The impact of value-related crises on price and product-performance elasticities

  • Raoul V. Kübler
  • Michael Langmaack
  • Sönke AlbersEmail author
  • Wayne D. Hoyer
Original Empirical Research


Previous research on the impact of corporate crises on customers’ elasticity has largely focused on performance-related crises (e.g., product recalls) and found an increasing price elasticity under these conditions. We investigate whether this result differs for value-related crises that are due to ethical violations, such as the use of child labor or environmental pollution. In line with moral foundation theory (MFT), we propose that value-related crises lead to stronger moral outrage and increased boycott intentions, thereby decreasing price and product-performance elasticities. We first analyze more than 360,000 Facebook user comments in relation to four value-related and four performance-related crises and show that the different outcomes for value- and performance-related crises can be explained according to MFT. Then, through discrete choice experiments, we demonstrate that, in contrast to performance-related crises, price elasticity decreases substantially for a value-related crisis that affects both violating and nonviolating companies. We also show for the first time the impact on product-performance elasticities with similar negative effects as for price. The results are stable even for different product categories, causes of ethical violations, and measurement conditions. As a result, it is more difficult for companies to recover from value- than performance-related crises.


Value-related crisis Performance-related crisis Product-harm crisis Corporate unethical behavior Moral foundation theory Price elasticity Product-performance elasticity 


Supplementary material

11747_2019_702_MOESM1_ESM.docx (108 kb)
ESM 1 (DOCX 108 kb)


