contagious disaster

A Disaster Is Contagious: How a Brand in

Crisis Affects Other Brands

MICAEL DAHLEN

Center for Consumer

Marketing

Stockholm School of

Economics

[email protected]

FREDRIK LANGE

Center for Consumer

Marketing

Stockholm School of

Economics

[email protected]

Negative publicity is increasing in frequency to become part of the everyday iives of

consumers and everyday business of brands. Previous research reports several

negative effects on the focal brand and tests strategies to cope with one's own brand

crisis. But one question needs examining: how does a brand crisis affect the product

category and competing brands? This article reports two studies showing that a brand

crisis changes consumer perceptions and the game rules of the entire product

category. The effects on competing brands differ depending on similarity to the brand

in crisis. Implications for advertising, positioning, and tracking are reported in the

study's findings.

INTRODUCTION

Tylenol poisonings, questionable ethics at ArthurAndersen, defective Firestone tires, contaminatedTaco Bell products—the list of high-profile brandcrises in recent years is a long one. Flip throughthe pages of any newspaper on a given day andyou can be sure to find reports of brands in crisis.The authors perused four major newspapers on aThursday morning and found 19 articles relatingto brands—11 were negative. The frequency ofnegative brand publicity is increasing in the every-day lives of consumers and everyday business ofbrands (cf. Dawar and Pillutla, 2000; Laczniak,DeCarlo, and Ramaswami, 2001). In fact, an often-cited study by DDB Needham Worldwide sug-gests that, today, negative publicity is one of themost important factors influencing consumers' buy-ing decisions (e.g., Ahluwalia et al., 2000).

The potential impact of negative publicity isunsurprising. First, publicity in general is a morecredible source of information than advertising andis therefore more influential (Ahluwalia, Unnava,and Burnkrant, 2000). Second, because the mediaprefers reporting bad news, companies are morelikely to receive bad press rather than positive press(Dean, 2004). Third, negative information is morediagnostic than positive information (the so-called

negativity effect), meaning that consumers putgreater weight on it in their brand judgments(Ahluwalia, Burnkrant, and Unnava, 2001).

Accordingly, negative publicity receives a sub-stantial amount of research interest. The negativepublicity research uncovers a number of effects onthe focal brand, such as reducing effectiveness ofthe company's advertising (Stammerjohan, Wood,Chang, and Thorson, 2005), damaging reputation(Dean, 2004), reducing brand equity (Dawar andPillutla, 2000), negative attitudes (Ahluwalia et al.,2000), and unfavorable associations (Ahluwalia et al.,2001). However, no study to date examines the ef-fects a brand in crisis might have on the productcategory and competing brands. Are they exempt?Or could reports on, for example, Tylenol poison-ings, or the recent Tegenero medical test tragedy,lead to an increased suspicion toward pain reliefpills in general, and alter the criteria by which con-sumers evaluate competing brands? Could the re-ports on driving problems with the Suzuki Samuraiaffect how consumers evaluate and process adver-tising for Land Rovers and other off-road vehicles?Disaster is contagious, and brand crisis may affectconsumer perceptions of the entire product cat-egory and perceptions and choices of competingbrands.

388 Of lyEBTISlOG RESEHRCH December 2 0 0 6 DOI: 10.2501/S0021849906060417

HOW A BRAND IN CRISIS AFFECTS OTHER BRANDS

Today, negative publicity is one of tiie most important

factors infiuencing consumers' buying decisions.

The argument builds on categorizationand priming theories suggesting that thecompeting brands that come to mind af-fect consumers' perceptions of a productcategory (cf. Ehrenberg et al., 2002). Whena brand receives negative publicity, it be-comes more salient in consumers' mindsand may have a greater effect on theirperceptions of the product category thanpreviously. This salient brand may workas a prime on consumer's evaluations ofother brands in the same product cat-egory, so that consumers evaluate similarbrands more negatively and dissimilarbrands more positively. By testing theseassumptions, the study extends the liter-ature on negative publicity beyond effectson the brand in crisis to effects on cat-egory competition. Moreover, this articleties in with recent literature suggestingthat brand perceptions are continually re-constructed (e.g., Cramphorn, 2004; Hall,2002; Weilbacher, 2003) and provides em-pirical evidence that marketing communi-cations and market research must befrequently updated and take the brand'scontext better into account.

