Measuring the short-term spillover impact of a product recall on a brand ecosystem

Abstract

Robert Mackalskiis a branding specialist. He lectures at McGill University, in Montreal, Canada, and focuses much of his professional time working with high-growth companies on their marketing and branding strategies. Following his MBA, he cofounded the e-commerce company, Peachtree Network, and led the company's efforts in sales and marketing. After the company became public, he completed his doctorate on branding and now splits his time among teaching, academic research at McGill, and support of entrepreneurial companies through advisory and consulting work. Jean-Francois Belislespecializes in data-driven decision-making applied to digital marketing, retailing and risk management. Prior to his current role, he worked as a consultant in strategy and analytics for large companies (P&G, Bell, Development Bank of Canada and Jean Coutu) and supported entrepreneurial companies through advisory and consulting work. He currently lectures at the MBAlevel at Université Laval. He pursued PhD studies in Computational Statistics and Marketing at McGill University, holds a Master degree in Marketing from HEC Montréal, and has a Bachelor in Economics from the Université de Montréal.ABSTRACT This research examines the short-term impact of a product recall on a brand ecosystem by investigating the following questions: How do product recall spillover effects spread to (i) the recalled brand's related product categories, (ii) competing brands, and (iii) private label brands? Studying the 2003 Land O'Lakes butter recall case using a difference-in-differences model, our research shows that negative spillovers occur within the same brand family, carry over to private label brands and then quickly dissipate, but do not carry over to competitor brands. Managerial implications and directions for future research are provided.

Consumer response to private label brands’ negative publicity: a relational effect on retailer’s store image

“…Apparently, consumers differentiate between store-and product-related image dimensions. This can be explained by similarity theory, which stipulates that spillovers are more likely to occur among similar brands, and least likely among brands that are perceived as different (Mackalski and Belisle, 2015). The external attribution of the cause decreases the impact of the NP (Klein and Dawar, 2004).…”

“…The potential negative affect toward the retailer's PLB and the retailer's store image can be further explained by the spillover effect literature (Hansen and Onozaka, 2011;Rea et al, 2014;Cleeren, 2015;Mackalski and Belisle, 2015). Spillover effect refers to the extent to which information provided in a message alters consumers' beliefs about attributes that are not mentioned in that message (Ahluwalia et al, 2001).…”

“…However, in light of the above-suggested interdependency between PLB image and retailer's store image, an inverse influence also seems a reasonable possibility, which retailers must consider. PLB-related NP can damage the store brand and "spill over", negatively impacting the store's image as well (Mackalski and Belisle, 2015).…”

Spillover effects of supply chain news on consumers' perceptions of product quality: An examination within the triple bottom line

“…The effect was strongest when participants were primed to think that the company was less (vs. more) concerned about the environment. Furthermore, reports of unethical company behavior can produce reputational and financial consequences, not only for the brand in question but to the entire brand ecosystem (Mackalski & Belisle, ).…”

Journal of Brand Management – Year end review 2015

“…: The weak brand retain-or-discard decision in brand portfolio management (Shah, 2015) The impact of brand strength on satisfaction, loyalty and WOM: An empirical examination in the higher education sector (Casidy and Wymer, 2015) Three's company: Investigating cognitive and sentiment unit imbalance in co-branding partnerships (Baxter and Ilicic, 2015) Measuring the short-term spill over impact of a product recall on a brand ecosystem (Mackalski and Belisle, 2015) A conceptual framework for the assessment of brand congruent sensory modalities (Stach, 2015) Hip to be cool: A Gen Y view of counterfeit luxury products (Francis et al, 2015) 'You'll never tweet alone': Managing sports brands through social media (Parganas et al, 2015) Measuring consumer design perceptions for digital devices: A multi-dimensional scale (Mishra et al, 2015) Global brands in emerging markets: The cultural antecedents of global brand preference (Dalmoro et al, 2015) Consumer-brand relationships within the luxury cosmetic domain (Hodge et al, 2015) Brand personification and symbolic consumption among ethnic minority teenage consumers: An empirical study (Gbadamosi, 2015) Using social media to communicate employer brand identity: The impact on corporate image and employer attractiveness (Kissel and Buettgen, 2015) BRAND AND LINE EXTENSIONS…”