Executive summary of "An investigation of the effects of product recalls on brand commitment and purchase intention

Citation

(2015), "Executive summary of "An investigation of the effects of product recalls on brand commitment and purchase intention", Journal of Consumer Marketing, Vol. 32 No. 1. https://doi.org/10.1108/JCM-12-2014-1257

Executive summary of "An investigation of the effects of product recalls on brand commitment and purchase intention"

Article Type: Executive summary and implications for managers and executives From: Journal of Consumer Marketing, Volume 32, Issue 1

This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.

Consumer reaction to product recalls has been the subject of considerable research attention. The focus has largely been placed on how businesses can find ways to minimize the negative impact in the aftermath of a recall event. Evidence shows that brand equity, together with the image and reputation of the firm, are particularly vulnerable. Damage inevitably extends to investor returns and market share as well.

Brand commitment has been found to moderate the negative effects in these circumstances. More specifically, consumers who are highly committed to a brand are more prone to overlook any unfavorable exposure. Two forms of commitment are noted in the literature:

1. Affective commitment, which demonstrates emotional attachment to a company or brand that results from personal involvement. This type of commitment and the trust it incorporates is regarded as higher level.

2. Calculative commitment: Economic motivations drive this form. It has a rational foundation that considers the cost of switching brands and other choices available.

Four categories of consumers have been identified based on their levels of affective and calculative commitment. They are labeled as follows:

1. Hard Cores: These consumers score high in both commitment forms. Brand loyalty is important to them and they embrace common values they share with their favorite brands. This bond should shield against negative consequences of recall, many authors believe. However, a decrease in calculative commitment may occur due to individuals perceiving a greater risk in consuming the brand.

2. Don’t Cares: The lack of attachment in either affective or calculative terms characterizes this segment. It is purported that a product recall will damage existing relations with the brand because both forms of commitment are already low.

3. Lovers: Affective commitment is high for these individuals, but calculative commitment is low. Emotional attachment is said to emerge through nostalgia in the shape of “cognitive memories and affective experiences”. Factors relating to, such as, a brand’s functional value or switching costs do not diminish their affective commitment. Product recall may not either. But the already weak calculative commitment is likely to reduce further.

4. Rationalists: Commitment from these consumers is of an economic kind. Brand utility drives choice, which is influenced by product benefits and costs associated with switching or terminating the relationship. Affective commitment is low in this group and will be further weakened in the event of a recall. Concerns about brand quality in such situations will likely also bring about a reduction in calculative commitment.

Consumer behavior after a recall event is also shaped by various internal and external factors. Regarding the former, trust in the brand is crucial. Plenty research positively links trust to purchase activity, brand loyalty, word-of-mouth recommendations and insensitivity to price. A product recall produces a harmful effect on these behaviors. The impact is greater when the brand is strong, as this exacerbates consumer disappointment.

Risk aversion is another key internal factor. In this context, risk takes two forms: risk associated with the actual recall, and the risk inherent in trying out alternative products and brands. Both risk types can seriously influence subsequent consumer actions. Scholars suggest that risk of the unknown might be perceived as greater; therefore, consumers will maintain their commitment to the brand. Remaining loyal becomes likelier if the recall is voluntary and suitable replacements with the same brand are available.

It is variously suggested that consumer thinking style shapes how pessimistic information is received. Those who think holistically consider all information, not just the negative details pertaining to recall. Voluntary product recall by a firm is in itself viewed as a positive action that outweighs the predictable negativity that surrounds the event.

Who is responsible for the recall is identified as an important external factor. Hostility toward the brand will be greater when corporate responsibility is perceived to be failing as opposed to the problem being down to a supplier.

Consumers also pay attention to the seriousness of the recall. Trust and commitment invariably suffer when the issue increases perceptions of risk. On the other hand, something like labeling inaccuracy might be overlooked more readily.

The consequences are often more serious when recall involves a core product of the brand. Disappoint is greater among committed consumers, and damage to brand reputation is more serious than when a non-core product is subjected to recall.

Dass & Byun test out various hypotheses using a scenario-based experiment. Subjects were exposed to a recall situation, involving a serious or minor issue, a core or non-core product and fault of company or supplier. Commitment and purchase intention were measured both before and a week after the product recall scenario to ascertain any changes. Starbucks was chosen as the study brand due to its high profile and relevance to the undergraduate student participants. The study was later replicated using Nike.

Both studies provided similar findings following product recall and are listed below:

• Affective commitment reduces in all groups, except for Lovers. These consumers react less to negative publicity because of their high degree of affective commitment.

• Calculative commitment increases for Hard Cores and Rationalists. Their high levels of this commitment are attributed to switching costs and limited number of alternatives.

• The tendency for affective commitment to be independent, indicated by the fact it is only influenced by its own level prior to recall.

• Affective commitment exhibits a stronger resistance to negativity than calculative commitment.

• The impact of a recall on calculative commitment depends on pre-event levels of both commitment types and purchase intention. Negativity has a lower impact if affective commitment of purchase intention is high prior to recall.

• Hard cores are influenced by trust and holistic thinking. Looking at the whole event increases calculative commitment because recall signals “choice deletion”.

• Rationalists base their decision making on their experiences and product knowledge.

• Lovers are risk averse and this makes them avoid alternatives and increase their affective commitment to the brand.

• Rationalists and Lovers are the groups most influenced by external factors. When product recall involves a core product of a favored brand, the negative impact is greater.

• A serious product recall has a more significant effect on the purchase intention of Hard Cores than on their commitment.

• Neither internal nor external factors have any impact on the commitment levels of Don’t Cares. They show little interest in product recalls. But, being detached from the brand prompts a considerable decrease in their purchase intention.

Different communication strategies should be used following a recall depending on the consumer group, the authors believe. Informing Hard Cores and Rationalists about alternatives under the same brand can help sustain their calculative commitment. Therefore, having a product portfolio is recommended as a means of retaining market share. Messages that reinforce the importance of emotional attachment to the brand are most likely to resonate with Lovers. Dass & Byun likewise advocate using multiple marketing channels incorporating high, medium and low-media richness as a means to improve both types of commitment. Strategies that help boost affective commitment are perceived as valuable during challenges times.

An investigation into possible interaction between product category and commitment is an option for future study. Consideration of different categories is thus suggested. Whether or not the negative impact of a recall on such as purchase behavior is permanent or can be later reversed is also worthy of exploration.

To read the full article enter 10.1108/JCM-06-2014-1000 into your search engine.

(A précis of the article “The impact of choice on co-produced customer value creation and satisfaction”. Supplied by Marketing Consultants for Emerald.)