Firm/product reputation and new-product recalls

Kashef Majid, Mooweon Rhee

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Purpose: The purpose of this paper is to identify the rate of recall for new products vs established products and to explore the simultaneous impact of a firm’s reputation and a product’s reputation on the market response to a product recall. Design/methodology/approach: The authors first use an accelerated hazard model to establish that new products are more vulnerable to damage than established products. Once this is established, the authors use a hierarchical linear model to explore the simultaneous impact of the firm and product reputation on the market response to a product recall. Findings: The findings indicate that new products have a greater probability of recall over time than existing products and after a product recall a positive firm reputation can negatively impact the firm and hence becomes a liability. However, when the product is first introduced, the product reputation can help offset any negative market response; the product reputation can therefore be an asset. Research limitations/implications: New products are more flawed than their established counterparts. A positive reputation can be a liability but a positive product reputation can offset the negative impact of the firm reputation and this is especially pertinent to new products. Originality/value: The majority of prior research has focused on the reputation and assumed that the firm represented the product as well; the findings of this study reveal that the reputation of the product can have contrasting effects to the reputation of the firm.

Original languageEnglish
Pages (from-to)572-584
Number of pages13
JournalMarketing Intelligence and Planning
Volume36
Issue number5
DOIs
Publication statusPublished - 2018 Aug 6

All Science Journal Classification (ASJC) codes

  • Marketing

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