A Disaster Is Contagious: How a Brand in Crisis Affects Other Brands

MICAEL DAHLEN

Negative publicity is increasing in frequency to become part of the everyday iives of consumers and everyday business of brands. Previous research reports several negative effects on the focal brand and tests strategies to cope with one's own brand crisis. But one question needs examining: how does a brand crisis affect the product category and competing brands? This article reports two studies showing that a brand crisis changes consumer perceptions and the game rules of the entire product category. The effects on competing brands differ depending on similarity to the brand in crisis. Implications for advertising, positioning, and tracking are reported in the study's findings.

Center for Consumer Marketing Stockholm School of Economics micael.dahlen@hhs.se
FREDRIK LANGE

Center for Consumer Marketing Stockholm School of Economics fredrik.lange@hhs.se

INTRODUCTION

Tylenol poisonings, questionable ethics at Arthur Andersen, defective Firestone tires, contaminated Taco Bell products—the list of high-profile brand crises in recent years is a long one. Flip through the pages of any newspaper on a given day and you can be sure to find reports of brands in crisis. The authors perused four major newspapers on a Thursday morning and found 19 articles relating to brands—11 were negative. The frequency of negative brand publicity is increasing in the everyday lives of consumers and everyday business of brands (cf. Dawar and Pillutla, 2000; Laczniak, DeCarlo, and Ramaswami, 2001). In fact, an oftencited study by DDB Needham Worldwide suggests that, today, negative publicity is one of the most important factors influencing consumers' buying decisions (e.g., Ahluwalia et al., 2000). The potential impact of negative publicity is unsurprising. First, publicity in general is a more credible source of information than advertising and is therefore more influential (Ahluwalia, Unnava, and Burnkrant, 2000). Second, because the media prefers reporting bad news, companies are more likely to receive bad press rather than positive press (Dean, 2004). Third, negative information is more diagnostic than positive information (the so-called 388 Of lyEBTISlOG RESEHRCH December 2 0 0 6

negativity effect), meaning that consumers put greater weight on it in their brand judgments (Ahluwalia, Burnkrant, and Unnava, 2001). Accordingly, negative publicity receives a substantial amount of research interest. The negative publicity research uncovers a number of effects on the focal brand, such as reducing effectiveness of the company's advertising (Stammerjohan, Wood, Chang, and Thorson, 2005), damaging reputation (Dean, 2004), reducing brand equity (Dawar and Pillutla, 2000), negative attitudes (Ahluwalia et al., 2000), and unfavorable associations (Ahluwalia et al., 2001). However, no study to date examines the effects a brand in crisis might have on the product category and competing brands. Are they exempt? Or could reports on, for example, Tylenol poisonings, or the recent Tegenero medical test tragedy, lead to an increased suspicion toward pain relief pills in general, and alter the criteria by which consumers evaluate competing brands? Could the reports on driving problems with the Suzuki Samurai affect how consumers evaluate and process advertising for Land Rovers and other off-road vehicles? Disaster is contagious, and brand crisis may affect consumer perceptions of the entire product category and perceptions and choices of competing brands.
DOI: 10.2501/S0021849906060417

HOW A BRAND IN CRISIS AFFECTS OTHER BRANDS

Today, negative publicity is one of tiie most important factors infiuencing consumers' buying decisions.

The argument builds on categorization and priming theories suggesting that the competing brands that come to mind affect consumers' perceptions of a product category (cf. Ehrenberg et al., 2002). When a brand receives negative publicity, it becomes more salient in consumers' minds and may have a greater effect on their perceptions of the product category than previously. This salient brand may work as a prime on consumer's evaluations of other brands in the same product category, so that consumers evaluate similar brands more negatively and dissimilar brands more positively. By testing these assumptions, the study extends the literature on negative publicity beyond effects on the brand in crisis to effects on category competition. Moreover, this article ties in with recent literature suggesting that brand perceptions are continually reconstructed (e.g., Cramphorn, 2004; Hall, 2002; Weilbacher, 2003) and provides empirical evidence that marketing communications and market research must be frequently updated and take the brand's context better into account.
BRAND-IN-CRISIS EFFECTS ON PRODUCT CATEGORY PERCEPTIONS