BRAND-IN-CRISIS EFFECTS ON PRODUCT

CATEGORY PERCEPTIONS

To minimize cognitive effort, consumersgroup brands together in associative net-works to form product categories (Meyers-Levy and Tybout, 1989). These associativenetworks contain all our knowledge ofthe product category, such as categorymembers (brands), product attributes,usage situations, and consumption expe-riences. Product category knowledge pro-vides an instant idea about what itsmember products are about and helps

consumers generalize knowledge aboutbrands they have encountered onto other,similar, brands (Medin and Smith, 1984).Categorization enables consumers to ef-fortlessly form a set of alternatives in apurchase decision and provides criteriafor choosing between the competingbrands (Ratneshwar, Barsalou, Pechmann,and Moore, 2001).

Product categories are not fixed, butare continually updated when consum-ers encounter new information (Moreau,Markman, and Lehmann, 2001). For ex-ample, consumers may incorporate a newbrand into the sparkling water productcategory and label yet another sparklingwater brand, or the new brand may adda new subcategory in the form of, forinstance, flavored sparkling water. Ge-neric advertising, new-product introduc-tions, and newspaper stories can changehow much weight consumers place oncertain attributes (e.g., Chakravarthi andJaniszewski, 2004; Shankar, Carpenter, andKrishnamurthi, 1998). Thus, consumersmay update product categories with newinformation that alters our decision crite-ria, as when the Super Size Me movieinformed consumers about the nutri-tional content of hamburger meals andmade meal size and calories more impor-tant product attributes.

Whether new information updates con-sumers' perceptions of the product cat-egory or not depends on its accessibilityand relevancy (Braun, Gaeth, and Levin,1997). Processing occurs easily for highlyaccessible information. In fact, the mereaccessibility of information is an impor-tant cue in itself (Menon and Raghubir,2003). The easier an event comes to mind,

December

the more frequent consumers estimate theevent to be. For example, studies showthat the easier in memory it is to retrieveAIDS-related behaviors, the higher peo-ple judge their risk of contracting AIDS(Raghubir and Menon, 1998). Similar re-sults occur for a number of risks, such asheart disease and sexual assault (Schwarz,2004). Applied to negative publicity, theeasier consumers retrieve a brand in crisisfrom memory, the higher they estimatethe risk (likelihood of brand crisis) in theproduct category.

Not only does negative publicity in-crease the accessibility of the brand incrisis, such publicity also increases its rel-evaricy. Research shows that publicity isgenerally seen as more relevant than ad-vertising (Dawar and Pillutla, 2000). Fur-thermore, consumers perceive negativeinformation as more diagnostic and rele-vant than positive information (Ahluwa-lia, Burnkrant, and Unnava, 2001). Thus,negative publicity is relevant almost bydefinition.

In conclusion, a brand in crisis thatreceives negative publicity increases itsaccessibility and relevancy. Therefore, byway of its association to the product cat-egory, consumers use the new informa-tion about the brand to update theircategory perceptions. As a result, consum-ers wiU reevaluate category attributes fromthe associations to the brand in crisis (inorder to reduce the perceived categoryrisk induced by the brand).

HI: A brand crisis affects the evalua-

tion of category attributes.

CRISIS EFFECTS ON SIMILAR AND

DISSIMILAR COMPETING BRANDS

Consumers store information about brandsin individual brand schemas (Braun, 1999).Challenging the traditional view of thebrand schema as a rather stable entity,recent literature suggests that brand

2 0 0 6 JOURIIHL DF RDUERTISIOG RESERRCH 3 8 9


schemas change continuously (e.g., Braun-Latour and Latour, 2005; Hall, 2002). Abrand evaluation at any moment is a tem-porary construction; accessibility and sa-lience of whatever attitude-relevantinformation comes-to-mind influence abrand evaluation (Reed, Wooten, and Bol-ton, 2002). Therefore, the brand's contextmay be as important as the brand itselfwhen consumers evaluate brands (Weil-bacher, 2003).

By way of categorization and inferencemaking, information about a brand in cri-sis should be both accessible and relevantinput in the temporary construction ofevaluations of competing brands. Re-search shows that information is general-izable between brands, so that, for example,consumers perceive a new car as expen-sive when one brand's car exposure oc-curs together with other expensive cars,and consumers perceive the car to be cheapwhen exposure of a car with a lower priceoccurs together with extremely expensivecars (Herr, 1989). In the first case, consum-ers assimilate the new car with the othercars, and consumers incorporate expen-sive price information into the brandschema. In the second case, consumerscontrast the new car with the other cars,and information about the brand as rela-tively cheap occurs into the brand schema.Expect similar mechanisms to be at playwhen a brand in crisis provides the con-text for evaluations of competing brands.

