report opic business communication case study burger king

Rationale Recently, in 2019, after an advertisement on Burger King New Zealand''''s Instagramdepicted westerners attempting to eat the new "Vietnamese Sweet Chili Tender CrispBurger" with a

NATIONAL ECONOMICS UNIVERSITY

SCHOOL OF ADVANCED EDUCATIONAL PROGRAM

Report Topic BUSINESS COMMUNICATION’ CASE STUDY: BURGER

KING

Students Nguy n Ng c Minh Châu ễ ọ

V ươ ng Quang Huy Nguy n Th H ễ ị ươ ng Giang Bùi Ph ươ ng Th o ả

Supervisor Mrs Mai Le

Hanoi, 2021

Table of contents

II Problems in the case study 4

a An overview about the problem: Burger King in New Zealand released an advertisement that made the brand’s multicultural blunder 4

Analyzing the problem of lack of control over franchisees 6 III Recommendations and applying theory to address the problems 8

1 Lessons learned from an inappropriate advertisement 12

2 Lessons gained from the lack of control over franchisees 13

I Introduction

1 Company

Founded in 1954, Burger King is the second-largest fast-food chain in the world In the early 21 century, they claimed to have about 14,000 stores in one hundred countries withst

more than eleven million guests visiting Burger King restaurants to enjoy the best burger every day In 2011, the vast majority of Burger King restaurants (about 90%) were privately owned franchises Burger King Corporation oversees licensing operators and store administration in North America Internationally, the corporation frequently partners with third parties to operate facilities, or it will transfer the operational and administrative rights to a franchisee who will be designated as the territory's master franchise Burger King Corporation will provide administrative and commercial support to the master franchise in exchange for the supervisory obligations, ensuring a uniform marketing strategy

Burger King, the world's second-largest fast-food hamburger company, entered the Vietnamese fast-food market through franchising in 2012 Burger King would invest forty million dollars to develop the restaurant chains with the hope to open as many stores as possible Fast food in Vietnam is a competitive market and need great long-term success to capture market share While the worldwide fast-food market growing at only 5% to 7%, the fast-food market in Vietnam is 15% to 20%, which is too attractive to investors and calls for a lot of big brands participating and contributing to the competition being pushed higher than ever They began with thirteen stores in three cities: Hanoi, Ho Chi Minh and Da Nang and quickly expanded to seventeen stores in late 2012 Currently, Burger King in Vietnam has a substantial change in brand and profit when the number of stores decreases from 17 to 9 stores with the problem of indigenous culture This means that after 8 years of business in Vietnam, Burger King not only stagnates but also slightly regressed in the plan to expand the chains in the country of ninety million people

2 Rationale

Recently, in 2019, after an advertisement on Burger King New Zealand's Instagram depicted westerners attempting to eat the new "Vietnamese Sweet Chili Tender Crisp Burger" with absurdly large red chopsticks, the fast-food business experienced a massive internet criticism The advertisement, which did not appear to depict any Vietnamese people, was captioned, "Take your taste buds all the way to Ho Chi Minh City” However, the post was eventually removed after a post criticizing the advertisement as rude and culturally inappropriate went viral, garnering over 2.7 million views and

sparking outrage that Burger King was mocking chopsticks and Asian culture The food chain apologized, admitting the advert was “insensitive and does not reflect our brand values regarding diversity and inclusion.” Yet the brand has been facing a deluge of derogatory comments across social accounts in all its markets following the PR blowback Several comments feature the hashtag #BurgerKingGetOutOfVietnam The provocative advertisement might be just as harmful to Burger King's standing in Asia While the fast-food chain has yet to acquire momentum in Vietnam, it is highly popular

in the area, serving as the largest US food chain in Malaysia and the second largest in Thailand and Indonesia The firm intends to open 1,000 additional stores in China Therefore, whether a company is just getting started or has been in operation for a few years, or even decades, social media platforms are crucial to effectively reach to a broader audience

II Problems in the case study

1 Problem 1:

a An overview about the problem: Burger King in New Zealand released an advertisement that made the brand’s multicultural blunder

