Firm/product reputation and new-product recalls

2018 ◽  
Vol 36 (5) ◽  
pp. 572-584
Author(s):  
Kashef Majid ◽  
Mooweon Rhee
Keyword(s):  
Negative Impact ◽  
New Products ◽  
Hierarchical Linear Model ◽  
New Product ◽  
Market Response ◽  
Product Recalls ◽  
Product Recall ◽  
Firm Reputation ◽  
Content Type ◽  
Simultaneous Impact

Purpose The purpose of this paper is to identify the rate of recall for new products vs established products and to explore the simultaneous impact of a firm’s reputation and a product’s reputation on the market response to a product recall. Design/methodology/approach The authors first use an accelerated hazard model to establish that new products are more vulnerable to damage than established products. Once this is established, the authors use a hierarchical linear model to explore the simultaneous impact of the firm and product reputation on the market response to a product recall. Findings The findings indicate that new products have a greater probability of recall over time than existing products and after a product recall a positive firm reputation can negatively impact the firm and hence becomes a liability. However, when the product is first introduced, the product reputation can help offset any negative market response; the product reputation can therefore be an asset. Research limitations/implications New products are more flawed than their established counterparts. A positive reputation can be a liability but a positive product reputation can offset the negative impact of the firm reputation and this is especially pertinent to new products. Originality/value The majority of prior research has focused on the reputation and assumed that the firm represented the product as well; the findings of this study reveal that the reputation of the product can have contrasting effects to the reputation of the firm.

scholarly journals The more I err, the less I pay

2019 ◽  
Vol 53 (5) ◽  
pp. 916-943 ◽  
Author(s):  
Etayankara Muralidharan ◽  
Hari Bapuji ◽  
Manpreet Hora
Keyword(s):  
Future Research ◽  
Published Data ◽  
Product Recalls ◽  
Firm Characteristics ◽  
Product Recall ◽  
Product Complexity ◽  
Firm Reputation ◽  
Content Type ◽  
The Us ◽  
Toy Industry

Purpose This study aims to investigate the effects of firm characteristics and crisis characteristics on remedies offered to consumers by firms in the event of a product recall crisis. Design/methodology/approach Published data on 868 product recalls in the US toy industry from 1988 to 2011 have been used to investigate the effects of firm experience in product recalls, type of firm (company versus intermediary) and product recall severity in predicting remedies offered to consumers in the event of a product recall. Findings The findings show that firm recall experience, firm type and recall severity are negatively associated with recall remedies offered. Specifically, firms offer lower remedies if they have higher recall experience, if they are upstream firms in the supply chain (farther from consumers) and if the recall is more severe. Research limitations/implications This study focuses on the toy industry and does not consider product complexity, firm reputation and the role of external regulatory agencies in the prediction of remedies offered by firms. Future research may extend this study to include the above factors. Practical implications Offering a high remedy to consumers of a recalled product may be a responsible decision by a firm, but it may also attract shareholder wrath. The study has implications for managing multiple goals in product recall crisis management. Originality/value Studies focused on issues of interest to consumers during a recall crisis, such as swift recalls and appropriate remedies, are limited. This study contributes to the understanding of the antecedents of recall remedies.

“De terughaalactie geld alleen voor de hierboven afgebelede pizza’s geldig.”

2015 ◽  
Vol 43 (3) ◽  
Author(s):  
Mariet Raedts ◽  
Irene Roozen
Keyword(s):  
Negative Impact ◽  
Purchase Intentions ◽  
The Other ◽  
Product Recalls ◽  
Negative Consequences ◽  
Product Recall ◽  
Brand Evaluations ◽  
Different Types

Consumers’ responses to product recalls with language errors Consumers’ responses to product recalls with language errors Product recall notices not only warn consumers for faulty products, they also limit the damage which may be caused to the company. But what happens when the product recall notice itself contains errors? This study investigated the effects of three different types of language errors: typographical errors, verb errors and sentence errors. Four versions of a product recall were created. The control condition contained no errors. The other three versions contained either five typos, five grammatical conjugation errors or five poorly formed sentences. Participants (N = 710) were randomly assigned to one of the four conditions. Results indicate that participants who detected the errors, had lower attitudes towards the advertisement and the company than participants in the control condition and participants who failed to detect the errors. Poorly formed sentences also had a negative impact on consumers’ brand evaluations and their future product purchase intentions. Hence, language errors in product recall notices can have negative consequences for companies.

