Crisis management and its impact on brand image

Salvador, Alexandre Borba; Ikeda, Ana Akemi; Crescitelli, Edson

doi:10.1590/0104-530X1668-14

Brasil

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Articles • Gest. Prod. 24 (1) • Jan-Apr 2017 • https://doi.org/10.1590/0104-530X1668-14 linkcopy

Crisis management and its impact on brand image

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract:

Brand crises due to product fail has become more frequent due to increases in products complexity. Crisis generated by recall campaigns are unique, unexpected and can lead to deterioration of the established favorable relationship between brands and consumers, affecting the brand image and its brand equity. The consequences involve short and long-term financial losses for the brand, the company and eventually to the category as a whole. This article is based on a qualitative exploratory research with a single case study in the food industry. Its objective is to verify empirically the application of the theories of brand recall and crisis in a recent Brazilian case. The results meets the assumptions developed based on theoretical framework. The study presents as additional contribution the effect of a real crisis overtime.

Keywords: Crisis management; Recall; Brand crisis effect

ASSUMPTIONS	REFERENCES
Assumption 1: A brand crisis caused by problem harm leads to losses in volume and market share.	Anwar (2014); Assiouras et al. (2013); Cleeren et al. (2013); Van Heerde et al. (2007); Tsang (2000)
Assumption 2: A brand crisis caused by product harm may generate negative brand associations.	Aaker (1996b); Anwar (2014); Assiouras et al. (2013); Dawar & Lei (2009); Dawar & Pillutla (2000)
Assumption 3: A crisis of medium extent of the brand of a high reputation company represents a threat to the business of competitors by having the potential to affect negatively the entire category.	Roehm & Tybout (2006); Siomkos et al. (2010)
Assumption 4: Due to the crisis, competitors may become more aggressive aiming to win over consumers of the product that triggered the crisis.	Assiouras et al. (2013); Tsang (2000)

ASSUMPTIONS	OBSERVED EFFECTS
Assumption 1: A brand crisis caused by problem harm leads to losses in volume and market share.	Immediate loss of approximately 60% of the sales volume and market share of the “brand”. Immediate reduction of 5% in the volume of the category (Chart 2).
Assumption 2: A brand crisis caused by product harm may generate negative brand associations.	The brand health indicators of the tracking indicated drop in perception of value, recognition of the superiority of the value proposal, perceived quality, and emotional relationship with the brand (Figure 4).
Assumption 3: A crisis of medium extent of the brand of a high reputation company represents a threat to the business of competitors by having the potential to affect negatively the entire category.	Immediately after the recall, the category loses 5% of its volume and takes six months to return to pre-recall levels. One year after the event, the volume of the category was already 12% higher than the pre-recall volume (Chart 2). The main brand health indicators of “competitor 1” experienced a higher decline that the “brand” in the first year post-recall.
Assumption 4: Due to the crisis, the competitors may become more aggressive aiming to win over consumers of the product that triggered the crisis.	Regional competitors made price reductions after the announcement of the recall and “competitor 2” intensified investments in communication.

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Universidade Federal de São Carlos Departamento de Engenharia de Produção , Caixa Postal 676 , 13.565-905 São Carlos SP Brazil, Tel.: +55 16 3351 8471 - São Carlos - SP - Brazil
E-mail: gp@dep.ufscar.br

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