stuck in a crisis an experimental study of the relationship between crisis response strategies and...

Stuck in a crisis

An experimental study of the relationship between crisis response strategies and post crisis brand equity in the fashion industry

CBR 2013, Orlando

28. September 2013

Sabrina Hegner

Ardion Beldad

Sjarlot Kamphuis op Heghuis

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Why studying crises in the fashion industry?

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http://reputation-

metrics.org/tag/abercrombie-fitch-analysis-

crisis/

http://reputation-metrics.org/tag/abercrombie-fitch-analysis-crisis/

Why brand equity as an outcome variable?

Brand Equity is one of the main indicators of brand success and therefore one of the most important intangible assets for an organization (Christodoulides & Veloutsou, 2010)

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Situational Crisis Communication Theory (SCCT) by

Coombs

Crisis typeVictimAccidentalIntentional

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Response type

denying

diminishing

bolstering

rebuilding

Trust as a buffer in times of crises?

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Research questions

1. research question. What is the effect of various crisis response strategies on post-crisis brand equity (including its dimensions, namely brand awareness/associations, perception of brand quality, and brand loyalty)?2. research question: What is the impact of consumers’ prior trust in the brand on the relationship between crisis response and the company’s post-crisis brand equity?

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Research design

Brand Trust was measured first6 scenarios (denial, diminish, bolstering, rebuild, no-response, and a control group) – between subject designDutch newspaper article stating that an independent 3rd party found carcinogenic chemicals in T-Shirts of the brandThe newspaper article was shown to every participant (except control group) and the brand response to the accusation was manipulatedBrand equity was measured afterwardsControl questions

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Scenariosresponse Explanation The Reaction of the company

Denial Claiming that there is no

crisis

“The CSPI thoughtlessly insinuates that the cotton we use in our t-

shirts is unsafe and it causes cancer among our consumers. The

blame for this incident cannot be attributed to our organization. Our

products are in line with the law”, the company said in a statement.

Diminish Minimizing the responsibility

by claiming inefficiency to

control the events and/or by

denying to do intentionally

harm.

“We don’t have any control over what our imported clothing

contains. That is why we did not know about these toxic chemicals.

We did not intend to do any harm”,...

Rebuild Declaring that the brand

takes the full responsibility

for the crisis and asks

stakeholder for forgiveness.

“We take full responsibility for the fabricated t-shirt containing the

toxic chemicals, therefore we will compensate this unpleasant

incident with an extra discount day. We also have stopped

immediately the fabrication of these t-shirts. We are so sorry for all

inconveniences triggered by this incident”, ....

Bolsterin

g

Telling the stakeholders

about the past good work of

the brand. Reminding the

stakeholders that the brand

is a victim of a crime too.

“We are known for our fashionable clothes and our good prices. Our

company never had any incidents before and we have had many

successes where you all benefited from. We also hope to have a lot

more of these successes in the future. We also wanted to remind

you that we are a victim of this incident as well”,…. *

Participants

187 Dutch respondents Mean age: 28.1Gender: 56% women, 44% menEducation: high 60%, low 40%

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Results ANOVA

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Denial

M (SD)

Diminish

M (SD)

Rebuild

M (SD)

Bolstering

M (SD)

No

Response

M (SD)

Control

Group

M (SD)

Brand equity 2.74 (.69) 2.95 (.72) 3.14 (.71) 3.00 (.77) 2.61 (.55) 3.21 (.73)

Brand awa/ass 3.39 (.91) 3.49 (.86) 3.73 (.87) 3.44 (.83) 3.43 (.73) 3.88 (.84)

Brand quality 2.18 (.78) 2.44 (.97) 2.66 (.71) 2.65 (.77) 1.93 (.68) 3.00 (.68)

Brand loyalty 2.04 (.90) 2.41 (1.01) 2.46 (1.01) 2.52 (1.01) 1.71 (.75) 2.23 (1.03)

Brand Equity (F(5, 181)=3.181, p=.009)

Brand quality (F(5, 181)=7.401, p=.000)

Brand loyalty (F(5, 181)=3.064, p=.011)

Brand awareness/associations (F(5, 181)=1.765, p=.122)

Results Post-hoc test

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Denial

M (SD)

Diminish

M (SD)

Rebuild

M (SD)

Bolstering

M (SD)

No

Response

M (SD)

Control

Group

M (SD)

