8.10 Strategic Branding Decisions
8.10.1 Brand Crisis/ Recovery
Keywords: brand crisis, product harm, crises, firestorm, negative word of mouth
(Ahluwalia, Burnkrant, and Unnava 2000) firms responses to negative events can mitigate brand perceptions
(An, Gower, and Ho Cho 2011) found firms communication can affect news.
(Golmohammadi et al. 2021) Complaint Publicization in Social Media
(Borah and Tellis 2016): nameplate recall effects on another car brand. Brand crises can negatively spill over into other segments and brands within the same brand, and the consequences are more pronounced inside a particular nation.
Other studies:
(Dawar and Pillutla 2000): Customers’ past expectations of the company influence how they understand the evidence of the firm’s reaction to a brand crisis.
(Sujay Dutta and Pullig 2011): Effectiveness of corporate responses to brand crises: The role of crisis type and response strategies
(Hewett et al. 2016): negative news spiral
(Dahlén and Lange 2006): Crises can affect other brands in the same product category, and this is especially true if the brands are comparable.
(Ertekin, Sorescu, and Houston 2018): Investors respond poorly to trademark infringement cases, but businesses that prevail in them do well over the long run.
(Dinner, Kushwaha, and Steenkamp 2018): If a brand crisis occurs in a foreign market, the repercussions relate inverted U-shaped patterns to the mental distance between the home country and the host nation. If a company has built strong marketing capabilities, the impact of psychological distance is greatly lessened.
- Active listening and empathy in the firm’s response evoke gratitude in high-arousal customers, even if the actual failure is not (yet) recovered.
- Pre-study interviews: 16 social media managers
- Data: Facebook brand community listed on the S&P 500 (Oct 1, 2011 and Jan 31th, 2016): 472,995 negative customer posts across 89 brand communities
- LIWC text mining dictionary to have intensity of pos and neg words
- Measurement:
Arousal: text analysis
Strength of structural ties: frequency of communication between users
Degree of linguistic style match (LSM): intensity of each of word categories in negative postings
Intensity of empathy/ explanation: proportion of affect/explanatory words
Control var:
Firm level: industry membership, brand familiarity, brand reputation,
Community level: community size, member attentiveness and expressiveness, firm engagemetn frequency, average structural tie strength among members, variance in linguistic style,
Post level: # of competing inputs at the time of post, sentiment of previous post, post length, post complexity, frequency of complain
firm response: respond or not, response time
time: year and month
Virality: # of likes and comments
Dummy var: apology, compensation, suggested communication channel change
8.10.2 Global Brand Strategy
(Z. Yang et al. 2019) When consumers think of themselves as local instead of global, they are more likely to link price to how good they think something is.
(Jan-Benedict E. M. Steenkamp 2019) A company’s implementation of a global brand strategy is greatly affected by its organizational structure and management methods. The more global a brand is seen to be, the higher its perceived quality and prestige, as well as its association with global citizenship, trust, affect, purchase likelihood, and loyalty.
(Torelli and Ahluwalia 2012) The perceived quality and prestige of a brand, as well as its associations with global citizenship, trust, affect, purchase propensity, and loyalty, increase the more globally recognized it is.
(Gürhan-Canli and Maheswaran 2000) Depending on the vertical dimension of individualism and collectivism, the influence of nation of origin on product choices varies.
(Strizhakova, Coulter, and Price 2011) Consumers who believe more strongly in achieving global citizenship through global brands are more inclined to utilize brands as identity markers and symbolic signals.
(Jennifer L. Aaker and Maheswaran 1997) Processing differs systematically across cultures, and these variances are caused by changes in cue diagnosticity.
8.10.2.1 Perceived Brand Globalness
E M Steenkamp, Batra, and Alden (2002)
Perceived brand globalness affects brand purchase (via brand quality, and prestige)
The effect is moderated by consumer ethnocentrism (CET)
- CET is “the beliefs held by consumers about the appropriateness, indeed morality, of purchasing foreign-made products’ (Shimp and Sharma 1987, 280)
Alternative route to brand purchase is to become an icon of the local culture
Davvetas, Sichtmann, and Diamantopoulos (2015)
- Validate results from E M Steenkamp, Batra, and Alden (2002)
Y. Xie, Batra, and Peng (2015)
Formally introduce perceived brand localness
With the construct “brand identity expressiveness”, the path of brand quality and brand prestige from previous model become null.
Brand identity expressiveness is “the capability of a particular brand to construct and signal a person’s self-identity to himself as well as his social identity to important others.” (p. 53)
Three key needs in defining self-identity (Edson Escalas and Bettman 2012):
self-continuity
self-distinctiveness
self-enhancement
Jan-Benedict E. M. Steenkamp and de Jong (2010)
Introduce two concepts:
Attitude toward global products (AGP)
Attitude toward local products (ALP)
BATRA et al. (2000)
In the context of developing countries, brands from a nonlocal country of origin are preferred to those that are local because of social status.
This effect is greater for those who have a greater admiration for developed countries lifestyles.
This effect is greater for consumers who are high in susceptibility to normative influence and product categories that carry social signaling values
This effect is greater when products are less familiar
(Bart J. Bronnenberg, Dhar, and Dubé 2009; Bart J. Bronnenberg, Dubé, and Gentzkow 2012)
Found pattern of consumer preferences for local brands
People carry their local preferences to their new location (i.e., preference persistence)
8.10.3 Competitors
(Zhou, Du, and Cutright 2021) found compliments posts (on Twitter) generated over 10x more likes and retweets than their typical content. Hence, complimenting competitors can have a positive effect on sales and reputation, because the complimenters can be seen as warmer, more friendly and trustworthy. This phenomenon is coined as “brand-to-brand praise.” In the case of skeptical consumers and for-profit brands (i.e., those were seen not as warm) and authentic and ingenuous compliments, this effect is largest.
(Wedel and Zhang 2004) The influence of national brands on store brands across subcategories is stronger than the impact of store brands on national brands.
(Thomadsen 2012) When a moderate number of consumers were underserved before to the launch of the new product and the new product is positioned so that both rivals’ goods appeal to similar sets of customers, firms gain from the arrival of a rival the most.
(Paharia, Avery, and Keinan 2014) Compared to when they are competing with brands that are comparable to them or when consumers perceive them outside of a competitive context, support for small companies rises when they are exposed to a competitive threat from large brands.
(Dubé and Manchanda 2005) Advertising’s function is to create categories rather than to steal market share (competitive), however the complementary function of advertising is considerably more pronounced in larger markets than in smaller ones.