consumers generalize knowledge about brands they have encountered onto other, similar, brands (Medin and Smith, 1984). Categorization enables consumers to effortlessly form a set of alternatives in a purchase decision and provides criteria for choosing between the competing brands (Ratneshwar, Barsalou, Pechmann, and Moore, 2001). Product categories are not fixed, but are continually updated when consumers encounter new information (Moreau, Markman, and Lehmann, 2001). For example, consumers may incorporate a new brand into the sparkling water product category and label yet another sparkling water brand, or the new brand may add a new subcategory in the form of, for instance, flavored sparkling water. Generic advertising, new-product introductions, and newspaper stories can change how much weight consumers place on certain attributes (e.g., Chakravarthi and Janiszewski, 2004; Shankar, Carpenter, and Krishnamurthi, 1998). Thus, consumers may update product categories with new information that alters our decision criteria, as when the Super Size Me movie informed consumers about the nutritional content of hamburger meals and made meal size and calories more important product attributes. Whether new information updates consumers' perceptions of the product category or not depends on its accessibility and relevancy (Braun, Gaeth, and Levin, 1997). Processing occurs easily for highly accessible information. In fact, the mere accessibility of information is an important cue in itself (Menon and Raghubir, 2003). The easier an event comes to mind,
December

the more frequent consumers estimate the event to be. For example, studies show that the easier in memory it is to retrieve AIDS-related behaviors, the higher people judge their risk of contracting AIDS (Raghubir and Menon, 1998). Similar results occur for a number of risks, such as heart disease and sexual assault (Schwarz, 2004). Applied to negative publicity, the easier consumers retrieve a brand in crisis from memory, the higher they estimate the risk (likelihood of brand crisis) in the product category. Not only does negative publicity increase the accessibility of the brand in crisis, such publicity also increases its relevaricy. Research shows that publicity is generally seen as more relevant than advertising (Dawar and Pillutla, 2000). Furthermore, consumers perceive negative information as more diagnostic and relevant than positive information (Ahluwalia, Burnkrant, and Unnava, 2001). Thus, negative publicity is relevant almost by definition. In conclusion, a brand in crisis that receives negative publicity increases its accessibility and relevancy. Therefore, by way of its association to the product category, consumers use the new information about the brand to update their category perceptions. As a result, consumers wiU reevaluate category attributes from the associations to the brand in crisis (in order to reduce the perceived category risk induced by the brand). HI: A brand crisis affects the evaluation of category attributes.

To minimize cognitive effort, consumers group brands together in associative networks to form product categories (MeyersLevy and Tybout, 1989). These associative networks contain all our knowledge of the product category, such as category members (brands), product attributes, usage situations, and consumption experiences. Product category knowledge provides an instant idea about what its member products are about and helps

CRISIS EFFECTS ON SIMILAR AND DISSIMILAR COMPETING BRANDS

Consumers store information about brands in individual brand schemas (Braun, 1999). Challenging the traditional view of the brand schema as a rather stable entity, recent literature suggests that brand

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HOW A BRAND IN CRISIS AFFECTS OTHER BRANDS

schemas change continuously (e.g., BraunLatour and Latour, 2005; Hall, 2002). A brand evaluation at any moment is a temporary construction; accessibility and salience of whatever attitude-relevant information comes-to-mind influence a brand evaluation (Reed, Wooten, and Bolton, 2002). Therefore, the brand's context may be as important as the brand itself when consumers evaluate brands (Weilbacher, 2003). By way of categorization and inference making, information about a brand in crisis should be both accessible and relevant input in the temporary construction of evaluations of competing brands. Research shows that information is generalizable between brands, so that, for example, consumers perceive a new car as expensive when one brand's car exposure occurs together with other expensive cars, and consumers perceive the car to be cheap when exposure of a car with a lower price occurs together with extremely expensive cars (Herr, 1989). In the first case, consumers assimilate the new car with the other cars, and consumers incorporate expensive price information into the brand schema. In the second case, consumers contrast the new car with the other cars, and information about the brand as relatively cheap occurs into the brand schema. Expect similar mechanisms to be at play when a brand in crisis provides the context for evaluations of competing brands. The degree of associative overlap between brands affects whether a brand is assimilated or contrasted to a context brand (Herr, 1989). A high degree of overlap fosters assimilation and a low degree of overlap fosters contrast (Meyers-Levy and Sternthal, 1993). For example. Van Auken and Adams (1998) find that the introduction of a toy store in the Montgomery Ward department store assimilates the brand with Toys 'r' Us and enables transfer of desirable associations from Toys 'r' 390

