The Negative Spill-over Effect Of Product-harm Crisis On Product Category

There are more and more product-harm crises coming with the rapid development ofeconomy, which do harm enterprises and consumers a lot. The product-harm crisis maybring a big loss to the company, cause great physical harm and psychological harm toconsumers. Consequently, many scholars have done researches on it.Even if a product-harm crisis is associated with the company that manufactured thedefective product, the entire industry may be affected. Not only consumers of the affectedcompany, but also consumers of competitors and the whole industry are affected by thecrisis. In addition, the product-harm crises have shown up a new characteristic in ourcountry which is a crisis occurs in different companies at the same time. We call thatMass-PH. We do not know this new characteristic will bring what to us. Under thiscircumstance, the paper seeks to deal mainly with the relationship between theproduct-harm crises (single-and mass product-harm crisis) and the evaluation ofconsumers’ on category.For the purpose of this paper, an experiment was conducted. In the experiment,177students were distributed to five groups, in which four groups are experimental groups andone group is reference group. The empirical study shows that when a product-harm crisisoccurs, it is not only do negative effect on the company but also the whole category. TheConsumers’ Perceived Risk Theory shows that the consumers tend to avoiding risk in apurchase decision. When a product-harm crisis happens, the perceived risk of consumerswill increase. As a result, the consumers show more negative attitude toward the categorywhen a product-harm crisis occurs in many different companies. The consumers’perceived risk mediates the product-harm crisis and consumers’ attitude toward thecategory. Furthermore, the brand reputation moderates the product-harm crisis andconsumers’ perceived risk.