The degree of associative overlap be-tween brands affects whether a brand isassimilated or contrasted to a context brand(Herr, 1989). A high degree of overlapfosters assimilation and a low degree ofoverlap fosters contrast (Meyers-Levy andSternthal, 1993). For example. Van Aukenand Adams (1998) find that the introduc-tion of a toy store in the MontgomeryWard department store assimilates thebrand with Toys 'r' Us and enables trans-fer of desirable associations from Toys 'r'

Us to Montgomery Ward. However, inanother study, they found that advertis-ing for the Mazda Miata that compared itwith the BMW Z3 resulted in loweredquality ratings for the Miata, because itwas perceived as being too different fromthe BMW Z3 (Van Auken and Adams,2005).

Applied to negative publicity, a brand incrisis likely influences negative effects onsimilar competing brands. When consum-ers evaluate brands in the same product cat-egory as the brand in crisis, the negativepublicity may be an input in the reconstruc-tion of brand schemas. Negative associa-tions can spill-over onto brands withschemas that have a high degree of asso-ciative overlap with the salient brand in cri-sis (Hypothesis H2). Conversely, one wouldexpect positive effects on dissimilar brands.These brands have a low degree of asso-ciative overlap with the brand in crisis. Thus,the salient information from the brand incrisis produces a contrast effect on brandevaluations (Hypothesis H3).

H2: A brand crisis affects evaluations

of similar brands negatively.

H3: A brand crisis affects evaluationsof dissimilar brands positively.

METHOD

To test the hypotheses, comparing cat-egory and brand perceptions between con-sumers exposed versus consumers notexposed to a brand crisis in the sameproduct category must be possible. Thestudy includes creating an experimentaldesign to ensure complete control overcrisis exposures.

Banks were chosen as the product cat-egory for two reasons. First, the bankcategory comprises a number of highlycompetitive and well-known brands.Second, one can make a simple divisionbetween traditional banks and new.

online-based, banks. The existence of twosubcategories enables comparisons be-tween brands with both higher (similar)and lower (dissimilar) associative over-laps. Furthermore, banks make an inter-esting product category because they aresubject to both much press coverage andcompeting advertising.

Procedure

To ensure that our scenario would be rel-evant to respondents, we used visitors toan apartment showing as our samplingframe because apartment transactions areadministrated and financed by banks. Weasked the three market-leading real estateagents to give us a representative sampleof apartment showings in the Stockholmarea and were admitted to three show-ings per agent. All 119 visitors were handedquestionnaires, and 100 complete ques-tionnaires were returned, making a re-sponse rate of 84 percent. The sampleconsisted of 59 percent women and 41percent men, and the average age was 39.

We used the common procedure in neg-ative publicity research, in which respon-dents are exposed to a scenario in theform of a newspaper article and theirreactions are measured in a questionnaire(e.g., Stammerjohan, Wood, Chang, andThorson, 2005). One group of respon-dents was exposed to a negative scenarioin the form of a newspaper article about afictitious online bank in crisis (reports onfraud and insolvency) before filling outthe questionnaire. We chose a fictitiousbrand to avoid confounding effects due toconsumers' potential relationships with ex-isting brands. The other group of respon-dents worked as a control group and filledout the questionnaire without previousexposure to any newspaper article.

Respondents were randomly assignedto one of the two conditions (newspaperarticle/no newspaper article). The ques-tionnaire included questions about the

390 DF RDOERTISIRG RESERRCH December 2 0 0 6


respondent, about the bank category in

general, and about specific bank brands

that were similar or dissimilar to the brand

in crisis.

Research instrument development

The newspaper article was pretested on20 respondents, who rated its valence(negative /positive, unfavorable /favorable,no crisis/crisis) and credibility (biased/unbiased, subjective/objective, believable/unbelievable) on a 7-point scale (Cronbach'salpha for both indices >0.86). The averagevalence was 1.9 and the average credibilitywas 6.1, and the newspaper article wasdeemed suited for simulating negativebrand publicity.

Three brands were chosen for the study,two online bank brands and one tradi-tional bank brand. The two online banksrepresent similar brands and the tradi-tional bank represents a dissimilar brand(testing Hypotheses H2 and H3). The rea-son for including two similar brands inthe study is that we expect similar brandsto suffer more from a brand crisis. Forexploratory purposes, we investigatewhether the effects are common for botha weak (number five in the market) anda strong (number one in the market)brand. We chose the traditional bank basedon familiarity, ranking three in the mar-ket and holding a top-place advertisingpresence.

Measures

To measure category attributes (HypothesisHI), we first conducted a pretest, where10 respondents retrieved attributes frommemory that they would use when choos-ing a bank. Second, 20 respondents ratedthe importance of these attributes on ascale 1-7. The four attributes that ratedhighest (M > 5) were selected for inclusionin the questionnaire: price, competence,information, and availability. In the mainstudy, respondents rated the importance

of each attribute on a Likert scale rangingfrom 1 (not at all) to 7 (very important).