The interactive effect of insight and cuteness in driving purchase likelihood: a lay belief of creativity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Felix Septianto ◽  
Rokhima Rostiani ◽  
Widya Paramita
Keyword(s):  
New Products ◽  
Interactive Effect ◽  
Experimental Studies ◽  
New Product ◽  
Underlying Mechanism ◽  
Content Type ◽  
Narrative Study ◽  
Managerial Implications ◽  
Purchase Likelihood

PurposeWhile new product introductions can potentially promote growth and benefit for brands, it remains unclear how marketers can develop effective communication strategies to increase the chance of success for new products. The present research investigates the role of cuteness in leveraging the effectiveness of a narrative emphasizing an insight versus an effort in this regard.Design/methodology/approachThis research presents two experimental studies. Study 1 examines the moderating role of cuteness on the likelihood of purchasing a new product featuring an insight-based (vs effort-based) narrative. Study 2 extends the findings of Study 1 using different stimuli and establishes the underlying mechanism.FindingsResults show that when a cuteness appeal is present, an insight-based (vs effort-based) narrative will lead to a higher purchase likelihood. However, these differences do not emerge when a cuteness appeal is absent (a control condition). Further, perceived brand creativeness will mediate this effect.Originality/valueThe findings of this research contribute to the literature on lay belief of creativity, cuteness, and product narrative, as well as managerial implications on how to promote new products.

The effects of brand equity and failure severity on remedy choice after a product recall

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sascha Raithel ◽  
Alexander Mafael ◽  
Stefan J. Hock
Keyword(s):  
Decision Making ◽  
Brand Equity ◽  
Probit Model ◽  
Future Research ◽  
Product Recalls ◽  
Product Recall ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Content Type ◽  
Failure Severity

Purpose There is limited insight concerning a firm’s remedy choice after a product recall. This study aims to propose that failure severity and brand equity are key antecedents of remedy choice and provides empirical evidence for a non-linear relationship between pre-recall brand equity and the firm’s remedy offer that is moderated by severity. Design/methodology/approach This study uses field data for 159 product recalls from 60 brands between January 2008 to February 2020 to estimate a probit model of the effects of failure severity, pre-recall brand equity and remedy choice. Findings Firms with higher and lower pre-recall brand equity are less likely to offer full (vs partial) remedy compared to medium level pre-recall brand equity firms. Failure severity moderates this relationship positively, i.e. firms with low and high brand equity are more sensitive to failure severity and then select full instead of partial remedy. Research limitations/implications This research reconciles contradictory arguments and research results about failure severity as an antecedent of remedy choice by introducing brand equity as another key variable. Future research could examine the psychological process of managerial decision-making through experiments. Practical implications This study increases the awareness of the importance of remedy choice during product-harm crises and can help firms and regulators to better understand managerial decision-making mechanisms (and fallacies) during a product-harm crisis. Originality/value This study theoretically and empirically advances the limited literature on managerial decision-making in response to product recalls.

Best of both worlds

2021 ◽  
Vol 37 (3) ◽  
pp. 21-23
Keyword(s):  
Design Methodology ◽  
Reading Time ◽  
Negative Impact ◽  
New Product ◽  
Innovation Strategy ◽  
Content Type ◽  
Strategic Approach ◽  
Pertinent Information ◽  
Product Launches ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings How firms perform with new product launches significantly depends on the strategic approach adopted. Both innovation and imitation offer specific benefits but have risks attached too. By adopting a combination innovation strategy, it is possible for organizations to exploit the advantages of each approach and also minimize any negative impact from these risks. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Strategic delegation, quality competition, and new product profitability

2015 ◽  
Vol 53 (3) ◽  
pp. 713-729 ◽  
Author(s):  
Hyun Shin ◽  
Jongtae Shin ◽  
Shijin Yoo ◽  
Joon Song ◽  
Alex Kim
Keyword(s):  
New Products ◽  
New Product ◽  
Quality Competition ◽  
Strategic Delegation ◽  
Content Type ◽  
Financial Outcomes ◽  
Rival Firms ◽  
New Perspective ◽  
Duopolistic Market ◽  
Low Sensitivity

