When a brand caught fire: the role of brand equity in product-harm crisis. Issue 7 (11th November 2014)

• Record Type: Journal Article
• Authors: Rea, Brianna; J. Wang, Yong; Stoner, Jason
• Is Part Of: Journal of product & brand management. Volume 23:Issue 7(2014)
• Page Start: 532
• Page End: 542
• Publication Date: 2014-11-11
• Subjects: Brand equity (consumer) -- Crisis management -- Product-harm crisis -- Public relations; New products -- Management -- Periodicals; New products -- Marketing -- Periodicals; Branding (Marketing) -- Periodicals; Advertising -- Brand name products -- Periodicals; 658.8
• DOI: 10.1108/JPBM-01-2014-0477
• Languages: English
• ISSNs: 1061-0421

Abstract

Abstract : Purpose: – The purpose of this study is to investigate differences in consumer reactions to high- versus low-equity brands in terms of consumer attitude toward the brand, involvement with the brand, company credibility and consumer purchase intentions. Design/methodology/approach: – Experimental procedure is conducted to test three hypotheses using 317 consumer participants. The experiment is carried out comparing a high-equity personal computer (PC) brand and a low-equity PC brand involved in product-harm crisis. Findings: – The results indicate that, in the case of product-harm crisis, negative consumer perceptions regardless of brand equity level; less negative perceptions for a high-equity brand than for a low-equity brand; and smaller loss in consumer perceptions for a high-equity brand than for a low-equity brand. Research limitations/implications: – The findings highlight the importance of brand equity in crisis management explained by covariation theory of attributions. Practical implications: – Although product-harm crisis is inevitable for many firms, continuous investment in brand equity can mitigate the negative consequences. Originality/value: – Product-harm crisis can pose serious consequences for firms on both financial and intangible dimensions. Given the occurrence of numerous product-harm crises involving both reputable and less known brands, it is important to consider potential influences of brand equity on consumer reactions to such crisis.