In the argumentation leading up to Hy-pothesis HI, it was reasoned that a brandcrisis would probably increase perceivedrisk. To account for this, we measuredcategory risk on a 1-7 scale with a three-item measure (high risk/low risk, unsafe/safe, not risky/risky). They were averagedto form an index (Cronbach's alpha >0.90). As an exploratory measure, we alsoasked respondents to rate their category

attitude on a 7-point semantic differential,comprised of three items: good/bad, favor-able/unfavorable, attractive/unattractive.They were averaged to form an index(Cronbach's alpha > 0.86).

We measured brand evaluations (Hypoth-eses H2 and H3) with a number of ques-tions to get a comprehensive view of thehypothesized effects: brand associations weremeasured with the same items that we usedfor the category attributes. Respondentsrated each brand on a 1 (not at all) to 7 (verywell) Likert scale regarding convenience,price, competence, and information.

Brand attitude was measured on a 7-pointsemantic differential with three items: good/bad, favorable/unfavorable, attractive/unattractive. They were averaged to forman index (Cronbach's alpha > 0.92).

Brand trust was measured on a 7-pointLikert scale with four items: "I trust thisbrand," "I rely on this brand," "this brandis honest," and "this brand is safe." Theywere averaged to form an index (Cron-bach's alpha's > 0.96).

Ideal proximity was measured for eachbrand on a 1 (very far) to 7 (very close)scale with the question: "Imagine a bankthat is perfect in every aspect; how closeto this ideal is the brand?"

Brand choice would ideally be tested ina quasi-experimental approach that mea-sures the impact of a real brand in crisison the sales of other brands in the cat-egory (cf. Campbell, 1969). However, the

study's scenario-based approach did notprovide such an opportunity. Brand choicewas instead measured with an open-ended question in the questionnaire: "whatbrand would you choose if you were tosign a bank loan today?" In addition, wemeasured purchase intention for eachbrand on a 1 (very unlikely) to 7 (verylikely) scale with one single question: "Ifyou were to sign a new bank loan, howlikely would you choose this brand?"

RESULTS

In order to test all hypotheses simulta-neously, we ran a MANOVA (multivari-ate analysis of variance) on all dependentvariables (see Tables 1 and 2). Overall, theresults confirm the hypotheses. Plannedcomparisons probe additional findings be-tween the two groups.

Confirming the argumentation leadingup to Hypothesis HI, the brand crisisincreased consumers' perceived categoryrisk (although the category attitude re-mained constant). Lending support to thehypothesis, there is a difference in impor-tance ratings between the groups on allfour attributes (Table 2). The consumersthat were exposed to the brand crisis rateinfoj-mation and competence higher, andprice and availability lower, compared tothe other consumers. Hypothesis HI issupported: A brand crisis affects the eval-uation of category attributes.

The attributes that gain importance onthe category level, information and com-petence, are the same attributes that areassociated more strongly to the dissimilarbrand in the crisis condition (see Table 2).This suggests that associations that aremore strongly tied to dissimilar brandsgain in importance in the event of a brandcrisis. Conversely, the similar brands scorelower on all four attributes (though notstatistically different on price and avail-ability for the strong brand). SupportingHypothesis H2, that a brand crisis affects

December 2 0 0 6 JDyRllflL DF HDUERTISinG BESEflRCH 3 9 1


TABLE 1 ways: contact lenses are purchased more

Category and Brand Evaluations, Banks frequently and are perceived to be lower" risk.

No Eta

Dependent Measure Crisis Crisis Squared Planned Comparisons CONTACT LENSES TEST

Category attitude 4.01 4.17 n.s. The measures were identical to the bankstudy. Two online (number one and num-

Categoryrisk 6.12 5.21 0.13 t = 2 .99 ,p<.01 u ( • .u r .N J.•••• ber tour m the market) and one tradi-

Weak similar brand tional (number two in the market) contact...Brand attitude 2.94 3.96 0.19 t = 4.73,p< .01 lens retailers were chosen for the study

Brand trust 3.14 4.01 0.16 t = 3.86, p < . 0 1 Ten plus 20 respondents elicited and rated

""ideal brand 3^00 3^66 OAO t = l42"p '< "oi category attributes; the top-four chosenfor the study were: quality, reliability,

....Bra^d purchase intentiori 2.40 3.22 0.06 t. = .3;65;.P.<,-91 convenience, and price. The newspaper

Brand selected 0.02 0.07 article (reports on fraud and indiscretion)

