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Abstract
Negative information about companies can have a harmful effect on consumer perceptions. However, few studies investigate how consumers process negative publicity and how companies should react to it. In order to examine this question, two experiments were carried out: first, a laboratory experiment which tests how consumers process two different types of negative publicity (product attributes or company values); second, a field experiment comparing three different responses (no answer, denial/reduction of offensiveness and corrective action) given by the company affected by the negative publicity. Results from the first study confirm the detrimental effect of negative publicity on consumer attitudes, indicate that consumers have a higher level of involvement with the message when it is concerned with the company's values and suggest a moderating role of the product involvement on the influence of negative information on corporate image. The second study extends these findings by identifying different options for company reactions from literature and testing them empirically. Results suggest again the involvement variable as a moderator, now on the influence of company reaction on product image.
Highlights
The greater weight of negative information compared to its positive counterpart is a phenomenon that has already been investigated in the area of Psychology, especially in impression formation subject (FISKE, 1980)
Given that the main studies dealing with negative publicity have been restricted to the ability domain, such as the one of Ahluwalia and colleagues (2000), this paper aims to investigate another type of negative publicity, which is in the morality domain
Research has given heavier weight to negative information in the formation of individual judgments (FISKE, 1980) and the harmful effect of negative publicity on consumer attitudes (AHLUWALIA; BURNKRANT; UNNAVA, 2000; GRIFFIN; BABIN; ATTAWAY, 1991; MENON; JEWEL; UNNAVA, 1999), there is still a gap when referring to the influence of two types of negative publicity related to specific product attributes or to general company values
Summary
The greater weight of negative information compared to its positive counterpart is a phenomenon that has already been investigated in the area of Psychology, especially in impression formation subject (FISKE, 1980). Given that the main studies dealing with negative publicity have been restricted to the ability domain (i.e., product attributes), such as the one of Ahluwalia and colleagues (2000), this paper aims to investigate another type of negative publicity, which is in the morality domain (i.e. company values). There are suggestions in the literature that the relevance and usefulness of information that leads to the consumers’ final decision is greater in this second type of negative publicity (SKOWRONSKI; CARLSTON, 1987). The first experiment manipulates negative publicity in two levels (i.e. product information and company information) and tests how consumers perceive these different levels and how involvement affects this process. We discuss the results comparing them with previous studies, presenting the contributions and limitations of the current study and considering the implications for future research
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