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Ewelina Brania

Student’s book 79774

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1.1. ArlaArla FoodsFoods

2.2. Society profileSociety profile� Country profile

� Cultural profile� Communication components

3.3. Case profileCase profile

4.4. CampaignCampaign• Aims

• Strategy

• Instruments applied

5.5. The crisis of The crisis of ArlaArla

6.6. ConclusionConclusion

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� The largest producer of dairy products in Scandinavia

� Headquarter in Aarhus, Denmark

� Mission: “… to provide modern consumers with natural milk-based products that create inspiration, confidence and well-being”

� Owned by 7 996 milk producers in Denmark and Sweden

� 73% of shares in Danish, Swedish and British market

� 49, 469 m DKK revenue (2008)

� 15, 927 employees

� Arla - “early” in archaic Swedish

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�� 18821882 – 1st Dairy in Hjedding in Denmark

�� 1970 1970 - Establishment of Mejeriselskabet Danmark (MD)

�� 19891989 - Formation of MD Foods International to acquire dairies abroad

�� 19901990 - Launch of butter Lurpak on UK market

�1st dairy in Stora Arla Gärd in Sweden -18811881

�Formation of Mjölkcentralen (MC)- 19451945

�Mjölkcentralen changes name to Arla – 19751975

�� 2000 2000 - Merger of Danish MD Food and

Swedish Arla

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� 13 countries: Algeria, Libya, Egypt, Lebanon, Yemen, Kuwait, Morocco, Jordan, Oman, Saudi Arabia, Qatar, UAE

� 50% of shares in Saudi Arabian butter market, 68% - UAE, 80% - Qatar

� Annual sales of $550 m in the Middle East

� Strong positive “Danish” image

“Coming from a small and politically natural country likeDenmark is definitely a plus when you’re selling in the MiddleEast. We are not associated with any kind of imperialism – we feelthat our partners trust us.”

H. Niss

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PoliticalPoliticalPoliticalPoliticalstructurestructurestructurestructure

Republic - 6, constitutional monarchy – 3, absolute monarchy – 3, federation of emirates - 1

Legal Legal Legal Legal systemsystemsystemsystem

Mainly Shari‘a law with western influences

The independence of judiciary main principle in Shari‘a

The Beirut Declaration (1999) for Arab states – proceduralguarantees of judicial independence, denouncement ofdiscrimination on the basis of gender etc.

Level of Level of Level of Level of activismactivismactivismactivism

“Lack of transparency, a weak media, lack of democracy,social dogmas, religious tension – all this makes it almostimpossible to make any real change. Arab society providesno encouragement to pursue a life of activism”

Weal Hmaidan, co-funder of the League of Independent Activists

Theocratic activism - terrorism

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Economic Economic Economic Economic structurestructurestructurestructure

GDP (PPP) – 20 782.62$

very diversified – max. Qatar 86 006$

min. Yemen 2 411$(IMB 2008)

Adult literacy – 66% (Syria, Lebanon, Jordan – over 90%)

Media Media Media Media systemsystemsystemsystem

Practically lack of press freedom (mostly ranks under 100th

place in Reporters Without Boundaries’s ranking 2008 )

Yemen – 167th, KSA – 165th , Syria – 163rd

“independent” press owned by member of the ruling familyof businessmen close to the ruling family, very few literallyindependent

Usually a government-issued license is needed

Harsh defamation law

Usually direct censorship for materials from abroad

Al-Jazeera (1996) – a revolution on Arab TV market, highlyindependent in spite of financing by Qatari government,often discusses taboo topics

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� High-context

� Authoritarian relationships

� High power distance

� Polychronic

� High uncertainty avoidance

� Non-linear

� Present-oriented

� Being-oriented

� Cultural values: collectivism, hospitability, honor

� Socio-historical influences: Islam, poetry, nationalism

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Language and verbal Language and verbal Language and verbal Language and verbal communicationcommunicationcommunicationcommunication

NonNonNonNon----verbal communicationverbal communicationverbal communicationverbal communication

Elaborateness Gestures – direct body orientation

Codeswitching between differentforms of Arabic and French,English

Direct eye contact between thesame sex, lowered gaze submission

Affectiveness Touching restricted between malesand females

Repetition

Indirectness

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�� 1717..0909..20052005 – “Politiken” publishes an article “Profound anxietyabout criticism of Islam” in which the authordiscusses the problem of self-censorship inrelation to Islam in Denmark

�� 3030..0909..20052005 – the Danish newspaper “Jyllands-Posten” publishesarticle “Muhammeds ansigt” (The face ofMuhammad) that refers to terrorism of Islamicorganizations with 12 cartoons

“They [Muslims] demand a special position, insisting on special consideration of their own religious feelings. It is incompatible with democracy and freedom of speech.”