Brand equity 2.74 (.69) 2.95 (.72) 3.14 (.71) 3.00 (.77) 2.61 (.55) 3.21 (.73)

Brand awa/ass 3.39 (.91) 3.49 (.86) 3.73 (.87) 3.44 (.83) 3.43 (.73) 3.88 (.84)

Brand quality 2.18 (.78) 2.44 (.97) 2.66 (.71) 2.65 (.77) 1.93 (.68) 3.00 (.68)

Brand loyalty 2.04 (.90) 2.41 (1.01) 2.46 (1.01) 2.52 (1.01) 1.71 (.75) 2.23 (1.03)

The buffering effect of brand trust

Median split was performed in high truster and low trusterComparison of high truster and low truster and CG for each response strategyFor almost all comparisons, a significant difference between low-trusting group and the control group on overall brand equity & single dimensions.the low-trusting respondents show significant lower values on brand equity and the dimensions compared to the high trusting respondents, while there is no significant difference between high trusting group and the control group1 exception: In the no-response scenario, no difference between the high trusting and the low trusting group is found, while there is a significant difference between these two groups and the control group.

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Discussion

Brands are susceptible to various forms of crisesBut how a brand responds to a crisis is not out of its control!Results indicate that the crisis response strategy a brand employs can influence its brand equity.Prior trust can serve as a buffer for a crisis-stricken organizationBut: No response is always bad!!!

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Thank you for your attention!

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Appendix trust as a buffer – overall brand equity

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Mean (SD) low trust control group F sign.

Overall Brand Equity

denial high trust 2.98 (.55) -0.50* -0.23 5.375 .007

low trust 2.48 (.75) -0.73***

diminish high trust 3.38 (.93) -0.68*** 0.17 4.637 .013

low trust 2.70 (.41) -0.51**

rebuild high trust 3.49 (.81) -0.65** 0.29 3.556 .035

low trust 2.84 (.46) -0.37*

bolstering high trust 3.21 (.57) -0.46* 0.00 2.186 .121

low trust 2.75 (.92) -0.46*

no response high trust 2.82 (.45) -0.31 -0.39 7.187 .002

low trust 2.51 (.58) -0.70***

control group 3.21 (.73)

Appendix trust as a buffer – brand awareness/associations

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Brand Awareness/Associations

denial high trust 3.64 (.67) -0.54* -0.24 4.224 .019

low trust 3.10 (1.09) -0.78***

diminish high trust 3.77 (.94) -0.45 0.11 2.920 .061

low trust 3.32 (.80) -0.56**

rebuild high trust 3.96 (.98) -0.42 0.08 1.241 .296

low trust 3.54 (.74) -0.33

bolstering high trust 3.69 (.52) -0.56** -0.19 4.575 .014

low trust 3.13 (1.03) -0.74***


low trust 3.26 (.82) -0.61***


Appendix trust as a buffer – brand quality

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Perceived Brand Quality

denial high trust 2.19 (.68) -0.01 -0.81*** 9.449 .000

low trust 2.18 (.91) -0.82***

diminish high trust 2.88 (1.09) -0.70*** -0.13 6.713 .002

low trust 2.18 (.80) -0.83***

rebuild high trust 3.04 (.66) -0.68*** 0.04 6.187 .004

low trust 2.35 (.61) -0.65***

bolstering high trust 2.86 (.54) -0.46* -0.14 3.653 .032

low trust 2.40 (.93) -0.60***

no response high trust 2.05 (.50) -0.18 -0.95*** 18.802 .000

low trust 1.87 (.76) -1.13***


Appendix trust as a buffer – brand loyalty

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Brand Loyalty

denial high trust 2.40 (.95) -0.75** 0.17 2.700 .076

low trust 1.64 (.67) -0.59*

diminish high trust 3.06 (1.07) -1.04*** 0.83** 4.687 .013

low trust 2.02 (.75) -0.21

rebuild high trust 3.02 (1.12) -1.02*** 0.79** 4.829 .011

low trust 2.00 (.64) -0.23

bolstering high trust 2.65 (.99) -0.29 0.42 .975 .383

low trust 2.36 (1.05) 0.13


low trust 1.67 (.73) -0.56**

control group 2.23 (1.02)

stuck in a crisis an experimental study of the relationship between crisis response strategies and...

Marketing

post crisis brand equity

components of brand

brand loyalty

brand awareness

form of crisis

consumerbased brand

role precrisis brand

impact of crisis responses