negative brand image (Klein, Smith, and John 2003).  the level of perceived egregiousness has a direct impact on boycott participation.  in general, boycott participation is prompted by the belief that a firm has engaged in conduct that is strikingly wrong and that has negative and possibly harmful consequences for various parties (e.g., workers, consumers, society at large). 3
  4. 4. CONCEPT OF BOYCOTT  Most boycott studies have been conceptual or descriptive (case studies), with a focus on boycott organizers and targets rather than on the consumer.  Only two studies have reported empirical research that focuses directly on variables that influence an individual consumer’s boycott decision.  Kozinets and Handelman’s (1998) netnographic study suggests that boycott participation represents a complex emotional expression of individuality and a vehicle for moral self-realization.  Sen, Gürhan-Canli, and Morwitz (2001) test a theoretical framework that proposes that a fundamental question underlies a consumer’s decision to boycott: Will the boycott be successful? They find that consumers’ participation decisions are influenced by their perception of the likelihood of the boycott’s success, their susceptibility to normative social influences (social pressure), and the costs associated with boycotting 4
  5. 5. MOTIVATIONS FOR BOYCOTT PARTICIPATION  Four factors are found to predict boycott participation: 1. the desire to make a difference. 2. the scope for self-enhancement. 3. counterarguments that inhibit boycotting. 4. the cost to the boycotter of constrained consumption. 5
  6. 6. MAKE A DIFFERENCE  Boycotters may have an instrumental motivation to change the target firm’s behavior and/or to signal to the firm and others the necessity of appropriate conduct (Friedman 1999; Kozinets and Handelman 1998).  people are more cooperative in social dilemmas if they expect that the group will attain its goals (Wiener and Doescher 1991).  Beliefs in boycotting to make a difference predict boycott participation. Consumers who believe that boycotting is appropriate and that it can be effective are most likely to participate in the boycott.  The effects of perceived egregiousness may be enhanced or diminished through interactions with the cost–benefit motivations.  Beliefs in boycotting to make a difference moderate the relationship between egregiousness and the boycott decision.  When these beliefs are strongly held, the relationship between egregiousness and boycotting is greater than when the beliefs are less strongly held. 6
  7. 7. THE SCOPE FOR SELF-ENHANCEMENT  Participation enables the boycotter to boost social and personal self-esteem either by associating with a cause or group of people or simply by viewing him- or herself as a moral person.  Socially embedded expectations or social pressures are also likely to affect the guilt or positive feelings associated with boycotting. The relevance of social pressure for boycott participation is widely acknowledged in the boycott literature and in the helping literature.  Thus, self-enhancement through boycott participation includes the avoidance of feelings of guilt or the negative perceptions of others. 7
  8. 8. COUNTERARGUMENTS  Helping studies show that as costs for helping increase, helping decreases.  For example, Schwartz (1977) asserts that in the process of deciding to help another person in need, there is a “defensive step” of assessing potential negative outcomes of helping (e.g., injuring or embarrassing the person in need).  Another type of counterargument pertains to the consumer’s perception of whether his or her individual contribution will play any role in achieving the collective action goal.  There are two variations.  First, boycotters might believe that their actions will have no impact because they are too small to be noticed (John and Klein 2003).  Second, boycotters might believe that their actions are unnecessary because they can free ride on the boycott decisions of others. 8
  9. 9. COUNTERARGUMENTS  Counterarguments about boycotting moderate the relationship between egregiousness and the boycott decision.  The stronger the counterarguments, the weaker is the relationship between perceived egregiousness and boycotting.  Increased egregiousness may fail to translate into boycotting if counterarguments loom large in the minds of consumers. 9
  10. 10. COST TO THE BOYCOTTER OF CONSTRAINED CONSUMPTION  The direct cost of boycotting also factors into the consumer’s boycott decision.  The degree to which consumption is constrained predicts boycott participation. Consumers whose consumption is most constrained by boycotting are less likely to boycott.  the degree to which boycotting constrains consumers’ consumption influences the effect of egregiousness on their boycott decisions.  There is a weaker relationship between egregiousness and boycotting for consumers who suffer the greatest constraint in their consumption. 10
