Crisis Case Study Presentation
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Example1-CrisisCommunicationCaseStudy.pptx
DOLCE & GABBANA
Provokes Public Outrage in China
CMN 6050 Crisis Communication
Wenhao Fang
Hi everyone, I’m Wenhao Fang. The crisis case I will present is the DOLCE & GABBANA’s improper advertisement video, which provokes public outrage in China.
The crisis management was also a negative example.
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History of Company
Italian luxury fashion brand founded in 1985
Italian designers Domenico Dolce and Stefano Gabbana
Brand value of $937 million
Annual turnover of $1.6 billion
The Chinese market accounts for 30% of turnover
Dolce & Gabbana is an Italian luxury fashion brand founded in 1985 by Italian designers Domenico Dolce and Stefano Gabbana.
Its brand value is $937 million in 2018 with an annual turnover of $1.6 billion. Particularly, the Chinese market accounts for 30% of turnover.
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Crisis Summary
Videos launched on Nov. 17 to promote an upcoming “great show” in Shanghai.
Controversy arose after Chinese watched the videos showing a Chinese model using chopsticks to try to eat a pizza, a cannoli and spaghetti, accusing D&G for trivializing Chinese culture and depicting Chinese women in a racist way.
Then, an Instagram direct message conversation between Stefano Gabbana and the fashion writer Michaela Phuong was shared on Nov. 21. In the message, Stefano called China as the country of shit.
On Nov.17 of 2018, Dolce & Gabbana launched three short videos on the Chinese social media network Weibo to promote its upcoming Shanghai runway show on Nov. 21.
The controversy arose after Chinese watched the videos showing a Chinese model using chopsticks to try to eat a pizza, a cannoli and spaghetti, accusing D&G for trivializing Chinese culture and depicting Chinese women in a racist way.
With Chinese folk music playing in the background, a Mandarin-speaking voiceover kicks in: "Welcome to the first episode of ‘Eating with Chopsticks' by Dolce & Gabbana" — pronounced incorrectly on purpose in a way that mocks Chinese speech. The male voice proceeds to mansplain how to "properly" eat the dishes. "Is it too big for you?" mocks the voiceover when the woman doesn't know what to do with the gigantic cannoli. "Let's use these small stick-like things to eat our great pizza margherita," he instructs in another video.
The video was taken down within 24 hours, but it had already been shared widely on social media.
Then, an Instagram direct message conversation between Stefano Gabbana and the fashion writer Michaela Phuong was shared. In the conversation, Gabbana appears to make derogatory comments about China and Chinese commenters. He also complains about the video being taken down.
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Handling of the Crisis
Later on Nov.21, in a subsequent statement on Instagram, the company claimed that their Instagram account has been hacked and so has the account of Stefano Gabbana. Their legal office is urgently investigating. And they apologized for any distress caused by these unauthorized posts, comments and direct messages. Later, it added that they have nothing but respect for China and the people of China.
A statement released later, said the planned Shanghai event was something that they created especially with love and passion for China and all the people around the world who love Dolce & Gabbana. What happened that day was very unfortunate not only for them, but also for all the people who worked day and night to bring this event to life.
After 48 hours of the crisis breakout, the brand published the official apology video and claimed that they respect the various culture in all the countries and the racialism was only an unintentionally wrong interpretation of Chinese culture.
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Theories Applied & Analysis
Apologia theory-redefinition: hacking
Apologia theory-dissociation: wrongly reading Chinese culture
Image Restoration theory: love and passion for China
Decision theory-satisficing: express respect for all cultures
Targeted publics involved:
Chinese
Potential Customers from all countries
In D&G crisis, the brand applied four theories to mitigate the negative influence.
First is the redefinition. The brand insist that the charges of racialism are false because the conversation between Stefano Gabbana and the fashion writer Michaela Phuong is groundless due to hack breaking into his account.
Second, the dissociation is used, and it is also the core. the brand might seem to have committed a misdeed that they feel sorry and make apologies to public but actually not. It was stated that they were well intentioned，dedicating to localizing their brand culture. What they are guilty for is their lack of understanding of Chinese culture.
Thirdly. D&G used image restoration theory, expressing the great show was out of love and passion for China, trying to redeem its fast-fading public image.
Finally, all measures taken can be concluded as satisficing of decision theory. D&G seems only to pursue a satisfaction for the public’s minimum requirements.
Besides, the targeted public in this crisis should be Chinese and potential customers from all countries.
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Mass Media Coverage
BBC News
New York Times
Fox News
Yahoo Finance
New York Times, BBC News, Yahoo Finance and Fox News published news reporting this issue. And these are the title of the reports.
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Results
the great show layout loss: nearly $1.5 million
Sales volume on e-commerce platforms loss: $1.5 billion
Asian market revenue in 2019 shrank to 22%, compare with 25% in 2018
D&G drops from position 360 to 500 in 2019, which is one of the biggest falls overall in the 2019 list of Asia’s Top 1000 Brands ranking.
The complete layout of the great show is nearly $1.5 million, which has been all for naught.
Also, China's e-commerce giants, Alibaba and JD, removed D&G products from their online stores. Hong Kong retailer Lane Crawford also halted the sale of D&G goods both in stores and online, after customers started to return the products. And these led to a financial loss of $1.5 billion.
Third, the controversy could result in a financial blow to the company, which has shops in 25 cities in China. According to a 2017 McKinsey report, Chinese luxury consumers annually spend more than £56 billion, which accounts for almost a third of the global luxury market. Therefore, D&G Asian market revenue in 2019 shrank to 22%, compare with 25% in 2018.
Besides, D&G drops from position 360 to 500 in 2019 in the list of Asia’s Top 1000 Brands ranking, which is one of the biggest falls overall. It suggests a shift in Asian consumers’ sentiments about the brand.
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References
Dolce&Gabbana. November. 23, 2018. Dolce&Gabbana apologizes. Retrieved from https://www.youtube.com/watch?v=7Ih62lTKicg
Olivia Parker. June 18, 2019. Dolce & Gabbana Falls 140 Places in Asia’s Top 1000 Brand Ranking. Retrieved from https://jingdaily.com/dolce-gabbana-brand-ranking/
Yuhan Xu. December 1, 2018. Dolce & Gabbana Ad (With Chopsticks) Provokes Public Outrage in China. Retrieved from https://www.npr.org/sections/goatsandsoda/2018/12/01/671891818/dolce-gabbana-ad-with-chopsticks-provokes-public-outrage-in-china
These are my references. Thanks for listening my presentation.
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