Strong similar brand ^^^ pretested on 20 respondents, whoBrand attitude 5.01 5.45 0.03 t = 1.56, p < .10 ""^^^"^ '*® valence (negative/positive, un-

favorable/favorable, no crisis/crisis) andBrand trust 4.70 5.15 0.03 t = 1.65, p < . 1 0 ,.,.,., ,i,- ^ , ,• , , • • ,•••• credibility (biased/unbiased, subjective/

...Jdeal brand 4.28 5.16 0.03 f..=.l-68, P < .05 objective, believable/unbelievable) on a

Brand purchase intention 5.14 5.60 0.09 t = 1.73, p < . 0 5 7-point scale (Cronbach's alpha for both

Brand'ielected 0^59 0^69 indices >0.88). The average valence was2.0 and the average credibility was 6.04

Dissimilar brand (^^1^^^ practically identical to the bank....Brand attitude 5.05 4.51 0.09 t = 2.39, p < .01 crisis), and the newspaper article was

Brand trust 5.27 4.74 0.08 t = 2 .47 ,p<.01 deemed suited for simulating negative

Ideal brand 4.98 4.42 0.09 t = 2.88, p < .01 ^''^''^ publicityRespondents were recruited via inter-

Brand purchase intention 4.46 4.16 0.03 t = 1.63,p<.10 ^ . • J u c 11. > , , - , • ,'-^ cept outside the Stockholm public library.

....?.';?"d . .?'.®?.* .d .9.-.-?9. .9-,24, Every tenth visitor was approached and

Note: F(i4,100) = 5.22, p < .01, Wiiks' iambda, 0.68. asked if they used contact lenses. Thosewho answered "no" were screened out. Atotal of 120 contact lens users were inter-

evaluations of similar brands negatively, the In summary, the findings support the cepted, out of which 102 completed theresults reveal a number of negative effects hypotheses. A brand crisis affects percep- questionnaire for a response rate of 85on the similar brands (see Table 1): brand tions of the entire category and of compet- percent. The sample consisted of 58 per-attitude and brand trust are lowered, they ing brands. To validate our findings, we cent men and 42 percent women, and theare perceived to be less ideal, and consum- decided to repeat the study in a different average age was 23.ers inclination to choose the brands de- product category. We chose contact lensescrease. In contrast, evaluations are higher as the product category. The category re-for the dissimilar brand in the crisis situa- sembles banks in two ways. First, thetion: when brand attitude and brand trust category comprises a number of highlyincrease, it is perceived to be closer to the competitive and well-known brands. Sec-ideal brand, and consumers are more in- ond, one can make a simple division be-clined to choose the brand. This supports tween traditional (opticians) and new.Hypothesis H3: A brand crisis affects eval- online-based, retailers. However, the cat-uations of dissimilar brands positively. egory differs from banks in two important

Results

An initial MANOVA (muitivariate analy-sis of variance) on all dependent vari-ables confirms the hypotheses on a generallevel (see Tables 3 and 4). Similar to study1, the brand crisis increased consumers'perceived category risk (however, the ef-fect is smaller, and marginally significant

3 9 2 JOUBOHL OF HDOEfiTISlOG RESEflRCH December 2 0 0 6


2 brand choice are all directionally lower

Category Criteria and Brand Associations, Banks ' ° ' ^^'"^'^^""^^^ (supportingHypoth-esis H2) and higher for the dissimilar

No Eta brand (Hypothesis H3).

Crisis Crisis Squared Pianned Comparisons Overall, the results replicate the find-ings in the first study. The effects of a

Attribute importance^ r-r^ ^^ brand crisis on the product category and

Information 5.84 5.18 0.08 t = 3.53, p < .01 ^ ^ ^on competing brands materialize over two

....?.°^P^t.?".^.? 9.B. ;46 0.05 f.= 2,70, p < .05 different product categories and samples.

Price 6.16 6.60 0.06 t = 2.40, p < . 0 1 Category perceptions are changed, and

Availability 4.74 5.14 0.05 t = 1 .73,p<.05 similar brands are evaluated more nega-tively, whereas dissimilar brands are eval-

Weak similar brand associations ^ . ,.• ,uated more positively.