Flemming Rose, editor of “Jyllands-Posten”

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�� 2020..1010..0505 – ambassadors of Muslim countries ask the primeminister to react

“The freedom of expression has a wide scope and the Danishgovernment has no means of influencing the press”

Anders Fogh Rasmussen, prime minister of Danmark

�� 2828..1212..0505 - “Jyllands-Posten” refuses to apologize for thepublication

�� 2020..0101..0606 – religious clerics in KSA advise Muslims not to buy

Danish products (Arla Foods, Lego, Ecco shoes etc.)

Most of the shops as a sign

of solidarity with Muslims

community remove Danish

products from their shelves.

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”Our challenge is to Our challenge is to Our challenge is to Our challenge is to

regain consumer regain consumer regain consumer regain consumer

confidence in the confidence in the confidence in the confidence in the

Middle East” Middle East” Middle East” Middle East”

Managing Director

Peder Tuborgh

Restore it’s

product on

the shelves in

shops in the

Middle East Reintroduce Arla

to the market

(cut off from an

image of a

DanishDanishDanishDanish company)

Maintain dialoguedialoguedialoguedialogue

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� Emphasizing long-lasting relations with Muslim community(long history in the Middle East, many Muslim employees overthe years etc.)

� Showing interest of Islamic and Arabic culture

� Appealing to Islamic values (tolerance, justice, forgivenessetc.)

� Showing Muslims society understand of their reaction tocartoons - Influencing Muslims hearts not minds, “leaving”them decision about the future of the boycott

� Improving contact with Islamic religious leaders, asintermediaries to reach Arab Muslim society

� Lobbying the Danish Prime Minister to apologize for thecartoons

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� Newspaper’s adverts with Arla’s standpoints and reprints ofopinions of the Danish government and Jyllands-Posten

� TV commercials

� Frequent up-dates about the boycott and undertaken actionson the website

“Status report Friday afternoon”, “Arla makes "all resourcesavailable“ etc.

� Records with confessions of Arla’s Muslims employees fromfeelings about the cartoons

� Leaflets with reprints of Jylands-postand standpoint

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�� 2626..0101..0606 – the largest grocery

retailer in KSA – Al-Othaim Holding

Company confirms that it will not be

selling Danish products until an

apologize for the cartoons will be

published in the largest newspaper

in the country

“In the name of Allahwe apologize our dearcustomers but wedon’t sell Danishproducts because ofthe boycott campaign.The products are:…”*

“The campaign of allMuslims to protect the lastprophet Muhammad (saw)”*

*Translated by the author

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�� 2626..0101..0606 – “We can confirm that our sales have been affected”says Finn Hansen, Executive Director, Arla Foods

In one of Arab countries people are throwing stones at Arla’svehicle.

Arla tries in press release to emphasize it’s long-lasting goodrelations with Muslim community, cut themselves off from animage of a DanishDanishDanishDanish company – “InInInIn fact,fact,fact,fact, wewewewe havehavehavehave moremoremoremore MuslimMuslimMuslimMuslimthanthanthanthan DanishDanishDanishDanish consumers”consumers”consumers”consumers”. ED of Arla calls for peaceful dialogue.

�� 2727..0101..0606 –– Arla ensures that the press release with thestatement of Danish Government will bepublished in Saudi Arabians newspapers (Arlaputs ads in Middle East’s newspapers)

In the statement the Danish government ensures that itrespects Islam and that “Jyllands-Posten” have no connectionswith government, it’s private and independent so it can

not be perceived as a standpoint of Denmark society.

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SALES STOPPED!!!SALES STOPPED!!!SALES STOPPED!!!SALES STOPPED!!!SALES STOPPED!!!SALES STOPPED!!!SALES STOPPED!!!SALES STOPPED!!!

�� 2828..0101..0606 – Arla placesplacesplacesplaces advertsadvertsadvertsadverts in Middle Eastern newspaperstrying to encourage people to stop the boycott

�� 2929..0101..0606 – ”Jyllands-Posten” prints statement in Arabicexplaining that cartoons had been a sign offreedom of speech notnotnotnot aaaa campaigncampaigncampaigncampaign againstagainstagainstagainst IslamIslamIslamIslam....

Libya closes the Danish embassy in Tripoli, Palestinians burnDanish flag.

