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Research provides insight into how companies should respond to negative publicity

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Research led by a marketing expert from the University of Texas at Arlington could help organizations assess how quickly they should respond to negative publicity to improve their bottom line.

Traci Freling, associate professor in the Department of Marketing, is co-author of the article titled “When Do Product Crises Hurt Business? A Meta-Analytic Investigation of Negative Publicity on Consumer Responses,” which was published in the Business Research Magazine.

Her report summarizes 30 years of empirical research into the impact of product crises on consumer evaluations. Previous research suggests that a product crisis will negatively affect consumer responses to that product. By expanding this stream of research, the team shows that the magnitude of negative information effects depends on characteristics of the crisis, the product and the target consumers.

“When the severity of the threat is high and the product is health-related or directly involved in the crisis, negative publicity is likely to have a lasting impact,” Freling said. “In those cases, companies have to react quickly and decisively.”

Freling mentioned the recent shortage of baby food related to problems in a production facility. The company knew as early as October 2021 that there might be a problem, but was unable to prepare for negative publicity related to the recall and subsequent plant closure, she said.

“Now we are several months down the road with shortages and panic,” Freling said. “Since this crisis is very serious, health-related and involves a performance-related product failure, our research suggests that Abbott Laboratories should have immediately initiated an aggressive, proactive crisis response strategy.”

Freling said her research team was unable to fully explore spillover effects in her research, but the baby food incident shows that competitors, industry and even government organizations can be affected by one company’s missteps.

Freling said the most important steps are to spot problems early; diagnosing the characteristics of the crisis, the product and the consumers; and then determine what action to take when companies are in crisis mode.

Elten Briggs, chairman and associate professor in the Department of Marketing, said Freling’s paper shows that companies should not approach all product crises in the same way.

“Organizations will always be made up of fallible people, so crises will definitely occur,” he said. “The results of this study will help companies predict and understand what negative consumer reactions will be like so that they can formulate a more appropriate response when that time inevitably comes.”

In a crisis people trust feelings over facts

More information:
Zhiyong Yang et al, When do product crises harm companies? A meta-analytical study of negative publicity about consumer reactions, Business Research Magazine (2022). DOI: 10.116/j.jbusres.2022.05.022

Provided by the University of Texas at Arlington

Quote: Study provides insight into how companies should respond to negative publicity (2022, August 15) retrieved August 15, 2022 from https://phys.org/news/2022-08-insight-companies-negative.html

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