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Spillover Effect Study of Product Harm Crisis on Competing Brands

Author: ChengZuoZuo
Tutor: QingPing
School: Huazhong Agricultural University
Course: Business management
Keywords: Product harm crisis Competing brands Negative spillover effect Assimilation effect
CLC: F224
Type: Master's thesis
Year: 2011
Downloads: 200
Quote: 1
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Abstract


As regulations become more stringent and mass media more sensitive in recent years, unexpected product harm crisis are everywhere in market. As one Chinese saying goes, a fire on the city gate brings disaster to the fish in the moat, crisis not only give devastaing damage to scandalized brand, but also negatively affects competing brands and even the whole product category by association, resulting in "negative spillover effect". Facing continuous product harm crisis, all trades and professions have to consider how crisis affect other competing brands, when a scandal is likely to spill over and whether different characteristics of crisis turn out to be different in negative spillover effect. Furthermore, the paper explores the possibility of Word of Mouth moderating such negative spillover effects.The paper borrows the Prime Stimulus Assimilation and Contrast Theory and Accessibility-Diagnosticity framework to explain spillover mechanism under product harm crisis. Based on literature review, spillover on competitors model for product harm crisis is construed. By virtue of survey data, the research empirically mainly uses method of between-subjects design and adopt SPSS 15.0 for descriptive statistical analysis, reliability validity analysis, paired-samples T test, ANOVA analysis of variance and multivariate analysis of variance to explores their relationships. The result shows:(1) when crisis come, non-scandalized brands can’t be isolated and inevitably involved in trouble. The negative spillover happens. (2) Event attributes of crisis positively affect the extent of negative spillover effects. High mass-arising of the crisis causes greater negative spillover effects. (3) Scandalized company attribute positively affect the extent of negative spillover effects. Typical scandalized company causes greater negative spillover effects. (4) Perceived similarity positively affect the extent of negative spillover effects. High relationships among scandalized brand and competing brands causes greater negative spillover effects. (5) Despite negative spillover effect, positive and negative word of mouth can still affect attitudes and beliefs toward competing brands. Influenced by word of mouth, negative spillover effects turn out to be different under the same type of the crisis. Positive WOM can weaken its negative spillover effects, while negative WOM deepen such negative spillover effects. These findings, in marketing theory, fill up a blank in spillover research for product harm crisis; in commercial practice, give suggestions to the corporations and even the whole industry on how to diminish the negative spillover in crisis.

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CLC: > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods
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