How far can brands go to defend themselves? The extent of negative publicity impact on proactive consumer behaviors and brand equity
| Author | Sojin Jung,Byoungho Ellie Jin,Hongjoo Woo |
| DOI | http://doi.org/10.1111/beer.12246 |
| Published date | 01 January 2020 |
| Date | 01 January 2020 |
Business Ethics: A Eur Rev. 2020;29:193–211. wileyonlinelibrary.com/journal/beer
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© 2019 John Wiley & Sons Ltd
1 | INTRODUCTION
In 2006, Mike Je ffries, th e CEO of American ap parel brand
Abercrombie & F itch (A&F), wa s accused of makin g inappropriat e
comments in an int erview publ ished by the onlin e breaking news
site, Salon.com . Jeffries stated that the b rand's clothes are only for
the “cool kids,” and that n ot every consumer be longs to this exclusive
segment of the pop ulation (Denizet‐Lewis, 20 06). The consequen ces
of this one misst atement made by the brand's figu rehead were for‐
midable; consum ers formed nat ionwide solidar ity agains t A&F, and
even though the CEO an nounced his apo logy throug h the brand's
public relatio ns team, he eventually had to ste p down from his posi‐
tion (McGregor, 2013). Twelve years l ater, the brand is still str uggling
with the after effects of this incide nt. A&F’s sales have continuous ly
decreased sin ce the incident, and the num ber of store closings have
reached the leve l of bankruptcy (Jannuz zi, 2014).
The stories of suc h tragedies caused by one b rand figurehead's
poor choices is not l imited to the United State s. The European com‐
munity has also e xperienced nume rous cases such as this; af ter Karl
Lagerfeld's (Creative Director of Chanel) problematic comment on
larger sized women w as released by th e media, consume r advo‐
cate groups in Paris demanded this outspoken designer be fined
for his “defamator y and discrimin atory comment s” (Swift, 2013).
Stephano Gabbana, one of Dolce & Gabbana's two most prominent
figures, went v iral on social me dia with his controve rsial claim in
an interview wi th British Vog ue, stating that sexual harassment is
“not a violence” (Les avage, 2017). These c ases of brands’ d emise
are perfec t examples of personnel‐related negative publicity (i.e.,
negative publi city derived f rom a person ass ociated with a br and,
such as the A&F CEO and t he Dolce & Gabba na designer), whi ch
can have a massive imp act on a brand' s reputation an d financial
profile (Temin, 2013).
Received:23Aug ust2018
|
Revised:19Augus t2019
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Accepted:26Augu st2019
DOI: 10 .1111/bee r.12246
ORIGINAL ARTICLE
How far can brands go to defend themselves? The extent of
negative publicity impact on proactive consumer behaviors and
brand equity
Hongjoo Woo1 | Sojin Jung2 | Byoungho Ellie Jin2,3
1Departme nt of Clothing & Textiles , College
of Human Ecolog y, Yonsei University, Seoul ,
Korea
2Departm ent of Clothing & Textiles , College
of Human Ecolog y, Kyung Hee University,
Seoul, Korea
3Departm ent of Textiles and Appa rel,
Technology and Management, Wilson
College of Textile s, North Carol ina State
Universit y, Raleigh, North C arolina
Correpondence
Sojin Jung, D epartment of Clot hing &
Textiles, Coll ege of Human Ecology, Kyung
Hee Universi ty, 26, Kyungheedae‐ro ,
Dongdaemun‐gu, Seoul, 02447, Korea.
Email: sjjung@khu.ac.kr
Abstract
Negative publicity, defined as the public disclosure of a problematic incident associ‐
ated with a brand, is a cr itical issue for fashion brands, as it vi tiates the image of tar‐
geted brands and dri ves consumers’ voice and exi t behaviors. Desp ite the impact of
negative publicit y, few studies have compared th e impact of produc t‐related versus
personnel‐relate d negative publicit y, or explored the exte nt to which brands’ cop‐
ing strategies ca n prevent consumers’ anti‐b rand behavioral int entions and recover
brand equity. This st udy used multivariate analyses of var iance to analyze responses
from 594 American consume rs, which revealed that when negati ve publicity is about
a product‐related issue, non e of the brand's dif ferent recovery ef forts are ef fec‐
tive in decreasing consu mers’ voice and exit intenti ons and protecting b rand equity.
However, for a personnel‐related is sue, functional and informat ional recovery strate‐
gies were effect ive in decreasing consum er voice and exit intentions , and affecti ve,
functional, an d informational recover y strategies positively impacted mo st domains
of brand equity (b rand judgement, brand feeling s, and brand resonance). The follow‐
ing analysis of variance an d post hoc analyses reveale d the comparative effec tiveness
of specific recover y types. Discussions and implic ations of the findings are provided .
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WOO et al.