A recently released advertisement from Burger King targeting Vietnamese customers has provoked a heated controversy over the culturally impertinent media, implying the company’s insufficiency in market research towards global expansion

Burger King, the latest western corporation to be criticized of ridiculing Asian food customs, has been forced to remove a "culturally insensitive" advertisement depicting a westerner straining to eat a burger with chopsticks Moreover, the caption of an advertisement points directly to the city of Vietnam- Ho Chi Minh city It was captioned:

“Take your tastebuds all the way to Ho Chi Minh City with our Vietnamese Sweet Chili Tender crisp, part of our Tastes of the World range Available for a limited time only" Many users on social media expressed their displeasure with the advertisement, which they thought was culturally insensitive and exploited chopsticks as a joke vehicle Especially the audiences in Asia and Vietnam are extremely dissatisfied with this advertisement and Vietnamese people even boycott Burger King due to the cultural sensitivity and the racism from the brand Others pointed out that sweet chilli sauce, the burger's distinctive ingredient, is considerably more common in Thailand than in Vietnam

b Analyzing the problem:

The ad played on widespread Asian stereotypes, as though their thought process went,

‘what’s Asian? Chopsticks!’ The brand walks a delicate line when trying to reach to the specific audiences A company could have broadcast a single TV commercial to a large group of customers ten years ago without fear of backlash Fast food companies frequently use humor in their advertisements; however, humor is subjective, and what one person finds funny may offend another That means brands must think about how their content will be perceived on a social scale in addition to keeping a close eye on it

Some have in comparison the fast-food brand's since-eliminated commercial to the

debatable Dolce & Gabbana advertmarketing campaign that confirmed a version eating

Italian food with chopsticks Just closingyear Italian stylebrand Dolce and Gabbana had been accused of racism and racial stereotyping when theyposted a video at the Chinese social media platform Weibo displaying a Chinese versionthe usage of chopsticks to

attempt toeat a pizza, a cannoli and spaghetti The backlash in China changed into so big

that some Chinese web sites and stores stopped promoting Dolce and Gabbana products

It is clear that discrimination in advertising continues to be a serious issue Although major advertisers are assisting in the creation of an inclusive culture in which King Burger can feel like they are a part of the culture and that they belong here, attempts to truly showcase Vietnamese traditional cuisine in advertising have so far failed Meanwhile, some advertisers attempt to exploit or foment divisiveness, while others are simply unconcerned about the offense they cause

This problem was a result of poor market research and a lack of interpretation decision-making process

● Poor market research

The problem of poor market research of large transnational corporations has caused unnecessary social media communication crises Burger King has made the same mistake

as Dolce & Gabbana when it had a media campaign and used images deemed "offensive", which had negatively impacted brand reputation This is a consequence of the lack of market research and reasonable communication decisions by the company's leadership Especially, in the case of Burger King, the firm did not research thoroughly the customs, practices, culture of Vietnamese people in general and food culture in particular Vietnam

is a country with a long history and traditions, so cultural values have been passed down through many generations Therefore, businesses must understand the importance of culture when doing business in Vietnam because when they neglect this aspect in doing market research, they would miss valuable opportunities and heavy losses in terms of image and revenue

Nevertheless, the most absurd knowing is that the American Society of Anesthesiologists ordered the ad be removed from any platform, not because of any reasons involving cultural insensitivity, but the advertisement’s final remark (“Just need another three!”) normalized what it is believed to be “excessive consumption” This is an example of food marketing that takes advantage of the developmental vulnerabilities of specific targeted audiences

● Lack of interpretation decision-making process

Not only that, the decision-making process of media campaigns with transnational corporations is definitely important To have an effective communication campaign, multinational corporations need to have cultural diversity from many different countries Indeed, Burger King has not really built a diverse cultural environment in the workplace,

so the decision-making process of the management has lacked proper evaluation When a company tries to engage with consumers from another culture, understanding cross-cultural differences is critical to the venture's success Misunderstandings and communication blunders will harm these efforts if the persons in charge of these projects

or their advertising firms are unaware of the influence on cross-cultural connections

