Who is to Blame? The Effects of Store Image and Product Branding on the Assignment of Responsibility for Failures Involving Multiple Firms

Abstract

The current work examines who consumers hold responsible when multi-loci failures occur-failure situations in which multiple firms contribute to the failure. Much of the literature that examines consumer responses to product and service failures has traditionally focused exclusively on situations that are caused by a single firm or employee (Bitner 1990; Folkes 1984; Folkes, Koletsky, and Graham 1987; Oliver and DeSarbo 1988). There are many failure situations in which multiple firms jointly contribute to or potentially contribute to the failure. Indeed, the growing trend in outsourcing production, distribution, and various sales activities has made error-free delivery of products and services quite challenging for organizations (Bennedsen and Schultz 2005; Hamm 2004). In two studies, we establish that both retailers and producers are blamed for failures occurring in the food industry. In a scenario-based survey, we manipulate store image and product branding to examine whether these constructs buffer retailer and producer responsibility, respectively. Store image has little impact in a multi-loci failure. Interestingly, counter to the standard understanding of brand equity, product branding draws blame to the producing firm. Perceptions of responsibility had direct effects on “exit” and “voice” after controlling for satisfaction. Implications for future failures research, retail policy, and brand equity are also discussed.