Your Power is in Your Wallet

As I sit writing this blog I have my favourite study snack by my side – a KitKat Chunky. To many of you this will seem like a completely irrelevant piece of trivia, but to many others this information can be used to judge me. This is not because of the health issues related to my choice of food but down to the fact that KitKat’s are a product made by Nestle.

And to many people Nestle is a dirty word…

In the 1970’s Nestle began selling formula-milk to the developing world as an alternative to breastfeeding. The company used aggressive marketing to inform mothers in poorer countries that Nestle formula-milk was safer than the milk in their breasts  (Klein et al., 2001). This was proved not to be the case because the formula-milk had to be mixed with water, which is a major problem when the mothers in question have no access to clean water (Moorhead, 2007). Nestle were also found guilty of selling cans of formula-milk which included instructions written in the wrong language for the women who needed them (ibid). These actions caused outrage because they were putting the lives of millions of babies at risk. So in 1977, protesters began calls for a boycott of all Nestle products, a boycott which still exists today.

So, what is a boycott?

According to Freidman (1999) a consumer boycott is “an attempt by one or more parties to achieve certain objectives by urging individual consumers to refrain from making selected purchases in the marketplace” (pp.4.)

Why do people do it?

Boycotts typically take place as a reaction to a negative activity that people feel very strongly about. In 1989, a tragic accident happened at a football ground in the UK . This was the Hillsborough disaster where 96 Liverpool football supporters lost their lives because too many people were let into a football stadium and were crushed (BBC News, 2012). After this horrific event the Sun newspaper published the following front page:

The city of Liverpool was disgusted with the article and accused the paper of lying. Therefore a boycott was placed on the Sun newspaper in the Merseyside city. The ‘Don’t Buy the Sun’ campaign became an incredibly strong movement and even held a concert featuring Mick Jones of the Clash (BBC News, 2012).

It should be noted at this point that another reason people undertake boycotts is that they are very effective. In 1990, the Economist argued that consumer boycotts were popular “for one simple reason: they work” (pp.69).

The effectiveness of boycotts can be demonstrated by returning to the example of the Sun. On the 14th September, 23 years after the Hillsborough disaster, the boycott finally paid off when the newspaper published the following front page admitting that they were wrong and that they had lied:

So what does this mean?

It means that consumers have more power than they think. It means that people can influence companies more than they think they can, simply by using their purchasing behaviour. We live in a time where people know that companies are often doing wrong but do nothing to try and stop it. People’s power is in their wallets and they need to remember this, we all need to remember this. If you’re not happy with a company then don’t buy from them, it’s as simple as that. This applies to me as well – so perhaps I should rethink my favourite study snack?

Finally, if you needed any more proof that boycotts can be incredibly effective, how about this for an amazing result?

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About Think Outside The Cliché

I write blogs that try to encourage people to think differently about their purchasing behaviour. I also write blogs that attempt to show companies that there are often other unconventional ways to conduct business. Whether you are a consumer or a business person there will be definitely be something interesting in my blogs for you. I hope you enjoy them and please remember I always, always appreciate constructive feedback.

10 responses to “Your Power is in Your Wallet”

  1. psp0a2 says :

    Interesting blog, after James mentioned a few weeks ago now in lectures that he thought perhaps people should be boycotting Amazon due to their sneaky non-tax paying antics it made me wonder how realistic it is that this will effect companies that are that huge. Also who’s responsibility is it to find out when companies are doing things they shouldn’t? Clearly they aren’t the only company that are getting away with this but do you think it is our responsibility to check that the companies are doing as they should be, and behaving ethically and morally. Or should there be stricter laws and perhaps the government should be enforcing this? Are there any examples of boycotts successfully toppling any companies or specific products?
    I know laws are clamping down on advertising and accuracy of statistics within these and also the use of computer enhanced imagery. Perhaps ignorance is bliss when it comes to the production of some products though!

  2. weiliwang90 says :

    Since read your the newest blog, sex for Sex for Less, I am totally attracted by your blogs. This topic quite interesting! Not only explained the history of boycott, also indicated how this effect the consumer behaviour and company.

    The use of the boycott as a form of consumer protest is more popular than ever, however. “Boycotts are shockingly common,” says Maurice Schweitzer, a Wharton professor of operations and information management. “One group or another has boycotted almost every major company at some point, whether it’s Walmart for its development procedures or union policies, Procter & Gamble for the treatment of animals, Nike for employment practices or Kentucky Fried Chicken for the treatment of chickens.”

    “Boycotts may not need to affect sales at all in order to be effective,” a study of Brayden King of Kellogg’s Management & Organizations department indicates. “Rather, boycotters” influence stems from their ability to make negative claims about the corporation that generate negative public perceptions of the corporation. Hence, corporations that are already struggling to maintain their previously positive reputations will be more likely to concede to boycotts and quell any further damage the boycott may do to their reputation.”

  3. qinrongma says :

    I found it very interesting. I always like eating snacks during doing homework. Indeed, I’d want to have a suitable snack at homework time. That kind of snacks can not fall scum, so as not to damage my keyboard; it also does not make my fingers dirty because it is not inconvenient for me to write. Perhaps you will feel that it is suitable for chewing gum. But chewing gum does not have satiety! Does it can be considered as a need? The market is grown up through this little request as mine. Since the market is determined by the consumer, who can ignore the anger of consumers?

