How Do I Fix This? Managing a Product-Harm Crisis
Product-recalls have become increasingly commonplace in American media reports. Everything from food products to toys and cars have been recalled with increasing frequency in recent years. Some researchers predict the numbers will continue to rise as regulatory agencies and consumers alike become more vigilant about health and safety (Gunther 2010; Berman 1999).
A product-harm crisis, which often necessitates a product-recall, can have tremendous human and financial costs. For example, a 2010 case of salmonella-infected peanuts involved a massive recall effort involving 70 companies, 3,900 products, and approximately $1 billion in financial losses. It also made hundreds of people sick and caused 9 deaths (Gunther, 2010). No industry or brand—no matter how large or well known—is immune to the impact of such a crisis, as proven by Toyota’s over $2 billion loss stemming from a 2009 gas pedal recall (Isadore, 2010).
Given recent trends and the high-stakes consequences, businesses are interested in knowing what to expect in case of a product-harm crisis in terms of consumer and stock market reaction. Researchers continue to study what factors influence those reactions and hope to use their findings to build a viable product-harm crisis response strategy.
To prepare: Review this week’s Learning Resources, including those on effective paraphrasing available at the Walden Writing Center. You must use proper paraphrasing techniques when completing your analysis. Use the APA Course Paper Template to complete this assignment. The link to the template can be found in this module’s Learning Resources.You may use the articles in the Learning Resources and additional scholarly resources to develop your analysis. Avoid using direct quotes by paraphrasing as appropriate, include proper APA citations, and submit your Assignment.
By Day 7 of Week 3, submit your first draft of your 3- to 5-page scholarly document for review and feedback. Your paper must do the following:
• Define a product-harm crisis.
• Identify the factors that contribute to a product-harm crisis.
• Compare and contrast the findings of the various studies on product-harm crisis.
• Synthesize your analysis of the research to develop and support a recommendation for a company handling a product-harm crisis
• Chen, Y, Ganesan, S., & Liu, Y. (2009). Does a firm’s product-recall strategy affect its financial value? An examination of strategic alternatives during product-harm crises. Journal of Marketing, 73(6), 214–226.
Retrieved from the Walden Library databases.
The authors outlined a research study that examined the impact of four different product-recall strategies on the price of a company’s stock. The authors examined the actions and stock prices of companies for which the U. S. Consumer Product Safety Commission issued recalls from 1996–2007. Their findings provide a broad view of the impact. The article also offered a potential contrast to points raised in other product-harm literature. The article will be helpful in completing this module’s Assignment.
• Lei, J., Dawar, N., & Gürhan-Canli, Z. ( 2012). Base rate information in consumer attributions of product-harm crisis. Journal of Marketing Research, 49(3), 336–348.
Retrieved from the Walden Library databases.
The researchers examined how information on the base-rate, which is the rate of frequency of product-harm cases in a brand’s industry, affects whom consumers blame for a product-harm crisis. The experimental study examined this effect in a variety of conditions. The authors drew conclusions about the specific conditions and manner in which base-rate impacts consumer attribution of blame. They also explained the underlying psychological processes that lead to consumers’ attributions.
• Vassilikopoulou, A., Lepetsos, A., Siomkos, G., &.Chatzipanagiotou, K. (2009). The importance of factors influencing product-harm crisis management across different crisis extent levels: A conjoint analysis. Journal of Targeting, Measurement, and Analysis for Marketing, 17(1), 65–74.
Retrieved from the Walden Library databases.
This article analyzed the effects of four different facets of a company’s response to product-harm crises. The authors examined how each facet of a response impacts consumers’ intention to make future purchases of the product. The authors studied these effects across product-harm crises at different severity levels. The aim of the study was to advise companies on how to focus their crisis management efforts for product-harm crises at each of these levels.
• Yannopoulu, N., Koronis, E., & Elliot, R. (2011). Media amplification of a brand crisis and its effects on brand trust. Journal of Marketing Management, 27(5/6), 539–546.
Retrieved from the Walden Library databases.
The authors conducted a case study of a product-harm crisis. They interviewed Greek consumers who purchased a moldy yogurt that eventually was the subject of a product recall. They compared the consumers’ perceptions of the brand’s trustworthiness after they purchased moldy yogurt with their perceptions after they viewed negative news reports about the crisis. The study provided insights on the nature and strength of the influence of media on consumers’ perceptions of product-harm crises. The article will be helpful in completing this module’s Assignment.
• Zhao. Y., Zhao, Y., & Helsen , K. (2011). Consumer learning in a turbulent market environment: Modeling consumer choice dynamics after a product-harm crisis. Journal of Marketing Research, 48(2), 255–267.
Retrieved from the Walden Library databases.
Through mathematical analysis of data related to a product-harm crisis in the Australian peanut butter industry, the authors of this study shed light on the changes in consumer purchase behavior during and after a product-harm crisis and the factors that influence these changes. To do this, they analyzed the purchases of specific consumers before, during, and after the crisis using supermarket scanner data, changes in money spent on advertising, and changes in prices of the various brands. The study offered new insights into the nuances of consumer reasoning related to a product-harm crisis and the factors that influence that reasoning. The article will be helpful in completing this module’s Assignment.
• University of Southern Mississippi. (n.d). Welcome to the plagiarism tutorial. Retrieved April 7, 2013, from http://www.lib.usm.edu/legacy/plag/plagiarismtutorial.php
This tutorial provided definitions of plagiarism and tips for avoiding it as well as a pretest and posttest to check knowledge. This resource will be helpful in completing this module’s Discussions and Assignment.
• Walden University. (n.d). Academic integrity & Turnitin. Retrieved April 7, 2013, fromhttp://writingcenter.waldenu.edu/809.htm
Page proved information on Walden’s Academic Integrity Policy as well as instructions on how to use the Turnitin tool to avoid plagiarism. This resource will be helpful in completing this module’s Discussions and Assignment.
• Walden University. (2013b). APA course paper template.. Retrieved fromhttp://writingcenter.waldenu.edu/57.htm
This template must be used for every application assignment in this course. Failure to use this template will result in a mandatory grade of zero for that assignment. Please note that the APA Course Paper Template is found under the “Course Paper” section on this web page. Be sure to click on the + sign to expand the Course Paper area and find the APA Course Paper Template.
• Walden University. (2013c) Citing sources propertly. Retrieved fromhttp://writingcenter.waldenu.edu/613.htm
This resource, which provided common citation errors and tips for avoiding them, will be helpful in completing this module’s Discussions and Assignment.
• Walden University. (2013d) Effective paraphrasing. Retrieved fromhttp://writingcenter.waldenu.edu/295.htm
This web page provided information on effective and ineffective paraphrasing strategies as well as relevant examples. This resource will be helpful in completing this module’s Discussions and Assignment.
• Walden University. (2013e). Plagiarism. Retrieved from http://writingcenter.waldenu.edu/63.htm
This page explained Walden’s policy on plagiarism and academic standards for writing. This resource will be helpful in completing this module’s Discussions and Assignment.
• Walden University. (2013f). What is plagiarism?. Retrieved fromhttp://inside.waldenu.edu/c/Student_Faculty/StudentFaculty_3667.htm
This explained concept of plagiarism as recognized at Walden. This resource will be helpful in completing this module’s Discussions and Assignment.
• Walden University. (2013g). Online writing center. Retrieved fromhttp://writingcenter.waldenu.edu/index.html
This gateway provided resources and information from the Walden University Writing Center. This resource will be helpful in completing this module’s Discussions and Assignment.
• Document: Paraphrasing in Graduate Writing (PDF)