�� 3030..0101..0606 – “Production for the area seriously threatened”alarms Arla:

KSA – Arla’s importers cancelled all ordersKuwait – wide media coverage about the boycottQatar – the products removed from almost all shopsUAE – within a short time the products will be removed

EVERYWHEREEVERYWHEREEVERYWHEREEVERYWHERE

"I urgentlyurgentlyurgentlyurgently begbegbegbeg thethethethe governmentgovernmentgovernmentgovernment to enter a positivedialogue with the many millions of Muslims who feelthey have been offended by Denmark” says in a

statement Peder Tuborg, Arla’s ED

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�� 3131..0101..0606 – Arla informs that none of the employees in theMiddle East will be dismissed so that Arla canquickly restart production when the boycott will beover

Danish imaans call off the boycott in Denmark. In the pressrelease Arla tries to emphasize it’sit’sit’sit’s opennessopennessopennessopenness andandandand goodgoodgoodgood relationsrelationsrelationsrelationswithwithwithwith MuslimsMuslimsMuslimsMuslims societysocietysocietysociety by citing Kasim Amat, a spokesperson for theDanish Islamic Community, who suggests undertaking a jointjointjointjointventureventureventureventure (DIC, Ministry of Foreign Affairs, Dansk Industri and Arla)totototo SaudiSaudiSaudiSaudi ArabiaArabiaArabiaArabia totototo “correct“correct“correct“correct thethethethe misunderstandingsmisunderstandingsmisunderstandingsmisunderstandings”. The situationabroad is still difficult.

“The dialoguedialoguedialoguedialogue here has taken a positive turn”

Finn Hansen, ED Arla Food

�� 0101..0202..0606 –– Arla ensures that it will spreadspreadspreadspread thethethethe statementsstatementsstatementsstatements(press(press(press(press adverts)adverts)adverts)adverts) ofofofof thethethethe DanishDanishDanishDanish PrimePrimePrimePrime MinisterMinisterMinisterMinister andandandandJyllandsJyllandsJyllandsJyllands----PostenPostenPostenPosten from press conference on 31th Jan,when they emphasized that cartoons are a part offreedom of speech not incursion on Muslimssociety and that they want to continue thedialogue and restore good relations with Arab

world.

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In French, German, Italian and Spanish newspapers appearreprints of the cartoons

�� 1818..0202..0606 –– Arla participates in Middle East’s largest foodexhibition “Gulf Food” in Dubai

Signs at Arla’s stand show it’s distancedistancedistancedistance fromfromfromfrom thethethethe cartoonscartoonscartoonscartoons. Arlastaff gives away customers copies of JyllandsJyllandsJyllandsJyllands----Posten’sPosten’sPosten’sPosten’s apologyapologyapologyapologyand is willing to answer to the questions of the local media.

“A facefacefaceface----totototo----facefacefaceface dialoguedialoguedialoguedialogue isisisis extremelyextremelyextremelyextremely importantimportantimportantimportant inininin thethethethe MiddleMiddleMiddleMiddleEastEastEastEast and cannot be substituted by a phone call” says Jan E.Pedersen, Arla’s Director for the UAE

�� 2020..0202..0606 –– as a reaction to rumors in the media that Arla isboycotting Isreal, Andreas Lundby, DeputyManaging Director, makes a statement

In the statement he also emphasizes that all of productsexportedexportedexportedexported totototo KSAKSAKSAKSA are Danish and nonenonenonenone ofofofof thethethethe ingredientsingredientsingredientsingredients comescomescomescomes

fromfromfromfrom IsraelIsraelIsraelIsrael.

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�� 0202..0303..0606 –– estimations of Arla show that the boycott will costthe company 400 m DKK

�� 2020..0303..0606 – Arla announced that it was going to publish on25th explanation of it’s stand in case of theoffensive cartoons in full page advertisement in25 newspapers across the Middle East

“Arla Foods distancesdistancesdistancesdistances itselfitselfitselfitself fromfromfromfrom thethethethe actactactact ofofofof JyllandsJyllandsJyllandsJyllands----PostenPostenPostenPosten inchoosing to print caricatures of the Prophet Muhammad andwe do not share the newspaper’s reason for doing it. (…) WeWeWeWeunderstandunderstandunderstandunderstand andandandand respectrespectrespectrespect youryouryouryour reactionreactionreactionreaction, leading to boycott ofour products as a result of the irresponsible and unfortunateaccident. (…) TheTheTheThe yearsyearsyearsyears thatthatthatthat wewewewe havehavehavehave spentspentspentspent inininin youryouryouryour worldworldworldworld havetaught us that justicejusticejusticejustice andandandand tolerancetolerancetolerancetolerance areareareare fundamentalfundamentalfundamentalfundamental valuesvaluesvaluesvalues ofofofofIslamIslamIslamIslam….in the hope that you will reconsider your attitude toour company”.

�� 2222--2323..0303..0606 – Arla took part in The First Conference of theInternational Committee of the Support of theFinal Prophet in Bahrain

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�� 0303..0404..0606 - International Committee for the Support of theProphet publishes press release with the result ofthe conference in which it

appreciatesappreciatesappreciatesappreciates ““““thethethethe attitudeattitudeattitudeattitude ofofofof ArlaArlaArlaArla Foods that declared its rejection ofthe pictures and was not in agreement for reasons for theirpublication.“ The president of ICSFP, Yousef Al-Qaradawi noticesthat Arla is an objective of criticism for it’s standpoint in Denmark.

