Brand sickness and health following major product withdrawals

Abstract

PurposeThe mandatory withdrawal of almost 2,000 complementary and alternative medicines, manufactured under contract on behalf of multiple brand names, primarily in the Australian and New Zealand markets, provides an opportunity to examine the impact on sales levels and both brand and category loyalty of a major product confidence crisis. Sets out to deal with this issueDesign/methodology/approachFocuses on the impact of the events surrounding the recall within both the Australian and New Zealand markets and links the events surrounding the recall with the scant international literature relating to brand management during crisis situations. Then reports on findings from an investigation of New Zealand consumer perceptions of the sector after the recall event.FindingsThe substantial impact on both category and brand loyalty in the face of prolonged non‐availability of some products is revealed, as is the lack of contingency planning across product supply and marketing communications dimensions. Concludes with recommendations for the future management of brands during such events.Practical implicationsLessons that may be learned in relation to brand management during crisis situations are stressed, along with implications for cross‐border brand management.Originality/valueThe dynamics of the complementary and alternative medicines market have not been comprehensively researched. In addition, the extant literature regarding brand management during crisis situations is not extensive. This paper therefore makes a contribution towards the understanding of an under‐researched market sector and also the impact on brand management of major disruption to consumer confidence and product availability.