  11. 11. BARRIERS TO PARTICIPATE IN BOYCOTTING Individuals participation on a boycotting may be effected by many variables: 1- the perception of how many others are boycotting(Pressure group). 2- Consumer who participate in a boycott are forgoing consumption of a favored product or brand, the extent of this sacrifice are inversely related to boycotting. 3- Reminding Consumer about the positive attributes of the product or the negative attributes of the competitors could enhance the perceived cost of boycotting (Anti-Boycotting campaigns) 11
  12. 12. BARRIERS TO PARTICIPATE IN BOYCOTTING CONT… 4- Brand attributes that tap into values such as health and Safety might be particularly relevant to a forgoing a product with these attributes may reduces the self-enhancement advantages of boycott participation. 5- Most Consumers are likely refuse participating in boycotts, because of the cost she/he might incur from withholding the consumption and the uncertainty of the possibility of whether the utility will over weigh the costs of boycotting 12
  13. 13. FACTORS THAT INFLUENCE THE COSTS IN BOYCOTTING Two factors that influence the costs consumer incur in boycotting are inherent in the nature of consumption: 1- first factor are related to consumer’s intrinsic preference for the boycotted product will be less likely to participate in the boycott because it will be difficult for them to withhold consumption. 2- Second factor to withhold consumption the unavailability of a perfect substitute for the boycotted product or service in the market place, when a satisfactory substitute exists, can simply switch to the substitute which give them more options in term of consumption 13
  14. 14. HISTORY OF BOYCOTTING  In 617 the leaders of Makhzum and Banu Abd-Shams, two important clans of Quraysh, declared a public boycott against the clan of Banu Hashim, their commercial rival, in order to put pressure on the clan to withdraw its protection from Muhammad. The terms imposed on Banu Hashim, as reported by Ibn Ishaq, were "that no one should marry their women nor give women for them to marry; and that no one should either buy from them or sell to them, and when they agreed on that they wrote it in a deed." The boycott lasted for two or three years but eventually collapsed mainly because it was not achieving its purpose; the boycott had caused extreme privation and the sympathizers within the Quraysh finally united to annul the agreement 14
  15. 15. HISTORY OF BOYCOTTING  The Continental Association, often known simply as the "Association", was a system created by the First Continental Congress in 1774 for implementing a trade boycott with Great Britain. Congress hoped that by imposing economic sanctions, they would pressure Great Britain into redressing the grievances of the colonies. 15
  16. 16. ETYMOLOGY OF BOYCOTT  History books often label the protests of Colonial America boycotts. After the British imposed taxes on tea and other imported goods in the Townshend Act of 1767, the colonists responded with the Non-importation agreement. The boycott decreased British trade, and in 1770 most of the Acts were repealed. The retention of the tea tax led to the Boston Tea Party — a more radical remedy. However, "boycott" as a term for such financial actions came into use over a hundred years later. The practice got its name from an English land agent, Captain Charles Cunningman Boycott, who led a ruthless eviction campaign against tenants in Ireland around 1880. His employees began to refuse to assist Boycott or his family in any manner. 16
  17. 17. HISTORY OF BOYCOTTING  1905: Chinese boycott of U.S. goods: China boycotts the import of American goods because of the treatment of Chinese under the Chinese Exclusion Act, Due to prohibiting all immigration of Chinese laborers.  Boycotts of Japanese products have been conducted by numerous Chinese civilian and governmental organizations, always in response to real or perceived Japanese aggression, whether military, political or economic.  Struggle for Indian Independence (1915–47) boycott of foreign-made goods, especially British goods. 17
  18. 18. ARAB ISRAEL BOYCOTT  The Arab League boycott of Israel is a systematic[1] effort by Arab League member states to isolate Israel economically to prevent Arab states and discourage non-Arabs from providing support to Israel and adding to Israel's economic and military strength. 18
