THE INFLUENCE OF PRODUCT RECALL ON CONSUMER LOYALTY. DOI: 10.15600/1679-5350/rau.v14n1p143-164

Abstract

The number of recalls has increased over the last few years and research into crisis management strategies and their impact on consumer behaviour has been carried out, however, there are still issues relating to the subject that have been little explored and there are still few empirical investigation studies into how consumers process this type of negative information and which factors have an influence on this process (Matos & Rossi, 2007). The objective of this study is to check the impact of recall on consumer loyalty, considering brand image, the seriousness of the recall and involvement with the product. Its specific objectives are: (i) to check whether recall has an impact on brand loyalty; (ii) to identify whether the seriousness of the recall has an impact on different levels on loyalty to strong brands, when compared with weak brands; and (iii) to identify whether the seriousness of the recall has an impact on different levels on the loyalty to different types of product. To investigate the hypotheses a factorial experiment (between-subjects) was undertaken with 360 undergraduate students in Sao Paulo. The independent variables were type of product (automobile or condom), product brand (weak/little known, or strong/well known) and recall (no recall, a mild recall or a serious recall); the dependent variable was loyalty. The analyses were carried out by way of a general linear model (GLM) to check the association between the study variables. The results suggest that: (i) recall has an impact on loyalty to the brand; (ii) the seriousness of the recall has an impact on different levels on loyalty towards strong brands when compared with weak brands; and (iii) the impact of the recall on brand loyalty is more negative in products where there is less purchase involvement. The main contributions are: expansion of the discussion about product recall, including the consumer loyalty variable, and indications for preparing contingency strategies for facing up to a crisis. As its contribution to management, an understanding of how recall affects loyalty is relevant, so that companies can prepare contingency strategies for facing up to the situation when a recall becomes necessary, particularly if the recall is for reasons that are considered to be serious.