  4. theconsumerbeat says :

    Nestle have been a very controversial company with regards their ethical practices. You have already mentioned the problems they have come across with their marketing of formula milk. This is only one of many ethical dilemma that the consumer has faced with Nestle. For example, Greenpeace piloted a boycott of the company due to the problem of deforestation in their palm oil supply.

    This boycott was so successful, that after only 8 weeks, Nestle came up with a comprehensive policy that was monitored by the Forest Trust. This example shows the power that the consumer has when it comes to companies with less-that-sound ethical practices.

    You may be interested in this website that lists all the brands under the Nestle company, and some other controversies that surround it!

    http://www.ethicalconsumer.org/boycotts/currentboycottslist/nestleboycottprofile.aspx

    • thinkoutsidethecliche says :

      Thanks for your comment.

      The website you posted is very interesting – thank you. I amazed by how many products Nestle own – they are a difficult company to avoid!

      The boycott piloted by Greenpeace, that you discussed, is a wonderful example of how consumers can change corporation’s behaviour simply by adjusting their purchasing behaviour.

      One of the key factors behind the success of this boycott was that it was so well documented. The boycott was covered by mainstream newspapers such as the Guardian, newswires like Reuters as well as specialist media such as Treehugger. According to Greenpeace 70% of the awareness raised about the boycott came through blogs. This shows how influential social media can be to the success of boycotts.

      Perhaps it also suggests that as social media develops boycotts will in turn have more and more impact?

  5. Heliumhead says :

    May have missed the point, but stop snacking on kitkats and train more. What you eat in private, gets seen in public!

  6. Declan McClelland says :

    I’ve always been a bit cynical about boycotts.

    I hear talk of boycotts all the time: football fans saying their going to boycott games in protest of a chairman, people saying they’re going to boycott amazon or starbucks about the tax controversy. These boycotts never seem to materialise – I don’t know why – consumer apathy perhaps?

    As James said in our lecture last week – companies don’t care about the people that us their services. They care about the people that go there 2/3 times a week. These people tend to be brand loyal and aren’t going to change their habits and boycott an event. If they were willing to change their habits, these boycotts could actually seriously hurt a company and put it in trouble.

    weiliwang90 suggests that “Boycotts may not need to affect sales at all in order to be effective… boycotters influence stems from their ability to make negative claims about the corporation that generate negative public perceptions of the corporation”. While I certainly agree that boycotts can make a company look bad, this negative publicity doesn’t seem to affect them in the one place where it really hurts them: their wallets.

    Just look at Nestle – they are still going strong, making billions, despite negative press that has lingered for 20 years. And as Maria pointed out – they haven’t changed their ways – just look at the recent palm oil scandal. If Nestle was a person, you wouldn’t piss on fire to put it out. A truly effective boycott would put this company out of business for good – and to me, that’s what a boycott should be – not a halfhearted finger wagging to get a company to stop being naughty.

    Perhaps as you suggest, Christian, social media can play a bigger part….but as we saw with the Kony 2012 campaign, the problem with social media is that news and scandal are quickly forgotten.

    • thinkoutsidethecliche says :

      Hi Declan

      You certainly are cynical about boycotts! But you are totally right to be.

      There are plenty of examples where companies who ought to be the victims of boycotts (e.g. Starbucks and Amazon) are still thriving. You are also absolutely right regarding the fact that companies only care about their loyal customers and it is true that bit of bad press is not going to stop a Starbucks fanatic.

      However, I would argue that we simply have no alternative. If we just let companies do as they please without airing our grievances then we would be in a much worse position.

      If people didn’t show that they care, papers wouldn’t bother printing stories like the tax scandal, people wouldn’t have angry conversations at water-coolers and companies would do exactly as they pleased.

      If companies know that we as their consumers have a conscience and that we have the potential to air it, then it helps to prevent them from acting inappropriately in the first place.

      This is perhaps a very simplistic way to look at this topic. But I know that if I was to set up a clothes shop I wouldn’t sell real fur. This isn’t just because of my own personal values but also because I know that there is the very real threat of a public backlash if I did.

      I feel that although boycotts and negative press may not always be totally effective we simply can’t do without it. Companies have to know, and have to fear, the fact that we as consumers have a voice and we will damn well use it if they step out of line.

  7. elpebc says :

    – This blog had been talked about a bad history to some companies and consumers reaction at the time by district of their goods. In addition, it said companies do not care about this kind of consumer. I not sure about this idea maybe it true in past but not now. I depend on several reasons. First, technology is fast way for spread any district. For example, internet, face book and twitter. Second, consumer awareness, people now have awareness about their rights

  8. wangxuanjun says :

    An interesting blog! I don’t know the history of Nestle until I read your blog. And I totally agree with your point. Consumers have more power as they think. In China there is words’ Consumers are like the parents’. Without consumers to buy products, any promotions are for nothing. Consumers should resist those unethical products and use their behaviors to make companies to make a change.

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