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

58 Pages Posted: 14 Aug 2020

See all articles by Chris Hydock

Chris Hydock

California State Polytechnic University, San Luis Obispo - Orfalea College of Business

Neeru Paharia

Georgetown University - Robert Emmett McDonough School of Business

Sean Blair

Georgetown University - Robert Emmett McDonough School of Business

Date Written: July 14, 2020

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.

Keywords: corporate political advocacy, choice share, market share, political orientation, brand activism, negativity bias, identity-based consumption

Suggested Citation

Hydock, Chris and Paharia, Neeru and Blair, Sean, Should Your Brand Pick a Side? How Market Share Determines the Impact of Corporate Political Advocacy (July 14, 2020). Available at SSRN: https://ssrn.com/abstract=3651205 or http://dx.doi.org/10.2139/ssrn.3651205

Chris Hydock (Contact Author)

California State Polytechnic University, San Luis Obispo - Orfalea College of Business ( email )

San Luis Obispo, CA 93407
United States

Neeru Paharia

Georgetown University - Robert Emmett McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

Sean Blair

Georgetown University - Robert Emmett McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
100
Abstract Views
251
rank
294,697
PlumX Metrics