Incorporates: Pricing Strategy and Practice
Online from: 1992
Subject Area: Marketing
|Title:||Product recall crisis management: the impact on manufacturer's image, consumer loyalty and purchase intention|
|Author(s):||Nizar Souiden, (Faculty of Business Administration, Marketing Department, Laval University, Quebec, Canada), Frank Pons, (Faculty of Business Administration, Marketing Department, Laval University, Quebec, Canada)|
|Citation:||Nizar Souiden, Frank Pons, (2009) "Product recall crisis management: the impact on manufacturer's image, consumer loyalty and purchase intention", Journal of Product & Brand Management, Vol. 18 Iss: 2, pp.106 - 114|
|Keywords:||Brand image, Customer loyalty, Product recall|
|Article type:||Research paper|
|DOI:||10.1108/10610420910949004 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
|Acknowledgements:||The authors thank their graduate student Zouhair Mouhib for his efforts on an earlier draft and his help with data collection.|
Purpose – This paper aims to examine the impact of recall crisis management on the manufacturer's image, consumers' loyalty and future purchase intentions. More specifically, this research aims to clarify the types of recall strategies that companies put forward, as well as their impact on consumers' behaviors and perceptions of the manufacturer's image.
Design/methodology/approach – The current study focuses on vehicle users who have either experienced automobile recalls or heard them discussed. Data were collected via car-related web sites. The final sample comprises 573 people. The direction and strength of the relationships between various consumers' attitudes toward the different recall methods and their purchase intention are assessed through structural equation modeling (SEM).
Findings – Results show that recalls contested by manufacturers have a significant negative impact on manufacturers' image, as well as on consumers' loyalty and purchase intentions. On the other hand, voluntary recalls or improvement campaigns have a significant positive impact on the manufacturer's image, as well as consumers' loyalty and purchase intentions.
Research limitations/implications – Proactive strategies are the best solution to avoid a loss in consumer loyalty to the manufacturer during a recall crisis. In the contrary, manufacturers' adoption of reactive strategies harms their image, as well as consumers' loyalty. This translates into a negative impact on future purchase intentions and manufacturers' market share. This study concludes by recommending appropriate strategies to limit possible negative effects of product recalls.
Research limitations – Some variables (such as media, the degree of severity of recalls and the frequency of recalls) are not investigated in this study. Additionally, the research is limited to the automobile industry. Other industries that also experience recalls (such as the pharmaceutical industry) might be considered in future research in order to confirm the consistency of the research findings.
Originality/value – The approach adopted by the current research is relatively different from earlier studies that directly link the types of recalls to the danger perceived by consumers that in turn affects their purchase intentions. In the current study, recalls indirectly impact purchase intentions principally via the manufacturer's image and brand loyalty. Additionally, the originality of this research stems from the fact that the manufacturer's image is considered as part of the changeable legacy of the company that itself may be affected by the “crisis situation,” not a stable asset.
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