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How company responses and trusting relationships protect brand equity in times of crises

Abstract

Brands are susceptible to various forms of crises, regardless of whether a brand’s conscious deviation from socially acceptable practices or forces and activities beyond the brand’s control prompted a crisis. Undeniably, crises can have negative ramifications for the brand’s consumer relationships and financial assets. An experimental study with 187 residents of the Netherlands was conducted to determine whether or not crisis response strategies influence post-crisis brand equity. In addition, the research also investigated the influence of pre-crisis brand trust on the relationship between crisis response and post-crisis brand equity. Results show that the ways in which brands react to a crisis have an influence on brand equity. Non-response leads to the depreciation of brand equity. Furthermore, pre-crisis brand trust can serve as a buffer for a brand during a crisis and even after it.

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Additional information

3obtained her Master of Science in Communication Studies at the University of Twente (Enschede, the Netherlands). For her Master’s thesis, she investigated the effects of various crisis response strategies on brand equity.

Appendices

Appendix A

News article

Consumer group find high levels of carcinogenic chemicals in brand X’s t-shirts

Tubantia, May 1, 2012

An influential consumer group called for a worldwide ban of two types of chemicals used in the t-shirts of Brand X, claiming that the chemicals could cause cancer.

A letter Brand X sent to Greenpeace last month indicated that the brand ‘always prioritizes quality and safety’. Greenpeace, nonetheless, decided to test the veracity of the brand’s claim as part of the organization’s campaign of how toxic chemicals could enter the human body through food items, household products, and clothing articles. Greenpeace commissioned an independent laboratory, Eurofins, to analyse the t-shirts of Brand X currently sold in 22 different countries. Analyses showed that cancer-inducing chemicals are present in the t-shirts tested.

Consequently, the Center for Science and Public Interest (CSPI) also performed its own test of the t-shirts upon hearing of Greenpeace’s claims. ‘We’re asking the WHO (World Health Organization) to ban the use of chemicals in Brand X’s t-shirts’, said Rick Peterson, Executive Director of CSPI. Peterson added that such a ban is urgent as the chemicals used in the t-shirts have been found to cause cancer in mice and rats.

According to CSPI, Brand X’s t-shirts are produced from cotton processed with high levels of carcinogenic chemicals, namely, cyanide, dicofol, naled, and propargite. The chemicals used for processing the textile for Brand X’s t-shirts are still present when they reach the stores.

------- Insert Company Response here --------

Brand X is a worldwide company known for its good price/quality ratio. It has never experienced any product recall and has not violated any law before. The negative environmental and health effects of these four chemicals have been known for a long time. Therefore, it is worrying that Brand X still produces t-shirts containing high levels of these chemicals. There is currently no ban on these four toxic chemicals, the CSPI wants the WHO to forbid the four toxic chemicals.

illustration

figure a

Appendix B

Trust – Delgado-Ballester et al (2003)

Brand X guarantees satisfaction.

Brand X is a brand name that meets my expectations.

I feel confidence in Brand X.

Brand X is a brand that never disappoints me.

Brand X would be honest and sincere in addressing my concerns.

Brand X would make any effort to satisfy me.

I could rely on Brand X to solve the problem.

Brand X would compensate me in some ways for the problem with the clothes.

Brand equity – Yoo and Donthu (2001)

Brand loyalty

I consider myself to be loyal to Brand X.

Brand X would be my first choice.

I will not buy other brands if Brand X is available at the store.

Perceived quality

The likely quality of Brand X is extremely high.

The likelihood that Brand X would be functional is very high.

Brand awareness

I can recognize Brand X among other competing brands.

I am aware of Brand X.

Some characteristics of Brand X come to my mind quickly.

I can quickly recall the symbol or logo of Brand X.

I have difficulty in imagining Brand X in my mind (r).

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Hegner, S., Beldad, A. & Kamphuis op Heghuis, S. How company responses and trusting relationships protect brand equity in times of crises. J Brand Manag 21, 429–445 (2014). https://doi.org/10.1057/bm.2014.12

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Keywords

  • brand equity
  • crisis
  • crisis response strategies
  • brand trust