Rebuilding Trust with the Chinese Luxury Consumer: Culturally Sensitive Crisis Management Strategies

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The Wharton School::Wharton Undergraduate Research::Joseph Wharton Scholars
Degree type
Discipline
Adult and Continuing Education
Communication
Asian Languages, Literatures, and Cultures
Marketing
Subject
Public relations
Chinese luxury market
Crisis management
Cultural sensitivity
Cross-cultural communication
Brand reputation recovery
Foreign brand scandals
China consumer behavior
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2025
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Zhou, Ariel
Contributor
Tuleja, Elizabeth
Abstract

Foreign luxury brands operating in China have increasingly faced public relations crises triggered by cultural insensitivity, political missteps, and perceived disrespect toward China’s national and cultural identity. While established Western frameworks, such as Coombs’ Situational Crisis Communication Theory and Burnett’s Four-Stage Crisis Management Model, offer structured response methods, their effectiveness in the Chinese context is limited unless significantly adapted to local cultural, nationalistic, and political expectations. Thus, this thesis explores five in-depth case studies of major foreign luxury scandals in China, qualitatively analyzed through three critical dimensions: (1) crisis management frameworks, (2) cultural factors, and (3) across case studies.

Key findings indicate critical divergences from Western norms, as crisis severity in China hinges primarily upon perceived offenses to national pride or cultural identity, surpassing the conventional attribution of responsibility. Effective crisis responses in China, thus, hinge on accurately classifying crises as either “cultural disrespect” or “nation-state disrespect.” Each demands distinct responses, with strategic silence appropriate for “cultural disrespect,” but if the “nation-state disrespect” threshold is breached, it requires an appropriate apology and tangible re-engagement with cultural and governmental entities. Accordingly, this thesis proposes the C.A.R.E. Model (Crisis Classification, Apology Appropriateness, Re-engagement Strategy, Execution & Evaluation) as a culturally attuned framework to guide future crisis management strategies for luxury brands in China. This research contributes to crisis communication literature by blending traditional theory with localized insight, highlighting the need for culturally calibrated, high-context, and politically attuned strategies in one of the world’s most complex and consequential markets.

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2025
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