Stuck in a crisis An experimental study of

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Stuck in a crisis An experimental study of the relationship between crisis response strategies

Stuck in a crisis An experimental study of the relationship between crisis response strategies and post crisis brand equity in the fashion industry CBR 2013, Orlando 28. September 2013 Sabrina Hegner Ardion Beldad Sjarlot Kamphuis op Heghuis * *

Why studying crises in the fashion industry? http: //reputationmetrics. org/tag/abercrombie-fitch-analysiscrisis/ *

Why studying crises in the fashion industry? http: //reputationmetrics. org/tag/abercrombie-fitch-analysiscrisis/ *

Why brand equity as an outcome variable? Brand Equity is one of the main

Why brand equity as an outcome variable? Brand Equity is one of the main indicators of brand success and therefore one of the most important intangible assets for an organization (Christodoulides & Veloutsou, 2010) *

Situational Crisis Communication Theory (SCCT) by Coombs Crisis type §Victim §Accidental §Intentional § Response

Situational Crisis Communication Theory (SCCT) by Coombs Crisis type §Victim §Accidental §Intentional § Response type § denying § diminishing § bolstering § rebuilding *

Trust as a buffer in times of crises? *

Trust as a buffer in times of crises? *

Research questions § 1. research question. What is the effect of various crisis response

Research questions § 1. research question. What is the effect of various crisis response strategies on post-crisis brand equity (including its dimensions, namely brand awareness/associations, perception of brand quality, and brand loyalty)? § 2. research question: What is the impact of consumers’ prior trust in the brand on the relationship between crisis response and the company’s post-crisis brand equity? *

Research design §Brand Trust was measured first § 6 scenarios (denial, diminish, bolstering, rebuild,

Research design §Brand Trust was measured first § 6 scenarios (denial, diminish, bolstering, rebuild, no-response, and a control group) – between subject design §Dutch newspaper article stating that an independent 3 rd party found carcinogenic chemicals in T-Shirts of the brand §The newspaper article was shown to every participant (except control group) and the brand response to the accusation was manipulated §Brand equity was measured afterwards §Control questions *

Scenarios response Explanation The Reaction of the company Denial Claiming that there is no

Scenarios response Explanation The Reaction of the company Denial Claiming that there is no crisis “The CSPI thoughtlessly insinuates that the cotton we use in our tshirts is unsafe and it causes cancer among our consumers. The blame for this incident cannot be attributed to our organization. Our products are in line with the law”, the company said in a statement. Diminish Minimizing the responsibility “We don’t have any control over what our imported clothing by claiming inefficiency to contains. That is why we did not know about these toxic chemicals. control the events and/or by We did not intend to do any harm”, . . . denying to do intentionally harm. Rebuild Declaring that the brand takes the full responsibility for the crisis and asks stakeholder forgiveness. “We take full responsibility for the fabricated t-shirt containing the toxic chemicals, therefore we will compensate this unpleasant incident with an extra discount day. We also have stopped immediately the fabrication of these t-shirts. We are so sorry for all inconveniences triggered by this incident”, . . Bolsterin Telling the stakeholders “We are known for our fashionable clothes and our good prices. Our g about the past good work of company never had any incidents before and we have had many the brand. Reminding the successes where you all benefited from. We also hope to have a lot stakeholders that the brand is more of these successes in the future. We also wanted to remind a victim of a crime too. you that we are a victim of this incident as well”, …. *

Participants § 187 Dutch respondents §Mean age: 28. 1 §Gender: 56% women, 44% men

Participants § 187 Dutch respondents §Mean age: 28. 1 §Gender: 56% women, 44% men §Education: high 60%, low 40% *

Results ANOVA Brand Equity (F(5, 181)=3. 181, p=. 009) Brand quality (F(5, 181)=7. 401,

