Using a series of Toyota automotive recalls as the context, this study examines reactions by consumers, investors, and reports on a combined measure to capture the overall effect of the recalls on the firm. Following the recalls, consumer sales returned to pre-recall levels quickly, however, investors immediately punished the firm with negative abnormal returns of between -14.16 and -16.04% over the longest event windows examined. A combined measure designed to capture consumer and investor reaction shows that the overall brand value of Toyota declined by 16% in the year following the announcement of the product-harm crises. Investor and consumer reaction was different following the recalls. Managerial implications are discussed.
Firms invest large amounts of money in direct to consumer (DTC) advertising for prescription drugs.However, under what conditions consumers perceive DTC advertising to be valuable? The results in this research show: 1) consumers with children who also seek advice from pharmacists perceive DTC advertising to be valuable; 2) educated consumers who have visited a doctor recently (in last 6 months) perceive DTC advertisements to be less valuable; and 3) disease condition of the consumer significantly impacts perceived value of DTC advertising.
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