Testing the Impact of Recalls on the Demand for Automobiles

Grafton, Steven M.; Hoffer, George E.; Reilly, Robert J.

doi:10.1111/j.1465-7295.1981.tb00348.x

Cited by 80 publications

(36 citation statements)

References 3 publications

(4 reference statements)

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“…Harrison et al (1982) also show that 74 percent of owners who experienced automobile recalls are favorable to the purchase of the same model. In contrast, Crafton et al (1981) demonstrate that automobile recalls for safety reasons have a short-term negative influence on sales of these products. Jarrell and Peltzman (1985) show that recalls may have an impact on the stock market of the company in question.…”

Section: Review Of the Literature And Research Hypothesesmentioning

confidence: 79%

Product recall crisis management: the impact on manufacturer's image, consumer loyalty and purchase intention

Souiden

Pons

2009

Journal of Product &Amp; Brand Management

119

103

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -This paper aims to examine the impact of recall crisis management on the manufacturer's image, consumers' loyalty and future purchase intentions. More specifically, this research aims to clarify the types of recall strategies that companies put forward, as well as their impact on consumers' behaviors and perceptions of the manufacturer's image. Design/methodology/approach -The current study focuses on vehicle users who have either experienced automobile recalls or heard them discussed. Data were collected via car-related web sites. The final sample comprises 573 people. The direction and strength of the relationships between various consumers' attitudes toward the different recall methods and their purchase intention are assessed through structural equation modeling (SEM). Findings -Results show that recalls contested by manufacturers have a significant negative impact on manufacturers' image, as well as on consumers' loyalty and purchase intentions. On the other hand, voluntary recalls or improvement campaigns have a significant positive impact on the manufacturer's image, as well as consumers' loyalty and purchase intentions. Research limitations/implications -Proactive strategies are the best solution to avoid a loss in consumer loyalty to the manufacturer during a recall crisis. In the contrary, manufacturers' adoption of reactive strategies harms their image, as well as consumers' loyalty. This translates into a negative impact on future purchase intentions and manufacturers' market share. This study concludes by recommending appropriate strategies to limit possible negative effects of product recalls. Research limitations -Some variables (such as media, the degree of severity of recalls and the frequency of recalls) are not investigated in this study. Additionally, the research is limited to the automobile industry. Other industries that also experience recalls (such as the pharmaceutical industry) might be considered in future research in order to confirm the consistency of the research findings. Originality/value -The approach adopted by the current research is relatively different from earlier studies that directly link the types of recalls to the danger perce...

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Section: Review Of the Literature And Research Hypothesesmentioning

confidence: 79%

Product recall crisis management: the impact on manufacturer's image, consumer loyalty and purchase intention

Souiden

Pons

2009

Journal of Product &Amp; Brand Management

119

103

View full text Add to dashboard Cite

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“…The model, known as a paired-difference design, is a special case of the general randomized block design (Mendenhall and Reinmuth, 1974). Crafton et al (1981) (Reilly and Hoffer, 1983) developed a paired-difference model to assess the impact of recalls on the demand for automobiles. The same basic design is used in the current study to examine the impact of styling change on the demand for automobiles.…”

Section: T H E Modelmentioning

confidence: 99%

Automobile styling as a shift variable: an investigation by firm and by industry

Hoffer

Reilly

1984

Applied Economics

Self Cite

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“…7 The reference is to Bragdon and Marlin (1972), Spicer (1978), Levy and Shatto (1980), Maddox and Siegfried (1980), Crafton et al (1981), Fry et al (1982), Reilly and Hoffer (1983), Shane and Spicer (1983), Stevens (1984), Jarrell and Peltzman (1985), Newgren et al (1985), Marcus and Goodman (1986), Pruitt and Peterson (1986), Wokutch and Spencer (1987), Hoffer et al (1988), Bromiley and Marcus (1989), Morris et al (1990), Davidson and Worrell (1992), Porter and Van Der Linde (1995), McLaughlin (1996), Nehrt (1996), Galaskiewicz (1997), Judge and Douglas (1998), Klassen and Whybark (1999), Dowell et al (2000), Gompers et al (2003), Brown and Caylor (2006).…”

mentioning

confidence: 99%

The Relationship Between Corporate Social Performance and Corporate Financial Performance in the Banking Sector

2011

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Since the 1970s, many Anglo-American studies have investigated the theme of corporate social responsibility (CSR) and its costs and benefits. Most studies have tried to test, largely in samples of multiple industries, the relationship between corporate social performance (CSP) and corporate financial performance (CFP). These analyses, however, have produced conflicting results and any attempt to give a generalized and coherent conclusion has proved inadequate. This article examines the ways CSP can be proxied and investigates the possible relationship between CSP (measured by ethical rating) and CFP (measured by market and accounting ratios) in the banking sector using correlation methodology. It emerges that there is no statistically significant link between CSP and CFP.

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Testing the Impact of Recalls on the Demand for Automobiles

Cited by 80 publications

References 3 publications

Product recall crisis management: the impact on manufacturer's image, consumer loyalty and purchase intention

Product recall crisis management: the impact on manufacturer's image, consumer loyalty and purchase intention

Automobile styling as a shift variable: an investigation by firm and by industry

The Relationship Between Corporate Social Performance and Corporate Financial Performance in the Banking Sector

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