  1. Aaker, J., Fournier, S., & Brasel, S. A. (2004). When good brands do bad. Journal of Consumer Research, 31(1), 1–16.Google Scholar
  2. Auger, P., Devinney, T., & Louviere, J. (2007). Using best–worst scaling methodology to investigate consumer ethical beliefs across countries. Journal of Business Ethics, 70(3), 299–326.Google Scholar
  3. Auger, P., Devinney, T. M., Louviere, J. J., & Burke, P. F. (2008). Do social product features have value to consumers? International Journal of Research in Marketing, 25(3), 183–191.Google Scholar
  4. Bijmolt, T. H. A., Van Heerde, H. J., & Pieters, R. G. M. (2005). New empirical generalizations on the determinants of price elasticity. Journal of Marketing Research, 42(2), 141–156.Google Scholar
  5. Bloch, P. H. (1981). An exploration into the scaling of consumers' involvement with a product class. In K. B. Monroe (Ed.), Advances in consumer research (Vol. 8, pp. 61–65). Ann Abor: Association for Consumer Research.Google Scholar
  6. Borah, A., & Tellis, G. J. (2016). Halo (spillover) effects in social media: Do product recalls of one brand hurt or help rival brands? Journal of Marketing Research, 53(2), 143–160.Google Scholar
  7. Büschken, J., & Allenby, G. M. (2016). Sentence-based text analysis for customer reviews. Marketing Science, 35(6), 953–975.Google Scholar
  8. Carrington, M., Neville, B., & Whitwell, G. (2010). Why ethical consumers don't walk their talk: Towards a framework for understanding the gap between the ethical purchase intentions and actual buying behaviour of ethically minded consumers. Journal of Business Ethics, 97(1), 139–158.Google Scholar
  9. Chen, Y., Ganesan, S., & Liu, Y. (2009). Does a firm’s product-recall strategy affect its financial value? An examination of strategic alternatives during product-harm crises. Journal of Marketing, 73(6), 214–226.Google Scholar
  10. Cleeren, K., Dekimpe, M. G., & Helsen, K. (2008). Weathering product-harm crises. Journal of the Academy of Marketing Science, 36(2), 262–270.Google Scholar
  11. Cleeren, K., van Heerde, H. J., & Dekimpe, M. G. (2013). Rising from the ashes: How brands and categories can overcome product-harm crises. Journal of Marketing, 77(2), 58–77.Google Scholar
  12. Cleeren, K., Dekimpe, M. G., & van Heerde, H. (2017). Marketing research on product-harm crises: A review, managerial implications, and an agenda for future research. Journal of the Academy of Marketing Science, 45(5), 593–615.Google Scholar
  13. Clifford, S., & Jerit, J. (2013). How words do the work of politics: Moral foundations theory and the debate over stem cell research. Journal of Politics, 75(3), 659–671.Google Scholar
  14. Creyer, E. H., & Ross, W. T. (1996). The impact of corporate behavior on perceived product value. Marketing Letters, 7(2), 173–185.Google Scholar
  15. Dawar, N., & Pillutla, M. M. (2000). Impact of product-harm crises on brand equity: The moderating role of consumer expectations. Journal of Marketing Research, 37(2), 215–226.Google Scholar
  16. De Pelsmacker, P., Driesen, L., & Rayp, G. (2005). Do consumers care about ethics? Willingness to pay for fair-trade coffee. Journal of Consumer Affairs, 39(2), 363–385.Google Scholar
  17. De Wolf, D., & Mejri, M. (2013). Crisis communication failures: The BP case study. International Journal of Advances in Management and Economics, 2(2), 48–56.Google Scholar
  18. Ding, M., Park, Y.-H., & Bradlow, E. T. (2009). Barter markets for conjoint analysis. Management Science, 55(6), 1003–1017.Google Scholar
  19. Elite Daily (2013). Abercrombie & Fitch CEO explains why he hates fat chicks. Retrieved March 15, 2019 from
  20. Fiebig, D. G., Keane, M. P., Louviere, J., & Wasi, N. (2010). The generalized multinomial logit model: Accounting for scale and coefficient heterogeneity. Marketing Science, 29(3), 393–421.Google Scholar
  21. Flynn, T. N., Louviere, J., Peters, T. J., & Coast, J. (2007). Best-worst scaling: What it can do for health care research and how to do it. Journal of Health Economics, 26, 171–189.Google Scholar
  22. Folkes, V. S. (1984). Consumer reactions to product failure: An attributional approach. Journal of Consumer Research, 10(4), 398–409.Google Scholar
  23. Friedman, M. (1996). A positive approach to organized consumer action: The “buycott” as an alternative to the boycott. Journal of Consumer Policy, 19(4), 439–451.Google Scholar
  24. Gao, H., Xie, J., Wang, Q., & Wilbur, K. C. (2015). Should ad spending increase or decrease before a recall announcement? The marketing–finance interface in product-harm crisis management. Journal of Marketing, 79(5), 80–99.Google Scholar
  25. Gijsenberg, M. J., van Heerde, H. J. V., & Verhoef, P. C. (2015). Losses loom longer than gains: Modeling the impact of service crises on perceived service quality over time. Journal of Marketing Research, 52(5), 642–656.Google Scholar
  26. Graham, J., & Haidt, J. (2009): Moral Foundations Dictionary for LIWC, available online at:
  27. Graham, J., Haidt, J., & Nosek, B. A. (2009). Liberals and conservatives rely on different sets of moral foundations. Journal of Personality and Social Psychology, 96(5), 1029–1046.Google Scholar
  28. Haidt, J. (2003). The moral emotions. In R. J. Davidson, K. R. Scherer, & H. H. Goldsmith (Eds.), Handbook of affective sciences (pp. 852–870). Oxford: Oxford University Press.Google Scholar
  29. Haidt, J., & Joseph, C. (2004). Intuitive ethics: How innately prepared intuitions generate culturally variable virtues. Daedalus, 133(4), 55–66.Google Scholar
