Special Session Summary Dealing With Consumer Discontent

Citation:

Zeynep Gurhan-Canli and Niraj Dawar (1999) ,"Special Session Summary Dealing With Consumer Discontent", in E - European Advances in Consumer Research Volume 4, eds. Bernard Dubois, Tina M. Lowrey, and L. J. Shrum, Marc Vanhuele, Provo, UT : Association for Consumer Research, Pages: 143-144.

European Advances in Consumer Research Volume 4, 1999      Pages 143-144

SPECIAL SESSION SUMMARY

DEALING WITH CONSUMER DISCONTENT

Zeynep Gurhan-Canli, University of Michigan, U.S.A.

Niraj Dawar, University of Western Ontario, U.S.A.

SESSION OVERVIEW

The three papers in the session addressed different aspects of consumer discontent. Together, the papers focused on how consumers’ knowledge about the company and involvement with the specific cause of discontent interact with remedial actions taken by that firm in affecting consumers’ expressions of discontent. Specifically, the first paper by Sen, Gnrhan-Canli, and Morwitz examined consumers’ decisions to participate in a boycott following an unfair price increase. They treated the consumers’ boycott decision for an otherwise desirable product as a social dilemma. They draw on research, which has been used to explain mobilization and participation in social movements to predict whether or not an individual will participate in a boycott. They find that consumers’ expectations of overall participation in the boycott, of their own effectiveness, and of the boycott’s success interact in predictable ways to affect individual consumers’ decision to boycott. Their research reveals the tension between individual and collective gains in this particular expression of consumer discontent. The second presentation by Klein explored consumer reactions to corporate responses to a boycott. An experiment was conducted in which subjects were exposed to accusations against Nike concerning their labor practices in Asia and Nike’s responses to these accusations were manipulated. The findings indicated that these responses differentially affected consumer anger towards Nike, feelings of guilt concerningthe purchase of Nike products in the future, and the intention to boycott Nike products. The third presentation by Dawar and Pillutla reported the results of a field survey and an experiment designed to examine whether consumers’ prior expectations about a firm’s consumer friendliness affects the interpretation of the firm’s response to a product-harm crisis and consequently the brand equity of the firm. The results suggest that prior expectations interact with actual firm response to determine the effect on brand equity. Specifically, the same response by two firms with different levels of prior consumer expectation can be interpreted very differently, especially when the response is equivocal.

 

WITHHOLDING CONSUMPTION: A SOCIAL DILEMMA PERSPECTIVE ON CONSUMER BOYCOTTS

Sankar Sen, Temple University, U.S.A.

Zeynep Gnrhan-Canli, University of Michigan, U.S.A.

Vicki Morwitz, New York University, U.S.A.

Boycotts have become a pervasive and potent expression of consumer discontent in today’s marketplace: according to the newsletter Boycott Quarterly, over 800 products, not to mention whole states and countries, are current targets for boycotts worldwide. This paper represents an initial attempt at a theoretical understanding of the individual consumer’s decision to participate in a boycott. We propose that for a majority of consumers, the decision to withhold consumption of a desirable product or service in the interests of achieving certain collective economic, social and/or political gains can be conceptualized as a social dilemma. Consequently, we draw on social dilemma research and Klanderman’s (1984) theory of mobilization and participation in social movements to investigate the determinants of and the mechanisms underlying the individual consumer’s decision to participate in a boycott. In a set of two experiments involving marketing policy boycott scenarios, we manipulate (i) subjects’ expectations about overall participation in the boycott (small vs. large percentage), (ii) their expectations about their own contribution (low vs. high self-efficacy), and (iii) the boycott’s eventual outcome (failure vs. success), to examine their interactive effects on subjects’ willingness to participate in a boycott protesting an unfair and unanticipated price increase (Garrett 1987).

Our results suggest that when the personal value of achieving the boycott’s objective (i.e. reversing or mitigating the price increase) is low, consumers’ decision to participate in the boycott is analogous to cooperation in a social dilemma. In particular, we find that consumers’ boycott participation decision is jointly and predictably determined by their expectations regarding overall participation, their own efficacy, and the boycott’s eventual outcome. When a successful boycott outcome is salient, their high likelihood of participation is not affected by either their expectations about their own efficacy or others’ participation. On the other hand, when an unsuccessful boycott outcome is salient, we obtain a crossover interaction between their expectations about their own efficacy and others’ participation. While subjects’ participation likelihood is not affected by their expectations about others’ participation when their self-efficacy expectations are high, it varies directly with the percentage of consumers expected to boycott when their self-efficacy expectations are low. Importantly, the relationship between consumers’ participation likelihood and all three expectations is mediated by their perceptions of boycott success, and moderated by their susceptibility to interpersonal influence. The implications of our findings for consumers, boycott organizers, and boycott targets are discussed.

 

THE EFFECTIVENESS OF CORPORATE RESPONSES TO BOYCOTTS: NIKE’S DEFENSE OF LABOR PRACTICES

Jill G. Klein, INSEAD, France

Labor practices in Asia have prompted calls for the boycott of products of some ultinational corporations. These accused firms must decide how to respond to consumer protests. While there has been some discussion of boycotts in the marketing literature (e.g., Friedman 1991; Garrett 1987), little attention has been paid to the effectiveness of different corporate responses to a boycott.