Results ANOVA Brand Equity (F(5, 181)=3. 181, p=. 009) Brand quality (F(5, 181)=7. 401, p=. 000) Brand loyalty (F(5, 181)=3. 064, p=. 011) Brand awareness/associations (F(5, 181)=1. 765, p=. 122) Denial M (SD) Diminish M (SD) Rebuild M (SD) Bolstering M (SD) No Response M (SD) Control Group M (SD) Brand equity 2. 74 (. 69) 2. 95 (. 72) 3. 14 (. 71) 3. 00 (. 77) 2. 61 (. 55) 3. 21 (. 73) Brand awa/ass 3. 39 (. 91) 3. 49 (. 86) 3. 73 (. 87) 3. 44 (. 83) 3. 43 (. 73) 3. 88 (. 84) Brand quality 2. 18 (. 78) 2. 44 (. 97) 2. 66 (. 71) 2. 65 (. 77) 1. 93 (. 68) 3. 00 (. 68) Brand loyalty 2. 04 (. 90) 2. 41 (1. 01) 2. 46 (1. 01) 2. 52 (1. 01) 1. 71 (. 75) 2. 23 (1. 03) *

Results Post-hoc test Denial M (SD) Diminish M (SD) Rebuild M (SD) Bolstering M

Results Post-hoc test Denial M (SD) Diminish M (SD) Rebuild M (SD) Bolstering M (SD) No Response M (SD) Control Group M (SD) Brand equity 2. 74 (. 69) 2. 95 (. 72) 3. 14 (. 71) 3. 00 (. 77) 2. 61 (. 55) 3. 21 (. 73) Brand awa/ass 3. 39 (. 91) 3. 49 (. 86) 3. 73 (. 87) 3. 44 (. 83) 3. 43 (. 73) 3. 88 (. 84) Brand quality 2. 18 (. 78) 2. 44 (. 97) 2. 66 (. 71) 2. 65 (. 77) 1. 93 (. 68) 3. 00 (. 68) Brand loyalty 2. 04 (. 90) 2. 41 (1. 01) 2. 46 (1. 01) 2. 52 (1. 01) 1. 71 (. 75) 2. 23 (1. 03) *

Results Post-hoc test Denial M (SD) Diminish M (SD) Rebuild M (SD) Bolstering M

Results Post-hoc test Denial M (SD) Diminish M (SD) Rebuild M (SD) Bolstering M (SD) No Response M (SD) Control Group M (SD) Brand equity 2. 74 (. 69) 2. 95 (. 72) 3. 14 (. 71) 3. 00 (. 77) 2. 61 (. 55) 3. 21 (. 73) Brand awa/ass 3. 39 (. 91) 3. 49 (. 86) 3. 73 (. 87) 3. 44 (. 83) 3. 43 (. 73) 3. 88 (. 84) Brand quality 2. 18 (. 78) 2. 44 (. 97) 2. 66 (. 71) 2. 65 (. 77) 1. 93 (. 68) 3. 00 (. 68) Brand loyalty 2. 04 (. 90) 2. 41 (1. 01) 2. 46 (1. 01) 2. 52 (1. 01) 1. 71 (. 75) 2. 23 (1. 03) *

Results Post-hoc test Denial M (SD) Diminish M (SD) Rebuild M (SD) Bolstering M

Results Post-hoc test Denial M (SD) Diminish M (SD) Rebuild M (SD) Bolstering M (SD) No Response M (SD) Control Group M (SD) Brand equity 2. 74 (. 69) 2. 95 (. 72) 3. 14 (. 71) 3. 00 (. 77) 2. 61 (. 55) 3. 21 (. 73) Brand awa/ass 3. 39 (. 91) 3. 49 (. 86) 3. 73 (. 87) 3. 44 (. 83) 3. 43 (. 73) 3. 88 (. 84) Brand quality 2. 18 (. 78) 2. 44 (. 97) 2. 66 (. 71) 2. 65 (. 77) 1. 93 (. 68) 3. 00 (. 68) Brand loyalty 2. 04 (. 90) 2. 41 (1. 01) 2. 46 (1. 01) 2. 52 (1. 01) 1. 71 (. 75) 2. 23 (1. 03) *

The buffering effect of brand trust §Median split was performed in high truster and

The buffering effect of brand trust §Median split was performed in high truster and low truster §Comparison of high truster and low truster and CG for each response strategy §For almost all comparisons, a significant difference between lowtrusting group and the control group on overall brand equity & single dimensions. §the low-trusting respondents show significant lower values on brand equity and the dimensions compared to the high trusting respondents, while there is no significant difference between high trusting group and the control group § 1 exception: In the no-response scenario, no difference between the high trusting and the low trusting group is found, while there is a significant difference between these two groups and the control group. *

Discussion §Brands are susceptible to various forms of crises §But how a brand responds