Information 4.26 4.72 0.09 t = 3.20, p < .01Competence 4.12 4.74 0.12 t = 3.35, p < .01 DiSCUSSiONPrice 4.80 5.38 0.07 t = 2.59, p < . 0 1 The introduction poses the question: are

the product category and competingAvaiiabiiity 4.00 4.46 0.05 t = 2.41, p < . 0 1 ^ ^ ^ f b

brands exempt when there is a brandStrong similar brand associations ^ igig? j^^ ^^^ studies provide an un-

...,!f?f° [ . .'.°.". .?:3.? 3.80 0.05 t.=..l.-.66,.P <..O5 equivocal "no" as an answer. Our results

Competence 3.72 4.14 0.06 t = 2.38, p < .01 suggest that a brand crisis is contagious

Price 4.10 4.14 n.s. ^"'^ affects both the product category ingeneral and has specific effects on com-

Avaiiability 3.80 4.04 n.s. . , ,•• petmg brands.Dissimilar brand associations

Information 5.38 4.80 0.10 l=^.:^!^.:.P.'^..:9.^ Brands are becoming increasingiy

Compe1;ence 5.12 4.86 0.07 t = 2.41, p < .01 vuinerabiePrevious studies of negative publicity and

Price 4.16 4.22 n.s. b f yreputation management have proven the

....AyailalDility 4.94 4.86 n.s. ^^-^^ that the brand is not really owned

Note: FC16, WO) = 3.99, p < .01, Wilks' lambda, 0.89. by the brand manager. The brand is infact in the hands of its consumers and themedia, who determine its reputation (e.g.,Chaudhuri, 2002; Stammerjohan, Wood,

at p < .10). Furthermore, category atti- On the brand level, the similar brands Charig, and Thorson, 2005). Negative presstude decreased, so that those exposed score directionally lower on all four asso- and word-of-mouth about a brand canto a brand crisis held less favorable ciations. All differences are statistically sig- have severe effects on brand perceptionsattitudes toward the entire product cat- nificant for the strong brand, whereas only and brand performance. The present arti-egory (see Table 3). Turning to Hy- quality differs significantly between con- cle adds the insight that the brand is alsopothesis HI, planned comparisons reveal ditions for the weak brand (see Table 4). in fact in the hands of its competitors,differences between the conditions for Conversely, all four associations are per- Negative press and word-of-mouth aboutall four attributes. The consumers that ceived more strongly (although price is them can have severe effects on brandwere exposed to the brand crisis rate not significantly different) for the dissim- perceptions and brand performance, too.quality and reliability higher, and con- ilar brand in the brand crisis condition. Two facts make the notion of crisis con-

venience and price lower, compared to Similar patterns are found for the brand tagion crucial. First, one could expect thatthe other consumers. Hypothesis HI is evaluations (see Table 3), where brand the frequency of brand crisis reports willsupported. attitude, brand trust, ideal proximity, and increase as a result of increasing product

D e c e m b e r 2 0 0 6 J0URI1RL OF HDUERTISIOG RESERRCH 3 9 3


TABLE 3 enough (Ehrenberg, Barnard, and Scriven,

Category and Brand Evaluations, Contact Lenses ^ ^ ' Ehrenberg, Barnard, Kennedy, andBloom, 2002). It does not really matter

No Eta what is said; the important thing is to

Crisis Crisis Squared Pianned Comparisons be seen (cf. Heath and Nairn, 2005). As

Category attitude 4.27 5.18 0.14 t = 3.00,p < .01one can easily understand how a brand

Category risk 4.63 4.38 0.03 t = 1.51, p < . 1 0 •• . « . u ..• JS.,.,-: : r tr. crisis may have effects on the entire prod-

Weak similar brand uct category and competing brands, asBrand attitude 3.57 3.95 n.s. the negative publicity propels the brand

Brand trust 3.50 4.05 0.05 f = 1.70, p < .05 i"*° ^ prominent position in consumers'minds.

Ideal brand 3.64 3.96 n.s.

?.-.9?. .3.-.26 n-s- Revisiting positioning

Brand seiected 0.14 0.19 The results show that similar brands suf-

Strong similar brar^d ^^Brand attitude 4.35 5.19 0.07 t = 2 . 4 3 , p < . 0 1 lar brands could actually gain from it.

This conclusion supports Van Auken andBrand trust 4.07 4.99 0.06 t = 2.38, p < . 0 1 , . > naaQ\ ^ c l;..';. ..t. Adams (1998) argument for across-class

ideai brand 4.18 5.00 0.07 t = 2.38, p < . 0 1 positioning. By tying the brand closer to

Brand purchase intention 4.24 4.82 0.05 t = 2.34, p < .01 brands in other product categories andpositioning it in relation to them, the brand

Brand seiected 0.43 0.57gains the advantage of becoming less

Dissimilar brand similar—and vulnerable—to competing

.....B. and attitude 5.46 4.59 0.12 i=.^:33.P<.01 brands in the category. Thus, the brand is

