Abstract
AbstractDifferent scientific studies provide many valuable recommendations how to manage crises in order to lessen their negative effect on relations with consumers. But the question whether the same business crises management rules can be applied for different industries, or they must be adapted depending on industries specifics, has not received sufficient scientific attention. Knowledge gaps about industry specific effect on consumer reactions to business crises remain. This study focuses on understanding the differences in consumers’ reactions in business crises situations with regard to controversial evaluation in the society of “the sin industries” (alcohol, tobacco, gambling, etc.) and ordinary industries (not having controversial associations). Experimental research design, including online experiment with tobacco, beer and functional soft drinks consumers (in total 306 respondents), was chosen for competing research hypotheses testing. Empirical evidence was in line with theoretical argumentation about less negative consumers’ reactions during business crises in case of “sin industries” versus ordinary industry. This study shows that consumers attitudes, such as perception of company’s product quality, trust, social responsibility and behavioural intentions, such as intention to buy and recommend company’s products, are less negative during business crises in lower reputation “sin industries” than in ordinary industries.
Highlights
The rapid technological progress, globalization and mobile technologies determine that today we are living in the era of crises (Lerbinger, 2012), when consumers in no time learn of the problems or crises experienced by the companies
The results of the experiment clearly show that in crisis situations consumers’ reactions to the company and its products change in the negative direction (Table 2)
The results of the study substantiated the results of previous studies (Mohr & Webb, 2005; Johnson & Grayson, 2005; Zhao et al, 2011; Cleeren et al, 2013; Haas-Kotzegger & Schlegelmilch, 2013; Grappi & Romani, 2015; Lin et al, 2011; Ahluwalia et al, 2000; Assiouras et al, 2013; Dean, 2004; Coombs & Holaday, 2007; Klein & Dawar, 2004), showing that during the crisis consumers’ reactions to the company and its products change in the negative direction and this tendency can be observed regardless of the industry
Summary
The rapid technological progress, globalization and mobile technologies determine that today we are living in the era of crises (Lerbinger, 2012), when consumers in no time learn of the problems or crises experienced by the companies. The messages on the problems related to quality of different products, accidents occurring on their production places, environmental disasters and different acts of organizational misdeed are widely covered by media, rapidly disseminated in social networks and continuously discussed with friends and acquaintances In such conditions consumers cannot remain apathetic to the information – many studies conducted in the past two decades Business organizations have no other choice but to accept crises as unavoidable reality and learn to manage them in order to minimize their negative impact on the relations with consumer This is especially important for the companies operating in the industries, which experience crises more often only due to their product specifics. Different scholars (Davidson, 2003; Keane, 2006; Kim & Venkatachalam, 2011 and others) most frequently define alcohol, tobacco and gambling business as sin industries, others mention legal pornography and weapons business
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