Can commitment save companies from negative publicity? : The tempering effect of commitment and corporate response on negative publicity

University essay from Högskolan i Jönköping/IHH, EMM (Entrepreneurskap, Marknadsföring, Management); Högskolan i Jönköping/IHH, EMM (Entrepreneurskap, Marknadsföring, Management); Högskolan i Jönköping/IHH, EMM (Entrepreneurskap, Marknadsföring, Management)

Abstract:

 

 

According to Faircloth, Capella & Alford, (2001), a brand is one of the most important assets a company can possess. A brand is what the consumers relate to when differentiating one com-pany from another and therefore plays a vital role for determining competitive advantage. How-ever, in the modern world, with the increasing technology advances, companies are losing more and more control of what is said and spread about their brands. What takes companies years to build can nowadays be destroyed in just a short amount of time. When dealing with negative publicity, a company‟s actions have a crucial role in determining the outcome of the negative publicity. The theoretical literature suggests that strong respective weak corporate response, will decide whether the consumers‟ brand attitude will be improved or wors-ened. Furthermore, it is also argued that consumers‟ commitment level can temper the effects of negative publicity in the sense that the more committed a consumer is, the more he/she will re-sist a change in brand attitude. Therefore, the purpose of this study is "to examine if consumers’ atti-tude towards a brand is changed depending on strong or weak corporate response to the negative publicity. A significant aspect is to investigate and further associate the commitment variable to the outcome of change in attitudes as a result of the negative publicity."

In order to determine the cause-and-effect relationship between corporate response and brand attitude, an experiment was conducted where corporate response was the independent variable and brand attitude was the dependent variable. Furthermore, the commitment variable was in-cluded as a covariate; an independent variable not manipulated by the experimenter but still ex-pected to affect the outcome. Three different questionnaires were created: 1) Negative publicity with weak corporate response, 2) Negative publicity with strong corporate response, and 3) Negative publicity only. The experiment was conducted on consumers in Jönköping. The results indicate that whether a company decides to reply with a strong or weak corporate re-sponse to negative publicity, it will in the end have an effect on the consumers‟ brand attitude. Furthermore, the results also reveal that a consumer‟s level of commitment reinforces the effect of corporate response on his/her attitude towards a brand. In other words, the degree of the consumers‟ commitment towards a brand can temper the effect of negative publicity, ultimately saving companies from the consequences of negative publicity.

 

 

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