Consumer reactions to product recalls: the effects of intentionality, reputation, and public apology on purchase intentions

Abstract

The existence of a more suspicious and less forgiving public, as well as increased regulations and intense digital communications has heightened the level of threats to organizations. Among those threats, product harm crisis will have significant consequences on both firms and consumers. Those consequences often involve product recalls, where all defective products are being pulled from the market. When a product recall occurs, it will be followed by a search for attribution of blame. It is known that intentional and unintentional events affect consumer attributions differently. Especially, during product harm crisis and product recall situations, the future consumer responses might change in regard to the level of attributed blame to the company. Another important factor during crisis is reputation, where a high reputation may act as a shield during the crises since high-reputation companies can be more effective than low-reputation companies in crisis management. Inspired by the 2015 Volkswagen emission crisis and recall, this study aims to extend the current knowledge on crisis situations by adding the intentionality dimension and try to understand whether it alters the consumer perceptions despite the protective powers of reputation, through an experimental study where two factors (reputation and intentionality) are being manipulated at two levels (2X2). A total of 730 responses were collected and the responses were analyzed by using MANOVA and SEM techniques. The results revealed important ramifications in terms of the effects of corporate reputation and intentionality of wrongdoing on perceived apology sincerity, attitude towards the company and purchase intentions.