The Power of Consumer Boycotts:

The Power of Consumer Boycotts:

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Introduction

Boycotts have been in play, in the economic history of the world since time immemorial as a means to effect change from an all-powerful and unyielding economic power. The following paper seeks to analyze in depth the effectiveness of boycotts in today’s consumer based society, as well as its effects on both the producer and the consumer.

Definition

The Cambridge Business English Dictionary defines a consumer boycott as an occasion when consumers stop buying a particular product or from a particular company as a way of expressing strong disapproval. The definition under the Consumers law states that, a boycott is a way in which consumers demonstrate their disappointment in a product or a service. In essence a consumer boycott is the refusal of consumers to purchase products or services from a particular company or product in general in an effort to effect change by the manufacturer of the product, the market that the product is sold, or service provided, or the provider of the service. A boycott was initially a one-time affair that was originally designed to fix an existing social wrong. If the boycott is extended for a long time or as part of a blanket program of raising awareness, or law reform, it becomes a part of moral purchasing and such economic or political terms are to be used instead (GLICKMAN, 2009).

Boycotts mainly focus on long term changes in buying habits of consumers by introducing and enforcing long-term reforms in the consumption habits, in the good’s market or by forcing governments to act via moral purchasing. Individuals decide to boycott based on the individual’s personal ideals or the policy the company. The basic idea behind any boycott is the campaign against the company or product in an effort to hurt the company’s revenue stream to a point where the company is forced to comply with the demands of the boycotters and change either the policy or a product under scrutiny. The initiation of boycotts has become an easier prospect through the mainstream and widespread use of the internet through social media, blogging, sharing communities, newsgroups, and even mailing lists. Boycotts initiated via digital means usually have a large following within a very short period as compared to other traditional means of campaign such as newspapers, magazine subscriptions among others (MIZE, 2010).

A consumer boycott has the following characteristics:

1. It focuses on individual consumers on a large scale via a variety of media rather than organizational entities
2. Emphasizes on customers to selectively withdraw from the market selling the good
3. It uses or attempts to use market means to secure what may or may not be marketplace ends i.e. environmental goals as the stoppage of animal abuse through cosmetic testing, social goals such as civil rights for the gay community.

Legality of Boycotts

According to the supreme court of the United States boycotts are a legal method of activism and expression of opinion provided that a boycott is not in any way malicious or driven by individual feelings towards a member of a given company.

Types of Boycotts

According to Monroe Friedman, there are two types of boycotts, instrumental boycotts and expressive boycotts. Instrumental boycotts are boycotts designed to make a firm change through economic pressure. Such boycotts tend to require the determination, coordination and resources in equal measure. Expressive boycotts are mainly concerned with having political debates or political discourse. Such boycotts are publicised discussions of what is wrong and right in an intriguing way. Expressive boycotts allow for an issue that might have gone unnoticed for years to be brought to light to the public and the global population in a manner that is less awkward than most. It also serves as an educational tool to individuals by bringing to light the link between the goods present on their supermarket shelves or dinner tables and the possible injustices that may have been carried out during their manufacture in order to ensure the goods are produced cheaply.

According to urban legend and rumours, firms conduct industrial espionage and may be responsible for leaking sensitive information about their competitors through anonymous means in order to induce an expressive boycott.

Such outrageous acts  have the effect of making consumers of that company’s products express clear disassociation with it and, therefore, redirect their consumption and purchases to its competitors and alternative producers. While this information is highly suspect and false, the results are associated with expressive boycotts (HARRISON, NEWHOLM, AND SHAW (2005).

Effectiveness of boycotts

Boycotts are not always fully effective in our consumer fueled economy. According to research done by Paul Sergius Koku, Aigbe Akhigbe and Thomas M. Springer of Florida Atlantic University, their findings indicate that boycotts are not always successful in their attempts and sometimes end up failing. The failour is because, boycott targets (firms) do not passively accept being boycotted or threatened by boycotts and instead take action to blunt the possible effects of being boycotted through damage control measures (FRIEDMAN, 1999). Furthermore, for every boycott, there are opposite “buycotts” which loyal customers of the targets of boycotts seek other loyal customers, supporters and sympathizers come together and seek out to buy the products in question and boosting their sales. This makes it plausible that boycotts and their threats are unable to cause financial loss for firms due to the lack of a close substitute for the product making it difficult for their clients to boycott. However, very, very few products in today’s commodity markets around the world enjoy this status for their products.

