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Marketing research on product-harm crises: a review, managerial implications, and an agenda for future research

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Abstract

A product-harm crisis is a discrete event in which products are found to be defective and therefore dangerous to at least part of the product’s customer base. Product-harm crises are not only dangerous for consumers; they also represent a major threat to the reputation and equity of brands or companies, which often struggle with how to best respond. The marketing literature has witnessed a surge in interest on the consequences of product-harm crises for a variety of stakeholders, including consumers, the brand or company itself, its investors, as well as competitors. This article offers a systematic review of research on product-harm crises in the marketing literature. We discuss the antecedents and consequences of product-harm crises, their moderators and mediators, and the theories and methodologies used. We identify commonalities and differences between the studies, as well as gaps in the literature and avenues for future research. Finally, we synthesize the managerial implications across studies.

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Notes

  1. See, for example, https://www.cnet.com/news/5-biggest-takeaways-from-samsungs-note-7-battery-fire/; http://abcnews.go.com/Blotter/toyota-pay-12b-hiding-deadly-unintended-acceleration/story?id=22972214.

  2. Product-harm crises are one of the most-often studied forms of marketing crises, which according to Clark (1988) have the following characteristics: (1) they threaten marketing goals, (2) they reduce the marketer’s ability to control or direct the marketing environment, and (3) decision or response time is short.

  3. Even though the literature has conventionally focused on the bodily harm that could arise from product-harm crises, several of the concepts and insights may (as we discuss later) also be applicable to other forms of harm, such as psychological or financial harm.

  4. In Table 5, we also add the insights from the recent game-theoretic paper of Bala et al. (2017). As this paper uses neither experimental nor secondary data, we do not include this study in Tables 1, 2, 3, & 4.

  5. Given that three of these studies considered the same Australian product-harm crisis faced by Eta and Kraft peanut butter, the actual product scope is more limited than suggested by the mere number of articles.

  6. Interestingly, experimental studies tend to focus on the same subset of categories as well (see Table 1).

  7. See, for example, Jarrell and Peltzman (1985) or Rhee and Haunschild (2006).

  8. See http://www.nytimes.com/2007/08/15/business/worldbusiness/15imports.html and http://www.cbsnews.com/news/mattel-toy-recall-list/, among others.

  9. Outside of marketing, some of these industries have received more attention. The toy industry, for example, was studied in Hora et al. (2011) and Freedman et al. (2012).

  10. See http://www.nytimes.com/2007/08/15/business/worldbusiness/15imports.html.

  11. Source: http://www.stuff.co.nz/business/industries/78200909/Samsung-washing-machines-still-bursting-into-flame-but-most-found.

  12. Also outside the marketing literature, event studies have been used frequently to quantify the impact of product recalls on firm value, as in Bromiley and Marcus (1989), Davidson and Worrell (1992) and Chen and Nguyen (2013) in the management literature; Pruitt and Peterson (1986) and Govindaraj et al. (2004) in finance; and Jarrell and Peltzman (1985) and Hoffer et al. (1988) in the economics literature (see also Liu et al. 2012, Table 12.1).

  13. Please note that because this stream of research uses the occurrence of a product recall as the dependent variable, conceptually it studies the antecedents of product recalls. That is why in Fig. 2 this research is represented in the antecedents box and not in the dependent variables box.

  14. https://www.forbes.com/sites/maribellopez/2017/01/22/samsung-reveals-cause-of-note-7-issue-turns-crisis-into-opportunity/#26f93e5124f1

  15. See for example http://www.telegraph.co.uk/technology/blackberry/8825661/BlackBerry-blackout-how-it-happened.html and http://money.cnn.com/2011/10/13/technology/blackberry_outage/ .

  16. A related problem may occur when components are shared across multiple products/categories (see, e.g., Ramdas and Randall 2008), even though this may, in itself, increase product reliability.

  17. See http://www.autoexpress.co.uk/volkswagen/92893/vw-emissions-scandal-recalls-compensation-is-your-car-affected-latest-news and http://www.forbes.com/sites/greatspeculations/2015/09/24/dieselgate-scandal-could-cost-volkswagen-up-to-35-billion/#7134853b3b4d.

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Author notes

  1. Kathleen Cleeren, Marnik G. Dekimpe and Harald J. van Heerde contributed equally to this work.

Authors and Affiliations

  1. KU Leuven, Antwerpen, Belgium

    Kathleen Cleeren

  2. Marketing Department, Tilburg University, Tilburg, The Netherlands

    Marnik G. Dekimpe

  3. KU Leuven, Leuven, Belgium

    Marnik G. Dekimpe

  4. Massey University, Auckland, New Zealand

    Harald J. van Heerde

  5. CentER, Tilburg University, Tilburg, The Netherlands

    Harald J. van Heerde

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  1. Kathleen Cleeren
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Correspondence to Kathleen Cleeren.

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Mark Houston served as Area Editor for this article.

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Cleeren, K., Dekimpe, M.G. & van Heerde, H.J. Marketing research on product-harm crises: a review, managerial implications, and an agenda for future research. J. of the Acad. Mark. Sci. 45, 593–615 (2017). https://doi.org/10.1007/s11747-017-0558-1

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