The afterima ge of negative publi city become s even more det‐
rimental whe n the issue is relate d to product s that come into di‐
rect contac t with consumer s’ bodies. Our s ociety has obs erved
from other indus tries that a pr oduct‐related sc andal, such as a re‐
call, foodbo rne illness, o r the use of toxic chem icals in consume r
products , can immediate ly lead to a consume r boycott. This pro d‐
uct‐related negative publicity (i.e., negative publicity d erived from
a product‐related in cident) has also b een witness ed in the fashion
industry, such a s with Greenpe ace's publicat ion of a list of global
fashion brands using toxic chemicals in the manufacturing of their
clothing (Gree npeace Interna tional, 2012), and in a m edia repor t
about A&F’s use of hazardous chemicals in their perfume products
(Townsend, 2010). Negative publicity, the disclosure of such nega‐
tive incidents through mass media outlets, has tremendous power,
thus maximizing the detrimental aftereffects of these incidents
(Dean, 200 4). The media functions as an imp ortant source of infor‐
mation for consum ers, informin g the public repu tation and eth ical
image of corporat ions (Park & Lee, 2 017). Despite the det rimental
impact of negat ive publicit y on brands’ repu tations and th erefore
future subsist ence in the market (G raafland, 20 04), very li ttle aca‐
demic researc h has been conducted on the ext ent of the impact of
negative publi city on fashio n brands (Hegne r, Beldad, & Kamph uis
op Heghuis, 2014). More im portantly, studies com paring the effect s
of various typ es of negative pub licity, or studie s suggesting a ppro‐
priate “recover y” strategie s for fashion br ands to impleme nt after
incurring negative publicity, are very scant. Furthermore, research
on the extent to wh ich a company's recovery str ategies can protect
a brand's equit y is even more sparse.
Addressing the se gaps in research is impor tant for the following
reasons. First, with increasing consumer consciousness toward cor‐
porate social re sponsibility, negative p ublicity can be tri ggered by an
ever‐expanding range of causes and events, fr om product‐related is‐
sues to personnel‐related issues as the earlier examples demonstrate
(Xie & Peng, 20 09). Due to the reach of social medi a which enables
consumers to rap idly dissemina te information, t oday the cause s of
negative publi city are not limited to cer tain issues but can s tem from
nearly any sourc e (Dean, 200 4). For this reason, brands’ respo nses
must be altered a nd strategically cr afted based on the spe cific cause
of negative publi city (Coombs, 2007) bec ause consumers may have
different exp ectation s as to what constitu tes an appropr iate rem‐
edy (Coombs, 20 07). By comparing the effe cts of different typ es of
negative publi city on consumers’ per ceptions, this study w ill provide
empirical evidence for which type of negative publicity causes more
serious consequences, and how these consequences specifically
manifest accor ding to type.
In addition, th is comparative i nvestigation wi ll test a variet y of
recovery optio ns. Researchers have po inted out that the recomm en‐
dations for recover y strategi es in previous st udies have tended t o
be fragmentary and noncommittal (Hegner, Beldad, & Kraesgenberg,
2016). Without exami ning the effec tiveness of sp ecific recover y
strategies, t he implications of this resea rch for brands would be in‐
complete. Therefore, examining the specific extent to which those
recovery str ategies can rec over brand equit y is also impor tant to
maximize the valu e of this study. Even though so me researchers h ave
tested the ef fect of negative publicit y on consumers’ brand perce p‐
tions (Standop & G runwald, 2009; Trump, 2014; Xie & Peng, 20 09),
there has yet been n o attempt to bre ak down this effe ct across
different st ages of brand equity (from the low er stage of bran d sa‐
lience to the highe r stage of brand resonance) (Kelle r, 2016). When
the effect of n egative publicity on a bran d is examined without this
specific dep artmenta lization, even if t hat effect wa s observed in a
particular e lement of brand equity, it cannot b e confirmed that the
same effec t is going to be found across oth er elements and st ages of
brand equity. Therefore, by examining the extent to which negative
publicity re covery strategies can rea ch different levels in the bran d
equity mode l, this study will reveal to what ex tent each specific re‐
covery strate gy can recover brand equ ity.
This study emp loys both the social exchange t heory and Keller's
brand resona nce model to exam ine the abilit y of a fashion com‐
pany's various re covery stra tegies to decrea se consumers’ ho stile
reactions towa rd the brand an d losses in bran d equity, throug h a
consumer exper iment. Specific ally, the current stud y aims to achieve
three goals: fir st, this study ex amines the effec ts of a fashion brand 's
recovery str ategies on two types of negativ e publicity: p roduct re‐
lated and perso nnel related. Although ef fective response stra tegies
vary depen ding on the type of negative pu blicity incident (Coombs ,
2007), compar isons of the effects of recover y efforts across dif fer‐
ent types of inc idents have been scarce in the li terature (Hegner et
al., 2014). Second, this s tudy examin es the effec tiveness of such
recovery str ategies on both con sumers’ immed iate behaviora l re‐
actions toward t he brand (voice an d exit intentions) an d customer‐
based brand eq uity, which could in dicate both the s hort‐term and
long‐term impact s of negative publicity on the br and, respec tively.
Third, in examin ing the impact of negati ve publicity on brand eq uity,
based on Keller’s (2 009) brand res onance model , this study exa m‐
ines specific ally to what extent each type of r ecovery str ategy can
preserve br and equity by comparing th e effects of recovery ef forts
across differ ent domains of brand equit y. In these ways, this experi‐
mental stud y will provide rich implicati ons for fashion brands by re‐
vealing what kind s of recovery str ategies are ef fective in sec uring
both consumer ret ention and brand equity, and wha t specific types
of recoveries are mo st effecti ve according to the t ype of negative
publicity in cident, along with the ex tent to which negative publicit y
affects di fferent stages of bran d equity.
The remainder of t his paper is str uctured as fo llows. First , the
concept of and liter ature about negative publici ty will be reviewed,
including consu mers’ voice and exi t intentions foll owing negative
publicity, and rec overy strategies. Using th e social exchange theory
to explain how the se recovery strategie s can decrease the impa ct of
negative publicity, research hypotheses regarding consumers’ voice
and exit intentio ns will also be provi ded. Following t his, Keller’s
(2009) brand re sonance mode l will be reviewed, a nd research hy‐
potheses rega rding brand eq uity will be pr oposed. Afte r providing
the study's methods and results, discussion, implications, and the
limitations of th is study will follow, along w ith suggestions for fu ture
research.
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