The roles of brand equity and branding strategy: A study of restaurant food crises

Abstract

Food crises, such as food borne illnesses, are a major threat to the restaurant industry. However, consumer responses to a food crisis are expected to differ depending on the brand equity and branding strategy of the restaurant involved. In order to test the roles of brand equity and branding strategy in a food crisis situation, this study used a scenario-based experimental survey with a 2 (brand equity: Low/High)×2 (branding strategy: Corporate branding/House-of-brands)×2 (presence of crisis: No/Yes) design. The results of the study supported the “amplifying” perspective by providing evidence of the negative role of brand equity during a crisis. Moreover, the three-way interaction between brand equity, branding strategy, and presence of crisis revealed the effectiveness of the corporate branding strategy, which varies depending on the level of brand equity, under crises. The findings of this study will enable marketers to develop appropriate post-crisis strategies based on predicted consumer responses depending on the level of brand equity and branding strategy. Further discussion and implications are provided in the text.