  19. 19. RACISM BOYCOTTING  The Montgomery Bus Boycott, in which African Americans refused to ride city buses in Montgomery, Alabama, to protest segregated seating, took place from December 5, 1955, to December 20, 1956, and is regarded as the first large-scale demonstration against segregation in the U.S. On December 1, 1955, four days before the boycott began, Rosa Parks, an African-American woman, refused to yield her seat to a white man on a Montgomery bus. She was arrested and fined. The boycott of public buses by blacks in Montgomery began on the day of Parks’ court hearing and lasted 381 days. 19
  20. 20. RACISM BOYCOTTING  The academic boycott of South Africa comprised a series of boycotts of South African academic institutions and scholars initiated in the 1960s, at the request of the African National Congress, with the goal of using such international pressure to force the end to South Africa's system of apartheid. The boycotts were part of a larger international campaign of "isolation" that eventually included political, economic, cultural and sports boycotts. The academic boycotts ended in 1990, when its stated goal of ending apartheid was achieved. 20
  21. 21. BOYCOTT IN SPORTS  1980: Olympic Boycotts: The United States and 59 other nations refused to send their Olympic teams to the Moscow Olympics as a protest against the Soviet invasion and occupation of Afghanistan in 1979. Four years later, in a second Olympic boycott, the USSR and some of its allies refused to attend the Los Angeles Olympic Games.  In 1990 Nike found cheaper People's Republic of China, and Vietnam, which prohibited labor unions. When workers demanded additional rights and benefits in these countries, the Nike factories closed and moved to a different location that would enable them to continue operating at a low cost. People began boycott Nike Product and put the slogan “Just Don’t Do It” . 21
  22. 22. RELIGIOUS BOYCOTTING  In 2005 A consumers boycott was organized in Saudi Arabia, Kuwait, and other Middle Eastern countries against Denmark. And also Norway, France, Germany and all others that have "insulted the Prophet Mohammed" by printing cartoons depicting him. 22
  23. 23. ENVIRONMENTAL BOYCOTTING  In 2010 there has been a great deal of criticism of BP both in the US and worldwide for its role in the oil spill. 23
  24. 24. A BRIEF HISTORY AND DESCRIPTION OF THE ARAB BOYCOTT  With 300 million people in the region, there is significant purchasing power involved. And there is always the fear that a boycott movement could snowball and cover the entire Muslim world—1.3 billion people.  There is growing evidence that the turmoil in the Palestinian territories, the war in Iraq, US support for Israel, the Danish cartoons that were considered blasphemous in the Muslim world because of their depiction of Muhammad (Pbuh) in a derogatory manner. 24
  26. 26. THE BOYCOTT TRIGGERS  Every boycott has to have a justification to generate public support.  Typically, this justification is used to create a public outcry against the perpetrators (or the most representative symbols of perpetrators) of the actions.  Three different classes of boycott triggers can be identified:  government action (or inaction)  corporate action  individual action. 26
  27. 27. GOVERNMENTS’ ACTIONS  Government actions include all those instances where the government of a country engages in an act that infuriates the population of another country.  The affected population then expresses its displeasure by hurting the economic interests of the offending country by shunning its products. For example, the call to boycott McDonald's, Coca Cola, Pepsi, Kentucky Fried Chicken, Pizza Hut, Marlboro, Proctor & Gamble, and Starbucks in the Middle East during the second Palestinian uprising was triggered in part by the resentment that people felt toward the United States' foreign policy on the Palestinian issue, which is seen as pro- Israel by many factions in the Arab world. 27
  28. 28. CORPORATIONS’ ACTIONS  The second trigger for boycotts is actions of individual corporations. In these instances, corporations (or their partners) either engage in an act that people find offensive or they are (rightly or wrongly) accused of  supporting causes that the public finds unacceptable or offensive. An example of the first kind would be the situation that found itself in around November 2002. It was revealed that the Jerusalem Post was donating its slice of the profits derived from the partners An ad appearing in the newspaper claimed: "Buy at & Support Israel". 28
