A Comparative Study of Management of Mistakes in Cross-Cultural Marketing
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UNIVERSITY OF LJUBLJANA SCHOOL OF ECONOMICS AND BUSINESS MASTER´S THESIS A COMPARATIVE STUDY OF MANAGEMENT OF MISTAKES IN CROSS-CULTURAL MARKETING Ljubljana, September 2020 KLEMEN AHMETOVIĆ AUTHORSHIP STATEMENT The undersigned Klemen Ahmetović, a student at the University of Ljubljana, School of Economics and Business, (hereafter: SEB LU), author of this written final work of studies with the title “A comparative study of management of mistakes in cross-cultural marketing”, prepared under supervision of doc. dr. Tamara Pavasović Trošt, PhD. DECLARE 1. this written final work of studies to be based on the results of my own research; 2. the printed form of this written final work of studies to be identical to its electronic form; 3. the text of this written final work of studies to be language-edited and technically in adherence with the SEB LU’s Technical Guidelines for Written Works, which means that I cited and / or quoted works and opinions of other authors in this written final work of studies in accordance with the SEB LU’s Technical Guidelines for Written Works; 4. to be aware of the fact that plagiarism (in written or graphical form) is a criminal offence and can be prosecuted in accordance with the Criminal Code of the Republic of Slovenia; 5. to be aware of the consequences a proven plagiarism charge based on the this written final work could have for my status at the SEB LU in accordance with the relevant SEB LU Rules; 6. to have obtained all the necessary permits to use the data and works of other authors which are (in written or graphical form) referred to in this written final work of studies and to have clearly marked them; 7. to have acted in accordance with ethical principles during the preparation of this written final work of studies and to have, where necessary, obtained permission of the Ethics Committee; 8. my consent to use the electronic form of this written final work of studies for the detection of content similarity with other written works, using similarity detection software that is connected with the SEB LU Study Information System; 9. to transfer to the University of Ljubljana free of charge, non-exclusively, geographically and time-wise unlimited the right of saving this written final work of studies in the electronic form, the right of its reproduction, as well as the right of making this written final work of studies available to the public on the World Wide Web via the Repository of the University of Ljubljana; 10. my consent to publication of my personal data that are included in this written final work of studies and in this declaration, when this written final work of studies is published. Ljubljana, ________________________ Author’s signature: _________________________ (Month in words / Day / Year, e. g. June 1st, 2012 TABLE OF CONTENTS INTRODUCTION ............................................................................................................... 1 1 THE IMPORTANCE OF CULTURAL UNDERSTANDING IN MARKETING 5 1.1 A New Age of Marketing..................................................................................... 5 1.2 National and Organizational Culture ................................................................ 6 1.3 Hofstede’s Cultural Dimensions ......................................................................... 8 1.4 Cultural Intelligence .......................................................................................... 12 2 CROSS-CULTURAL MARKETING MISTAKES ............................................... 14 2.1 The Why of Cross-Cultural Marketing Mistakes ........................................... 15 2.2 Categorization of Cross-Cultural Marketing Blunders ................................. 17 2.3 Strategies for Avoiding Cross-cultural Marketing Mistakes ........................ 19 3 METHODOLOGY .................................................................................................... 20 3.1 Research Purpose and Goals ............................................................................ 20 3.2 Research Design and Case Selection ................................................................ 20 3.3 Critical Analysis and Comparison ................................................................... 22 4 GUCCI: BLACKFACE CONTROVERSY ............................................................ 22 4.1 Description of the Blackface Advertisement ................................................... 23 4.2 The Troubling History of Blackface ................................................................ 24 4.3 The Role of Blackface in Modern Times ......................................................... 25 4.4 Media Reaction to Gucci’s Blackface Incident ............................................... 26 4.4.1 Social Media .................................................................................................... 26 4.4.2 Online Newspaper Outlets ............................................................................... 28 4.5 Company’s Response and Aftermath .............................................................. 30 4.5.1 The Apology .................................................................................................... 30 4.5.2 The Four step Action Plan and CSR ................................................................ 31 4.6 Effect on Sales .................................................................................................... 33 5 NIVEA:” WHITE IS PURITY” ADVERTISEMENT .......................................... 34 5.1 Description of Nivea´s Facebook Advertisement ............................................ 34 5.2 Background of the Affected Culture ................................................................ 35 5.3 Media Reaction .................................................................................................. 37 5.3.1 Social Media .................................................................................................... 37 i 5.3.2 Newspaper Articles ......................................................................................... 38 5.4 Company’s Response and Aftermath .............................................................. 40 5.4.1 The Apology .................................................................................................... 40 5.4.2 The Aftermath ................................................................................................. 42 5.5 Effect on Sales .................................................................................................... 43 6 DOLCE & GABBANA ADVERTISEMENT ......................................................... 44 6.1 Description of the “DG Loves China” Incident .............................................. 45 6.2 The Complexities of Doing Business in China ................................................ 45 6.3 Media Reaction .................................................................................................. 47 6.3.1 Social Media .................................................................................................... 47 6.3.2 Online Newspaper Outlets .............................................................................. 49 6.4 Company’s Response and Aftermath .............................................................. 51 6.4.1 Video Apology ................................................................................................ 51 6.4.2 The Aftermath ................................................................................................. 52 6.5 Effect on Sales .................................................................................................... 53 7 DISCUSSION AND IMPLICATIONS.................................................................... 53 7.1 Summary of Findings ........................................................................................ 53 7.2 Limitations of the Research .............................................................................. 56 7.3 Practical and Theoretical Implications ........................................................... 56 CONCLUSION .................................................................................................................. 59 REFERENCE LIST .......................................................................................................... 60 APPENDICES ................................................................................................................... 73 LIST OF FIGURES Figure 1: Hofstede´s dimensions of culture .......................................................................... 9 Figure 2: Five assumptions underlying Hofstede´s model according to McSweeney ........ 11 Figure 3: Low Context and High Context countries ........................................................... 12 Figure 4: Top 10 most valuable luxury brands worldwide in 2019 (in million US dollars) 23 Figure 5: The controversial sweater .................................................................................... 24 Figure 6: A vintage poster promoting a minstrel show ....................................................... 24 Figure 7: Popular cartoons and comics with racist imagery ............................................... 26 Figure 8: Gucci´s Twitter apology ...................................................................................... 30 Figure 9 :Likelihood of financial performance above national industry median % ............ 32 Figure 10: Gucci´s year-over-year sales growth ................................................................