In the present study consumer reactions to corporate responses to a boycott were investigated. An experiment was conducted in which subjects were exposed to accusations against Nike concerning their labor practices in Asia. This study was conducted through a mail survey of a sample of U.S. households (mean age=48). Nike’s responses to accusations were manipulated across subjects. Four types of responses were examined (each of which were actually made by Nike): 1) denial of the accusations; 2) claim that they cannot control what happens in overseas factories that they do not own; 3) implementation of a Code of Conduct that protects overseas workers (with a monitoring plan); 4) no response (control).

Thus far, surveys have been returned by 63 subjects (32% response rate). Preliminary results indicate that the implementation of a code of conduct led to a lower intention to participate in a Nike boycott than did the other two responses (t(59)=2.11, p<.05). This tactic also led consumers to feel that Nike had done the right thing in its response to accusations (t(44)=3.18, p<.01), and to feel marginally less guilty about purchasing Nike products in the future (t(59)=1.93, p<.06). Further, the claim that they could not control what happens in their overseas factories generated greater anger at Nike than did the other responses (t(58)=2.06, p<.05).

The impact of various motivations to participate in a boycott on the intention to boycott were examined through regression analysis. Anger toward Nike and feelings of guilt were both predictors of the intention to boycott (b=.57, p<.001 and b=.29, p<.05, respectively). Consumer efficacy, or the belief that consumers could change corporate behavior through boycotts, was not a significant predictor of boycott intention (b=.05, n.s.). Thus, the desire to participate in the boycott appears to be fueled by emotional issues.

Product ownership appeared to affect perceptions of Nike. Those who owned Nike products were less angry than were those who did not own Nike products (t(60)=3.53, p<001). Among owners, boycott intention was lower the greater the number of Nike products owned (r=-.40, p<.01). These initial results suggest that Nike owners are predisposed to view Nike’s labor practices and their responses to accusations in a favorable light. Additional data are being collected to examine the reactions of owners versus non-owners to Nike’s responses to accusations concerning their labor practices.

 

THE IMPACT OF PRODUCT-HARM CRISES ON BRAND EQUITY: THE MODERATING ROLE OF CONSUMER EXPECTATIONS

Niraj Dawar, The University of Western Ontario, Canada

Madan Pillutla, HKUST, Hong Kong

Product-harm crises which are discrete, well publicized events in which a product is found to be defective or dangerous, are increasing with the complexity of products, the more stringent quality requirements of consumers, and stricter interpretations of product liability laws. Crisis situations, and in particular, product harm crises, provide an opportune setting to study the impact of corporate actions on customer-based brand equity because: (1) by their very nature crises have a major impact on customer perceptions of firms and their brands. Large shifts in brand equity are important from a corporate standpoint and are more easily detectable from a measurement standpoint; and (2) product-harm, as opposed to other forms of crises (e.g. environmental or political crises) directly involve the marketing function and customers’ brand-related perceptions. The purpose of the present research is to assess the impact of firm responses to a product harm crisis situation on customer-based brand equity. A conceptual framework is developed on the basis of previous research, which suggests how inforation about crises and firm response may be integrated into existing cognitive structures based on prior expectations of firm response. Hypotheses drawn from this theoretical framework are tested in an experiment and a field survey conducted in the immediate aftermath of a product-harm crisis.

Results suggest that the impact of firm response to a crisis on customer based brand equity is a function of consumers’ prior expectations. An identical response by two firms with different prior consumer expectations can have opposite effects on brand equity. The magnitude of difference depends on the whether the firm’s response was unambiguous or ambiguous. Results of the field survey show that these differences may be due to selective weighting of information. In particular, consumers loyal to the target crisis brand were more likely to base their future purchase decisions on their perceptions of the firm’s responsible behavior during the crisis. On the other hand, consumers who purchased other brands were more likely to base future purchase decisions on their perceptions of the risk associated with purchasing the target brand.

Implications of the results are drawn for crisis management, brand equity, and the theoretical expectations framework. Specifically, for crisis management the results suggest that brand equity is preserved, and in some cases enhanced, by communicating to consumers the firm’s unambiguous response to the crisis. Further, tailored messages for different segments of the market (e.g. existing and future consumers) would alleviate their different concerns. The contribution of this project to brand equity research is that it provides an initial examination of corporate actions on brand equity. Finally, from a theoretical standpoint, the results of the experiment also demonstrate an interaction of prior expectations and a new information, which has remained elusive in previous research on expectations (Hoch and Ha 1986; Ha and Hoch 1989). Smith (1993) suggested that the interaction is elusive because the stimuli (advertising and product-trial) used in previous experiments in marketing have generally been overwhelmingly positive, creating a ceiling effect. In a crisis situation, the base-line impact is negative. This removes the constraints of the ceiling effects. As a result, we do detect the interaction that theory predicts, but which has remained elusive in previous studies.

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