Discussion §Brands are susceptible to various forms of crises §But how a brand responds to a crisis is not out of its control! §Results indicate that the crisis response strategy a brand employs can influence its brand equity. §Prior trust can serve as a buffer for a crisis-stricken organization §But: No response is always bad!!! *

Thank you for your attention! Questions? ? ? * Footer text: to modify choose

Thank you for your attention! Questions? ? ? * Footer text: to modify choose 'View' (Office 2003 or earlier) or *

Appendix trust as a buffer – overall brand equity Overall Brand Equity denial high

Appendix trust as a buffer – overall brand equity Overall Brand Equity denial high trust low trust diminish high trust low trust rebuild high trust low trust bolstering high trust low trust no response high trust low trust control group Mean (SD) 2. 98 (. 55) 2. 48 (. 75) 3. 38 (. 93) 2. 70 (. 41) 3. 49 (. 81) 2. 84 (. 46) 3. 21 (. 57) 2. 75 (. 92) 2. 82 (. 45) 2. 51 (. 58) 3. 21 (. 73) low trust -0. 50* -0. 68*** -0. 65** -0. 46* -0. 31 control group -0. 23 -0. 73*** 0. 17 -0. 51** 0. 29 -0. 37* 0. 00 -0. 46* -0. 39 -0. 70*** F 5. 375 4. 637 3. 556 2. 186 7. 187 sign. . 007 . 013 . 035 . 121 . 002 *

Appendix trust as a buffer – brand awareness/associations Mean (SD) Brand Awareness/Associations denial high

Appendix trust as a buffer – brand awareness/associations Mean (SD) Brand Awareness/Associations denial high trust 3. 64 (. 67) low trust 3. 10 (1. 09) diminish high trust 3. 77 (. 94) low trust 3. 32 (. 80) rebuild high trust 3. 96 (. 98) low trust 3. 54 (. 74) bolstering high trust 3. 69 (. 52) low trust 3. 13 (1. 03) no response high trust 3. 74 (. 35) low trust 3. 26 (. 82) control group 3. 88 (. 78) low trust -0. 54* -0. 45 -0. 42 -0. 56** -0. 48 control group -0. 24 -0. 78*** 0. 11 -0. 56** 0. 08 -0. 33 -0. 19 -0. 74*** -0. 14 -0. 61*** F 4. 224 2. 920 1. 241 4. 575 4. 101 sign. . 019 . 061 . 296 . 014 . 022 *

Appendix trust as a buffer – brand quality Perceived Brand Quality denial high trust

Appendix trust as a buffer – brand quality Perceived Brand Quality denial high trust low trust diminish high trust low trust rebuild high trust low trust bolstering high trust low trust no response high trust low trust control group Mean (SD) 2. 19 (. 68) 2. 18 (. 91) 2. 88 (1. 09) 2. 18 (. 80) 3. 04 (. 66) 2. 35 (. 61) 2. 86 (. 54) 2. 40 (. 93) 2. 05 (. 50) 1. 87 (. 76) 3. 00 (. 68) low trust -0. 01 -0. 70*** -0. 68*** -0. 46* -0. 18 control group -0. 81*** -0. 82*** -0. 13 -0. 83*** 0. 04 -0. 65*** -0. 14 -0. 60*** -0. 95*** -1. 13*** F 9. 449 6. 713 6. 187 3. 653 18. 802 sign. . 000 . 002 . 004 . 032 . 000 *

Appendix trust as a buffer – brand loyalty Brand Loyalty denial diminish rebuild bolstering

Appendix trust as a buffer – brand loyalty Brand Loyalty denial diminish rebuild bolstering no response control group high trust low trust high trust low trust Mean (SD) 2. 40 (. 95) 1. 64 (. 67) 3. 06 (1. 07) 2. 02 (. 75) 3. 02 (1. 12) 2. 00 (. 64) 2. 65 (. 99) 2. 36 (1. 05) 1. 80 (. 82) 1. 67 (. 73) 2. 23 (1. 02) low trust -0. 75** -1. 04*** -1. 02*** -0. 29 -0. 13 control group 0. 17 -0. 59* 0. 83** -0. 21 0. 79** -0. 23 0. 42 0. 13 -0. 43 -0. 56** F 2. 700 4. 687 4. 829 . 975 2. 515 sign. . 076 . 013 . 011 . 383 . 090 *