  30. Haidt, J., & Joseph, C. (2008). The moral mind: How five sets of innate intuitions guide the development of many culture-specific virtues, and perhaps even modules. In P. Carruthers, S. Laurence, & S. Stich (Eds.), Evolution and cognition. The innate mind Vol. 3. Foundations and the future (pp. 367–391). New York: Oxford University Press.Google Scholar
  31. Ingram, R., Skinner, S. J., & Taylor, V. A. (2005). Consumers’ evaluation of unethical marketing behaviors: The role of customer commitment. Journal of Business Ethics, 62(3), 237–252.Google Scholar
  32. Jolly, D. W., & Mowen, J. C. (1985). Product recall communications: The effects of source, media and social responsibility information. In E. C. Hirschman & M. B. Holbrook (Eds.), Advances in consumer research (Vol. 12, pp. 471–475). Provo: Association for Consumer Research.Google Scholar
  33. Kähr, A., Nyffenegger, B., Krohmer, H., & Hoyer, W. D. (2016). When hostile consumers wreak havoc on your brand: The phenomenon of consumer brand sabotage. Journal of Marketing, 80(3), 25–41.Google Scholar
  34. Kim, S. (2013). J.C. Penney and 6 other noteworthy company apologies. ABC news. Retrieved August 27, 2018 from
  35. Klein, J. G., Smith, N. C., & John, A. (2004). Why we boycott: Consumer motivations for boycott participation. Journal of Marketing, 68(3), 92–109.Google Scholar
  36. Lindenmeier, J., Schleer, C., & Pricl, D. (2012). Consumer outrage: Emotional reactions to unethical corporate behavior. Journal of Business Research, 65(9), 1364–1373.Google Scholar
  37. Liu, Y., & Shankar, V. (2015). The dynamic impact of product-harm crises on brand preference and advertising effectiveness: An empirical analysis of the automobile industry. Management Science, 61(10), 2514–2535.Google Scholar
  38. Louviere, J., Hensher, D. A., & Swait, J. D. (2000). Stated choice methods: Analysis and application. Cambridge: Cambridge University Press.Google Scholar
  39. Okada, E. M. (2005). Justification effects on consumer choice of hedonic and utilitarian goods. Journal of Marketing Research, 42(1), 43–53.Google Scholar
  40. Pennebaker, J.W., Booth, R. J., & Francis, M. E. (2007). Linguistic Inquiry and Word Count Software. Retrieved from
  41. Pruitt, S. W., & Friedman, M. (1986). Determining the effectiveness of consumer boycotts: A stock price analysis of their impact on corporate targets. Journal of Consumer Policy, 9(4), 375–387.Google Scholar
  42. Roehm, M. L., & Tybout, A. M. (2006). When will a brand scandal spill over, and how should competitors respond? Journal of Marketing Research, 43(3), 366–373.Google Scholar
  43. Rubel, O., Naik, P. A., & Srinivasan, S. (2011). Optimal advertising when envisioning a product-harm crisis. Marketing Science, 30(6), 1048–1065.Google Scholar
  44. Ruths, D., & Pfeffer, J. (2014). Social media for large studies of behavior. Science, 346(6213), 1063–1064.Google Scholar
  45. Schlereth, C., & Skiera, B. (2012). Measurement of consumer preferences for bucket pricing plans with different service attributes. International Journal of Research in Marketing, 29(2), 167–180.Google Scholar
  46. Schmalz, S., & Orth, U. R. (2012). Brand attachment and consumer emotional response to unethical firm behavior. Psychology & Marketing, 29(11), 869–884.Google Scholar
  47. Schneider, B., & Bowen, D. E. (1999). Understanding customer delight and outrage. Sloan Management Review, 41(1), 35–45.Google Scholar
  48. Smith, N. C. (1990). Morality and the market: Consumer pressure for corporate accountability. London: Routledge.Google Scholar
  49. Strahilevitz, M. (1999). The effects of product type and donation magnitude on willingness to pay more for a charity-linked brand. Journal of Consumer Psychology, 8(3), 215–241.Google Scholar
  50. Tellis, G. J. (1988). The price elasticity of selective demand: A meta-analysis of econometric models of sales. Journal of Marketing Research, 25(4), 331–341.Google Scholar
  51. Trump, R. K., & Newman, K. P. (2017). When do unethical brand perceptions spill over to competitors? Marketing Letters, 28(2), 219–230.Google Scholar
  52. Van Heerde, H., Helsen, K., & Dekimpe, M. G. (2007). The impact of a product-harm crisis on marketing effectiveness. Marketing Science, 26(2), 230–245.Google Scholar
  53. Verma, H. V. (2003). Customer outrage and delight. Journal of Services Research, 3(1), 119–133.Google Scholar
  54. Wattles, J. (2018). H&M closes all its stores in South Africa after protests. CNN Business. Retrieved March 1, 2019 from Accessed 1 Mar 2019.
  55. Wojciszke, B., Brycz, H., & Borkenau, P. (1993). Effects of information content and evaluative extremity on positivity and negativity biases. Journal of Personality and Social Psychology, 64(3), 327–333.Google Scholar
  56. Zhao, Y., Zhao, Y., & Helsen, K. (2011). Consumer learning in a turbulent market environment: Modeling consumer choice dynamics after a product-harm crisis. Journal of Marketing Research, 48(2), 255–267.Google Scholar

Copyright information

© Academy of Marketing Science 2019

Authors and Affiliations

  1. 1.Assistant Professor of MarketingMarketing Center MünsterMünsterGermany
  2. 2.Research AssociateKühne Logistics UniversityHamburgGermany
  3. 3.Professor of Marketing and InnovationKühne Logistics UniversityHamburgGermany
  4. 4.James L. Bayless/William S. Farish Fund Chair for Free Enterprise, McCombs School of BusinessThe University of Texas at AustinAustinUSA

Personalised recommendations