Us to Montgomery Ward. However, in another study, they found that advertising for the Mazda Miata that compared it with the BMW Z3 resulted in lowered quality ratings for the Miata, because it was perceived as being too different from the BMW Z3 (Van Auken and Adams, 2005). Applied to negative publicity, a brand in crisis likely influences negative effects on similar competing brands. When consumers evaluate brands in the same product category as the brand in crisis, the negative publicity may be an input in the reconstruction of brand schemas. Negative associations can spill-over onto brands with schemas that have a high degree of associative overlap with the salient brand in crisis (Hypothesis H2). Conversely, one would expect positive effects on dissimilar brands. These brands have a low degree of associative overlap with the brand in crisis. Thus, the salient information from the brand in crisis produces a contrast effect on brand evaluations (Hypothesis H3). H2: A brand crisis affects evaluations of similar brands negatively. A brand crisis affects evaluations of dissimilar brands positively.

online-based, banks. The existence of two subcategories enables comparisons between brands with both higher (similar) and lower (dissimilar) associative overlaps. Furthermore, banks make an interesting product category because they are subject to both much press coverage and competing advertising.
Procedure

To ensure that our scenario would be relevant to respondents, we used visitors to an apartment showing as our sampling frame because apartment transactions are administrated and financed by banks. We asked the three market-leading real estate agents to give us a representative sample of apartment showings in the Stockholm area and were admitted to three showings per agent. All 119 visitors were handed questionnaires, and 100 complete questionnaires were returned, making a response rate of 84 percent. The sample consisted of 59 percent women and 41 percent men, and the average age was 39. We used the common procedure in negative publicity research, in which respondents are exposed to a scenario in the form of a newspaper article and their reactions are measured in a questionnaire (e.g., Stammerjohan, Wood, Chang, and Thorson, 2005). One group of respondents was exposed to a negative scenario in the form of a newspaper article about a fictitious online bank in crisis (reports on fraud and insolvency) before filling out the questionnaire. We chose a fictitious brand to avoid confounding effects due to consumers' potential relationships with existing brands. The other group of respondents worked as a control group and filled out the questionnaire without previous exposure to any newspaper article. Respondents were randomly assigned to one of the two conditions (newspaper article/no newspaper article). The questionnaire included questions about the

H3:

METHOD

To test the hypotheses, comparing category and brand perceptions between consumers exposed versus consumers not exposed to a brand crisis in the same product category must be possible. The study includes creating an experimental design to ensure complete control over crisis exposures. Banks were chosen as the product category for two reasons. First, the bank category comprises a number of highly competitive and well-known brands. Second, one can make a simple division between traditional banks and new.

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HOW A BRAND IN CRISIS AFFECTS OTHER BRANDS

respondent, about the bank category in general, and about specific bank brands that were similar or dissimilar to the brand in crisis.
Research instrument development

The newspaper article was pretested on 20 respondents, who rated its valence (negative /positive, unfavorable /favorable, no crisis/crisis) and credibility (biased/ unbiased, subjective/objective, believable/ unbelievable) on a 7-point scale (Cronbach's alpha for both indices >0.86). The average valence was 1.9 and the average credibility was 6.1, and the newspaper article was deemed suited for simulating negative brand publicity.

