Is a brand boycott a good tactic for a retailer?

Boycotts in marketingThere has been an ugly labour dispute up the road from us in London. A subsidiary of Caterpillar that makes locomotives was unprofitable and informed the union that to stay in business, it needed to cut the wages of its workers, some by (allegedly) 50% to bring them in line with wage levels at its US plants.

When negotiations stalled and suspecting that the union would cause trouble, the company erected a security fence around the factory over the new year holiday weekend and locked the workers out.

Predictably the union has been squealing like a stuck pig, picketing the entrance to the factory, on a particularly cold day forcing some temporary workers to wait 5 hours in the freezing cold.

When the company did not relent, the union prevented a locomotive from leaving the factory by blocking the rail lines. If an ordinary person did that, he would be immediately arrested by the police and charged with trespass and probably more, but in Ontario there seems to be two sets of laws, one for unhappy aboriginal people or union members occupying and even destroying private property, and another much harsher for law abiding citizens and tax payers.

The company has now put up with enough nonsense and announced that the plant will be closed and production moved to a plant in the US. Well done to the union, 400 people have now lost their jobs. An own goal in soccer terminology or a self inflicted black eye with devastating consequences for those workers and their families, the effects will ripple through many businesses in the London area.

As a former employer and now self employed, I believe that the time for unions, if there ever was one, has long since passed. My personal view is that they are the biggest single factor in the export of jobs to developing countries. In times of recession like the last 3 years, I believe they should be banned. To actively prevent a business from operating and selling its products especially for export is unpatriotic and economically suicidal.

Was the company being harsh? Undoubtedly, particularly as Caterpillar made record profits in the last year and it is tough on those who lost their jobs. But this is the real world, we do not practice slave labour, no one is compelled to work for any one else. A job is a privilege not a right, any one who is unhappy with their employment conditions is completely free to find another job, or even better start a business and create jobs for more people.

A business has one purpose only, that is to give its owners or shareholders a return on their investment. It could well be argued that many of those now unemployed  workers were benefiting from Caterpillars success through investments with insurance companies or mutual funds. All the other reasons corporations give for being in business, like giving back to the community, providing enlightened employment conditions, protecting the environment, sound wonderful and are welcome, but not a single dollar can be sustainably diverted to those causes until that business makes a profit.

The purpose of this post was not to continue my crusade against unions, but it was necessary to provide the background.marketing boycott

What intrigues me is that a retailer of work clothes and footwear, Marks Work Wear, has publicly announced that it is boycotting the Caterpillar brand of work boots in sympathy with the workers who lost their jobs. It appears that the removal of the brand will only apply to stores in the London area and will probably be a temporary measure. Many of its customers were amongst those who lost their jobs.

Is this a clever marketing tactic? While it may generate some good feelings amongst the fired workers, they are not going to be buying boots again until they get new jobs. Will it help switch customers from competitors stores? Or will it cause dedicated Caterpillar brand fans to buy elsewhere? What about shareholders? I would seriously question the wisdom of the gesture if I was a shareholder. Will it backfire, like those businesses that banned Christmas from their stores not realising (or ignoring) that 76% of Canadians preferred the word to the politically correct alternatives.

I do not know the answers, it will be interesting to see the outcome but I suspect that a local, temporary,  boycott will not have much effect either way. It would be poetic justice though, if the boots manufacturer elected to use a different sales channel and decide not to supply this retailer in the future.

Boycotts can be double edged swords, it can be very dangerous for businesses to enter conflicts like this, which is why most marketers steer clear of them.

What are your thoughts?

Wishing you success in all your endeavours.

Peter Wright

 

Image from artvex.com and Dreamstime 

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