Examples of Boycotts

In an interesting twist, there are some boycotts that do more harm than good. To examine this statement, I am going to use an example of the US boycott on the franchise fast food restaurant Taco Bell. Taco Bell was implicated in the purchase of tomatoes to use in its food processing and production of fast food products from the growers in the Immokalee region, in Florida. The region and industry relies heavily on low wage migrant labor.

The farms and companies would hire migrants who had virtually no other options with which to take. The migrants were able to have a source of income; granted a low one. The farms were able to make profits from the sale of their tomatoes in bulk. Taco Bell was able to get tomatoes at a lower price compared to other suppliers in the region. In addition, this would allow them to keep the food prices affordable and also reach a broader consumer demographic, particularly the low-income consumer base. The situation created was a win situation for all the parties involved.

Activists, however, had a different view of the whole process. Due to the boycott announced and widely supported by religious groups nation-wide, it proposed decreased profits towards Taco Bell, which would have a food franchise decrease the amounts of tomatoes ordered. The decrease would in turn have a devastating effect on the growers and farms. With decreased purchases, there would be a massive decrease in profits. The organization will make them lay off the migrant workers, which will do the only thing that could make their plight worse; removing the only source of income for the individuals and families that would be laid off. The laying off will leave the migrant workers with little or no options for income (GOODMAN, & COHEN, 2004).

Whether the activists propose this via the unionization of the workers or decreased customers is immaterial. With the increased cost on the growers, there would be little choice in terms of business survival; comply or collapse. The effects would result in the culling of a labour segment which would leave the poor to languish in abject poverty. Whilst the boycott is aimed at increasing the quality of life, economically this has drastic consequences. It also shows that some boycotts are initiated with little regard to the consequences their success might have (NEWMAN, 2004). The policies advocated by some boycott groups such as unionization of workers, and other groups that cannot afford the increased costs have devastating effects on corporations and developing countries. These are the policies that hamper economic growth where economic growth is desperately needed.

Conclusion

Boycotts are indeed useful in some certain situations. An example of famous boycotts is the boycott of all buses that were initiated by Rosa Parks to end segregation in buses. Others include Greenpeace’s movement to curb Bluefin tuna fishing. Boycotts nowadays are becoming lesser and lesser effective. The main reason behind this is because, on average, boycotts and their threats do not cause financial loss to firms. It is, however, dependent on the duration of the boycott itself. If a boycott was called off early, it means that the target of the boycott was willing to negotiate with the boycott party and settle the issue in question. If the boycott, however, takes a long time, chances are it is never going to effect change (CARSON, 2007).

Reference:

FRIEDMAN, M. (1999).Consumer boycotts: effecting change through the marketplace and the media.New York: Routledge

GLICKMAN, L. B. (2009). Buying power a history of consumer activism in America. Chicago, University of Chicago Press.

MIZE, R. L. (2010). Consuming mexican labor: from the bracero program to nafta, 1942-2009. Toronto, UnivOf Toronto Press.

NEWMAN, K. M. (2004). Radio active advertising and consumer activism, 1935-1947. Berkeley, University of California Press.

GOODMAN, D. J., & COHEN, M. (2004). Consumer culture: a reference handbook. Santa Barbara, Calif. ;Oxford, ABC-CLIO.

CARSON, T. M. (2007). Black trade unions and consumer boycotts in the Cape Province, South Africa 1978-1982. Thesis (D. Phil.)–University of Oxford, 2008.

HARRISON, R., T. NEWHOLM, AND D. SHAW (2005).The Ethical Consumer.Sage .London