  29. 29. INDIVIDUALS’ ACTIONS  The third trigger for boycotts is actions of private individuals. These individuals may have no association with the boycotted companies and their actions can still harm corporations in a significant manner through indirect and inferred associations. A classic example in this case is that of the boycott of Danish products after the publication of cartoons in Denmark's largest newspaper, Jyllands-Posten, depicting Prophet Muhammad with a turban shaped like a bomb strapped to his head. The inferred implication of the images, considered blasphemous under Islam, was that Islam preaches violence and condones terrorism. While it was the Danish newspaper that published those images and later on refused to apologize, maintaining that ―printing the cartoons was a way to ensure freedom of speech in the face of intimidation from radical Islamists‖ 29
  30. 30. BOYCOTT IMPLEMENTATION STRATEGIES  We discuss three elements of the implementation strategy employed by the organizers of product boycotts:  awareness generation strategies, media strategies, and targeting strategies. For a boycott to be successful, an effective awareness strategy is needed to ensure that the public is made aware of the campaign and that the information is presented in a manner that it clicks with the target audience.  Second, a media strategy that utilizes cost-effective mechanisms for spreading the boycott call is essential to a boycott’s success.  Third, the target of a boycott has to be clearly identified and justified for the boycott to be successful. 30
  31. 31. AWARENESS  A formal awareness strategy used to legitimize a boycott call is to formulate it as a religious decree.  Religious leaders have often been involved in calling for product boycotts. For example, to express resentment against the US foreign policy, religious leaders and clerics, from Morocco to Saudi Arabia, have urged consumers  not to buy any products associated with the United States.  The prominent Muslim cleric, Sheikh Yusuf Al-Qaradawi, issued a fatwa (religious decree) prohibiting eating American burgers and pizza, or drinking Pepsi and Coke. He also displayed a blinking banner on his Web site that read: ''Boycott America from Pepsi cans to Boeing” 31
  32. 32. MEDIA  The digital age has revolutionized the field of communications. Just as corporations are utilizing the new media to communicate with their target audiences, the boycott organizers are becoming equally savvy at taking advantage of the new tools of communication to spread the word regarding their boycotts.  In addition to posting calls for boycotts on prominent religious web sites, organizers have also done a remarkable job of communicating the same through editorial write-ups in influential newspapers and magazines. 32
  33. 33. TARGETING  Different strategies have been adopted to target different companies across the Middle East. In one approach, a ―country-of-origin‖ argument is used to boycott all brands publicly associated with a target country. For example, in response to a movie, all Dutch products were generally targeted, with particular emphasis on Dutch dairy products. 33
  34. 34. CORPORATE RESPONSES  Boycotts can have a crippling effect on corporate finances and profitability. Without putting a dollar value  Faced by a widespread boycott campaign, violent attacks, and mounting losses, the British retailer Sainsbury’s sold its share to its minority partner (Al-Nasharty Group) at a loss of £125m ($200 million).  Similarly, the boycott of Danish companies cost Arla Foods an estimated $85 million in 2006.  We summarize some common responses available to multinationals to respond to boycott campaigns. 34
  35. 35. RESPONDING TO RUMORS  If left unchecked, rumors have the potential of ruining a company’s reputation and goodwill. It is therefore important to counter false rumors in a timely manner before they become ―accepted truths.‖ Many companies have responded forcefully to squash the rumor mill.  For example, P&G was quick to deny rumors regarding its detergent by stating that Ariel and its logo had been around longer than Prime Minister Sharon.  Furthermore, the company changed the six pointed star logo to a less contentious four pointed one. 35
  36. 36. DISTANCING FROM CONTROVERSIAL ISSUES  If the boycott is not driven any specific action of the company itself, then there is an opportunity to put some distance between the issue and the company. When discovered that Jerusalem Post was donating its slice of the profits derived from its partnership to Israeli soldiers (to which consumers in the Middle East objected), the internet bookstore terminated its association with the newspaper. It also asked the newspaper to remove the ads that linked purchases at to supporting Israel. Patty Smith of Amazon told BBC News Online, "We have asked them to take it down and if any sales are made through them they won't receive any commissions" 36
