#156 Barilla, not for everyone?
In 2013, one of the most successful multinational Italian companies, privately held past maker Barilla, almost stumbled over the comments of its chairman, Guido Barilla. When interviewed on Radio24, a national radio station, he expanded on how Barilla is rooted in traditional family values and why they would therefore never show a homosexual couple in their promotion. To make things worse, he added that gay customers who wouldn’t agree with Barilla’s position, could just buy their pasta from another brand. And so they did. Social media exploded with outrage, celebrities publicly shamed the pasta maker, and sales started to drop. While the immediate financial impact of consumer boycotts for the company that sells $2.4 bn worth of pasta annually was not too dramatic – fast-moving consumer goods like pasta move more by price than anything else – the long-term damage to the brand appeared to be potentially devastating. Especially in foreign markets of the West that care about diversity and about gay rights, but also in smaller pockets of the global LGBT community worldwide. Barilla has learned from this experience lemon and made lemonade from it. It launched a diversity and inclusiveness initiative. As Bloomberg Business Week reports, Barilla’s CEO, Claudio Colzani, has worked hard over the last few years to embrace the fact that love comes in different forms – as different as the dozens of types of pasta in Barilla’s factories…
April 4, 2020 @ 5:29 pm
Long story short: it does not matter if you want to enter a new market, if you want to gain new market shares or if you want to keep your current market position, when acting in a specific market, companies have to adapt to its particular culture and values.
Barilla’s mistake reminds me of a series of similar advertising campaigns and of the related – all equal – outcomes, all involving big brands like Dolce&Gabbana (disastrous advertising campaign in China) or H&M (the racist “coolest monkey in the jungle” hoodie on an US advertising poster).
Still, companies often find themselves in the unpleasant situation of having to apologize for their marketing campaign, due to the same – unfortunately very common – mistake: thinking that the market and the audience will adapt to their irony, habits or way of thinking, thus, in one word, adapt to their culture.
As a matter of fact, markets and customers rarely – or rather never – adapt. On the contrary, companies have to spot the specific cultural trends and sensitivities of their target audience and adapt to them, be it for an advertising campaign or for the next company expansion in a new region or country.
April 20, 2020 @ 4:39 am
Ouch! Another gaffe made by a high profile company in the age with the biggest visibility for diverse demographics and inclusion.
Just as we discussed in chapter 5 when selecting a target market, companies have to be mindful of demographic shifts amidst other factors. Population shifts impact economies significantly and economies with favorable demographics will enjoy continued growth. Naturally since firms are looking to enter these healthy economies they also have to adapt to the consumer market. In 2010, US held the highest GDP ranking in the world according to World Bank. US is also one of the western countries with the most progressive consumer populations. The state of California alone ranks as the fifth largest world economy and is an epicenter for the LGBTQ+ community. It’s a no brainer that if a firm wants to enter the US market they should keep in mind the aforementioned demographic information and adapt its advertising initiatives to reflect the foreign market.
April 26, 2020 @ 11:45 pm
This blog entry is making me wonder in which world some executive levels are living? Making such a statement in this time can only have a dramatic effect on the business. Most of the time it is not important what you as a person think, instead you have to go with the flow and respect the changes that are happening in the world.
This is a perfect example to see how vulnerable markets are in reality. With only one bad comment you can drop sales drastically, damage the image and lose customers. Furthermore, customers will start a social media “war” which spreads 10 thousand times faster than “good news”.
I think in some cases executive levels are not in agreement with employees. I would assume that most of the barilla employees have been shocked or ashamed by their chairman’s live comment. Having this difference between executives and employees can be very dangerous but once again, company size matters. The bigger the companies the more far away executives get from “reality”.