A Summary of an Article on the Impact of Significant News on Consumer Behavior Towards Favorite Brands

In: Business and Management

Submitted By negotiator1978
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THE IMPACT OF SIGNIFICANT NEGATIVE NEWS ON CONSUMER BEHAVIOR TOWARDS FAVORITE BRANDS
By Brad Sago, Craig Hinnenkamp
Excerpted from Global Journal Of Business Research The article deals with how negative corporate news in the form of a significant product related crisis impacts consumer behavior towards the company’s brand, and it cites the result of a research on this topic. The research found that negative corporate news had some adverse impact on aspects of consumer affinity towards favorite brands. First of all, Brands are comprised of more than a product’s logo, symbol, or slogan, and further considered the second most important asset of a company – only behind customers. Why brands are important is because brands can protect consumers by serving as identifiers of the producers and the products, and simplify choice, promise a particular quality level, reduce risk ,or generate trust and loyalty. Secondly, the strength of brands depends on the relationship between customers and brands, which may fall into three factors – brand equity, brand image, and brand attachment. Brand equity is the positive effect that the brand has on a potential customer of a product, and it reflects how much more consumers are willing to pay for a particular brand compared with a competing brand. Brand image is used by consumers as a cue in the purchase decision process that affects consumer behavior, influencing a firm’s profits and cash flow. Brand attachment describes the strength of connection between the customer and a brand, and affects consumer buying habits to such an extent as to impact a brand’s profitability. Firms should avoid negative news that may weaken the three factors associated with consumer behavior. Thirdly, regrettably, news about brands and businesses is not always positive. The results of a research mentioned in the article reveal that males…...

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