The Effects of Negative Publicity and Company Reaction on Consumer Attitudes

Abstract

Even though negative publicity can affect consumer perceptions, few studies investigate this process empirically, analyze different options of company reactions and test for moderators. Two studies are reported: a laboratory experiment testing how consumers process negative publicity information and a field experiment comparing different company responses. Results confirm the harmful effect of negative publicity on consumer attitudes, indicate a higher level of involvement with negative publicity in the values domain and suggest product involvement as a moderator. The second study extends these findings by testing different company reactions. Results suggest again that product involvement is a moderator.

Keywords: attitudes, company reaction, consumer behavior, experiment, involvement, negative publicity

JEL Classification: M31, C90