Managing customer satisfaction after a product recall: the joint role of remedy, brand equity, and severity

Alexander Mafael (), Sascha Raithel () and Stefan J. Hock ()
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Alexander Mafael: Stockholm School of Economics
Sascha Raithel: Freie Universität Berlin
Stefan J. Hock: University of Connecticut

Journal of the Academy of Marketing Science, 2022, vol. 50, issue 1, No 12, 174-194

Abstract: Abstract Firms struggle to respond to product recalls and manage post-recall customer satisfaction. In three studies, we examine the impact of firms’ remedy choice on satisfaction and provide evidence that firms’ post-recall remedy efforts are often not optimal. In Study 1 (field study), we estimate the longer-term effects of remedy on different satisfaction metrics and show that offering full remedy is much more important for low and high (vs. medium) brand equity firms, especially when failure severity is high. In Study 2 (experiment), we find further evidence that the positive impact of full remedy on satisfaction is moderated by brand equity in a u-shaped fashion. Finally, Study 3 (experiment) provides further evidence that the relationship between remedy and brand equity is contingent on failure severity. The findings contribute to the literature on firms’ management of negative relationship events and provide managers with the empirically grounded 5R guidelines to make better remedy decisions in response to product recalls.

Keywords: Product recall; Product-harm crisis; Remedy; Brand equity; Severity; Customer satisfaction (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s11747-021-00802-1

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