Should Your Brand Pick a Side? How Market Share Determines the Impact of Corporate Political Advocacy

Abstract

Consumers increasingly expect brands to “pick a side” on divisive sociopolitical issues, but managers are reluctant to risk alienating customers who oppose their position. Moreover, research on identity-based consumption and negativity bias suggests that corporate political advocacy (CPA) is more likely to repel existing customers who oppose the CPA than to attract new customers who support it, implying that the net effect will be negative even if consumers overall are evenly divided in their support/opposition. In this research, the authors posit that despite this negativity bias in individual-level choice, the net effect of CPA at the market level is determined by a sorting process that benefits small-share brands and hurts large-share brands. This is because having few customers to lose and many to gain can offset the risk of the negativity bias in consumers’ identity-driven responses to CPA, potentially leading to a net influx of customers for small-share brands. Five experiments provide support for this theorizing and identify authenticity as a necessary condition for small share brands to benefit.

Matching words with actions: understanding the effects of CSA stance-action consistency on negative consumer responses

“…Although most decisions are made based on the quality of the product, Hydock et al (2019) argued that corporate political advocacy will influence at least some socially responsible consumers who are willing to sacrifice their interests for moral beliefs, thus impacting purchase intention. In a follow-up study, similar to the findings in CSA research, Hydock et al (2020) also revealed that consumers are more likely to choose a brand whose stance on a political issue aligns with theirs. Simultaneously, Hydock et al (2020) questioned the risk of corporate political advocacy by examining misaligned consumers.…”

“…In a follow-up study, similar to the findings in CSA research, Hydock et al (2020) also revealed that consumers are more likely to choose a brand whose stance on a political issue aligns with theirs. Simultaneously, Hydock et al (2020) questioned the risk of corporate political advocacy by examining misaligned consumers. They observed that brands are more likely to lose an existing misaligned consumer than to gain a new aligned consumer, and such an effect was more obvious for large-share brands than smallshare brands.…”

The Impact of Corporate Social Responsibility on Brand Sales: An Accountability Perspective

“…Second, while social CSR initiatives have the potential to create a favorable image among subsets of stakeholders, these initiatives are perceived as being less focused, less verifiable, and thus more prone to agency costs (Mishra and Modi 2016). Moreover, recent research shows that consumers and shareholders do not always agree with the direction of social CSR, with some viewing such actions as an alienating form of activism (Burbano 2021;Hydock, Paharia, and Blair 2020;Yashoda, Warren, and Beck 2020). Therefore: H 3 : Having an environmental rather than a social focus in a CSR initiative enhances the positive effect of corrective and compensating CSR initiatives and mitigates the negative effect of cultivating CSR initiatives.…”

Astudyofonlinebrandactivismandits Impactonconsumerbrandrelationship

“…Past research studies on identity-based consumption and negativity bias suggests that the net effect will be negative even if consumers overall are evenly divided in their support/ opposition (Hydock et al, 2020). When brands match activist messaging, purpose, and values with prosocial corporate practice, they engage in authentic brand activism, but when they practice inauthentic brand activism through the practice of -woke washing,‖ potentially misleading consumers with their claims, damaging both their brand equity and potential for social change (Vredenburg et al, 2020).…”