STRATEGIC MARKETING AND CYBERSECURITY: THE CASE OF DATA BREACHES

Abstract

Data breaches can have a negative effect on the market value of the breached firm. Numerous studies examining the impact of a data breach on the market value of the firm have suggested that market value impact is moderated by a firm's reputation and customer attributions as to who is to blame for the data breach. While market value is essential, the ability of a firm to recover from a data breach is primarily influenced by the reaction of the firm's customers. This research proposes a model comprised of proactive marketing activities based on the SERVQUAL model that a firm can undertake before a data breach to increase firm reputation, firm trust and subsequently brand equity and brand loyalty that has the potential to increase the likelihood of positive attributions should a data breach occur. The model also offers strategic marketing activities that can be undertaken after a data breach to speed a firm's recovery.