In order to test all hypotheses simultaneously, we ran a MANOVA (multivariate analysis of variance) on all dependent variables (see Tables 1 and 2). Overall, the We measured brand evaluations (Hypoth- results confirm the hypotheses. Planned Three brands were chosen for the study, comparisons probe additional findings beeses H2 and H3) with a number of questwo online bank brands and one traditween the two groups. tions to get a comprehensive view of the tional bank brand. The two online banks Confirming the argumentation leading hypothesized effects: brand associations were represent similar brands and the tradiup to Hypothesis HI, the brand crisis measured with the same items that we used tional bank represents a dissimilar brand increased consumers' perceived category for the category attributes. Respondents (testing Hypotheses H2 and H3). The rearisk (although the category attitude rerated each brand on a 1 (not at all) to 7 (very son for including two similar brands in mained constant). Lending support to the well) Likert scale regarding convenience, the study is that we expect similar brands hypothesis, there is a difference in imporprice, competence, and information. to suffer more from a brand crisis. For Brand attitude was measured on a 7-point tance ratings between the groups on all exploratory purposes, we investigate four attributes (Table 2). The consumers semantic differential with three items: good/ whether the effects are common for both that were exposed to the brand crisis rate bad, favorable/unfavorable, attractive/ a weak (number five in the market) and infoj-mation and competence higher, and unattractive. They were averaged to form a strong (number one in the market) price and availability lower, compared to an index (Cronbach's alpha > 0.92). brand. We chose the traditional bank based the other consumers. Hypothesis HI is on familiarity, ranking three in the marBrand trust was measured on a 7-point supported: A brand crisis affects the evalket and holding a top-place advertising Likert scale with four items: "I trust this uation of category attributes. presence. brand," "I rely on this brand," "this brand The attributes that gain importance on is honest," and "this brand is safe." They the category level, information and comwere averaged to form an index (CronMeasures petence, are the same attributes that are bach's alpha's > 0.96). To measure category attributes (Hypothesis Ideal proximity was measured for each associated more strongly to the dissimilar HI), we first conducted a pretest, where brand in the crisis condition (see Table 2). brand on a 1 (very far) to 7 (very close) 10 respondents retrieved attributes from This suggests that associations that are scale with the question: "Imagine a bank memory that they would use when choosmore strongly tied to dissimilar brands that is perfect in every aspect; how close ing a bank. Second, 20 respondents rated gain in importance in the event of a brand to this ideal is the brand?" the importance of these attributes on a Brand choice would ideally be tested in crisis. Conversely, the similar brands score scale 1-7. The four attributes that rated lower on all four attributes (though not a quasi-experimental approach that meahighest (M > 5) were selected for inclusion statistically different on price and availsures the impact of a real brand in crisis in the questionnaire: price, competence, ability for the strong brand). Supporting on the sales of other brands in the catinformation, and availability. In the main Hypothesis H2, that a brand crisis affects egory (cf. Campbell, 1969). However, the study, respondents rated the importance

of each attribute on a Likert scale ranging from 1 (not at all) to 7 (very important). In the argumentation leading up to Hypothesis HI, it was reasoned that a brand crisis would probably increase perceived risk. To account for this, we measured category risk on a 1-7 scale with a threeitem measure (high risk/low risk, unsafe/ safe, not risky/risky). They were averaged to form an index (Cronbach's alpha > 0.90). As an exploratory measure, we also asked respondents to rate their category attitude on a 7-point semantic differential, comprised of three items: good/bad, favorable/unfavorable, attractive/unattractive. They were averaged to form an index (Cronbach's alpha > 0.86).

study's scenario-based approach did not provide such an opportunity. Brand choice was instead measured with an openended question in the questionnaire: "what brand would you choose if you were to sign a bank loan today?" In addition, we measured purchase intention for each brand on a 1 (very unlikely) to 7 (very likely) scale with one single question: "If you were to sign a new bank loan, how likely would you choose this brand?"
RESULTS

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HOW A BRAND IN CRISIS AFFECTS OTHER BRANDS

TABLE 1

ways: contact lenses are purchased more

Category and Brand Evaluations, Banks
"
No Dependent Measure Crisis Crisis Eta Squared

frequently
risk.

and are perceived to be lower

Planned Comparisons

CONTACT LENSES TEST

Category attitude Categoryrisk Weak similar brand ...Brand attitude Brand trust ""ideal brand ....Bra^d purchase intentiori Brand selected Strong similar brand Brand attitude Brand trust ...Jdeal brand Brand purchase intention Brand'ielected Dissimilar brand ....Brand attitude Brand trust Ideal brand Brand purchase intention
....?.';?"d .^.?'.®?.*^.d

4.01 6.12 2.94 3.14 3^00 2.40 0.02 5.01 4.70 4.28 5.14 0^59

4.17 5.21 3.96 4.01 3^66 3.22 0.07 5.45 5.15 5.16 5.60 0^69 0.03 0.03 0.03 0.09 0.13 0.19 0.16 OAO 0.06

n.s. t = 2.99,p<.01
.••••

The measures were identical to the bank study. Two online (number one and numu ( • .u r .N J
ber tour m the market) and one tradi-