Purpose – The purpose of this paper is to present a new perspective on the marketing-R & D interface by modelling firms that develop new products in a duopolistic market. Design/methodology/approach – By using a game-theoretic modelling approach, this study examines strategic delegation, through which the marketing and R & D managers of each firm are given authority over pricing and new products’ quality levels. Findings – Interestingly, the study finds that the case where two managers with conflicting incentives negotiate (the horizontal coordination case) might produce a better financial outcome than when the managers’ decisions are perfectly coordinated by a profit-maximizing CEO (the vertical control case). In addition, the study identifies several conditions that guarantee horizontal coordination’s generation of higher profit, such as high (or low) sensitivity to the quality (or price) of a new product. The paper further shows that two competing firms may select horizontal coordination as a Nash equilibrium. Practical implications – These findings provide new insights into the role of marketing-R & D interaction under strategic delegation, which may allow rival firms to “spend smart” on R & D, avoid excessive (and unnecessary) quality competition, and thus enhance the profitability of new products. Such insights would be useful for any firms under budget constraints. Originality/value – To the authors’ knowledge, this paper represents the first attempt to analyze how delegation interacts with the conflicting incentives of marketing and R & D managers, which in turn affects the quality investment decisions, competitive intensity, and, ultimately, the financial outcomes of new products developed competing firms.

Product recall strategy in the supply chain: utility and culture

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dara Schniederjans ◽  
Mehrnaz Khalajhedayati
Keyword(s):  
Supply Chain ◽  
Expected Utility ◽  
Large Scale ◽  
Economic Benefits ◽  
Product Recalls ◽  
Product Recall ◽  
Cross Sectional ◽  
Content Type ◽  
Supply Chain Networks ◽  
Cultural Variables

PurposeProduct recalls have the potential to damage firm and consumer quality reputation. While globalization has brought about various economic benefits, expanding supply chain networks have also made it more difficult for downstream organizations to manage product recall strategy. This study aims to examine the role of culture on a manufacturer's initiation of a recall and the severity of the remedy chosen for the product recall.Design/methodology/approachUtilizing the culture-specific argument, this study uses an exploratory approach to assess how cultural variables impact recall strategy utilizing a large-scale data analysis with a cross-sectional time-series panel of 898 firms.FindingsThe results provide support for the expected utility hypothesis that the more severe the consequence, the more likely a manufacturer will decide to recall the product. Moreover, the more likely the manufacturer will provide greater returns to the consumer. However, these relationships are impacted to differing degrees by the manufacturer's cultural origin.Originality/valueThese results provide evidence to researchers about how culture impacts the expected utility hypothesis in the decision theory. The study examines how deeply embedded cultural variables impact the relationship between the foreseeable consequence of the product recall and the recall facilitator and remedy.

Fighting the fire: improvisational behavior during the production launch of new products

2014 ◽  
Vol 34 (6) ◽  
pp. 722-749 ◽  
Author(s):  
Uwe Gross
Keyword(s):  
Problem Solving ◽  
New Product Development ◽  
Ad Hoc ◽  
New Products ◽  
New Product ◽  
Content Type ◽  
Real World Problem ◽  
Problem Solving Behavior ◽  
The Impact

Purpose – Short-term problem solving during production launch may result in extended lead times and increased overall costs of new product development, thereby reducing the overall profitability of a new product. While the previous literature suggests formalized procedures and systematic problem solving approaches, empirical analyses indicate improvised, non-systematic, and ad hoc responses actually being used in firms’ real world problem solving processes. The purpose of this paper is to explain the role of such non-systematic approaches for the efficiency and effectiveness of problem solving processes during production launch. Design/methodology/approach – The paper empirically explores the impact of improvisational problem-solving behavior on a firm's production launch efficiency and on the success of new products. Moreover, the paper investigates the moderating role of technology familiarity, project complexity, and the number of occurring problems during production launch. Findings – The paper finds evidence for a positive curvilinear effect of improvisational problem-solving behavior on new product success and production launch efficiency. Additionally, the paper finds that improvisation is especially reasonable in complex and familiar projects or in the case of many unplanned changes during production launch. Research limitations/implications – The study provides evidence for the relevance of routinized and improvisational behavior during production launch. Practical implications – Improvisational behavior decreases the performance of the production launch and the financial performance of a new product in the case of frequent product changes or complex projects. Originality/value – For the first time behavioral theory is applied to the phenomenon of production launch and problem solving.

Neighborhood effects of housing program using Jeonse in Korea

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sungjin Yun
Keyword(s):  
Housing Market ◽  
Public Housing ◽  
Neighborhood Effects ◽  
Negative Impact ◽  
Rental Housing ◽  
Hierarchical Linear Model ◽  
Hedonic Price ◽  
Housing Program ◽  
Content Type ◽  
Tenure System

Purpose This study aims to introduce the Youth Jeonse Rental Housing Program using the unique characteristics of the Korean housing market to explain its theoretical value in the current theoretical landscape of public housing and to identify the effect of the program on the regional housing price. Design/methodology/approach This study uses three hedonic price models on the basis of Korea’s housing market, namely, own, jeonse and rent models. Moreover, it uses the hierarchical linear model to include both house- and region-level variables. Findings Analysis shows that youth rental housing has no effect on falling prices in the region unlike long-term rental housing. Thus, the policies using regional tenure system are more effective in the social mix than existing public housing policies. Originality/value This study introduces the program using Korea’s unique tenure system called jeonse, arguing its advantages for the supplier, recipients and regional neighborhoods. Suppliers can easily provide affordable housing at a low economic and administrative cost, whereas recipients can easily mix socially, have broad housing choices and a fighting chance for a stable life. Additionally, this policy has a low negative impact on the region. Furthermore, this study theoretically presents the potential for mixed paths other than demand or supply policies. It introduces and analyzes special policy objectives for youth housing problems.

