When do unethical brand perceptions spill over to competitors?

Abstract

We examine whether the unethical actions of marketplace brands (e.g., the Volkswagen emissions scandal) hurt the ethical perceptions of competing brands (e.g., Ford, BMW). Across two studies, we find evidence for this unethical spillover effect and show that it can negatively affect consumers’ liking and purchase intentions for a competing brand. The results show that the spillover effect (1) only occurs for similar competitors and (2) is moderated by construal level (CL). Specifically, the spillover effect is more likely to occur when consumers focus on the finer details of the unethical brand’s transgression (i.e., low CL) but not when they focus on the bigger picture of the transgression (i.e., high CL). Thus, while it is intuitively appealing to assume that brands may benefit from a competitor’s foible, this research indicates that competitors may be hurt by a similar brand’s wrongdoing.