There is Bad and there is Worse – A Comparison of Consumer Reactions to Product-Harm Crises and Brand Crises

Abstract

Reports on industrial crises are increasing in frequency and becoming part of the everyday life of consumers and companies. The purpose of this paper is to draw a clear line between two common crisis types: product-harm crises and brand crises, and their impact on consumer behavior. In a product-harm crisis, the product is defective and/or dangerous, whereas a brand crisis results from claims that a key brand proposition is unsubstantiated or false. Using a real-life product-harm crisis and a brand crisis as stimuli in an experimental setting reveals that consumer responses differ between the crisis types. When consumers are faced with a brand crisis, they are more likely to accept the negative information than consumers confronted with a product-harm crisis. Buyers of a brand that faces a crisis are more influenced by the negative news and evaluate the brand worse than non-buyers or consumers confronted with a product-harm crisis. Moreover, consumers are more aware of brand crises than product-harm crises. This research contributes to a better understanding of consumer reactions to negative publicity about products and brands and provides a basis for future research in this area.