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Introduction
The more integrated and globalized markets around the world have certainly brought along huge opportunities for companies to expand their products worldwide and potentially to tap into new markets. Although globalization brings more opportunities, they also bring about more challenges and threats when the companies decide to venture into new markets. Multinational firms realize that any actions they make at home or in their host country and even the action or policy of their home government impact their business reputations, credibility, trust and sales[1].
Consumers are now more aware of and react toward any actions made by the companies, governments or the home country of origin. A popular method used by consumers to punish or demonstrate their anger toward companies that have committed negative or offensive actions is by boycotting their products. Friedman (1999, p. 4) defined consumer boycotts as “an attempt by one or more parties to achieve certain objectives by urging individual consumers to refrain from making selected purchases in the marketplace”. In the event where the boycotted products are not available in the marketplace, consumers could substitute with other products that have direct or indirect link with the target boycott, which is known as surrogate products (Friedman, 1985). In fact, surrogate boycotts are even more widespread and have become the most common type of boycotts adopted by consumers (Balabanis, 2013; Friedman, 2001).
In the current business environment, companies that are not directly involved can also be subjected to a boycott. Normally, this is because of the offensive actions undertaken by either the company’s headquarter or the policy or action of the home government. A surrogate boycott is even harder to handle, as it is not the company’s fault in the first place, or in a different circumstance, it is even harder for the company to change the governments or home country’s actions that have led to the boycott in the first place. An example of a surrogate boycott is the boycott of Danish products in the Middle East because of the Muhammad cartoon controversy (Jensen, 2008).
Regardless, a direct boycott or a surrogate boycott should not be taken lightly, as the impact could be vast and may last for a long time. The American consumers boycott toward French wines caused a...