  37. 37. MAKING CHARITABLE CONTRIBUTIONS  Making charitable contributions to causes that promote welfare in the host country is a commonly used mechanism to portray companies in a favorable light. When sales of McDonald's franchisees’ in Saudi Arabia plunged in the first few weeks of the second Intifada, they moved quickly to appease critics by announcing plans to donate approximately 26 cents of the price of each meal sold during the Islamic holy month of Ramadan (November 27-December 26, 2000) to Palestinian children's hospitals. 37
  38. 38. EMPHASIZING LOCAL CONNECTIONS AND IMPACT ON LOCAL ECONOMY  As noted in the opening quote of this paper, Coca-Cola responded to boycott calls by emphasizing its local roots. Similarly, in response to rumors regarding its alleged donations to Israel, McDonald’s took out ads in local newspapers in Egypt emphasizing its local connections and how the rumors threatened the future and source of income of over 3,000 Egyptian workers. 38
  39. 39. LOCALIZING THE MARKETING MIX  Companies have also responded to boycott calls by altering their marketing mix—by introducing new products with strong local flavor, by including locally popular endorsers in their ad campaigns, by offering localized  promotions, and even by de-emphasizing their American brand name. For example, in the midst of the Intifada movement, McDonald’s in Egypt responded by adding McFalafel to its menu. This was clearly in an attempt to attract local customers and boost sales. The company also hired an Egyptian singer, whose nationalistic song ―I hate Israel‖ topped the charts for months, to promote the sandwich 39
  40. 40. WORKINGWITH COUNTRIES’ GOVERNMENTS  Corporations often seek help (overtly or covertly) from their own governments to help avoid boycotts or to mitigate the effect of boycotts. As an example, the managing director of Arla Foods, Peder Tuborgh, sought his government’s help when the controversy regarding the Danish cartoons sparked calls for boycott: "I would ask the government to immediately enter a positive dialogue with the many millions of Muslims who feel offended by Denmark. 40
  41. 41. EGYPT BOYCOTTS TURKISH PRODUCTS  As a result of the current (2013-2014) bad political relationships between Egypt and Turkey a formal and public calls had been raised to boycott the Turkish products in the Egyptian market.  Egyptian government canceled the signed agreement with the Turkey (RORO), which allowed a tax free transportation of the Turkish goods from Damietta port to El-Sokhna port without passing and paying for the Suez Canal. 41
  42. 42. EGYPT BOYCOTTS TURKISH PRODUCTS …CONTINUE…  The Egyptians owned TV networks (Elhyat, CBC, SadaElbalad,…) took the initiative and stopped broadcasting the Turkish drama and series.  Most of tourism agents in Egypt stopped the Turkish trips advertisements. 42
  43. 43. BOYCOTTING THE AMERICAN PRODUCTS  During the military actions that repeatedly taken by Israel towards Palestinians , strong calls along the Islamic countries is being raised to boycott the American international companies that support Israel financially and morally like Coca-Cola, PEPSI and fast-food chains. 43
  44. 44. BOYCOTTING THE AMERICAN PRODUCTS.. CONTINUE  As a result for the Boycotting Americans product and services , some Egyptians local companies started to have a competitive advantage over the Americans ones. 44
  45. 45. BOYCOTTING THE DUTCH PRODUCTS DURING 2012  A Dutch film insulted all the Muslims and Islamic countries when described the Prophet Mohamed ( صلى الله عليه وسلم ) in un-appropriate descriptions far away from the real qualities Prophet Mohamed has.  Formal and public boycotting for the Dutch products had taken place and statistics showed that it was a painful one for Dutch producers. 45
  46. 46. BOYCOTTING THE ISRAELI PRODUCTS  Due to occupying the Palestine lands and due to un-human actions taken against the innocents ,the Arab countries and people boycott Israel at all economical and social levels.  Some internationals forces are being put on the Israel neighbors (Egypt, and Jordan) to increase their commercial relations with the boycotted neighbor through the Qualifying Industrial Zone agreement (QIZ) to take advantage of the free trade agreements between the United States and Israel. 46
  47. 47. REFERENCES  John and Klein (2003)  Friedman (1985)  Brown and Dacin 1997; Sen and Bhattacharya 2001  Sen, Gürhan-Canli, and Morwitz (2001)  Batson 1998  Kozinets and Handelman’s (1998)  Wiener and Doescher 1991  Schwartz (1977) 47