Netflix: SVoD entertainment of next gen

2020 ◽  
Vol 10 (3) ◽  
pp. 1-36
Author(s):  
Jitender Kumar ◽  
Ashish Gupta ◽  
Sweta Dixit
Keyword(s):  
New Products ◽  
New Product ◽  
Business Environment ◽  
Multinational Companies ◽  
Indian Market ◽  
Undergraduate Level ◽  
Content Type ◽  
Mba Students ◽  
Internet Penetration

Learning outcomes The case study illustrated strategic, marketing, financial and operational challenges faced by Netflix in India's growing SVoD market. This case is appropriate in courses such as Strategic Management, Business Strategy, Marketing Management and International Marketing for postgraduate MBA students, other graduate-level management programs and undergraduate-level students. The case was developed to raise awareness among students, to understand the complex nature of the technology-driven industry, to survive in the highly competitive market, to set up a company that serves the huge Indian market. This case delves into the dynamics of marketing on the Indian market, characterized by unorganized players such as local cable television; torrent downloads and organized and established players, low digitalization rates, language barriers, low internet penetration, lack of infrastructure, price-sensitive consumers. Due to up-gradation in technology, internet penetration, an increase in smartphone users, and the market has undergone a notable amount of change, due to a lot on new entrants, competitions, substitutes. The case states various obstacles, for a multinational company while entering the market such as India and how they are required to strategize, mold their marketing mix, need to analyze en-cash their strength, overcome their weakness, take maximum advantage of opportunities and modify their strategies to face huge challenges. The specific learning outcome of the case will help students to understand the strategy that multinational companies can adopt to sustain, compete in emerging countries such as India and within that emerging market such as streaming videos on demand (SVoD). This case will help students to understand the importance of internal and external resources, which help multinational companies to make strategies based on these resources. The case study offers learners the opportunity to explore the strategy in a dynamic environment. This case also highlights the critical issues that should be addressed by multinational companies when entering into a foreign market. The case highlights the importance of analyzing the competitive environment in which it’s going to compete and sustain. It can be used to introduce Ansoff’s growth matrix, internal and external factor analysis and porter’s five forces in the delivery of course for both regular and executive programs. The case should be offered in the middle term periods of the course. Additionally, the case could be used in marketing courses to indicate the importance of scanning the business environment in marketing activities for any organization. The case illustrates the strategies that companies can undertake to expand the market, introduce new products, as per the requirement of business environment and concerns linked with innovating approaches to support the organization to satisfy a larger number of price-sensitive consumers from varied backgrounds. Case overview/synopsis Netflix has been optimistic about the potential growth of the Indian market. It will grow slowly and gradually and become profitable. The SVoD market in India has been price sensitive. There are no plans for cheaper prices. Netflix had a long way to go. The pricing model of Netflix was a hurdle in its growth, but the future of Netflix in India was bright. There have been numerous challenges in terms of government regulations, pricing structure and an increase in the number of competitive players on the market. Netflix believed that Indian audiences enjoyed “Bollywood” film productions but watched low-quality soap opera content on television. Television audiences were a massive untapped market for their brand of original, exclusively produced content. Can Netflix come up with a marketing and growth strategy, or else they might be looking to lose market share and revenue. Should a new product such as Amazon and MI fire stick be introduced in the existing market like their competitors? Should they enter the existing market with existing products, or should they seek a new market in India, such as the rural market, the Pyramid market, the Tier II market and the City III market? Should they diversify into a new market with new products? How Netflix should plan its market communication if it wants to launch a new product or if it wants to reposition its existing product. Netflix had to rethink its strategies and also needed to address these issues so that they could travel smoothly on Indian roads. High marketing budget and aggressive promotions helped Netflix India to make a profit in its first year. Complexity academic level Postgraduate MBA students, other graduate-level management programs and undergraduate-level students. Supplementary materials Teaching notes are available for educators only. Subject code CSS 11: Strategy.

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