Consumers iews on text characteristics of product recall notices

2001 ◽  
Vol 2 (3) ◽  
pp. 258-271 ◽  
Author(s):  
Marinel Gerritsen ◽  
Frank van Meurs ◽  
Wendy Diepstraten
Keyword(s):  
Product Recalls ◽  
Product Recall ◽  
Likert Scales ◽  
Product Defect ◽  
Insight Into ◽  
Oriented Approach

Consumers who have suffered as a result of a product defect can claim compensation from the producer. By placing a product recall notice, producers can reduce their liability. Ideally, such a notice should protect the image of the company as well as warn consumers. The problem is that a clear warning may damage the image of the company that placed the notice. This study reports on experiments carried out among 128 female shoppers to gain insight into how a recall notice should be worded in order to protect the company’s image and, yet to be clear. Split-run tests were carried out to determine whether Minimisation (minimising the danger of the defect) and Bolstering (stressing the company’s good traits) contributed positively to the image of the company and whether inclusion of pictures, a list format, a reader-oriented approach, Minimisation, and Bolstering contrib- uted positively to the clarity of the notice. Likert scales were used to determine which heading drew most attention and through which channels consumers prefered to be informed about a product recall. According to our respondents, a recall notice including Minimisation strategies protects the company’s image more than one without such strategies. A recall notice is consid- ered clearer when it includes a picture, when it contains elements to highlight the structure of the information, and when it does not include Bolstering. According to our respondents, the most attention-grabbing heading is ‘Waarschuwing’ warning), and they prefer to be informed about product recalls through newspapers and television.

Product Recalls and Firm Reputation

2021 ◽  
Vol 13 (3) ◽  
pp. 404-442
Author(s):  
Boyan Jovanovic
Keyword(s):  
Product Quality ◽  
Firm Value ◽  
Stock Price ◽  
Policy Intervention ◽  
Product Recalls ◽  
Product Recall ◽  
Product Price ◽  
Firm Reputation ◽  
Recall Data ◽  
Product Defect

Product recall data and information on stock price reactions to recalls are used to estimate the value of reputation in a model in which product quality is not contractible. A recall is the result of a product defect that signals low effort. The recall triggers a reduction in the firm’s product price and value, which then both rise steadily until its next defect occurs. We estimate that reputation accounts for 8.3 percent of firm value and that welfare is 26 percent of its first best level. A policy intervention that attains first best is a recall tax accompanied by a flow subsidy. (JEL D22, G32, H25, L25, L62, M31)

“De terughaalactie geld alleen voor de hierboven afgebelede pizza’s geldig.”

2015 ◽  
Vol 43 (3) ◽  
Author(s):  
Mariet Raedts ◽  
Irene Roozen
Keyword(s):  
Negative Impact ◽  
Purchase Intentions ◽  
The Other ◽  
Product Recalls ◽  
Negative Consequences ◽  
Product Recall ◽  
Brand Evaluations ◽  
Different Types

Consumers’ responses to product recalls with language errors Consumers’ responses to product recalls with language errors Product recall notices not only warn consumers for faulty products, they also limit the damage which may be caused to the company. But what happens when the product recall notice itself contains errors? This study investigated the effects of three different types of language errors: typographical errors, verb errors and sentence errors. Four versions of a product recall were created. The control condition contained no errors. The other three versions contained either five typos, five grammatical conjugation errors or five poorly formed sentences. Participants (N = 710) were randomly assigned to one of the four conditions. Results indicate that participants who detected the errors, had lower attitudes towards the advertisement and the company than participants in the control condition and participants who failed to detect the errors. Poorly formed sentences also had a negative impact on consumers’ brand evaluations and their future product purchase intentions. Hence, language errors in product recall notices can have negative consequences for companies.