Brand trust 5.83 4.80 0.10 t = 2 .71, p < . 0 1 less likely to suffer from a competing

e, as Van AukenIdeai brand 4.86 4.26 0.09 t = 2.54, p < .01and Adams found that across-class posi-

Brand purciiase intention 4.80 4.00 0.09 t = 2.93, p < . 0 1 .• • J . .. i u u J•• .'..". tioning does not seem to make the brand

Brand selected 0.43 0.23 similar enough to the target brands in

Note: F(U, 102) = 4.48, p < .01, Wilks' lambda, 0.77. °*her categories (rather, it makes it more

dissimilar to brands in its own category),

one could expect contrast effects from a

complexities of products, more stringent increasingly difficult to be unique and brand crisis in the other, targeted cat-

legislation, more demanding customers, virtually impossible to persuade consum- egory. In other words, an across-class po-

and an increased focus on (negative) brand ers to buy your product (Weilbacher, 2003). sitioned brand reduces the risk of crisis

news in the media (Dawar and Pillutla, The goal is rather to become a good contagion in its own product category

2000; Dean, 2004). Realizing that it does enough brand that comes to mind easily and might even enjoy a positive contrast

not have to be your brand in the news, it

becomes obvious that negative publicity

will affect your brand sooner or later as Realizing that it does not have to be your brand in tiie news,some brand in your product category is

bound to suffer some form of crisis sooner it becomes obvious tbat negative pubiicity wiii affect youror later. Second, recent literature suggests

that brands are becoming more depen- brand sooner or iater a s some brand in your product cat-dent on publicity. In the massive mar-

ketspace and mindspace competition, it is egory is bound to suffer some form of crisis sooner or iater.

3 9 4 JOURIlflL OF HDOEBTISIHG BESEfleCH December 2 0 0 6


JA Dl p A tions from more health-oriented food (e.g..

Category Criteria and Brand Associations, Contact Lenses f^^'^ '/ ' ^ • -' " ^ *>' ' f^^"'; ^ -S'—— " — delis or famous restaurants). Recently, new

10 Et3 beer$ with low glycemic index have been

Crisis Crisis Squared Pianned Comparisons introduced on the alcoholic beverage

market.Attribute importance , , i . j -« .• ,

Another way brands can differentiateQuality 6.48 5.78 0.11 t = 4 .21 ,p< .01 , , . ., ,-, • u

••••••• •• themselves from similar competitors is byReliability 6.14 5.60 0.09 f..=..3;,99.'..P..' ..:9. . using brand-specific personalities (Aaker,Convenience 5.30 5.64 0.06 t = 1.70, p < .05 Foumier, and Brasel, 2004). These person-

/i or- c /I o r> r.e t o OQ ., n-1 alities become inherent to the brand andPrice 4.86 5.48 0.06 t = 2.98, p < .01

may insulate them from crisis contagion.Weak similar brand associations ^ ^^^.^^^ Fournier, and Brasel (2004), a....Quality 3.92 4.50 0.03 t. = .l;65, P < .95 ^^^^^ ^.^^ ^.^^^^^ personality suffered

Reliability 3.89 4.12 n.s. from a crisis whereas a brand with an

Convenience 4.22 4.48 n.s. exciting personality was not negativelyaffected to the same extent. Moreover, the

Price 4.16 4.42 n.s. . . . . . •• .exciting brand recovered more easily from

Strong similar brand associations the crisis than the sincere brand. We be-

Quality 4-.56 5.08 0.09 lz.?d'^.:.!?..^..:9^. Ueve that nonattribute based brand asso-Reliability 4.16 4.62 0.07 t = 2.38, p < .01 ciations, such as personality, may moderate

I^IIIIIIII^^ the effects of crisis contagion.....^^ 4.40 4.90 0.07 t = 2.36p<.01 Category effects and consumer

Dissimilar brand associations involvement

Quality 6.06 5.58 0.08 .lZ.'^:^.h..P..^..:9^. Our study suggests that consumer involve-

Reliability 6.08 5.58 0.10 t = 2.76, p < .01 ment in the product category need notbe static. A brand crisis "rubs off" on the

Convenience 5.52 4.74 0.12 t = 4.13, p < .01 .

entire category and increases its per-

Price .^:^,^ ^;.?9 H: .' ceived risk. Previously considered mainly

Note: F(16,102) = 4.23, p < .01, Wiiks' lambda, 0.88 a problem for the brand in crisis, engaged

and worried consumers would actually

be an issue for all brands in the category.