t = 4.73,p< .01 t = 3.86, p < . 0 1 t = l 4 2 " p ' < "oi t. = .3;65;.P.<,-91

tional (number two in the market) contact lens retailers were chosen for the study Ten plus 20 respondents elicited and rated category attributes; the top-four chosen for the study were: quality, reliability, convenience, and price. The newspaper article (reports on fraud and indiscretion) ^^^ pretested on 20 respondents, who ""^^^"^ '*® valence (negative/positive, unfavorable/favorable, no crisis/crisis) and ,.,.,., ,i,- ^ , ,• , , • • , credibility (biased/unbiased, subjective/ objective, believable/unbelievable) on a 7-point scale (Cronbach's alpha for both indices >0.88). The average valence was 2.0 and the average credibility was 6.04 (^^1^^^ practically identical to the bank crisis), and the newspaper article was deemed suited for simulating negative ^''^''^ publicity Respondents were recruited via inter^ . • J u c 11. > ,,-,•, cept outside the Stockholm public library.
Every tenth visitor was approached and

t = 1.56, p < .10 t = 1.65, p < . 1 0 •••• f..=.l-68, P < .05 t = 1.73, p < . 0 5

5.05 5.27 4.98 4.46
.9.-.-?9.

4.51 4.74 4.42 4.16
.9-,24,

0.09 0.08 0.09 0.03

t = 2.39, p < .01 t = 2.47,p<.01 t = 2.88, p < .01 t = 1.63,p<.10 '-^

Note: F(i4,100) = 5.22, p < .01, Wiiks' iambda, 0.68.

evaluations of similar brands negatively, the results reveal a number of negative effects on the similar brands (see Table 1): brand attitude and brand trust are lowered, they are perceived to be less ideal, and consumers inclination to choose the brands decrease. In contrast, evaluations are higher for the dissimilar brand in the crisis situation: when brand attitude and brand trust increase, it is perceived to be closer to the ideal brand, and consumers are more inclined to choose the brand. This supports Hypothesis H3: A brand crisis affects evaluations of dissimilar brands positively.

In summary, the findings support the hypotheses. A brand crisis affects perceptions of the entire category and of competing brands. To validate our findings, we decided to repeat the study in a different product category. We chose contact lenses as the product category. The category resembles banks in two ways. First, the category comprises a number of highly competitive and well-known brands. Second, one can make a simple division between traditional (opticians) and new. online-based, retailers. However, the category differs from banks in two important

asked if they used contact lenses. Those who answered "no" were screened out. A total of 120 contact lens users were intercepted, out of which 102 completed the questionnaire for a response rate of 85 percent. The sample consisted of 58 percent men and 42 percent women, and the average age was 23.
Results

An initial MANOVA (muitivariate analysis of variance) on all dependent variables confirms the hypotheses on a general level (see Tables 3 and 4). Similar to study 1, the brand crisis increased consumers' perceived category risk (however, the effect is smaller, and marginally significant

3 9 2 JOUBOHL OF HDOEfiTISlOG RESEflRCH December 2 0 0 6

HOW A BRAND IN CRISIS AFFECTS OTHER BRANDS

2

brand choice are all directionally lower

Category Criteria and Brand Associations, Banks
Crisis
Attribute importance

' ° ' ^^^'"^'^^""^^^ (supportingHypothesis H2) and higher for the dissimilar brand (Hypothesis H3). Overall, the results replicate the findings in the first study. The effects of a brand crisis on the product category and ^ ^ ^ on competing brands materialize over two different product categories and samples. Category perceptions are changed, and similar brands are evaluated more negatively, whereas dissimilar brands are eval^ . ,.• ,

No Crisis

Eta Squared

Pianned Comparisons ^ r-r^ ^^ t = 3.53, p < .01 f.= 2,70, p < .05 t = 2.40, p < . 0 1 t = 1.73,p<.05

Information ....?.°^P^t.?".^.? Price Availability
Weak similar brand associations Information Competence

5.84 9.B. 6.16 4.74

5.18 ^;46 6.60 5.14

0.08 0.05 0.06 0.05

uated more positively.
4.26 4.12 4.72 4.74 0.09 0.12 t = 3.20, p < .01 t = 3.35, p < .01 DiSCUSSiON

Price Avaiiabiiity
Strong similar brand associations

4.80 4.00

5.38 4.46

0.07 0.05

t = 2.59, p < . 0 1 t = 2.41, p < . 0 1

The introduction poses the question: are the product category and competing ^ ^ ^ f b brands exempt when there is a brand
^^igig? j^^ ^^^ studies provide an un-

