Impact of Product-Harm Crises on Brand Equity: The Moderating Role of Consumer Expectations

TLDR

Brand equity is a valuable yet fragile asset that can be severely damaged by frequent product‑harm crises and poorly prepared corporate responses, yet research on their marketing impact remains scarce. The study aims to examine how firms’ crisis responses influence customer‑based brand equity. Using the expectations–evidence framework, the authors analyze the relationship between consumer expectations, firm responses, and brand equity. Field surveys and laboratory experiments reveal that consumers judge firm responses through the lens of prior expectations, and that the interaction between expectations and response type—unambiguous support, ambiguous response, or unambiguous stonewalling—significantly shapes post‑crisis brand equity.

Abstract

Brand equity is a valuable yet fragile asset. The mounting frequency of product-harm crises and ill-prepared corporate responses to such crises can have profound consequences for brand equity. Yet there is little research on the marketing impact of crises. The authors employ the expectations–evidence framework to understand the impact of firms' responses to crises on customer-based brand equity. The results of a field survey and two laboratory experiments indicate that consumers interpret firm response on the basis of their prior expectations about the firm. The interaction of expectations and firm response is shown to affect postcrisis brand equity. The authors draw implications for the expectations–evidence framework and for the outcomes of different types of firm response (i.e., unambiguous support, ambiguous response, and unambiguous stonewalling) on brand equity.