When do consumers not blame a company for defective or dangerous products?

Aug 09, 2012, 10:07 ET from American Marketing Association

CHICAGO, Aug. 9, 2012 /PRNewswire-USNewswire/ -- The answer, according to a recent study, depends on whether the company is well-liked, whether defective products are common in its industry, and on whether this is the first instance of a defective product at the company.

The analysis appears in the June issue of the American Marketing Association's Journal of Marketing Research, and demonstrates that well-liked brands find that their reputation pays off during a product recall or product-harm crisis. Consumers are much more likely to seek out other possible causes for the defective or dangerous product, refraining from immediate blame. Companies that are less well-liked do not enjoy this consideration.

In industries where recalls are common (toys, children's products, automobiles, healthcare products), consumers are less likely to lay blame on a specific company if similar incidents have plagued other companies. But once again, companies that are not well-liked to begin don't benefit from this consideration.

Where recalls are less common, a product-harm crisis stands out and requires explanation. But even here, consumers will treat a recall from a well-liked company as an exception, a rarity, or accident, but blame a less well-liked company for a similar incident.

"It's easy to blame the company," say the authors, Jing Lei of the University of Melbourne, Niraj Dawar of the Ivey Business School in Canada, and Zeynep Gurhan-Canli of Koc University in Turkey. "Taking into account other possible causes for a product recall is effortful – and consumers will only do it if they like the company enough to make the effort."

But even well-liked companies are excused only once: repeat incidents will not be seen as an exception or accident.  

Positive consumer perceptions are like insurance – they pay off when you need them most.

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SOURCE American Marketing Association