The effects of brand equity and failure severity on remedy choice after a product recall

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sascha Raithel ◽  
Alexander Mafael ◽  
Stefan J. Hock
Keyword(s):  
Decision Making ◽  
Brand Equity ◽  
Probit Model ◽  
Future Research ◽  
Product Recalls ◽  
Product Recall ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Content Type ◽  
Failure Severity

Purpose There is limited insight concerning a firm’s remedy choice after a product recall. This study aims to propose that failure severity and brand equity are key antecedents of remedy choice and provides empirical evidence for a non-linear relationship between pre-recall brand equity and the firm’s remedy offer that is moderated by severity. Design/methodology/approach This study uses field data for 159 product recalls from 60 brands between January 2008 to February 2020 to estimate a probit model of the effects of failure severity, pre-recall brand equity and remedy choice. Findings Firms with higher and lower pre-recall brand equity are less likely to offer full (vs partial) remedy compared to medium level pre-recall brand equity firms. Failure severity moderates this relationship positively, i.e. firms with low and high brand equity are more sensitive to failure severity and then select full instead of partial remedy. Research limitations/implications This research reconciles contradictory arguments and research results about failure severity as an antecedent of remedy choice by introducing brand equity as another key variable. Future research could examine the psychological process of managerial decision-making through experiments. Practical implications This study increases the awareness of the importance of remedy choice during product-harm crises and can help firms and regulators to better understand managerial decision-making mechanisms (and fallacies) during a product-harm crisis. Originality/value This study theoretically and empirically advances the limited literature on managerial decision-making in response to product recalls.

Labor Unions and Product Quality Failures

2021 ◽  
Author(s):  
Omesh Kini ◽  
Mo Shen ◽  
Jaideep Shenoy ◽  
Venkat Subramaniam
Keyword(s):  
Product Quality ◽  
Labor Unions ◽  
Product Recalls ◽  
Employee Morale ◽  
Product Recall ◽  
Quality Outcomes ◽  
Panel Regressions ◽  
Broad Cross Section ◽  
Operating Leverage ◽  
The Impact

In this paper, we study the impact of labor unions on product quality failures. We use a product recall as our measure of quality failure because it is an objective metric that is applicable to a broad cross-section of industries. Our analysis employs a union panel setting and close union elections in a regression discontinuity design framework to overcome identification issues. In the panel regressions, we find that firms that are unionized and those that have higher unionization rates experience a greater frequency of quality failures. The results obtain even at a more granular establishment level in a subsample in which we can identify the manufacturing establishment associated with the recalled product. When comparing firms in close elections, we find that firms with close union wins are followed by significantly worse product quality outcomes than those with close union losses. These results are amplified in non–right-to-work states, where unions have a relatively greater influence on the workforce. We find that unionization increases firms’ costs and operating leverage and, consequently, crowds out investments that potentially impact quality. We also find some suggestive evidence that unions may compromise quality by hurting employee morale and by resisting technological upgrades in the firm. Overall, our results suggest that unions have an adverse impact on product recalls, and thus, product quality is an important dimension along which unions impact businesses. This paper was accepted by Gustavo Manso, finance.

scholarly journals Characterizing supply chain visibility – a literature review

2018 ◽  
Vol 29 (1) ◽  
pp. 308-339 ◽  
Author(s):  
Sirirat Somapa ◽  
Martine Cools ◽  
Wout Dullaert
Keyword(s):  
Supply Chain ◽  
Literature Review ◽  
Business Performance ◽  
Business Processes ◽  
Order Effects ◽  
Full Potential ◽  
Content Type ◽  
Process Oriented ◽  
Insight Into ◽  
Oriented Approach

Purpose The purpose of this paper is to present a literature review that aims to provide insight into the characteristics and effectiveness of supply chain visibility (SCV), as well as to identify metrics that capture these aspects in business processes. Design/methodology/approach A systematic review of the supply chain literature is conducted to identify the characteristics and the effectiveness of SCV. The synthesis of SCV effectiveness and its metrics are based on the process-oriented approach which relates the effectiveness of SCV to improved business performance. Findings This study reveals that the characteristics of SCV can be captured in terms of the accessibility, quality, and usefulness of information. The benefits of SCV are found to extend beyond improvements to operational efficiency of business processes or to the strategic competencies of an organization. Practical implications This study underlines that clear agreements between all players involved in the SC can help to solve problems caused by information completeness (type and amount of information), and unlock the full potential of SCV projects. Originality/value By using a process-oriented approach, this review provides a comprehensive explanation of the functions of SCV, as well as its first-order effects, in terms of automational, informational, and transformational characteristics.

