1. Define a product harm crisis.

A product harm crisis entails a publicized event in which a particular product line is found to be defective or even dangerous (Heerde, Helsen, & Dekimpe, 2007). The crisis can distort a brand’s or company’s long-term favorable equality perception, devastate its hard-earned brand equity, cause significant market-share and revenue losses due to product recalls, and tarnish a company’s reputation. The crisis will more often than not relate to a particular brand

2. Identify the factors that contribute to a this crisis

Companies are increasingly becoming vulnerable to the possibility of product difficulties that have the potential to disrupt the supply chain of businesses due to the high rate of globalization. The nature of a this crisis encompasses a broad range of incidences including floods, fire, quality assurance failure and computer viruses, which might result in conditions that affect a product that is critical to the local, regional or global business model.

There are two generic classifications of the factors that lead to this crisis. These include natural and unnatural conditions. Natural conditions include a myriad of calamities such as earthquakes, hurricanes, and wildfires while unnatural conditions include failure of quality assurance procedures, adverse product publicity, inappropriate product usage and other human-related incidents. Unnatural conditions are further categorized as intentional or unintentional. For instance, negative customer perceptions such as perceived social irresponsibility or shortage in supply can be parked by the accidental leakage of related information to the public or intentional circulation of unsubstantiated negative attributions regarding a brand or a company by its competitors.

3. Compare and contrast the findings of the various studies on product harm crisis.

Cleeren, Dekimpe, & Helsen’s (2008) study was motivated by the fact that brands often capitalize on their brand equity and advertising as a communication device to regain customers’ lost trust in the aftermath of a product harm crisis. They studied how publicity and consumer characteristics influenced the first purchase decisions of customers for two peanut butter brands in Australia following a severe crisis. They observed that both familiarity and brand loyalty prior to the crisis had a significant influence on product harm crisis. This influence, however, decreased over time. Another observation made by the authors was that heavy users were inclined toward purchasing the affected brands sooner, unless their rate of usage declined substantially during the crisis. More importantly, the authors found out that advertising was more effective for stronger brands compared to weaker ones. This echoes the pivotal played by brand loyalty in empowering companies to recover from this crisis.

On the other hand, in a bid to explore age-related reactions to a product harm crisis, Silvera, Meyer, & Laufer (2012) examined the differences between older and younger customers and how they reacted to a product harm crisis. These authors pointed out that cognitive and motivational changes due to aging had the capacity to cause information to be utilized differently. They used primary and secondary control influences on information processing to elaborate why younger customers perceived themselves as more susceptible to the threat associated with the crisis. These observations had a profound impact in terms of blame attributions and certain marketing variables such as negative word of mouth and purchase intentions. The authors further conducted two studies in which the participants were required to read a short newspaper article regarding a product harm crisis and respond to a few questions. When the participants’ responses were categorized according to their age groups it was established that older customers perceived product harm crises to be less threatening compared to younger customers. As such, they placed less blame on the company and were more likely to purchase and recommend the product involved in the crisis.

Following Cleeren, Dekimpe, & Helsen’s (2008) observation that both familiarity and brand loyalty prior to the crisis had a significant influence on product harm crisis, Kim (2014) examined the dimensional consequences of having previous positive and negative associations in times of product harm crisis in relation to corporate ability (CA) and corporate social responsibility (CSR). It is established that the disadvantages of having prior adverse CA associations outweighed the disadvantages of having negative CSR associations in times of product harm crisis, while the benefits of having positive prior CSR associations outweighed the benefits of having positive CA associations.

4. Synthesize your analysis of the research to develop and support a recommendation for a company handling a product-harm crisis

From the research carried out by Silvera, Meyer, & Laufer (2012), it is evident that older people perceive themselves to be less physically vulnerable to harm. As such, socially responsible companies should make deliberate efforts to sensitize older customers on the risks created by product harm crises to unnecessary casualties. Moreover, the results of the study carried out by Kim (2014) suggests that companies should concentrate on building their reputational strengths and minimizing the weaknesses in their corporate image prior to a product_harm crisis as part of their reputation and crisis management strategies. After successfully building positive corporate associations either along CSR or CA dimension, companies should attempt to meet consumer expectations for each dimension. Otherwise, in the event of a crisis that is closely related to previously build positive corporate associations’ dimensions, the positive expectations of consumers toward the company might backfire, resulting in even more severe damage to the company’s corporate image and overall performances as evidenced by Kim’s (2014) study for the case of positive CA associations in a product harm crisis. Due to the close applicability between pre-crisis CA associations and product-harm crises, having positive CA reputation is generally more detrimental than having positive CSR reputation.

References

Cleeren, K., Dekimpe, M. G., & Helsen, K. (2008). Weathering product-harm crises. Journal of the Academy of Marketing Science, 262–270.

Heerde, H. V., Helsen, K., & Dekimpe, M. G. (2007). The Impact of a Product-Harm Crisis on Marketing Effectivenes. Marketing Science, 230–245.

Kim, S. (2014). What’s Worse in Times of Product-Harm Crisis? Negative Corporate Ability or Negative CSR Reputation? Journal of Business Ethics, 157-170.

Silvera, D. H., Meyer, T., & Laufer, D. (2012). Age-related reactions to a product-harm crisis. Journal of Consumer Marketing, 302-309.