, . Consumers may have developed routin-effect from a brand crisis in its target possibilities, and so forth) on its website , , . . • ,

, ,. ized buymg behaviors and passive rela-cateeorv arid in its advertising to enhance credi-

" •' tionships to category brands over time. InFor example, as an across-class posi- bility. Moreover, compact cars can com- ^ . .

^ the event of a crisis, consumers becometioning strategy, an online contact lens municate that they use the same safety , , ,

° "•' more involved in the purchases and re-retailer might emulate traditional opti- technology associated with larger cars. • , • u-

° gress toward a more active relationship,cians (personal service, eve sight check-up Fast food restaurants can add associa-

' J '^ •^ where they scrutinize the brands more

closely: "Could this happen to 'my' brand

as well?"

Previously considered mainly a problem for the brand in The increased category involvementcould present opportunities for new

crisis, engaged and worried consumers would actually be brands and for new advertising strat-egies, as engaged consumers are more

an issue for all brands in the category. likely to process new information andDecember 2 0 0 6 JOUBOHL OF flDyERTiSinG RESEflRCH 3 9 5

HOW A BRAND iN CRISIS AFFECTS OTHER BRANDS

In the event of a crisis, consumers become more in-

volved in the purchases and regress toward a more ac-

tive relationship, where they scrutinize the brands more

closely: "Could this happen to 'my' brand as well?"

tend to consider a greater number of al-ternatives. It could also present a win-dow of opportunity for brands that wantto reposition themselves. Research showsthat established brands experience diffi-culties in communicating new positionsbecause consumers tend to rely on theirprevious, more easily processed, percep-tions of the brand (e.g., Jewell and Un-nava, 2003). With increased involvementcomes greater engagement in the brandsand their communication; consumers want

to hear what is new with the brand.

Brand communication and tracking must

be frequently updated

The presented results lend support to theliterature suggesting that brand schemasare continually reconstructed. The fact thata brand crisis affects consumers' percep-tions of competing brands proves thatbrand schemas are not stable entities.Brand perceptions are influenced by in-formation that seems relevant at the time,meaning that brand managers must con-stantly monitor their brands (Hall, 2002).Cramphorn (2004) suggests that advertis-ing testing is problematic because it asksthe wrong (predetermined) questions—what matters are consumers' spontaneousreactions. This became evident for Fire-stone, who withdrew their multimillion-dollar advertising campaign celebrating"100 years of reliability" in the midst oftheir defective tires crisis. However, in therecent (major insurance company brand)Skandia crisis in Sweden, two competi-tors did not withdraw their advertising

campaigns. The campaigns failed. As brandschemas are reconstructed, advertising andbrand managers must keep a close eye onthe competition and react on their behalfas well.

Advertising/brand tracking and cus-tomer satisfaction surveys rarely take intoaccount changes in attribute weights andcategory risk/attitude. Inertia may lead tounnoticed biases (negative or positive) whenmeasuring brand equity and advertisingeffects. Advertisers and brand managersneed to continually update evaluative cri-teria for brands and the category and mustmake large revisions to their tracking in-struments after dramatic category changes(such as a brand crisis or a radically new-product introduction). For instance, fast foodbrands that have not incorporated healthattributes in their tracking are most cer-tainly missing out on important and sa-lient consumer decision-making criteria.

The present research tests exposure toonly one newspaper article. The effects arelikely to be greater in reality, where onewould expect consumers to be exposed toseveral articles and/or newscasts over a pe-riod of time. Laying low (and withdraw-ing advertising campaigns) may be a goodidea as an immediate action, but a pro-longed crisis may change the rules of thegame for future advertising as well. A pre-dominantly hedonic category, such as fastfood, may need advertising with more util-itarian content (calories, fat content, etc.)when consumers are reacting to an "across-the-board" brand crisis. A historically low-involvement category may need advertis-

ing with more information when the cat-

egory risk is remarkably increased. Recent

real-life examples, such as the Enron-Arthur

Andersen crisis and the Super Size Me

attack on McDonald's, provide evidence

of how negative brand publicity may in

fact result in changes of practice of entire

industries.

MiCAEL DAHLEN is an associate professor of marketing

at the Stockholm Schooi of Economics. His research

focuses on innovative advertising and brand strat-

egies, with the ambition to join creativity, business,

and consumer value. Having been published in,

among others, the Journal of Advertising Research, the

Journal of Advertising, Psychology & Marketing, and the

Journai of Brand Management, he has taken the first

baby steps toward realizing that ambition.

FREDRIK LANGE is an assistant professor of marketing

at the Stockhoim School of Economics. His research

focuses on consumer behavior, branding, and market-

ing communication. He has published more than 10

articles in academic journals and cowritten a text

book on marketing communications.

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contagious disaster

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