Abstract
We assess attenuating and augmenting effects of brand commitment on consumer responses when product recalls occur. Consistent with our theorization, results from a laboratory experiment and an event study show that high levels of brand commitment attenuate negative consumer responses in low-severity product recalls but augment them in high-severity product recalls. Thus, while brand commitment seems to provide a reservoir of goodwill in the former case, it acts as a liability in the latter. These findings add to the extant brand and product recall literature by demonstrating that brand commitment has a complex effect on consumer responses when product recalls occur. Because product recalls are widespread, these findings also have managerial relevance.
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Notes
The three items are (1) “If brand X were not available at a store, it would make little difference to me if I had to choose another brand”; (2) “I consider myself to be highly loyal to brand X”; and (3) “When another brand is on sale, I would purchase it rather than brand X.” (coefficient alpha = 0.87). Ahluwalia et al. (2000) used the same scale to measure brand commitment.
Measuring attitude change as a difference raises the issue of whether the difference scores are reliable. Extant research (e.g., Collins 1996) has shown that difference scores are unreliable only when the pretest (x) and posttest (y) standard deviations are equal (i.e., λ = σ x /σ y = 1) and when the correlation between the two scores is high (ρ xy ≈ 1). Considering our data, λ = 0.57 and ρ xy = 0.47, in support of the reliability of our measure. The temporal proximity of the pre- and posttest scores remains a limitation.
We also estimated a fixed-effects model and then conducted the Hausman test to determine whether the random effects model is appropriate. The Hausman test yielded a statistically non-significant χ 2 (χ 2 = 0.296) suggesting that the random effects model is appropriate.
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Germann, F., Grewal, R., Ross, W.T. et al. Product recalls and the moderating role of brand commitment. Mark Lett 25, 179–191 (2014). https://doi.org/10.1007/s11002-013-9250-5
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DOI: https://doi.org/10.1007/s11002-013-9250-5