MGT303A - Business Information Analysis: H&M Racist Advertising

This report investigates the impact of racist advertising on H&M, stemming from a controversial online ad featuring a black child. The study explores the concept of racism in advertising, its manifestation in mass media, and relevant theories. It examines the adverse effects of racist advertising on brand image, customer support, and sales revenue, referencing the significant backlash and boycott H&M faced. The report emphasizes the importance of diversity in marketing and aims to provide insights for retailers to avoid similar pitfalls. The analysis incorporates literature review, highlighting the gaps in understanding the long-term consequences and potential solutions for fostering inclusive marketing practices. The aim of the report is to reveal the impact of racist advertising on H&M.

Running head: RESEARCH PROJECT
Business Information Analysis
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Table of Contents
Section 1: The Business Problem and Research Objectives............................................................3
Introduction..................................................................................................................................3
Research Context.........................................................................................................................3
Business Problem.........................................................................................................................4
Research Aim...............................................................................................................................5
Research Objectives.....................................................................................................................5
Research Questions......................................................................................................................5
Section 2: Literature Review...........................................................................................................6
Concept of racism in advertising.................................................................................................6
Mass media and racism................................................................................................................6
Theory of racist advertising.........................................................................................................7
Impact of racist advertising on the business................................................................................7
Gap of the literature.....................................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................12

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Section 1: The Business Problem and Research Objectives
Introduction
Online advertising is the popular marketing trend in the recent years. If the organization
fails to communicate their product information via online advertising then it may create a
negative impact on the brand (Walters, 2018). In order to achieve a better marketing activity and
improve the brand image incorporation of diversity in the business is crucial. Any discrimination
or racism in the marketing activity may hamper the marketing activity and the number of
customers (Cassanello, 2017). In the recent years, H&M's online advertising regarding a clothing
product highlights the racism. This study deals with the H&M racist advertising and its impact
on this brand.
Research Context
H&M is a popular Swedish fashion brand. This clothing retailer uses online marketing
rapidly to improve their brand in a large consumer domain. In the recent years, this H&M has
created an online advertising depicting a black child in a sweatshirt with text reading “Coolest
Monkey in Jungle” (Campaignlive.co.uk, 2018). Such online advertising created controversy
regarding the racism. Due to this advertisement, such organization was highlighted in the
consumer domain, which left a negative impact on this fashion brand (Bbc.com, 2018).
However, it is important for the fashion brands to deliver right messages during the online
advertising. If any wrong message is delivered via online advertising then it is difficult for this
organization to regain the trust of the customers. H&M add is the biggest example of racism in
the retail clothing industry. The slogan, which was used by H&M showed discrimination in the
clothing industry.

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In the current years, every business tries to bring diversity into the business. Hence, any
business activity that shows racism should be avoided by the marketers. This current study
focuses on the blunder that is created by H&M and highlights racism in the clothing industry.
This current online advertisement leads H&M under the fire for racism (Campaignlive.co.uk,
2018). The advertisement of H&M came into the social media and created challenges for H&M.
This research study highlights the marketing issues in H&M due to their inappropriate marketing
activity. However, this study will create awareness regarding the online marketing among the
fashion retailers.
Business Problem
Racism in the clothing industry is the biggest issue for the owners, which can destroy the
growth of an organization. However, the online advertisement of H&M creates huge controversy
about the marketing efficiency in the clothing industry. This organization has used a black child
for their advertisement and they used a slogan "Coolest Money in the Jungle" on the hoodie that
is worn by the child. This marketing activity affected the brand image of H&M and they are
forced to remove such advertisement from all online marketing channels (Independent.co.uk,
2018). Due to this advertisement, many people gained a wrong idea about H&M brand as a
result, their sales were affected. Racism is a big problem for the business owners as it may
hamper the brand image and affect the trust as well as the loyalty of the consumers. In the
context of H&M, such racist advertising campaign lowers their sale. H&M's 4,553 stores around
the world became declining due to this advertisement and the third largest political party in
Africa forced H&M banned their marketing activity in this country (Bbc.com, 2018). The year
2018 highlights the biggest incident of racism in the clothing industry, which is the current
business problem for H&M.

