An Empirical Study of the Volkswagen Crisis in China: Customers' Information Processing and Behavioral Intentions.

Abstract

Product-harm crises usually lead to product recalls, which may cause consumers concern about the product quality and safety. This study systematically examines customers' immediate responses to the Volkswagen product recall crisis in China. Particular attention was given to customers' responses to the risk information influencing their behavioral intentions. By combining the protective action decision model and the heuristic-systematic model, we constructed a hypothetical model to explore this issue. A questionnaire survey was conducted to collect data involving 467 participants drawn from the customers of Volkswagen. We used structural equation modeling to explore the model. The results show that customers' product knowledge plays an important role in their responses to the crisis. Having more knowledge would make them perceive a lower risk, but they might need even more information, making them more likely to seek and process information, and subsequently increasing their positive behavioral intentions toward the firm (that is pro-firm behavioral intentions). Risk perception increased customers' information needs, information seeking, and information processing but decreased their pro-firm behavioral intentions. In addition to promoting information seeking, information needed to also facilitate customers' systematic processing and thus increase their behavioral intentions to take corrective action. Customers' behavioral intentions were also spurred by systematic processing, but failed to be predicted by information seeking. In summary, theoretical and practical implications and suggestions for further research are also discussed.