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When do unethical brand perceptions spill over to competitors?

Author

Listed:
  • Rebecca K. Trump

    (Loyola University Maryland)

  • Kevin P. Newman

    (Providence College)

Abstract

We examine whether the unethical actions of marketplace brands (e.g., the Volkswagen emissions scandal) hurt the ethical perceptions of competing brands (e.g., Ford, BMW). Across two studies, we find evidence for this unethical spillover effect and show that it can negatively affect consumers’ liking and purchase intentions for a competing brand. The results show that the spillover effect (1) only occurs for similar competitors and (2) is moderated by construal level (CL). Specifically, the spillover effect is more likely to occur when consumers focus on the finer details of the unethical brand’s transgression (i.e., low CL) but not when they focus on the bigger picture of the transgression (i.e., high CL). Thus, while it is intuitively appealing to assume that brands may benefit from a competitor’s foible, this research indicates that competitors may be hurt by a similar brand’s wrongdoing.

Suggested Citation

  • Rebecca K. Trump & Kevin P. Newman, 2017. "When do unethical brand perceptions spill over to competitors?," Marketing Letters, Springer, vol. 28(2), pages 219-230, June.
    • Handle: RePEc:kap:mktlet:v:28:y:2017:i:2:d:10.1007_s11002-016-9409-y
    DOI: 10.1007/s11002-016-9409-y
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    References listed on IDEAS

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    Cited by:

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    3. Nicolas Pontes & Vivian Pontes, 2021. "Spillover effects of competitive rivalry on brand extensions," Journal of Brand Management, Palgrave Macmillan, vol. 28(4), pages 402-412, July.
    4. Kuchmaner, Christina A. & Wiggins, Jennifer & Grimm, Pamela E., 2019. "The Role of Network Embeddedness and Psychological Ownership in Consumer Responses to Brand Transgressions," Journal of Interactive Marketing, Elsevier, vol. 47(C), pages 129-143.
    5. Olga Untilov & Stéphane Ganassali, 2020. "Product‐harm science communication: The halo effect and its moderators," Post-Print hal-02957579, HAL.
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    7. Kirchhain, Heiko & Mutl, Jan & Zietz, Joachim, 2021. "Spillover effects of company news across real estate markets and causal impact analysis," Journal of Housing Economics, Elsevier, vol. 54(C).
    8. Olga Untilov & Stéphane Ganassali, 2020. "Product‐harm science communication: The halo effect and its moderators," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(3), pages 1002-1027, September.
    9. Andreas Hesse & Karolin Bündgen & Saskia Claren & Sarah Frank, 2022. "Practices of brand extensions and how consumers respond to FMCG giants’ greening attempts," Journal of Brand Management, Palgrave Macmillan, vol. 29(6), pages 520-537, November.
    10. He, Hongwei & Kim, Sumin & Gustafsson, Anders, 2021. "What can we learn from #StopHateForProfit boycott regarding corporate social irresponsibility and corporate social responsibility?," Journal of Business Research, Elsevier, vol. 131(C), pages 217-226.
    11. Jun Zhang & Joon Soo Lim, 2021. "Mitigating negative spillover effects in a product-harm crisis: strategies for market leaders versus market challengers," Journal of Brand Management, Palgrave Macmillan, vol. 28(1), pages 77-98, January.
    12. Liu, Dong & Varki, Sajeev, 2021. "The spillover effect of product recalls on competitors’ market value: The role of corporate product reliability," Journal of Business Research, Elsevier, vol. 137(C), pages 452-463.
    13. Joaquin Sanchez & Carmen Abril & Michael Haenlein, 2020. "Competitive spillover elasticities of electronic word of mouth: an application to the soft drink industry," Journal of the Academy of Marketing Science, Springer, vol. 48(2), pages 270-287, March.
    14. Paolo Antonetti & Ilaria Baghi, 2021. "How the sender’s positioning and the target’s CSR record influence the effectiveness of scapegoating crisis communications," Marketing Letters, Springer, vol. 32(4), pages 411-423, December.
    15. Meerza, Syed Imran Ali & Gustafson, Christopher R., 2018. "Consumer Response to Food Fraud," 2018 Annual Meeting, August 5-7, Washington, D.C. 274044, Agricultural and Applied Economics Association.
    16. Justin T. Huang & Masha Krupenkin & David Rothschild & Julia Lee Cunningham, 2023. "The cost of anti-Asian racism during the COVID-19 pandemic," Nature Human Behaviour, Nature, vol. 7(5), pages 682-695, May.
    17. Parshakov, Petr & Naidenova, Iuliia & Barajas, Angel, 2020. "Spillover effect in promotion: Evidence from video game publishers and eSports tournaments," Journal of Business Research, Elsevier, vol. 118(C), pages 262-270.
    18. Kathleen Cleeren & Marnik G. Dekimpe & Harald J. Heerde, 2017. "Marketing research on product-harm crises: a review, managerial implications, and an agenda for future research," Journal of the Academy of Marketing Science, Springer, vol. 45(5), pages 593-615, September.

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