The University of Southampton
University of Southampton Institutional Repository

Under a cloud: The impact of corporate reputation harm on brand equity and consumer value perceptions (An abstract)

Under a cloud: The impact of corporate reputation harm on brand equity and consumer value perceptions (An abstract)
Under a cloud: The impact of corporate reputation harm on brand equity and consumer value perceptions (An abstract)
What do Nestle, Apple, Tesla Motors, Shell, Walmart, NFL and FIFA have in common? These companies encountered severe corporate reputational crises due to various reasons. The stories of their crises circulated on social media, compounding the brands’ reputational damage. Such crises often precipitate a range of effects that negatively impact the company’s image and corporate reputation, market share, financial stability, public trust, its brand equity and the way consumers value the brand (Spiteri and Dion 2004). Specifically, the company under a crisis could end up with severely damaged brand equity and customer value perceptions (Spiteri and Dion 2004). Coombs (2000) suggests five types of crisis—corporate misdeeds, health challenges, ethical issues, human errors and technical failures. Although crises cannot be predicted or pre-empted, knowledge on how brand equity and value perceptions change according to the crisis type can help companies in brand communication strategy towards managing reputation following a crisis. Despite the insights provided by stand-alone studies on crisis types (Coombs 2000), corporate reputation (Raithel and Schwaiger 2014), brand equity (Kim et al. 2003) and customer value (Payne and Holt 2001), the relationship between brand equity and customer value perceptions following a crisis is not yet understood. Aiming to address the above gap, the study examines the relationship between brand equity and customer-perceived value dimensions, and customer purchase intentions, for different types of corporate reputation harm. Consistent with previous studies on reputation harm (Dean 2004, Grappi et al. 2013), this study employed a scenario-based quasi-experiment consisting of real-life corporate crises based on the typology provided by Coombs (2000). For data collection, a self-administered questionnaire was designed embedding five different scenarios to represent each crisis type. Prior to the main study, a manipulation check (n = 35) revealed significant differences between the five scenarios. In the main study, respondents included a convenience sample of UK consumers (n = 323) which were evenly distributed between professionals with a degree and postgraduate university students (62 % female, 38 % males, all aged 18+). In order to reveal the differential impact of crisis types on customer value perceptions, Partial Least Squares Structural Equation Modeling (PLS-SEM)-Based Multigroup Analysis was conducted. The study’s findings show there is a significant difference in the relationship between brand loyalty and functional value/price among the different types of crisis. In two out of five crisis types—misdeeds and ethical challenges—the above relationship is significant and positive. The findings also illustrate that across different types of crises, there is a positive relationship between brand loyalty and social value and emotional value. Further, results show differences between the relationship of perceived quality and functional value/price between the crisis types. In particular, there is no significant relationship between the above for misdeeds and ethical challenges, suggesting that these two crisis types influence the consumers’ appraisal and the impact on the perception of value for money. Moreover, the results suggest that there is significant difference in the relationship between emotional value and purchase intention among the different types of corporate reputation crisis. The study makes two important theoretical contributions. First, it investigates the relationship between brand equity and customer-perceived value dimensions in the light of company crises, which has been largely overlooked in extant research. Second, it furthers knowledge on the link between organisational crisis and brand management. The interface of the two streams of literature—brand equity and value perceptions—offers a robust platform for understanding corporate reputation and its impact on a brand’s evaluation following a crisis. From a managerial perspective, given the prevalence of corporate crises, the study’s results are crucial for marketers seeking to design effective brand communication strategies after a crisis.
2363-6165
467-468
Springer
Singh, Jaywant
db6316ed-e404-4c5a-873c-6e97c94fe531
Quamina, Latoya
03aaad0d-e084-4362-b373-2a78e3bc3715
Kalafatis, Stavros
e7b1aa2b-4d08-46fd-9eb6-215d9999d6c5
Rossi, P.
Singh, Jaywant
db6316ed-e404-4c5a-873c-6e97c94fe531
Quamina, Latoya
03aaad0d-e084-4362-b373-2a78e3bc3715
Kalafatis, Stavros
e7b1aa2b-4d08-46fd-9eb6-215d9999d6c5
Rossi, P.