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This racist ad incident leads H&M to face big issues in their business. However, the
customer creates boycott over the racist hoodie (Theguardian.com, 2018). In order to deal with
this critical situation, H&M had tried much. They apologized for this image and removed these
from online websites. This situation created a big controversy on social media. As a result, the
consumer did not purchase from H&M over the weekend in which the incident occurred. This
research study is significant for the business organization to understand the importance of
diversity during the marketing activity. The output of this research investigation will help the
retailers to incorporate diversity into their marketing activity. Therefore, the marketers will be
able to increase their knowledge in promoting a racism-free marketing, which will improve the
brand image.
Research Aim
This research aims to reveal the impact of racist advertising on H&M.
Research Objectives
 To understand the concept of racism in business
 To identify the impact of racism on business
 To what extent racist advertising affected the business of H&M
 To recommend to incorporate diversity in H&M marketing activity
Research Questions
 What is the racist free marketing activity?
 What is the impact of racist advertising on H&M?
 What are the possible ways to include diversity in the online marketing in the context of
H&M?

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 What are the advantages of racist free marketing activity?
 What are the major factors of racist advertising?
 What are the suggestions to carry out a racist free marketing in the context of H&M?
Section 2: Literature Review
Concept of racism in advertising
The use of racism in advertisement is difficult to define as there is no standard idea of
what is racism and its use in marketing. However, often the marketers use a racial trope to target
a particular demographic (Cassanello, 2017). This idea is not inherently negative though the
concept of racism is. It is a great debate about whether the use of racism or stereotype is ethical
or not. However, often the organization fails to deliver the messages properly and they choose an
inappropriate way to send the messages in the consumer domain. This creates racism in the
advertising (Matsuda, 2018). Therefore, the business uses the particular individual as the model
to advertise their product. If the model belongs from any particular ethnic group then it creates
racism in advertising.
Mass media and racism
In the recent years, maximum marketers focus on the mass media communication to
introduce their product in the consumer domain. However, mass media is the biggest culprit,
which creates racism in the marketing (Falkof, 2017). The newspaper, magazines and social
media are used to introduce the product in the target market domain. Especially the fashion
retailers use social media and magazine to advertise their product to a target-specific race group.
The media advertising targets people who belong from the upper class and financially strong. On
It has been received that the financial condition of black people is not strong and they get less

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social support. As a result, racism is created through the mass media communication. Mass
media advertisements are created for the target-specific race group, which includes affluent
whites on one hand and urban black on the other hand. Maximum marketers focus on the high-
class people and they advertise their products for them. As a result, racism and discrimination
occur easily in the marketing activity (Davis, 2018). Hence, it can be said that class and income
level are the major two factors that influence the racist advertisement in the business industry.
Theory of racist advertising
According to the critical race theory a racial power should be maintained over time.
Therefore, it is important for the business to show respect to the racial power while creating any
marketing activity. In the context of retailer, they can follow such critical race theory as it helps
them to understand the importance of racial power in the business (Matsuda, 2018). However, if
any organization want to improve their brand image then it is necessary for them to give their
focus on racial power. By getting racial support an organization is able to improve their brand
image. On the other hand, to maximize the business in the global market racial support is
important (Leite, 2018). Hence, this theory helps the marketers to create an advertisement by
including all the races. This can improve the brand strength in the international market.
Whiteness theory is another important theory that evaluates the racism in advertising.
According to this theory race of models leave a big impact on the attitudes of the audience
(Slutskiy & Hamilton, 2018). Studies show that color blind racism and racial identity is present
across the audience. Hence, the audience does not find significant relationship between the
attitudes of the advertisement and the races. Therefore, the color blind racism is not associated
with non-white racism (Houkamau et al., 2017). Hence, if any business uses black model for
their advertisement then it often develops negative impact on the white audience.

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Impact of racist advertising on the business
Racism leaves a negative effect on the brand image and the business activity. Racism has
a connection with the business organization and the concept of organizational culture. In the
context of marketing and advertisement ethnic discrimination and racist ideology affect the
internal operation (Davis, 2018). Therefore, this has an adverse effect on the relationship
between the business and the society. At present all the business organizations focus on the
diversity. In order to improve the brand image in the global market, diversity is crucial for the
business. Especially the fashion retailers need to reduce racism from the marketing activity as
they want to introduce their product in all ranges people (Houkamau et al., 2017). In the recent
years, many retailers have been facing issues due to their racist advertising. As a result, their
businesses have lost its popularity in the market.
Customer support is crucial for every business. However, racism affects the customer
support. As a result, the business organization loses their loyal customers as well as the new
customers (Houkamau, Stronge & Sibley, 2017). For the marketer's racism in the advertisement
is harmful. Racism hampers the fairness in a business. In the recent years, customers are more
conscious about the racism and diversity. The educated people prefer racism free business. On
the other hand, the marketers need to maximize their business in a large consumer domain.
Hence, if any business creates racial discrimination in their marketing activity and product
advertising then it can hamper their business. As a result, the consumer number can be
decreased. Racist advertising affects the brand image. If the marketers create racist advertising
then it leaves a negative impact on the customer mind and they started to avoid such brand
(Davis, 2018). In the global market, racism affects the brand image and sales revenue of a

