Product recall crisis management: the impact on manufacturer's image, consumer loyalty and purchase intention

Abstract

PurposeThis paper aims to examine the impact of recall crisis management on the manufacturer's image, consumers' loyalty and future purchase intentions. More specifically, this research aims to clarify the types of recall strategies that companies put forward, as well as their impact on consumers' behaviors and perceptions of the manufacturer's image.Design/methodology/approachThe current study focuses on vehicle users who have either experienced automobile recalls or heard them discussed. Data were collected via car‐related web sites. The final sample comprises 573 people. The direction and strength of the relationships between various consumers' attitudes toward the different recall methods and their purchase intention are assessed through structural equation modeling (SEM).FindingsResults show that recalls contested by manufacturers have a significant negative impact on manufacturers' image, as well as on consumers' loyalty and purchase intentions. On the other hand, voluntary recalls or improvement campaigns have a significant positive impact on the manufacturer's image, as well as consumers' loyalty and purchase intentions.Research limitations/implicationsProactive strategies are the best solution to avoid a loss in consumer loyalty to the manufacturer during a recall crisis. In the contrary, manufacturers' adoption of reactive strategies harms their image, as well as consumers' loyalty. This translates into a negative impact on future purchase intentions and manufacturers' market share. This study concludes by recommending appropriate strategies to limit possible negative effects of product recalls.Research limitationsSome variables (such as media, the degree of severity of recalls and the frequency of recalls) are not investigated in this study. Additionally, the research is limited to the automobile industry. Other industries that also experience recalls (such as the pharmaceutical industry) might be considered in future research in order to confirm the consistency of the research findings.Originality/valueThe approach adopted by the current research is relatively different from earlier studies that directly link the types of recalls to the danger perceived by consumers that in turn affects their purchase intentions. In the current study, recalls indirectly impact purchase intentions principally via the manufacturer's image and brand loyalty. Additionally, the originality of this research stems from the fact that the manufacturer's image is considered as part of the changeable legacy of the company that itself may be affected by the “crisis situation,” not a stable asset.