...,!f?f°^[^.^^.'.°.". Competence Price Avaiiability ••
Dissimilar brand associations Information Compe1;ence

.?:3.? 3.72 4.10 3.80

3.80 4.14 4.14 4.04

0.05 0.06

t.=..l.-.66,.P <..O5 t = 2.38, p < .01 n.s. n.s.

equivocal "no" as an answer. Our results suggest that a brand crisis is contagious ^"'^ affects both the product category in general and has specific effects on com. , , petmg brands.
Brands are becoming increasingiy vuinerabie

5.38 5.12

4.80 4.86

0.10 0.07

l=^.:^!^.:.P.'^..:9.^ t = 2.41, p < .01

Price ....AyailalDility

4.16 4.94

4.22 4.86

n.s. n.s.

Previous studies of negative publicity and b f y reputation management have proven the ^^-^^ that the brand is not really owned by the brand manager. The brand is in fact in the hands of its consumers and the media, who determine its reputation (e.g., Chaudhuri, 2002; Stammerjohan, Wood, Charig, and Thorson, 2005). Negative press and word-of-mouth about a brand can have severe effects on brand perceptions and brand performance. The present article adds the insight that the brand is also in fact in the hands of its competitors, Negative press and word-of-mouth about them can have severe effects on brand perceptions and brand performance, too. Two facts make the notion of crisis contagion crucial. First, one could expect that the frequency of brand crisis reports will increase as a result of increasing product

Note: FC16, WO) = 3.99, p < .01, Wilks' lambda, 0.89.

at p < .10). Furthermore, category attitude decreased, so that those exposed to a brand crisis held less favorable attitudes toward the entire product category (see Table 3). Turning to Hypothesis HI, planned comparisons reveal differences between the conditions for all four attributes. The consumers that were exposed to the brand crisis rate quality and reliability higher, and convenience and price lower, compared to the other consumers. Hypothesis HI is supported.

On the brand level, the similar brands score directionally lower on all four associations. All differences are statistically significant for the strong brand, whereas only quality differs significantly between conditions for the weak brand (see Table 4). Conversely, all four associations are perceived more strongly (although price is not significantly different) for the dissimilar brand in the brand crisis condition. Similar patterns are found for the brand evaluations (see Table 3), where brand attitude, brand trust, ideal proximity, and

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HOW A BRAND IN CRISIS AFFECTS OTHER BRANDS

TABLE 3

enough (Ehrenberg, Barnard, and Scriven,

Category and Brand Evaluations, Contact Lenses
No Crisis Crisis Eta Squared Pianned Comparisons

^^^^' Ehrenberg, Barnard, Kennedy, and
Bloom, 2002). It does not really matter what is said; the important thing is to be seen (cf. Heath and Nairn, 2005). As

Category attitude Category risk S.,.,-:
Weak similar brand Brand attitude Brand trust Ideal brand

4.27 4.63
3.57 3.50 3.64
?.-.9?.

5.18 4.38
3.95 4.05 3.96
.3.-.26

0.14 0.03

t = 3.00,p < .01 t = 1.51, p < . 1 0 :r tr.
n.s.

one can easily understand how a brand •• . « . ^u ..• J crisis may have effects on the entire product category and competing brands, as the negative publicity propels the brand i"*° ^ prominent position in consumers' minds.
Revisiting positioning

0.05

f = 1.70, p < .05 n.s.
n-s-

Brand seiected
Strong similar brar^d Brand attitude Brand trust ideai brand Brand purchase intention Brand seiected Dissimilar brand .....B.^and attitude Brand trust Ideai brand Brand purciiase intention •• Brand selected

0.14
4.35 4.07 4.18 4.24 0.43

0.19
5.19 4.99 5.00 4.82 0.57 0.07 0.06 0.07 0.05 t=2.43,p<.01 t = 2.38, p < . 0 1 ;..';. ..t. t = 2.38, p < . 0 1 t = 2.34, p < .01

The results show that similar brands suf^^ lar brands could actually gain from it. This conclusion supports Van Auken and ,. naaQ\ ^c l Adams > (1998) argument for across-class positioning. By tying the brand closer to brands in other product categories and positioning it in relation to them, the brand gains the advantage of becoming less similar—and vulnerable—to competing 0.12 0.10 0.09 0.09 i=.^:33.P<.01 t = 2.71, p < . 0 1 t = 2.54, p < .01 t = 2.93, p < . 0 1 .'..". brands in the category. Thus, the brand is less likely to suffer from a competing e, as Van Auken and Adams found that across-class posi.• • does not seem .. make ^u u J . i the brand tioning J to similar enough to the target brands in °*her categories (rather, it makes it more dissimilar to brands in its own category), one could expect contrast effects from a

