The Dark side of brand quality

This paper examines the impact of a product recall crisis on brand equity and brand choices by using a designed three stage experiment. We examine whether the impact of a given product recall crisis depends on the strength of the brand, the seriousness of the problem or company response. Additionally, we examine if after product recall choices are affected by the product recall incident and the associated company response. The results are ambiguous on whether brand strength influences the impact of the product recall. In general, the impact on brand equity is similar for both the stronger and weaker brands. However, when the company response to the crisis is considered, it appears that stronger brands are penalised more for a weak response than weaker brands. In terms of switching away from the brand, a weak response from the stronger brand invokes greater percentage switching than the same response from the weaker brand. Managerially, it suggests response to a product recall incident need to be carefully considered depending on the strength of the brand.