Title: The impact of a product-harm crisis on marketing effectiveness
Authors: van Heerde, Harald J. ×
Helsen, Kristiaan
Dekimpe, Marnik #
Issue Date: 2007
Publisher: The Institute of Management Sciences and Operations Research Society of America
Series Title: Marketing science vol:26 issue:2 pages:230-245
Abstract: Product-harm crises are among a firm’s worst nightmares. A firm may experience (i) a loss in baseline sales, (ii) a reduced own effectiveness for its marketing instruments, (iii) an increased cross sensitivity to rival firms’ marketing-mix activities, and (iv) a decreased cross impact of its marketing-mix instruments on the sales of competing, unaffected brands. We find that this quadruple jeopardy materialized in a case study of an Australian product-harm crisis faced by Kraft peanut butter. We arrive at this conclusion by using a timevarying error-correction model that quantifies the consequences of this crisis on base sales, and on own- and cross-brand short- and long-term effectiveness. The proposed modeling approach allows managers to make more informed decisions on how to regain the brands’ pre-crisis performance levels.
ISSN: 0732-2399
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Non-KU Leuven Association publications
× corresponding author
# (joint) last author

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