5.46 5.83 4.86 4.80 0.43

4.59 4.80 4.26 4.00 0.23

Note: F(U, 102) = 4.48, p < .01, Wilks' lambda, 0.77.

complexities of products, more stringent legislation, more demanding customers, and an increased focus on (negative) brand news in the media (Dawar and Pillutla, 2000; Dean, 2004). Realizing that it does not have to be your brand in the news, it becomes obvious that negative publicity

increasingly difficult to be unique and virtually impossible to persuade consumers to buy your product (Weilbacher, 2003). The goal is rather to become a good enough brand that comes to mind easily

brand crisis in the other, targeted category. In other words, an across-class positioned brand reduces the risk of crisis contagion in its own product category and might even enjoy a positive contrast

will affect your brand sooner or later as
some brand in your product category is

Realizing that it d o e s not have to be your brand in tiie news, it b e c o m e s obvious tbat negative pubiicity wiii affect your brand sooner or iater a s s o m e brand in your product category is bound to suffer some form of crisis sooner or iater.

bound to suffer some form of crisis sooner
or later. Second, recent literature suggests

that brands are becoming more dependent on publicity. In the massive mar-

ketspace and mindspace competition, it is

3 9 4 JOURIlflL OF HDOEBTISIHG BESEfleCH December 2 0 0 6

HOW A BRAND IN CRISIS AFFECTS OTHER BRANDS

J A Dl p A

tions from more health-oriented food (e.g..

Category Criteria and Brand Associations, Contact Lenses
—— 10 ^ Crisis Attribute importance Quality ••••••• • • Reliability Convenience Price Weak similar brand associations ....Quality Reliability Convenience Price Strong similar brand associations Quality Reliability 4-.56 4.16 5.08 4.62 0.09 0.07 lz.?d'^.:.!?..^..:9^. t = 2.38, p < .01 6.48 6.14 5.30 /i or4.86 5.78 5.60 5.64 c /I o 5.48 0.11 0.09 0.06 r> r.e 0.06 t = 4.21,p<.01 f..=..3;,99.'..P..'^..:9.^. t = 1.70, p < .05 t o O ., ^ n-1 Q t = 2.98, p < .01 Crisis Et3 Squared Pianned Comparisons "^—

f^^'^'/'^^^•^-'^"^^^*>' ^'^f^^"'; ^^-S'
delis or famous restaurants). Recently, new beer$ with low glycemic index have been introduced on the alcoholic beverage market. , , i . j-« .• , Another way brands can differentiate , , . ., ,-, • u themselves from similar competitors is by using brand-specific personalities (Aaker, Foumier, and Brasel, 2004). These personalities become inherent to the brand and may insulate them from crisis contagion. ^ ^^^.^^^ Fournier, and Brasel (2004), a ^^^^^ ^.^^ ^.^^^^^ personality suffered from a crisis whereas a brand with an exciting personality was not negatively affected to the same extent. Moreover, the . . . . . •• . exciting brand recovered more easily from the crisis than the sincere brand. We beUeve that nonattribute based brand associations, such as personality, may moderate

3.92 3.89 4.22 4.16

4.50 4.12 4.48 4.42

0.03

t. = .l;65, P < .95 n.s. n.s. n.s.

I^IIIIIIII^^
....^^ Dissimilar brand associations Quality Reliability Convenience Price 6.06 6.08 5.52 .^:^,^ 5.58 5.58 4.74 ^;.?9 0.08 0.10 0.12 .lZ.'^:^.h..P..^..:9^. t = 2.76, p < .01 t = 4.13, p < .01 H ^' : . 4.40 4.90 0.07 t = 2.36p<.01

the effects of crisis contagion.
Category effects and consumer involvement Our study suggests that consumer involvement in the product category need not be static. A brand crisis "rubs off" on the . entire category and increases its perceived risk. Previously considered mainly a problem for the brand in crisis, engaged and worried consumers would actually be an issue for all brands in the category. , . possibilities, and so forth) on its website , ,. arid in its advertising to enhance credibility. Moreover, compact cars can comConsumers may have developed routin,, . . • , ized buymg behaviors and passive relationships to category brands over time. In ^ . . the event of a crisis, consumers become , , , more involved in the purchases and re• , • ugress toward a more active relationship, where they scrutinize the brands more closely: "Could this happen to 'my' brand as well?"