Singh, Jaywant, Quamina, Latoya and Kalafatis, Stavros (2017) Under a cloud: The impact of corporate reputation harm on brand equity and consumer value perceptions (An abstract). In, Rossi, P. (ed.) Marketing at the Confluence between Entertainment and Analytics: Proceedings of the Academy of Marketing Science. (Developments in Marketing Science: Proceedings of the Academy of Marketing Science) Springer, pp. 467-468. (doi:10.1007/978-3-319-47331-4_89).

Record type: Book Section

Abstract

What do Nestle, Apple, Tesla Motors, Shell, Walmart, NFL and FIFA have in common? These companies encountered severe corporate reputational crises due to various reasons. The stories of their crises circulated on social media, compounding the brands’ reputational damage. Such crises often precipitate a range of effects that negatively impact the company’s image and corporate reputation, market share, financial stability, public trust, its brand equity and the way consumers value the brand (Spiteri and Dion 2004). Specifically, the company under a crisis could end up with severely damaged brand equity and customer value perceptions (Spiteri and Dion 2004). Coombs (2000) suggests five types of crisis—corporate misdeeds, health challenges, ethical issues, human errors and technical failures. Although crises cannot be predicted or pre-empted, knowledge on how brand equity and value perceptions change according to the crisis type can help companies in brand communication strategy towards managing reputation following a crisis. Despite the insights provided by stand-alone studies on crisis types (Coombs 2000), corporate reputation (Raithel and Schwaiger 2014), brand equity (Kim et al. 2003) and customer value (Payne and Holt 2001), the relationship between brand equity and customer value perceptions following a crisis is not yet understood. Aiming to address the above gap, the study examines the relationship between brand equity and customer-perceived value dimensions, and customer purchase intentions, for different types of corporate reputation harm. Consistent with previous studies on reputation harm (Dean 2004, Grappi et al. 2013), this study employed a scenario-based quasi-experiment consisting of real-life corporate crises based on the typology provided by Coombs (2000). For data collection, a self-administered questionnaire was designed embedding five different scenarios to represent each crisis type. Prior to the main study, a manipulation check (n = 35) revealed significant differences between the five scenarios. In the main study, respondents included a convenience sample of UK consumers (n = 323) which were evenly distributed between professionals with a degree and postgraduate university students (62 % female, 38 % males, all aged 18+). In order to reveal the differential impact of crisis types on customer value perceptions, Partial Least Squares Structural Equation Modeling (PLS-SEM)-Based Multigroup Analysis was conducted. The study’s findings show there is a significant difference in the relationship between brand loyalty and functional value/price among the different types of crisis. In two out of five crisis types—misdeeds and ethical challenges—the above relationship is significant and positive. The findings also illustrate that across different types of crises, there is a positive relationship between brand loyalty and social value and emotional value. Further, results show differences between the relationship of perceived quality and functional value/price between the crisis types. In particular, there is no significant relationship between the above for misdeeds and ethical challenges, suggesting that these two crisis types influence the consumers’ appraisal and the impact on the perception of value for money. Moreover, the results suggest that there is significant difference in the relationship between emotional value and purchase intention among the different types of corporate reputation crisis. The study makes two important theoretical contributions. First, it investigates the relationship between brand equity and customer-perceived value dimensions in the light of company crises, which has been largely overlooked in extant research. Second, it furthers knowledge on the link between organisational crisis and brand management. The interface of the two streams of literature—brand equity and value perceptions—offers a robust platform for understanding corporate reputation and its impact on a brand’s evaluation following a crisis. From a managerial perspective, given the prevalence of corporate crises, the study’s results are crucial for marketers seeking to design effective brand communication strategies after a crisis.

This record has no associated files available for download.

More information

e-pub ahead of print date: 30 April 2017
Published date: 2017

Identifiers

Local EPrints ID: 435954
URI: http://eprints.soton.ac.uk/id/eprint/435954
ISSN: 2363-6165
PURE UUID: 515ec4de-d84b-47d6-82d2-a4adb96b3fd0
ORCID for Jaywant Singh: ORCID iD orcid.org/0000-0002-0766-0162

Catalogue record

Date deposited: 25 Nov 2019 17:30
Last modified: 17 Mar 2024 03:59

Export record

Altmetrics

Contributors

Author: Jaywant Singh ORCID iD
Author: Latoya Quamina
Author: Stavros Kalafatis
Editor: P. Rossi

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×