2 Problem 2

Analyzing the problem of lack of control over franchisees

Franchising is a crucial entrepreneurial growth strategy that involves partnership among two distinct types of entrepreneurs The franchisor recognized a business opportunity and established a new venture to exploit it The franchisee purchases the right to replicate the franchisor's business model and exploit the opportunity in a new geographic market (Inbar Pizanti, Miri Lerner, 2015)

Nowadays, franchising has gained recognition as a secure and practical means for establishing businesses in foreign countries, which is currently considered a fast way to business growth Especially, the fast food and business services sector attribute more than

50% of the international franchising operations of US firms and Burger King is one of the successful fast-food franchises all over the world However, franchises around the world with various locations and diverse cultures makes it more challenging in managing

One of the challenges in franchising is reputation risks when a lack of control in management issues in almost all franchises chains all over the world As the nature of the franchise system, the franchisee purchases the brand rights from the franchisor, then they have a contract that defines the obligations and rights of both the franchisor and the franchisee to protect the commercial interests of both sides In the beginning, the franchisee will receive business assistance from the franchisor such as brand recognition, the equipment, supplies, and the advertising plan After having assistance from the franchisor, the franchisee needs to establish a long-term business strategy and marketing campaign on their own Therefore, the franchisors have no right to control all the franchisee's business activities, especially social media activities Indeed, most of the fast-food chain locations are separately held by individual owners and marketing campaign dependence on those owners, therefore, in this case, Burger King’s association within its franchises has not always effectively networked Indeed, Burger King food chains in New Zealand are separate from Burger King in Vietnam, which both chains are different from social media activities Hence, the activity of posting advertisements on social platforms in New Zealand and other chains in the world are not under the control

of the Burger King’ headquarter in the US

In 2019, Burger King New Zealand uploaded an advertisement with a sensitive image and content and went viral immediately on the Internet with a reach of 2.7 million views, which brings negative effects on the reputation of the chain Meanwhile, reputation is considered an intangible asset for a fast-food chain because it ensures its stability in the eyes of the customers Also, reputation is positively related to repurchase intention, word

of mouth and brand loyalty, which is crucial for the expansion and growth of the franchise Therefore, with the bad reputation starting from the New Zealand chain Instagram's account, the brand was under criticism heavily, especially from the Asians Also, the brand image had hit heavily negative effects when several comments from Vietnam with the hashtag "BurgerKingGetOutOfVietNam" emerged on the social networking sites of Burger King Vietnam Consequently, the mistake in advertising activity in New Zealand restaurants could bring serious negative influence on the Vietnam region that has not well robust

III Recommendations and applying theory to address the problems

1 Problem 1

Burger King, for its part, has withdrawn a commercial and apologized after being branded a racist by several netizens for personally attacking Asian people who eat with chopsticks via social media This is because the use of media platforms is emerging as an important technology for disaster response in the digital age

The brand's representative, Mr James Woodbridge (general marketing manager) apologized for this communication problem It was one of the mistakes that the company had released this deeply racist ad At the same time, the company has withdrawn this video from all media and asked the Burger King franchisee in New Zealand to remove the video from its marketing plan Although the advertisement has been taken down from Burger King New Zealand's social platforms, the Vietnamese burger included in the video

is still available on the fast-food chain's website and was under heavy criticism on the forums Burger King also sent an apology immediately for not well-prepared market research, especially about the Asian culture, which provoked a boycott from the public Whenever a crisis happens, either because the company itself did or due to external factors, the situation needs to be managed and addressed immediately by the company Therefore, evaluating then choosing an effective communication channel to cope with the crisis needs to be prioritized To solve the problem of Burger King, our group has been researching and collecting several effective solutions

The first solution is establishing effective channels to engage with more followers on mass media because of the diverse social media audience This is necessary on account of the spread perpetual way messages usually have amplifier effects One new follower could be tens, hundreds or thousands other social media users could follow posts at the time of crisis However, due to the diversity of social media users, social media channels need to be regularly evaluated to ensure that they have had maximum impacts and determine effective plans for negative circumstances Therefore, it is necessary to assess

by posting the same message on different social media platforms and channels and then controlling the reach, view, and engagement by statistics