Product recall strategy in the supply chain: utility and culture

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dara Schniederjans ◽  
Mehrnaz Khalajhedayati
Keyword(s):  
Supply Chain ◽  
Expected Utility ◽  
Large Scale ◽  
Economic Benefits ◽  
Product Recalls ◽  
Product Recall ◽  
Cross Sectional ◽  
Content Type ◽  
Supply Chain Networks ◽  
Cultural Variables

PurposeProduct recalls have the potential to damage firm and consumer quality reputation. While globalization has brought about various economic benefits, expanding supply chain networks have also made it more difficult for downstream organizations to manage product recall strategy. This study aims to examine the role of culture on a manufacturer's initiation of a recall and the severity of the remedy chosen for the product recall.Design/methodology/approachUtilizing the culture-specific argument, this study uses an exploratory approach to assess how cultural variables impact recall strategy utilizing a large-scale data analysis with a cross-sectional time-series panel of 898 firms.FindingsThe results provide support for the expected utility hypothesis that the more severe the consequence, the more likely a manufacturer will decide to recall the product. Moreover, the more likely the manufacturer will provide greater returns to the consumer. However, these relationships are impacted to differing degrees by the manufacturer's cultural origin.Originality/valueThese results provide evidence to researchers about how culture impacts the expected utility hypothesis in the decision theory. The study examines how deeply embedded cultural variables impact the relationship between the foreseeable consequence of the product recall and the recall facilitator and remedy.

The influence of politeness on the perception of product recall notices

2001 ◽  
Vol 2 (3) ◽  
pp. 272-279 ◽  
Author(s):  
Luuk Van Waes ◽  
Carel van Wijk
Keyword(s):  
Experimental Studies ◽  
Corporate Image ◽  
The Other ◽  
Product Recalls ◽  
Product Recall ◽  
Politeness Strategies ◽  
Negative Effect ◽  
Commercial Relation ◽  
Positive Effect ◽  
Clear Information

When companies decide — or are forced — to publish a product recall notice, their aim is to give consumers clear information on how to handle the problem and to warn them of a possible danger. On the other hand companies try to preserve their corporate image in order to guarantee a (commercial) relation in the future. This article deals with the question whether politeness strategies lead to differences in the appreciation, acceptance and perception of product recall notices. In two experimental studies we evaluated the effect of positive and negative politeness strategies in different conditions. The results show that the use of elaborated negative politeness strategies positively influences the appreciation and acceptance of the message, and has a positive effect on the perception of the corporate image. However in a context where the product recall warns of a severe risk, writers of product recalls should use politeness strategies more cautiously. In this context the use of politeness strategies even seems to have a negative effect on the acceptability of the recall message.

scholarly journals Does Social Media Accelerate Product Recalls? Evidence from the Pharmaceutical Industry

2021 ◽  
Author(s):  
Yang Gao ◽  
Wenjing Duan ◽  
Huaxia Rui
Keyword(s):  
Social Media ◽  
Pharmaceutical Industry ◽  
Underlying Mechanism ◽  
Product Recalls ◽  
Online Forums ◽  
Product Recall ◽  
Federal Drug Administration ◽  
Social Media Data ◽  
Drug Enforcement ◽  
Media Data

