A Study Of The Mechanism Of Public Response To Product Recalls

One of the most pressing problems faced by business leaders in product recalls is toreduce negative public response and protect the firms’ reputation.Due to publicity ofproduct recall information, it is possible that product recall events become the focusof the public.Although the public may not consume recalled product,how theyresponse to a product recall will directly influence the reputation of the focalfirm.Therefore,we will examine the mechanisms of public response towards productrecalls in this research in order to provide gudiance for practioners.Extant researches on product recalls mostly focus on direct stakeholders of the focalfirm,such like customer and investors, but how the public, a stakeholder that is notdirectly influenced by the event would response to product recalls remains largelyunexplored. The studies on public opinions investigated the public response topolitical and social issues but rarely involved consumption issues. Considering theinfluence of public in product recall events,we address the question that how aproduct recall raise the attention of the public, and how the public would evaluate theevent.According to crisis communication literature,response strategy adopted by thefirm have significant influence on public attitudes,but there are mixed results on theeffectiveness of response strategies.Dawing on agenda setting and framing theory, we develop a public response modelfrom public comments on product recall events occurred during2007and2011andexamine the model with quantitive approach. Three questions are addressed in theresearch:(1) How a product recall raise the attention of the public?(2) How the publicwould evaluate a product recall event and what is the mechanism through theevaluation process?(3) How response strategy of the firm influence the publicattitude?The results reveal that public response towards product recalls include publicattention and evaluation. Public attention to product recall are affected by productimportance,severity of product defect and scarcity of product recall actions. Priorbeliefs of the public on the recalled brand influence the choice of cognitive frame adopted by the public to interprete product recall events.When the public trust brandin competence, a product recall is interpreted as signal of product failure,when thepublic trust brand in benevolence, a product recall is interpreted as goodwill of thefirm.Besides,the alignment between public interpretation on the public recall andresponse strategy of the firm influence public attitudes.When a product recall isinterpreted as signal of product failure,accomodative response strategy indicatedacceptance of product defect and strengthen negative attitude,while a product recall isinterpreted as goodwill of the firm, accomodative response strategy will strengthenpositive attitude.These findings expand extant literature in three folds.First,we build public responsemodel towards prouct recall events.Previous researches mainly focused on directstakeholers of the focal firm involved in product recalls,such like consumer andinvestors, but our findings reveals the mechanism through which indirect stakeholdersreact to product recalls.Secondly,we find that the public interpret the recall eventswith either the “product defect frame”or the “company’s good deed frame”,which leadto different evaluations. Thirdly, we explore the mechanism of public responsetowards the firm’s product recall strategy. Prior literatures emphasized the responsestrategy itself,but our results shed light on the mechamism through which the reactionof the public take shape.The conclusions of this research also provides references andrecommendations for managers on how to protect the image of a company during acrisis.