Following the theory in chapter 4 Business Communication of Mary Ellen Guffey and Dana Loewy, it is essential for Burger King to analyze and anticipate the audience, especially the customers who come from Asia who damage directly through the

advertisement To have an effective apology message, first, the company need to determine the purpose of writing a message Why does Burger King need to write this message? What do they achieve when the audience receives the message? In this situation, the primary purpose is to send an apology for their misunderstanding advertisement and the secondary purpose is to show the customers that the brand is willing to fix their problem and hope that audiences may accept the apology and keep consuming their products After identifying the purpose, the company now need to anticipate and profile the audience The primary audiences in this situation are consumers from Asia, especially Vietnamese customers The secondary customers are the audiences from all over the world who can receive the message Then Burger King needs to make choices based on the audience profile which means they must carefully decide the language in the message, both suitable for primary and secondary audiences The decisive step and a crucial one is the way the company selects the best channel to send the message In addition to these practical problems, you'll think about the channel's material The amount to which a channel or medium recreates or displays all the information accessible in the original message is referred to as the channel's richness More engagement and feedback are possible with richer media, such as a face-to-face chat A flat, ondimensional message is presented by a thinner medium, such as a letter or an e-mail More verbal and visual clues, as well as the ability to customize the message to the audience, are all possible with richer media

Secondly, gathering feedback from the public, as well as regularly evaluating the social media activities are keys to gain more customers during a crisis The business then can

be aware of how posting content can be interpreted by the audience Of course, not placing information on the website can be strategic It's likely that an organization doesn't want to make the situation public by posting information about it on the company website But one of the terrific ways to get higher engagement is to implement contests

on social media channels Otherwise, it is also important that businesses need to carefully control their social media activities:

● When posting information, be truthful and transparent Before, during, and after a crisis, provide accessible information to reduce "new dangers as well as fulfilling the public's desire for information so they do not seek to other providers."

● Build a relationship with the publicbefore a crisis and encompass it to yourcrisis control policy It is essentialto set up a crisis control method that consists of conversation and social media updates Continuous conversation via social media

needs to be achieved before, during and after a crisis A powerfulmethod or

coverage is “ongoing and entails preparedness sportswhich includeinstructing the general public”

● During a crisis, make sure your messages are delivered on time When a crisis occurs, it is crucial to respond quickly to the public The first reply is the most necessary It is vital to (i) permitpeoplerecogniseyou'reaware about the crisis, (ii) that you're coping with it, (iii) what steps are being taken, or (iv) that you are going to “respond at a certain time when the facts are assessed”

● Sociocultural cognizance Emergency and disaster corporations need to be

conscious that cultural agencies can interpret tweets differently It is essential to

growth the social-cultural recognitionmost of the tweeters and keep away from

prejudiced or biased posts This may beachievedwith the aid of usingoperatingat the inner subculturewithinside the organization

Internal communications can be overlooked in the rush to deal with the issue and its impact on external audiences When addressed appropriately, effective internal communication, on the other hand, can be one of the most successful techniques for ensuring that your problem does not worsen Therefore, businesses can navigate internal organizations’ behaviour through the media crisis

● Provide messages of self-efficacy: If the organisation can involve stakeholders with significantmoves in a crisis,it couldpromote a experience of manage and self-efficacy Emergency and disastercompaniesought to offer “ a proof as to why the movement is recommended”

● Organize your messaging: Arrange the distribution of any crisis communication messages that are spread throughout the company It's vital to avoid circumstances where certain members of the council have more up-to-date information than others Instead of devolving different messages to different portions of the organization, consider producing an hourly bulletin where the most up-to-date information will be presented to everyone

2 Problem 2

Burger King's ownership structure is influenced not only by the external environment (competitors) but also by the franchisee entity structure, which has an impact on the dynamics of control and autonomy in franchising partnerships To solve the problem, Burger King needs to create a franchise network that can close the relationship among franchises all over the world It is essential that the franchisor should be a great host which means that the franchisors need to be the connector for all the franchisees Indeed, the annual conference is the way to make Burger King’s franchisees in different regions