Weathering Product-Harm Crises

KUL Working Paper No. MO 0611

39 Pages Posted: 16 Nov 2006

See all articles by Kathleen Cleeren

Kathleen Cleeren

Catholic University of Leuven (KUL) - Department of Applied Economics

M. G. Dekimpe

Catholic University of Leuven (KUL) - Department of Applied Economics; Erasmus Research Institute of Management (ERIM)

Kristiaan Helsen

Hong Kong University of Science & Technology (HKUST) - Department of Marketing

Date Written: 2006

Abstract

Product-harm crises can seriously imperil a brand's performance. Consumers tend to weigh negative publicity heavily in product judgments, customer preferences may shift towards competing products during the recall period, and competitors often increase their advertising spending in the wake of a brand's misfortune. To counter these negative effects, brands hope to capitalize on their equity, and often use advertising as a communication device to regain customers' lost trust. We develop a multiple-event hazard model to study how consumer characteristics and advertising influence consumers' first-purchase decisions for two affected brands of peanut butter following a severe Australian product-harm crisis. Buying a recently affected brand is perceived as highly risky, making the trial purchase a first hurdle to be taken in the brand's recovery. Both pre-crisis loyalty and familiarity are found to form an important buffer against the product-harm crisis, supporting the idea that a brand's equity prior to the crisis offers resilience in the face of misfortune. Also heavy users tend to purchase the affected brands sooner, unless their usage rate decreased significantly during the crisis. Brand advertising was found to be effective for the stronger brand, but not for the weaker brand, while competitive advertising delayed the first-purchase decision for both brands affected by the crisis.

Keywords: (pro-environmental) attitudes, Behavior, Claim, Cognitive, Consumption, Control, Control theory, Decision, Decisions, Demand, Ecological consumer behaviour, Effects, Ego depletion, Implications, Marketing, Model, Performance, Research, Self-control, Self-perception theory, Social marketing, Studies

Suggested Citation

Cleeren, Kathleen and Dekimpe, Marnik and Helsen, Kristiaan, Weathering Product-Harm Crises (2006). KUL Working Paper No. MO 0611, Available at SSRN: https://ssrn.com/abstract=944390 or http://dx.doi.org/10.2139/ssrn.944390

Kathleen Cleeren (Contact Author)

Catholic University of Leuven (KUL) - Department of Applied Economics ( email )

Leuven, B-3000
Belgium

Marnik Dekimpe

Catholic University of Leuven (KUL) - Department of Applied Economics ( email )

Leuven, B-3000
Belgium
+32 16 326 957 (Phone)
+32 16 326 732 (Fax)

HOME PAGE: http://www.econ.kuleuven.ac.be/tew/academic/market/members/MarnikDekimpe.htm

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1715/9576 (Phone)
+31 10 408 9011 (Fax)

HOME PAGE: http://web.eur.nl/fbk/dep/dep3/about/members/people/mdekimpe

Kristiaan Helsen

Hong Kong University of Science & Technology (HKUST) - Department of Marketing ( email )

Department of Marketing
Clear Water Bay, Kowloon
Hong Kong

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