T HE OFFICIAL END OF THE BOYCOTT

�� 0606060606060606........0404040404040404........0606060606060606 – Arla decides to sponsor humanitarian projects inthe Middle East (giving aid to disable children,cancer suffers and the hungry) and activities thatwill build mutual understanding between differentcultures

“The boycott had been liftedliftedliftedlifted onlyonlyonlyonly againstagainstagainstagainst ArlaArlaArlaArla. This companyapologised to Muslims and sponsored humanitarian projects forthe needy" says Adel Al-Maawdah, a spokesman of ICSFP

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� Arla was thethethethe firstfirstfirstfirst companycompanycompanycompany which Arab world have lifted theboycott for

� It’s products came back on 6th April 2006 on shelves of over3000 shops in the Middle East

� By the end of 2006 Arla recovered 50% of the pre-boycottannual sales volume

� The company restored good image in Muslim society throughcutting off from Denmark. Arla regained consumers trust.

“We must differentiate between those who insulted us andthosethosethosethose whowhowhowho stoodstoodstoodstood bybybyby usususus....”

Soliman Albuthi, spokesman of ICSFP

� In western countries the image was tarnished. The Arla’s apology for the cartoon was perceived as a denial of a fundamental value of modern society –freedom of speech. The campaign “Support Denmark

Boycott Arla” was launch.

Before crisis Arla supplied – 50 000 shops*

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� The biggest problem of the Arla’s case was the fact that thecompany hadhadhadhad strongstrongstrongstrong nationalnationalnationalnational imageimageimageimage.

“Key to Arla Foods’ strategy was deconstructing thesometimes conflicting national and organizational identitiesthat emerged.”

Patricia A. Curtin, Thomas K. Gaither

� If a company does not want to be perceive as a country-of-origin any more, then it can as a part of PR campaign:

• Get involved in local community issues (homelessness,cancer patients etc.)

• Publicly distance itself from the source of offence• Cut off from the image of a company from the issue

• Resign or downplay the “Made in…” aspect of thebrand

• Change the name of the company

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� R. Tench, L. Yeomans “Exploring Public Relations”,Prentice Hall, 2009

� E. Feghali “Arab Cultural Communication Patterns”[in:] ‘International Journal of Intercultural Relations”volume 3, number 3, Aug 1997

� A.O. Sherif, N.J. Brown “Judicial Independence In TheArab World”, a study presented to the Program ofArab Governance of The United Nations DevelopmentProgram

http://www.undp-pogar.org/publications/judiciary/sherif/jud-independence.pdf

� R.S. Zaharna “Overview: Florence Kluckhohn ValueOrientations” , 2000http://academic2.american.edu/~zaharna/kluckhohn.htm

� R.S. Zaharna “Understanding Cultural Preferences ofArab Communication Patterns” [in:] “Public RelationsReview”, volume 21, issue 3, Autumn 1995

� J. Lehtonen “Country Image and ConsumerNationalism. Case Arla and the Mohammed CartoonsEpisode” [in:] Ch. M. Schimdt, D. Neuendorff

“Sprache, Kultur und Zielgruppen”,DUV, 2008

� A. Maamoun “Guilty by association: The Boycotting of Danish Products in the Middle East” [in:] “Journal of Business Case Studies” volume 4, number 10, 2008

� W. Doesum “Crisis Communication in a Globalization World: Arla and the Cartoon Crisis”, a master thesis, 2008

http://209.85.135.132/search?q=cache:L0dWUfYta7IJ:theses.cbs.dk/bitstream/handle/10417/299/wouter_van_doesum.pdf%3Fsequence%3D1+%22boycott+arla%22+support+denmark&cd=7&hl=pl&ct=clnk&gl=pl&client=firefox-a

� ebdaa20.jeeran.com/

� NewsBBC.com

� TheEconomist.com

� WhyMuhammad.com

� ArabNews.com

� English.Al-Jazeera.com

� BuyDanish.home.comcast.net

� www.al-bab.com/media

� www.emel.com/article?id=58&a_id=1385

� www.clearlycultural.com/geert-hofstede-cultural-dimensions

� www.instituteforpr.org/essential_knowledge/detail/global_public_relations/

� http://infidelsunite.typepad.com/counter_jihad

� vb.alhilal.com/showthread.php?t=662059

� http://gatesofvienna.blogspot.com/2006/06/new-danish-export-dhimmi-cheese.htmlhttp://saaid.net/mohamed/

� www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1001920646