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business. However, online advertising delivers the product message in the international market.
Hence, racist advertising lowers the sales of an organization.
Boycott is another negative impact of racist advertising. Often the customers strike and
influence the people to reject the brand, which creates racism in their business. If a business fails
to deliver their product information through advertising due to racism then they face a huge loss.
One of the major challenges is the legal obligation that a business can face due to racism in their
marketing activity. Statistical data shows that between the years 2007 to 2013 racial
discrimination occurred in 27.3% of retail stores in Australia (Theguardian.com, 2018). This
affected the business badly. As a result, their revenue decreases (Leite, 2018). Many retailers in
the global market have faced challenges due to their racist advertising. Racist advertising creates
controversy on the social media and it becomes popular through the internet, which affects the
brand equity.
Gap of the literature
From the study of Davis (2018), a vast idea has been taken regarding the impact of racist
advertising on the business. Hence, from the study of Leite (2018), it has been received that
racism creates a pain in the consumer mind. Finally, the study of Houkamau et al., (2017), shows
that racism decreases the customer number. The above studies reveal the impact of racist
advertising on the business growth but there is a very little account of the racism theory and its
relation to the marketing activity. Hence, a gap is generated based on which the current literature
is conducted. This literature shows theories of racism and its relation to business.

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Conclusion
The entire study focuses on the impact of racist advertising on H&M. However, their
racist advertising affected their brand image and created a negative concept in the consumer
mind. It has been received that every business organization needs to follow diversity in their
business to reduce the legal issue. Therefore, to capture a large audience and to gain competitive
advantages in the global racism free marketing activity is crucial. H&M has faced issues due to
their racist marketing activity, which leads them to remove their advertisement from all channels.
Therefore, it can be concluded that to maintain a fair business racism should be removed from all
aspects of the business.

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References
Bbc.com (2018). H&M stores in South Africa trashed over 'racist' hoodie. on: 01 July 2017,
from: https://www.bbc.com/news/world-africa-42675665
Campaignlive.co.uk (2018). Lessons in semiotics from H&M's 'coolest monkey' epic fail.
Retrieved on: 01 July 2017, from: https://www.campaignlive.co.uk/article/lessons-
semiotics-h-ms-coolest-monkey-epic-fail/1454314
Cassanello, R. (2017). Understanding Jim Crow: Using Racist Memorabilia to Teach Tolerance
and Promote Social Justice.
Davis, J. F. (2018). Selling whiteness?–A critical review of the literature on marketing and
racism. Journal of Marketing Management, 34(1-2), 134-177.
Falkof, N. (2017). Advertising diversity: ad agencies and the creation of Asian American
Consumers.
Houkamau, C. A., Stronge, S., & Sibley, C. G. (2017). The prevalence and impact of racism
toward indigenous Māori in New Zealand. International Perspectives in Psychology:
Research, Practice, Consultation, 6(2), 61.
Independent.co.uk (2018). The H&M advert clearly didn't mean to be racist – which is worrying
in itself. Retrieved on: 01 July 2017, from: https://www.independent.co.uk/voices/hm-
advert-racist-hoodie-fashion-industry-retail-white-black-h-m-the-weeknd-a8149306.html
Leite, F. (2018). The everyday pain of racism of Brazilian black women and the effect of
counterintuitive ads for its reduction: a Grounded Theory study. Comunicación y
Sociedad, 31(1), 125-146.

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Matsuda, M. J. (2018). Words that wound: Critical race theory, assaultive speech, and the first
amendment. Routledge.
Slutskiy, P., & Hamilton, M. (2017). Correlates of Colorism: Freedom of Speech and
Discriminatory Advertising in Thailand. International Journal of Social Sciences, 6(2),
63-76.
Theguardian.com (2018). H&M stores in South Africa trashed by protesters after 'racist' ad.
Retrieved on: 01 July 2017, from: https://www.theguardian.com/world/2018/jan/14/hm-
stores-in-south-afrtica-trashed-by-protesters-after-racist-ad
Walters, K. (2018). “They’ll Go with the Lighter”: Tri-racial Aesthetic Labor in Clothing Retail.
Sociology of Race and Ethnicity, 4(1), 128-141.