Note: F(16,102) = 4.23, p < .01, Wiiks' lambda, 0.88

effect from a brand crisis in its target cateeorv " •' For example, as an across-class posi^ tioning strategy, an online contact lens municate that they use the same safety ° "•' retailer might emulate traditional optitechnology associated with larger cars. ° cians (personal service, eve sight check-up Fast food restaurants can add associa'^ J '^ •^

Previously considered mainly a problem for the brand in crisis, engaged and worried consumers would actually be
an issue for all brands in the category.

The increased category involvement
could present opportunities for new

brands and for new advertising strategies, as engaged consumers are more

December 2 0 0 6 JOUBOHL OFflDyERTiSinGRESEflRCH 3 9 5 likely to process new information and

HOW A BRAND iN CRISIS AFFECTS OTHER BRANDS

In the event of a crisis, consumers become more involved in the purchases and regress toward a more active relationship, where they scrutinize the brands more closely: "Could this happen to 'my' brand as well?"
tend to consider a greater number of alternatives. It could also present a window of opportunity for brands that want to reposition themselves. Research shows that established brands experience difficulties in communicating new positions because consumers tend to rely on their previous, more easily processed, perceptions of the brand (e.g., Jewell and Unnava, 2003). With increased involvement comes greater engagement in the brands and their communication; consumers want to hear what is new with the brand.
Brand communication and tracking must be frequently updated

ing with more information when the category risk is remarkably increased. Recent real-life examples, such as the Enron-Arthur Andersen crisis and the Super Size Me attack on McDonald's, provide evidence of how negative brand publicity may in fact result in changes of practice of entire industries.
MiCAEL DAHLEN is an associate professor of marketing at the Stockholm Schooi of Economics. His research focuses on innovative advertising and brand strategies, with the ambition to join creativity, business, and consumer value. Having been published in, among others, the Journal of Advertising Research, the Journal of Advertising, Psychology & Marketing, and the Journai of Brand Management, he has taken the first baby steps toward realizing that ambition.

campaigns. The campaigns failed. As brand schemas are reconstructed, advertising and brand managers must keep a close eye on the competition and react on their behalf as well. Advertising/brand tracking and customer satisfaction surveys rarely take into account changes in attribute weights and category risk/attitude. Inertia may lead to unnoticed biases (negative or positive) when measuring brand equity and advertising effects. Advertisers and brand managers need to continually update evaluative criteria for brands and the category and must make large revisions to their tracking instruments after dramatic category changes (such as a brand crisis or a radically newproduct introduction). For instance, fast food brands that have not incorporated health attributes in their tracking are most certainly missing out on important and salient consumer decision-making criteria. The present research tests exposure to only one newspaper article. The effects are likely to be greater in reality, where one would expect consumers to be exposed to several articles and/or newscasts over a period of time. Laying low (and withdrawing advertising campaigns) may be a good idea as an immediate action, but a prolonged crisis may change the rules of the game for future advertising as well. A predominantly hedonic category, such as fast food, may need advertising with more utilitarian content (calories, fat content, etc.) when consumers are reacting to an "acrossthe-board" brand crisis. A historically lowinvolvement category may need advertis-

FREDRIK LANGE is an assistant professor of marketing at the Stockhoim School of Economics. His research focuses on consumer behavior, branding, and marketing communication. He has published more than 10 articles in academic journals and cowritten a text book on marketing communications.

The presented results lend support to the literature suggesting that brand schemas are continually reconstructed. The fact that a brand crisis affects consumers' perceptions of competing brands proves that brand schemas are not stable entities. Brand perceptions are influenced by information that seems relevant at the time, meaning that brand managers must constantly monitor their brands (Hall, 2002). Cramphorn (2004) suggests that advertising testing is problematic because it asks the wrong (predetermined) questions— what matters are consumers' spontaneous reactions. This became evident for Firestone, who withdrew their multimilliondollar advertising campaign celebrating "100 years of reliability" in the midst of their defective tires crisis. However, in the recent (major insurance company brand) Skandia crisis in Sweden, two competitors did not withdraw their advertising 396

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