Social media has become a vital platform for voicing product-related experiences that may not only reveal product defects, but also impose pressure on firms to act more promptly than before. This study scrutinizes the rarely studied relationship between these voices and the speed of product recalls in the context of the pharmaceutical industry in which social media pharmacovigilance is becoming increasingly important for the detection of drug safety signals. Using Federal Drug Administration drug enforcement reports and social media data crawled from online forums and Twitter, we investigate whether social media can accelerate the product recall process in the context of drug recalls. Results based on discrete-time survival analyses suggest that more adverse drug reaction discussions on social media lead to a higher hazard rate of the drug being recalled and, thus, a shorter time to recall. To better understand the underlying mechanism, we propose the information effect, which captures how extracting information from social media helps detect more signals and mine signals faster to accelerate product recalls, and the publicity effect, which captures how firms and government agencies are pressured by public concerns to initiate speedy recalls. Estimation results from two mechanism tests support the existence of these conceptualized channels underlying the acceleration hypothesis of social media. This study offers new insights for firms and policymakers concerning the power of social media and its influence on product recalls.

scholarly journals The more I err, the less I pay

2019 ◽  
Vol 53 (5) ◽  
pp. 916-943 ◽  
Author(s):  
Etayankara Muralidharan ◽  
Hari Bapuji ◽  
Manpreet Hora
Keyword(s):  
Future Research ◽  
Published Data ◽  
Product Recalls ◽  
Firm Characteristics ◽  
Product Recall ◽  
Product Complexity ◽  
Firm Reputation ◽  
Content Type ◽  
The Us ◽  
Toy Industry

Purpose This study aims to investigate the effects of firm characteristics and crisis characteristics on remedies offered to consumers by firms in the event of a product recall crisis. Design/methodology/approach Published data on 868 product recalls in the US toy industry from 1988 to 2011 have been used to investigate the effects of firm experience in product recalls, type of firm (company versus intermediary) and product recall severity in predicting remedies offered to consumers in the event of a product recall. Findings The findings show that firm recall experience, firm type and recall severity are negatively associated with recall remedies offered. Specifically, firms offer lower remedies if they have higher recall experience, if they are upstream firms in the supply chain (farther from consumers) and if the recall is more severe. Research limitations/implications This study focuses on the toy industry and does not consider product complexity, firm reputation and the role of external regulatory agencies in the prediction of remedies offered by firms. Future research may extend this study to include the above factors. Practical implications Offering a high remedy to consumers of a recalled product may be a responsible decision by a firm, but it may also attract shareholder wrath. The study has implications for managing multiple goals in product recall crisis management. Originality/value Studies focused on issues of interest to consumers during a recall crisis, such as swift recalls and appropriate remedies, are limited. This study contributes to the understanding of the antecedents of recall remedies.

scholarly journals Qualitative Evaluation of the STOEMP Network in Ghent: An Intersectoral Approach to Make Healthy and Sustainable Food Available to All

2020 ◽  
Vol 17 (9) ◽  
pp. 3073 ◽  
Author(s):  
Marjolijn Vos ◽  
Maria Romeo-Velilla ◽  
Ingrid Stegeman ◽  
Ruth Bell ◽  
Nina van der Vliet ◽  
...  
Keyword(s):  
Qualitative Study ◽  
Systems Approach ◽  
Qualitative Evaluation ◽  
Collaborative Process ◽  
Sustainable Food ◽  
Sense Of Ownership ◽  
Disadvantaged Population ◽  
Neutral Process ◽  
Insight Into ◽  
Oriented Approach

The STOEMP network is, to our knowledge, one of the first initiatives to bring different sectors together in a municipality so as to increase accessibility to healthy and sustainable foods for all, with particular attention for the disadvantaged population. This qualitative study aimed to gain an in-depth insight into how the STOEMP network aims to reach its goal of making healthy, sustainable food available to everyone, through an intersectoral, collaborative process, exploring the facilitators and challenges of taking a systems-oriented approach to achieving this. Interviews were conducted among 15 stakeholders of the STOEMP network between March–July 2019 in Ghent (Belgium). Factors that facilitated the development and work of the network are reported, including having an external, neutral process manager, shared values, multisector engagement, enthusiasm, resources, and sense of ownership, as well as the barriers that were faced, such as time issues, uncertainty regarding continuation and funding, and discrepancy in visions. These issues reflect the strengths and challenges of taking a systems approach that aims to formulate solutions to widening access to healthy and sustainable foods. STOEMP would like to influence policy and thereby strengthen its impact, but needs further discussions to collectively formulate exact needs.

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