PRODUCT-HARM CRISES - When Bad Things Happen to Good Brands. On How to Deal with Product-Harm Crisis

Product-harm crises are prevalent in today's marketplace. Notable examples include contaminated coca-cola in several European countries and salmonella poisoning in Brinta's breakfast porridge. These crises can have a tremendous impact on society as well as on the affected companies. Moreover, the number of product recalls is on the rise both in the US and Europe. Not surprisingly, the European Union has realized the importance of product-harm crises to public safety and has fairly recently installed information sharing systems to facilitate the rapid diffusion of product safety information amongst its member countries. Although information on hazardous products now fairly quickly reaches the consumers, still little is known about the influence of these negative events on consumer purchases.
<P>

In contrast to previous literature on this topic that mainly focused on one particular crisis event, this research proposal consists of the systematic analysis of a unique database, containing purchase data surrounding a large sample of product-harm crises in three European countries. By systematically analyzing this large sample of crisis events, we will be able to create generalizable knowledge on consumer reactions to these negative events, while accounting for the potential moderating impact of different consumer, category and crisis characteristics such as loyalty, the length of the recall period and the amount of negative news. Not only will this research thus lead to an advancement of science on the topic of product-harm crises, it will also allow us to make reliable recommendations for companies on how to effectively deal with a crisis event.